Sir Richard Branson is a very cool guy. He has a self-made $4 billion fortune, knighthood, a global business empire, and a private Caribbean island - and to top it off, he’s closing in on 60 with hair like I had in the ‘70s. I mean, this is one cool dude. Of all the things on his resume, I’m most impressed by the Lifetime Achievement Award from National Geographic Adventure. If something has never been done, Branson wants to be the first to do it, especially if it entails a good chance of getting killed. He owns ocean-crossing world records in both speedboats and balloons. His failed attempts resulted in plucks from the ocean by rescue helicopters five times. Even his failures are cool. Now Branson is busy launching Virgin Galactic, the first manned commercial spaceship. On the Virgin Galactic website, you can book a ticket for only $200,000. Sounds like fun, but I’m a little short this week - can someone give me a loan?
For all his cool, Sir Richard’s place in the mobile telecom world is rather modest. Virgin Mobile is one of his many business ventures and it has a nice niche serving the youth market of several countries, but the brand is best known for clever and racy advertising. Branson has sold off much of Virgin Mobile; for example, the US operation is now owned by Sprint-Nextel. When Global Telecoms Business published their Power 100 last year, Sir Richard did not make the list. He probably didn’t notice since he was busy with Formula One racing and turning the King of Morocco’s former estate into a culinary center.
Who else is cool? The guy with the most nominations for the GTB Power 100 list was Google CEO, Eric Schmidt. Four years ago Google and Apple were not even in the telecommunications business. Now they dominate the buzz. The two most talked about stories in the wireless industry in 2010 have been Apple’s iPad and Google’s Nexus One. The Nexus One was only available through Google’s e-commerce store, but last week that was shut down. Google’s attempt to change the way consumers purchase mobile phones now appears to be dead. Instead, customers buying Android phones will most likely purchase HTC or Motorola branded phones from a store operated by either a consumer electronics retailer or the mobile operator.
In the business of building and sustaining large numbers of mobile subscribers, being cool does not create a competitive advantage. ESPN, Disney, and MTV are cool brands too. Yet each of their branded mobile phones failed to catch on.
So what does this mean for uncool network operators? Nothing gives telecom executives the willies more than the phrase “dumb pipe.” The fear is that network operators will be left providing bandwidth at low commodity prices, incurring all the expense of building and operating the network infrastructure while cool companies (Apple, Google, Netflix, Facebook, and others) profit from the data traversing the network.
Proponents of the dumb pipe argument assume that if you’re not cool, you’re dumb. They fail to grasp the treasure trove that network operators have buried within their customer and network data. This includes things consumers expect a great mobile service to provide. Making sure service is always available, that problems get fixed and that bills are accurate may not be cool, but they are the essentials that keep customers paying that monthly bill year after year. Leveraging customer and network data may not be as exciting as joining Richard Branson on one of his adventures, but it will keep you ahead of the competition - and it offers many opportunities for telecoms who are intent on being more than just a dumb pipe.
