From Carriage to Content - The future of telcos

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Carriers have long acknowledged that they need to bolt innovative and appealing content services onto their fixed and mobile communications services if they are going to weather the inevitable decline in access charges.

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Carriers have long acknowledged that they need to bolt innovative and appealing content services onto their fixed and mobile communications services if they are going to weather the inevitable decline in access charges.

Phase one of this acknowledgment was to throw a whole lot of stock reports, weather, horoscopes and sport at the problem and hope that would keep people happy.

Something called WAP (wireless access protocol) came to deliver these services and promptly died without anyone caring much. Many carriers seriously splashed on 3G spectrum without much idea of how to recoup their investment. Then along came MP3s, phones with cameras and video, MySpace and Youtube and suddenly the telco landscape looked nothing like it used to.

Analyst Bruce McCabe of S2Intelligence notes that while the promise of exciting content informs much of the marketing of carrier’s high speed services, it is something which they themselves are especially bad at.

“It’s like the very initial days of the dot com boom – there’s this naivety instead of being considered about what matters,” he says.

What’s ironic about all of this is that while carriers’ boardroom meetings centred on deciphering current consumer behaviour - and how to make them pay for it, the success of sites like MySpace, Youtube and even Ebay should have made it quite obvious that people are especially fond of watching, well, themselves.

“Youtube was never something that was going to be invented by big corporations,” says Australian Interactive Media Industry Association (AIMIA) chief executive John Butterworth.

“Carriers have been through the phase of wanting to be content providers and are now working with content aggregators.”

As Jennifer Wilson, managing director of Australian publishing veteran HWW, now owned by NineMSN, puts it: “The idea that content is a one way stream is dead.” Major portals like MSN, AOL and Yahoo! appear to have acknowledged this by moving away from charging for content, focussing instead on advertising revenues. Such changes are among many linked with the evolution of the so-called Web 2.0.

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