Five out-of-the-box telecom competitors

Category:
Web Apps and Content

Competitors:
Web portals like Google and Yahoo; upstarts like Facebook; niche players like Grand Central

Line of Attack:
The trick on the Web (similar to the over-the-top-video category) is that Internet content and application providers represent potential partners as much as competitors. The challenge is crafting the right relationships.

At the recent Web 2.0 Summit, AT&T CEO Randall Stephenson – who seemed very much the outsider at a conference dominated by discussion of Google, Microsoft and Facebook – told the Web-centric audience that “we all want the same thing here, but we’re kind of new and feeling our way around each other.”

On the one hand, Stephenson talked about partnering with Yahoo on its broadband portal. “Yahoo’s in the advertising business,” he said. “I don’t see us going and creating an elaborate advertising marketplace” on our own. In the same breath, he talked about competition from Web portal providers -- for instance, advertising supported 411 directory service alternatives. “We’d better get our advertising-supported models up fast,” he said in response to recent launches from Google and Microsoft.

One of the very real dangers, analysts note, is that Web portals and social network sites could begin to build in more communications-oriented services. Such portals already serve millions of e-mail and instant messaging users – delivering Web-driven call management or voice/video over IP calls is not a big leap. Social networks like Facebook and LinkedIn already own user address books (both personal and work) and are adding VoIP and other communications capabilities daily.

Best Defense:
The best defense on the Web is a good offense – especially partnerships in the areas of media, entertainment and publishing, said Graham Carey, director of industry solutions at Oracle. “Telcos know their consumer. Media, entertainment and publishing companies have the content, but they don’t know the consumer as an individual,” Carey said. “If you bring the two together there is excellent synergy. Telcos are excellent at delivering and charging for subscription services; that’s been their model. Add in some interesting content and charge a mixture of subscription and content-based pricing and you have it made.”

Interestingly enough, going deeper into content and home-based services will likely bring about a whole new group of competitors. “Once carriers move into more diverse revenue streams, they will increasingly come into competion with companies ranging from Brinks or ADT, to Google, NetFlix or even the Geek Squad and its bretheren,” said Matt Davis, director of consumer multi-play services at IDC. “But for the moment, they literally have nothing to lose in these areas.”

Everything to gain, nothing to lose. Now that’s the type of competition ay business can appreciate.