I’d like to draw your attention to this article penned (or syndicated) by our most esteemed and noble friends at The Register. It relays Gartner’s suggestion that employers should pay for employee hotspot access to extend the productive working day to commuting time (presumably by bus or train).
It raises the interesting possibility that public transport becomes a loss leader to attract a captive audience to whom you can market service. The most basic service is connectivity, but context-relevant transactional services as well as advertising can be imagined. What if there was free WiFi on the train to work, but every tenth web page was an advert? Would you use it? What’s the attention of eight carriages of highly-paid London commuters worth? Is there even a business in connecting the people in the carriages to each other? Why does business have to wait until you get to the office? Why do fast multiplayer games have to wait for you to unfold your laptop at your desk? The train service itself faces a much stiffer competitive situation (from bus, road, telecommuting and simply moving house/jobs) than the services provided on that train.
As Michel Porter suggested in his Strategy Pure & Simple books, telecom is at heart a distribution business. Since we have yet to reach the technology nirvana of inexhaustible universal connectivity, there is a reasonably gap into which you can pitch your business model. Examples like Truckstop.net, which address the road freight vertical market, may well point towards a brighter near future for connectivity providers.
The trick is to bundle the right connectivity and service offering to the right people. This niche/vertical-driven approach goes against the grain of the PSTN and data services like T1 lines: a broad-brush one-size-fits-all approach with a generic retail and sales force. It challenges telcos to turn themselves into business platforms on top of which other people can build end-user businesses. A business platform is more than an application platform. It also opens up things like access to the forward and reverse logistics chains that supply retail stores. (Reverse logistics is the discipline of taking things like broken handsets from the field and returning them to central location.)
Becoming a virtual network operator needs to become easy. The endless months of negotiation, business development extravaganza dinners and reams of lawyers need to be streamlined away.
Incidentally, and completely off topic, the Truckstop.net example highlights another paradox of the high-speed cellular data industry. By providing a wireless WAN connection, you by definition cover a huge geographic area, and have a large potential market. But at the same time, with today’s technology you’re forced into a pretty uniform pricing policy. You have to price somewhere that’s attractive to the marginal, lowest common denominator user. You can’t easily price discriminate between different uage sub-markets and geographies. On the other hand, a network sewn together from smaller pools of wireless connectivity, but tailored to a specific need, enables precision matching pricing to value received. Thus the “best” network may not be the biggest, fastest or cheapest. Just the right one for the job.
Posted by Martin Geddes at 02:52 PMTrackBack URL for this entry:
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