Crystal Ball 2.0: Crazy ideas for 2010

What’s next for 2010?
More of the same, and then some. A structural shortage of top line and capital makes it imperative for all to clean house — as an infocom sector and as individual players. I offer you two new predictions, to make it a full Top 10 to complement the eight that are recapped above.

No. 9 is “Regression to the Mean” in industry returns: There will be roughly 20% less players in the industry by end of 2010. Ironically, this will still not be enough to materially move the “return on capital” needle. The M&A bankers for telecom and health care will have a field day — I clearly picked the wrong profession. Cost structures will need to be re-set; there will be much more M&A, especially as the capital markets thaw out and as international multiples make it easier to go cross-border.

Also, for no. 10, there will be a renewed “Back to Basics” in operations, now that the crisis is slowing and because there is a never-ending, quarter-by-quarter, drumbeat-by-drumbeat call for incremental profits — like Chinese water torture. Why do telcos and cablecos need 10 supply chains? Why do we have so many layers of design and selling — from handset design to portfolio range to fulfillment models to reverse logistics? Why can’t we measure and insist on first call resolution for all customer experience calls? Why are so many of our white-collar assets in legacy locations, with legacy skills. How can we re-train and redeploy in a more global service model? How can we make sense of all the real-time customer information on the Web, all the inbound (and personal broadcast) channels that make traditional CRM systems and approaches obsolete? CEOs and CFOs will continue to be on the hot seat, working the horizontal cost-down, effectiveness-up agenda with the business owners of quad play and the like.

We survived the last year pretty intact overall. I see a couple more years of continued housecleaning, but the end result will be higher industry productivity, truly convergent players and stronger stand-alone players. The future is getting less cloudy.