Telepocalypse

Telecom training

Promise you won't tell? Really?

It's been quite nice being away from family duty on a business trip to Paris and London for two nights.

Ssssshh. It's just a secret between you and me, OK? I've always wanted to try out the Eurostar train from Paris to London, and it's certainly quick. Although someone needs to buy them a few sponges to clean the windows a bit.

Anyhow, I passed through London's Kings Cross station today on my way back up to Edinburgh. Here's a few vignettes from around the station I'd like to share with you.

Firstly, here's the automated ticket machines and an economics lesson for telcos.

Now, I've got an APEX ticket that only is valid on this 2pm service from London, and I collected my ticket from one of these machines. But I got to the station at 1pm, and there was a 1.30pm departure I could in principle have taken. The train operator, GNER, missed a chance at an up-sell here; they could have offered me (for a price) to go on the earlier service. There's always a price at which they won't undermine the price-discriminating effect of the original APEX ticket. It's free money! Likewise, they could try to do impulse up-sell to first class. This train is also one of the older 125mph diesel ones, as it carries on from Edinburgh to Aberdeen. The earlier (all-electric) service probably had Wi-Fi on board, so they've also missed an opportunity to see me connectivity.

I've been putting in my client reports some examples of how telcos fail to manage up-sell, cross-sell and impulse buys. For instance:

• You can normally call someone back from an SMS by just pressing the green call button; so why not at the bottom of each SMS draw a horizonal bar, and then say "To call Bob back press [green button icon]"?
• The phone and network knows who I SMS and MMS the most. Where's the one-click impulse "Send this message to Jane's mobile" menu option? Amazon don't own a patent on all impulse buying, you know!

Next up, here's a fuzzy O2 advert up above the entrance to the newsagents:

And the message, in close-up:

This is an iMode promo with a a picture of a field and the slogan "bid on eBay from here". Now, I'm sure there were some good expensed lunches for the biz dev teams, but this model is ye olde school "Look mama! I've got a link on their portal!". Will you be able to register your mobile number on eBay and have a seamless federated identity experience? Probably not. And even if you can, it's not enough. Because eBay is only one of many, many services with which you probably want to interact. If the mobile industry is going to have a future doing anything apart from bit pipes, it can't be this. Other people are better at portals, and can integrate more media properties together and scale their partnerships better. But if O2 offered a more open platform with a bunch of APIs, and don't put up hurdles, then there's a real chance that the public will find lots of services that have their mobile number automagically become easier to use on O2. And not just the few that they do deals with. Gatekeepers, burn your gates!

Next is this snippet from another illuminated advert.

The track infrastructure in the UK is operated by a nationalised body, Network Rail. (There was a literally catastrophic period when it was privatised; another telco infrastructure funding lesson for another day.) The trains are operated by various private companies. In some places, there's competition on parts of routes where the franchises of multiple train operators overlap. (The original rail infrastructure in the 19th century had multiple vertically integrated operators competing with different routes to the north and west!)

This ad is telling commuters from distant Peterborough that by putting up with the slower stopping service that regional operator WAGN offers, they can save £1000 a year (about US$1750) over the long-distance GNER service.

Competition works.

This brings me back to my old bug bear of network neutrality. This tries to get the outputs of competition without the inputs on, um, multiple competing services. Unsurprisingly, it's a dud. Suppose you pass such a law, and outlaw all "packet discrimination". You enforce it. Success? No banana, babe.

Say I'm a small business customer, and I don't care too much about how fast my connection is. I even don't care too much if I have to pay a bit more to get a "VoIP-compatible" jitter-free unblocked connection. But I really care if the service goes down for more than a few hours. A domestic DSL contract promises a fix to a service outage within a "reasonable" period, where "reasonable" is defined by the telco. They offer a "business-class" service that is functionally identical at five times the price with a sensible SLA. I'm not happy, but I have no choice. Network neutrality merely entrenched the single-supplier structure, delivered benefits I cared little about, and didn't give me the outcome I wanted.

There are many facets to a connectivity service, and different people place varing values on each of those facets. Picking one of them, application price discrimination, and artificially mandating an outcome in that one facet, is a pale shadow of what competition or alternative network ownership structures might deliver. "Positive discrimination" policies have been a spectacular failure for people; why should we think they'll align behaviour and incentives for technology any better?

PS - This train has a super-cool feature. Look!

Someone at GNER understands they're in intermodal competition with the planes, and the plane folk don't get it. Push home your advantage, whatever it is!

Posted by Martin Geddes at 8:06 PM

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