I have an idea for some large telecom companies. In my opinion the scope communication in our life is much more than talking or SMSing. Currently most of the companies are acting like landlords. They give you three services. Voice, Sms and Data. Voice and SMS rates are dirt cheap because of ugly competition and Data rates are unaffordable. The kind of infrastructure that these companies have built is huge and in my opinion can be used for much more.
Let me explain my idea. Most of the people use internet for email, casual surfing and social networking. They also use internet without it’s explicit knowledge through various apps such as FourSquare and Flipboard. The telecom operator merely has a link that connects consumer and this service provider. While Gmail might be free for you, you end up paying around Rs 2 to this telecom operator each time you check your emails. While Google can afford to give you a great service like email for free, the telecom operator is charging exorbitant amount of money just to provide you the link. It is like getting an apartment for free but you have to pay for using the elevator that takes you there.
Because of these high costs of the link, there is serious limitations on what consumers can use and what service providers can provide. My internet usage is around 6 GB per day. which is around 180GB per month. By the prevailing 3G rates I will end up paying Rs 90,000 per month if I have to rely on 3G. It hurts my productivity deeply and I dont use 3G at all and the company is losing a customer. I think to be successful the telecom company must understand that the service they are providing is priced way above the value it is adding to our life. To balance things it should do two important things.
1. Reduce the price by restructuring the revenue streams.
2. Think of adding more value than just providing a link.
My grand plan for a hypothetical company is like this.
The company first sets up a huge data center in India. This will provide cloud based services just like Rackspace/Amazon. In fact the telecom company may tie up with one of these to build this cloud.
The company declares that any data usage accessed through this data center will be absolutely free for the consumer. This is viable because there is no international bandwidth used hence the cost incurred by the telecom company is much lower. So a company like BookMyShow.com sets up their server in this cloud and starts providing this service for free. BookMyShow.com may use international bandwidth for various things and it will pay this charges to the telecom company. Telecom company can add a great amount of value here. For example Telecom company knows your phone balance hence it can let the consumer buy a phone ticket by using his phone balance it self. Telecom company can charge 1-2% of the total transaction value hence each time BookMyShow.com makes money, telecom company makes money too.
Telecom company can actually start giving almost all their services as APIs to third party developers. For example, let third party developers upload funny ringtones and caller tunes and each time it gets purchased both the developer as well as the telecom company makes money. Telecom company doesn’t have to create content it can rely on the huge population of creative people out there. On long term even the whole customer service thing can be outsourced like that. For example , currently when you want to activate certain plan on your connection you have to call up some customer service agent. With this new framework you have to only visit a website and click a button.
Real winners will be the video streaming websites. Currently this space is dominated by Google’s YouTube. With the localized data centers almost all Indian T.V. channels will start hosting their content for free on Telecom Company’s cloud infrastructure. They will put video advertisements in their programs and it’s revenue will be shared with the telecom company. Since the data usage is free users will not hesitate to watch as many videos as they want.
Most telecom companies also own wire-line broadband. Using this they can setup wifi hubs at all major public places such as restaurants, railway stations, hotels and so on and provide he exact same service via much faster and free wifi.
With the current model, there is a great limit to the earnings of a telecom company especially when the prices are high. With this new model, the telecom company becomes a little more than just a link provider and owns a stake in what is transferred over the link as well. Thus as companies across the country come with innovative products telecom company will earn a share no matter what. Large companies like Facebook and Google will never host anything on telecom company’s infrastructure but appropriate models may be provided where telecom company manages to extract some money from these large companies.
It is unlikely that any of these telecom companies will ever do these kind of things. I hope one of the Indian telecom companies get acquired by Google or Apple.