Towards a device-centric communication world

As Apple and Google get into the communication game, is the time up for traditional telecom operators?

Photo by Anshuman Poyrekar/Hindustan Times via Getty Images
Photo by Anshuman Poyrekar/Hindustan Times via Getty Images

Abhijit Roy

Over the last few months, I have had the privilege of getting an insight into the minds of some of the CEOs and CTOs of leading telecom operators. I was impressed and awed by the speed with which these operators are moving towards the new realities. They are maniacally focussed in enabling their business transformation to the next level – based on following three fundamental principles, I believe:

  • Digital First, Digital Subscription, Digital Transformation
  • Moving from monolithic business process and architecture towards open stack based virtualised environment; which is the foundation of Digital Transformation Platform
  • Rapidly embracing Agile-Dev and DevOps moving from 2 or 3 massive releases per year to multiple releases per month or even day, thereby improving time to market

I even heard one of the CTIO of a top Telecom Operator (if you still want to call them a Telecom Operator !!!) reflecting on the competitive landscape – ‘Our competitor is not any operator, not any more. Our competitor is Google.’

Truly speaking, there is a game-changing shift taking place in the telecommunication world and it is being ushered in not only by telecom companies, but also by technology giants like Google, Apple, Facebook, Amazon and Microsoft among others.  At the core of the strategies of all these companies is to be your single interface for all your connectivity requirements, moving the operator into the background.

On its iPads, Apple now lets you test various wireless services before settling on one. It has launched with it AT&T, Sprint, and T-Mobile in the US along with EE in the UK. That list has gradually expanded and now counts 8 carriers or MVNOs that offer service in more than 90 countries around the world. Each of Apple's current iPad models can be purchased with the Apple SIM preinstalled.

The concept of e-SIMs will not only be critical for IOT which is about devices’ communication with each other but will also be disruptive to the business operators as it increases possibilities of churn. The customer may be able to switch operators and offers (the prepaid client base, at least) more easily, and short-term promotion may trigger network switching. This means that churn between operators in a strong prepaid ecosystem will likely increase.

Microsoft appears to be moving in a similar direction. It has added a “Cellular Data” app to its Windows app store that “allows you to connect to a trusted nationwide mobile data network.” According to the app’s description, it requires a “Microsoft SIM.” But a Microsoft SIM would be another indication of the gradual power shift that’s remaking the world of wireless.

In the past, in order to use a cellular network in the US, you typically needed a SIM card from one of the major operators and a contract that locked you into that network for a good two years. Carriers would subsidise phone purchases in order to lock you in. But now, carriers like T-Mobile are offering access without extended contacts. More importantly, device makers like Apple and Google are building the hardware and software the world really wants—and they’re building those devices to free users from a single carrier.

Google is just a few steps closer to unifying the world’s wireless networks—and, in the process, providing your smartphone with a faster, more reliable, and less expensive signal. It recently struck a deal with 3, one of the largest cellular carriers in Europe, that will allow US based subscribers to use its experimental Project Fi wireless service when travelling in an additional 15 countries, bringing the total number of foreign countries where the service is available to more than 135. And at the same time, the company is removing the speed cap that previously limited the service overseas. Plus—and perhaps more importantly—it can move phones between disparate cellular networks, depending on which offers the best signal. And it does all this for a small, flat fee. All indications are that Google is building Project Fi as a viable communication business—and not just throwing money at the problem. And the carriers, thanks to consumer demand, can’t shun Apple or Google. They have no choice but to play along.

So who will win this race towards Digital Transformation – the traditional operators who are rapidly transforming their business model or the digitally native GAFAM (Google, Apple, Facebook, Amazon, Microsoft)? The race is definitely on.

Follow us on: Facebook, Twitter, Google News, Instagram 

Join our official telegram channel (@nationalherald) and stay updated with the latest headlines