It is time to think beyond telcos

Telcos have been impossible to work with, it is time to think beyond them.

3GPP is starting to define 6G this week. 5G has been a lot of things but a financial success it has not been. 6G is promising to be keeping up with the tradition. Telco’s 5G debt is starting to become too much for many and they now urgently are selling the crown Jewels, e.g. Vodafone sold Spain and Italy.

To be truthful, collaborating with telcos for a small company has been almost impossible. Most of the telecom executives were “too busy”. Their structures, too bloated. Their procurement processes, too greedy. Each couple of years there would be a reorganisation to keep the executives from focusing on launching innovative revenue-generating products that solved real customer problems. They only focused on launching me-too products, e.g. cloud, telco APIs, mobile app stores,…

Some months ago, I was foolish enough to try again. At LEAP I met with what on paper should have been an innovative telco. I proposed to them a solution that would solve their revenue problems. The gist is to open source a new type of fibre modem that would combine a fibre modem with a software defined radio so each modem is also a WiFi point, 5G base station and wireless IoT hub. By translating the design to Chinese, Vietnamese, Hindi, German, Spanish,… you could allow many device manufacturers to bring the price down. This telco would control the core repository of apps for the device and sell the concept to other telcos. Each telco could run their own branded Modem App Store and would handle payment. In exchange they pay a small revenue to this telco. By allowing third-party telcos to pay to put 5G apps on the modem, the device would become a neutral host. This meant that by putting the device in offices, shops and houses, the 5G network of many telcos could be more cheaply deployed. No house, office or shop would ever have to go without 5G coverage. Customers could pay for network apps, e.g. parents pay a small fee to be able to turn on/off with one button Minecraft, TikTok, YouTube Shorts, Fortnite, Roblox,… not Google Classrooms or Wikipedia. Real parental control :-) The IoT hub would allow the device to speak BLE, Zigbee, LoRa, NB-IoT, Matter, Thread, … So through apps you could have two IoT devices from different manufacturers using different technologies talk to one another. A Wi-Fi smoke alarm, a Zigbee escape of water sensor, a BLE movement sensor,… can be combined to build smart homes on a budget. The Internet of Cheap Things which does away with the $99 IoT device which is just a $5 device with a $0.5 Bluetooth or Zigbee transmitter. No collection of IKEA, Philips Hue, Xiaomi,… IoT hubs necessary.

The executive was responsible for exactly this part of the business. He loved the idea. He promised he would sign a letter of intent the week later. He also said he would not act like other telcos and move quickly. Through a post on LinkedIn even the CEO expressed privately interest in knowing more. What happened? The executive went on holiday for a month. Over that time he sent a couple of messages that he is still super interested and then went quiet. Same for the CEO. Even publicly pointing out that their business urgently needs revenue sources had no effect. 

So after decades of trying, I am giving up to help telcos to get to revenues beyond 5G. It is just not worth it. 

More importantly you should do the same. If you are a supplier of telecom hardware or software, you should think really hard about your future. CFOs have been promoted to Telco CEOs now. That only means one thing and one thing only: they are going to lower their costs because they seem to have given up on increasing revenues. In a market where money will dry up, you can only shrink. Unless you are a crisis manager that needs to find ways to sell more Crown Jewels, or an investment banker that needs to sell another telco bond to cover debt.

So what can you do? Think about the core competences you have, not the telco skills. If you are into hardware, which types of devices can be getting software defined radios, e.g. televisions, industrial machinery,… If you are into software, explore what new revenue generating solutions can be made that do not require a telco, e.g. television manufacturers might want to become IoT hubs, industrial machinery might want to use specific radio protocols to solve industry specific problems [make private 5G irrelevant before it is even a thing],… Try to be the Fujifilm who sees analogue photography disappearing and understands its skills are not digital cameras but chemical processing and expands in that area. Stop acting like Kodak! 

If you need help, always happy to have a chat.