Lip service

The emergence of new carriers in the telecom industry still carries the mysterious aura of a business phenomenon. Industry observers, media and otherwise, have fallen into almost trancelike states in delivering the mantras of how emerging carriers will affect our long-standing industry.

One mantra is this: Traditional carriers are indecisive; traditional carriers with legacy networks are not breeding grounds for new technology; traditional carriers are too laden with costs to compete.

Another mantra is this: New carriers are decisive; new carriers are not addled with legacy and will innovate with new technologies; new carriers have debt but none of the voluminous operational costs of larger enterprises.

The emphasis of all this lip service is on something far less tangible than network technology. This may seem funny because nearly all this industry's past fortunes have swung on technology rather than the decisiveness and overall personality of organizations that deploy it.

Past examples clearly support this observation. For one, the wireless industry finally emerged as a viable group of organizations only after the validity and reliability of cellular technology could be proved consistently on a large network model. Internet service providers became viable organizations after the technology in PCs and modems became fast enough, cheap enough and reliable enough to ensure prolonged Internet access for consumers.

So why doesn't the success of new carriers have a technology trigger? Has everything finally been invented? And how have the new carriers seemed to separate themselves as a broad group, even though the "new carrier" label describes organizations that already exist such as wireless carriers, ISPs and local exchange carriers?

Certainly not everything has been invented yet. Networks will continue to evolve in a way that draws together every network technology that now exists. Future networks will have elements of wireless, Internet protocol, packet switching and even circuit switching. The market will demand this, so technology no longer will separate carriers. This may be a grandiose prediction, although some carriers still will focus strictly on offering local service, wireless service or Internet service.

However, organizations that offer all three already exist.

This means that differences in methods of network transport and access already are no longer as valuable as differentiating factors. Internet access was really the last technology that needed to cross into mainstream availability and acceptance, and that threshold was passed somewhere around 1995.

In light of this, carriers that emerged with industry deregulation, as well as carriers that emerged just before industry deregulation such as PCS carriers and some ISPs, are without a clear technology advantage. Without legacy networks, it may be easier for them to adopt new technologies, but any carrier could adopt these same technologies at the same pace if it really wanted to.

So the measure of competitiveness becomes not the ownership of a technological advantage but the ownership of a business/operational advantage. Carriers born after the last technology opened need to rely on their brains, guts, creativity and efficiency to survive. In a world with much competition and no serious technology bridges to build, you must think and act more quickly. You must be a different kind of company than has roamed this industry landscape before.

All the mantras you have heard about emerging new carriers are not lip service after all. New carriers will be a different breed because they will have to be. The intangibles will have to be very powerful for these organizations because, in most cases, they will be smaller organizations competing not only against like-sized companies, but also against a group of traditional carriers that seems only to grow.

Mergers such as the planned SBC/Ameritech deal indicate that traditional carriers are most interested in sheer strength. Just when these companies seem to cut enough jobs and drop enough lame technology ventures to look lean and mean, they end up merging into Goliaths. This could mean that these traditional companies do not see the ultimate value of being quick, light organizations.

Contrary to their tactics, however, the competitive weights of this industry will change fundamentally based on the free-thinking, free-moving nature of new carriers, and traditional carriers will have to see if they can keep their balance. In this world, it will not be what you have that counts, but how you use it.