Carriers Worse Than Dinosaurs But Still Might Survive—France Telecom Techie
BURLINGAME, Cal. -- The novel part of the Silicon Valley rant against large carriers’ monumental ineptitude Thurs. at an Emerging Telephony Conference here was the source -- a France Telecom (FT) executive -- and the inside view he provided. Calling the carriers “dinosaurs” is an insult to dinosaurs, since they lasted 100 times as long as humans have, said Norman Lewis, technology research dir. of the company’s Home Div.
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Many of Lewis’s sentiments were seconded by BT Group CTO Jean-Marc Frangos: “We are a different kind of dinosaur and we are aiming toward a new kind of communication” with the all-Internet protocol 21st Century Network integrating wireless and wireline.
Big carriers resemble Britons still celebrating their last World Cup championship, in 1966, Lewis said. A cataclysmic future is bearing down on them, but telcos focus on the rear-view mirror, he said. “You maneuver, you maneuver… But nothing ever changes.” But Lewis also had sharp words for entrepreneurs and open-source software developers: “Dialing up somewhere to get a message from Beavis & Butt-Head is not the pinnacle of innovation. I think we need to have higher standards.”
Unlike others at FT, Lewis said, he views as “liberation” the “commoditization of Internet transport” that makes voice and audio “just another application” online. The disruption offers a chance to free voice “from the stranglehold the telcos have had,” which has “essentially throttled innovation.” The Skype vision of voice as an “adjunct to other services” presents “a golden opportunity.”
“The big telcos will lose” if history is a guide, Lewis said: “We're rearranging the deck chairs on the Titanic.” These companies “are shackled by our business models. We are shackled by our legacy systems.” They've been organized around the revenue and opportunities in a conventional voice business that produces enormous revenue, he said. “The immediate response” when threatened is “to hold on to what you've got.” Fear of cannibalizing mobile business interferes with VoIP efforts, for instance, “so you have a certain amount of paralysis,” he said.
Even within the carriers’ traditional frameworks, “we screw up continuously on our business model,” Lewis said. He related a calculation that it would take 31.7 years for European carriers to recoup their 3G license costs even if every adult, child and dog used service 6 hours a day. That’s because, according to the financial markets, “if you were not part of the [spectrum bidding] process, you were not seen as part of the future.”
Huge debt at companies like FT also held them back, despite huge supplies of cash, Lewis said. “The company has become more and more at the beck and call of the financial markets. This is the problem we all feel… It’s not about the next 3-5 years. It’s about the next quarter.” That mentality stifles whatever innovation would have occurred, he said.
“Every time the carriers did something, the customers did something else,” Lewis said. He cited industry promotion of “WAP crap,” a technology he recalled providing interminable downloads of text to cellphones. Meanwhile, “what did our consumers do? They used SMS,” which no one in telecom had anticipated being a hit, Lewis said. Now companies such as Nokia, Vodafone and Orange proudly take credit for SMS revenue as if they had any idea it was coming, he said.
But technologists aren’t immune to market pressures, Lewis said. Most high-tech communications entrepreneurs are angling to get bought out by big players, not to change the world: “That’s monopoly capitalism.” The goal should be integrating voice into Web applications to meet social needs, Lewis said.
Despite the carriers’ drawbacks, “we might just win,” with outside technologists’ help, Lewis said. When FT does move, it can do so fast and effectively, he said. His company is the leading VoIP provider not only in France but also in the U.K., Lewis said. “We have the networks. We have the scale and we have the data… We have quality of service.” Customer support hardly exists in high tech, he said.
Lewis invited developer collaboration with FT: “It could be the beginning of a great relationship.” He said the carrier will offer open application programming interfaces for a personalization platform called Octane and a social-networking platform. A goal will be for a person’s communications to be handled according to the status in which they hold the people initiating them, Lewis said.