There are no winners if we treat telcos like utilities

Two weeks ago, I was one of 60,000 people who attended the Mobile World Congress in Barcelona, the largest annual trade show dedicated primarily to the Telecom industry. It was an inspiring four days that showcased technological opportunities ranging from 5G to the Internet of Everything, to advancements in FinTech. These are connectivity technologies that are already having incredible impacts on industries including healthcare, education, transportation, and farming. 

But I worry that the continued progress and resulting benefits of these technologies could be limited by the way the telco sector is treated. By this, I refer to the recurring likening of Telecom and Utility services, and the great risk that comes with treating the former like the latter.

It is undeniable that both sectors provide an essential public service, and the criticality of telcos has been particularly clear during the pandemic. It is also clear that both services require a huge amount of infrastructure investment and carry a large debt load as a result. And just like a crucial utility like water, which can become polluted and dangerous if mismanaged, so too can our networks become corrupted without the proper security protocols.

But unlike utilities, the telco sector is in a constant state of progress and this must continue if we are going to continue benefitting from its game-changing innovation. This is not to belittle utilities – the delivery of water plays the most crucial role in human society – but to point out differences in characteristics and function. Water hydrates our bodies and keeps us alive; we cook with it and use it to keep ourselves clean. On the other hand, the role of Telecom services is anything but static – the level of innovation and impact these services have is constantly picking up pace, and continuously changing society and improving people’s lives.

To this point, the role played by Telecom services in human society has become nearly unrecognisable since its inception just a few decades ago. From its birth in 1983, the communication protocol TCP/IP has stayed the same, but its applications have gone beyond what anyone at the time would have imagined. In its infancy, the internet was just a static network designed to move across a few bytes of information between two terminals. In its adolescence, we saw static web pages and the first applications such as e-mail become mainstream. Then we saw the advent of social media, crowd-based communications tools, and interactive web pages. The internet is no longer a place to simply exchange information; it is a sophisticated multidisciplinary tool that enables individuals and businesses to create content, communicate with people on the other side of the world instantly, and even escape reality (how else do we think the Metaverse will come to life?).

With this evolution in mind, and with the prospect of even bigger step-changes to come, the shortcomings of utilities-telco equivalencies become even more obvious. Everyone uses water for mostly the same reasons – to drink, to keep clean, to cook. But the uses of Telecom services evolve to better meet individual needs every day – for the student at university it is about access to information and research, for the single mother in Africa it is about knowing that she can send her daughter money to keep her in school, for the farmer it is about knowing how much fertilizer to use on their crops, for the concerned son is about knowing his Dad that is showing signs of dementia is safe, for one of my colleagues it is about being able to play computer games for hours (still wondering when she gets any work done). For me it is about being able to call my kids every night and tell them I love them.

Telecom services are about growth and evolution, sharing new ideas and creating applications that we could not even imagine a few years before. They are the very essence of human connectedness and they are constantly changing lives and societies in ways that no utility service has ever done.  

Even if both utilities and telco provide crucial services, investors, governments and regulators should avoid the temptation to treat both as similar. Doing so will subject telco to the onslaught of increased regulation, decreasing profitability, and resulting commoditization and lack of investment that has long faced the utilities sector. And if that happens, then how will all the amazing advances and potential on display in Barcelona last week be realised and scaled up in future years?

I’m excited about the future of this sector and the amazing advances that it can bring. But let’s make sure that we maximise the potential of this sector – crucial to that will be ensuring that it’s not treated like a static utility but instead like the innovative and vibrant force for good that we need it to be.