Telepocalypse

Food for thought

An update to my earlier musings on the parallels between food retailing and telecom…

Walking around town yesterday, I note that the Co-Op is still going strong, despite a new Tesco Express micro-outlet opening nearby. The Co-Op is a very old organization, and is effectively owned by its customers. As a Co-Op customer, you get discount coupons (“dividends”) based on your spend there. Their profits are distributed through the (customer) dividend mechanism, as well as to a number of social good causes. Whilst they have traditionally been less agressive in their supply chain management and marketing than their publicly quoted peers, they are clearly holding there heads above water in the very competitive UK food retailing sector.

Sadly, the analog for telecom and issues such as municipally funded fibre isn’t as benificent as you might hope. Does the success of a user-owned supermarket bode well for user-owned telecom networks? It is easy for customers to switch supermarkets, and easier to open new ones compared to building new telecom access networks. The discipline of competition keeps the Co-Op honest. As a sole supplier, it could become a good-willed but lazy incumbent. No one customer is large enough to care about getting the management fired if they underperform or fail to innovate.

Another successful UK retail group, the John Lewis Partnership, is owned by its employees. Along with a department store chain, it runs a popular up-market supermarket chain called Waitrose. Let’s assume the Paradox of the Best Network is always true. (Incidentally, I believe that there are some get-outs by examining the assumptions and asterisked clauses.) That means there’s limited profit in running a telecom network. John Lewis makes money, but even if it just broke even, it could also be a template for a new type of telco. One that is employee-owned, and the ability to take home a half-decent salary is the only reward. If spectrum becomes free (in both senses), IP routers and 802.16/20 equipment are cheap, and back-haul inexpensive, then the capital costs are not prohibitive.

So who knows, perhaps the future of telecom looks more like a Marxist collective or hippie commune than a besuited corporate behemoth?