Warily we roll along

The cover story of the current issue of Telephony explores telecom's long road to recovery by analyzing recent second-quarter earnings reports of some of the industry's largest service providers. The report, compiled by several members of Telephony's editorial team, notes that service providers are somewhat apprehensive about the whole concept of recovery and the pressure on them to continue adding customers and increasing revenues at the same clip they have for the past two quarters.

The subject of telecom industry recovery has been top of mind for me over the past two weeks (it never really goes much lower in my mind, truth be told), because it's the subject of a presentation I've made at the forums Telephony and Oracle are co-hosting in several cities. (The road show concludes tomorrow in New York, so if you're in the area, please join us.) I have to admit that all this talk about recovery has me a little wary as well. It's not that I don't believe telecom is in the midst of a recovery. (I do.) Rather, I'm concerned that even the mildest uptick in the telecom economy could potentially guide industry leaders astray and cloud companies' priorities.

The best thing the economic downturn did for telecom was to get the people who make strategic decisions in this industry thinking about what matters the most--namely, how to invest pragmatically and sensibly in new technologies and capabilities, how to make their companies and networks operate more efficiently, how to improve the quality of both their organizations and the services they sell, and what they need to do to satisfy the increasingly complex and often unpredictable demands of their customer bases. Those weren't always the highest priorities in the now-infamous "boom" years, when everything was done more hastily with an eye toward quick return--whether in the form of actual revenue or, more commonly, some sort of liquidity event.

I'm not saying the downturn was good, and I'm certainly not blaming the whole debacle on the fact that some companies lost sight of the importance of basic principles of quality, efficiency and customer service. But it didn't help, and if it taught people a thing or two, maybe some good came out of it after all.

My sense is that this industry moves much slower now in many ways, and that's not necessarily a bad thing. Prudence and pragmatism are important characteristics of a scarred sector. As telecom moves closer and closer to what can be confidently called a recovery, here's hoping the industry learned from what went wrong and will heed those lessons this time around.

E-mail me at jmeyers@primediabusiness.com