Telco 2.0 : The End to a Culture of Scarcity

In the beginning we had "Business 2.0", the trade magazine launched at the height of the dotcom boom and surprisingly managed to survive the dotcom ice age. Then evolved "Web 2.0" with a more nimble business plan and a more interactive and social bent. This was soon followed by a seminal Powerpoint presentation titled "Identity 2.0". Most likely to be eternally remembered for its innovative form rather than its content. As the Web 2.0 began breeding like rabbits, the ecology required consolidation in the form of "Office 2.0".

Meanwhile the telco companies, the primary conduit of all things two-dot-oh, were aghast to find themselves unable to participate in the evolution. Feeling like dinosaurs in a domain that they believed to be lord and master over, they decided to take it back in a way they knew best. They went to Congress. As the lobby arms race raged in congress and lined the pockets of our elected representives, in the background a few bold fellows introduced a more sustainable path dubbed "Telco 2.0".

“Telco 2.0” defines any business model where connectivity is supported by a sustainable economic model. This means the end of artificial cross-subsidies between services and connectivity. We assume an all-IP world where choice of applications, devices and platforms is entirely driven by user preference. Connectivity charges will increasingly reflect actual costs of delivery (unlike, say, mobile roaming charges); relatively trivial services like standard voice call routing are effectively free; and thus the scope for the latter subsidising the former ceases to exist Customers will only take your replacement offering because they want it, not because they have no choice.

In essence, if one wants innovation one needs to abandon a Culture of Scarcity. The Culture of Scarcity in its rawest form can be found in less developed countries were there exits a state of continous struggle for limited resources. This exhibits itself in chaotic traffic behavior, where motorists refuse to give way and make every attempt to move forward at the expense of the group as a whole. It gives rise of a class system that maintains its status quo by "success through patronage" and the "disdain for labor".

The culture stands in stark contrast with Cultures of Abundance exhibited in many developed countries. This is where citizenry is expected, and order is achieved when motorists recognize that to achieve progress, giving way is benefical as a whole. Where there exists a Meritorious society, where all labor is given the respect it deserves and the laws are defined to ensure a level and fair playing field.

The conundrum however is that economics exists primarily because of scarcity. It's the age old question that confounded many during the dotcom boom. If access to all websites are essentially free, how then can one make money? The key to this conundrum is that a condition of unlimited resources gives rise to a scarity. In the web, that scarcity is a scarcity of attention. That attention is distributed in an endless long tail, and to be able to mine that long tail one needs a scalable and sustainable approach.

A Fast Company article writes on "Attention Scarcity and its Effect on Marketing", reflects the need for an alternative approach.

... marketing was formerly based on the three I's -- Intercept, isolate, inhibit -- and instead it should be based on the three A's: attract, assist (develop understanding of context both pre and post purchase); affiliate (mobilize people to help deliver value)

Telco 2.0 also describes an approach that requires a change in culture and mindset:

• An assumption of abundance, rather than rationed scarcity.
• A preference for openness, rather than hoarding of assets and information.
• A change for most from a network-centric view in favour of focusing on customer data, billing, relationship, distribution and partnership assets.
• A desire to connect people above the promotion and consumption of media content or information services.
• A willingness to learn from, and interact with, the broader world of Internet players.
• Agility and innovation in core messaging and voice products, in contrast to today’s stasis.
• Getting away from the fear of “dumb pipes”. Utility businesses can be very profitable given the right cost base, and funding/pricing approach.

Ironically, the strategies to survive in a world of abundance mirrors the strategies of Lean Development, as Chris Anderson observes:

In traditional business, small customers are all too often a barely-tolerated distraction on the road to getting big customers. They can cost as much to serve as their richer counterparts but generate less revenue. But digital businesses can be efficient enough to serve people who generate no revenue at all. Even if only a tiny fraction of them convert into paying customers, a small percentage of a very large number can still be a big number.

The conclusion is simple, "In a world of abundance, you need to be lean to be successful". It's definite "counter intuitive", but it certainly is true.