Telecom: Not Dead Yet

Mark Goldberg points out that a year ago The Economist ran a cover story on the death of telecom, in his words prematurely: "We have seen various signals that indicate a reincarnation," highlighting renewed capital spending by several carriers.

"It's more accurate to talk about 'energizing' the phone business, not killing it. Indeed, it isn't just the internet that is catalysing change, we see wireless technologies, computer processing, entertainment and societal behaviours also driving a renewal of investment and employment growth."

My sense is that telcos are beginning to react to the threats that are upon them, but the largest challenges arise from two simple questions which have nothing to do with technology or re-investment:

1. What should the telephone companies become?
2. What are the services and processes that should be abandoned as part of yesterday's business which is no longer valued by customers?

** Other views **
The Economist's full report

Former telecom exec Bob Ferchat has a Drucker-inspired essay on the subject from 2002 and still relevant: "Telecom is clearly not dead but the disarray is widespread... and learning to live with its radical makeover. It just looks and acts differently...The winners have not been declared, but clearly some of the traditional players are just as devastated and puzzled as we are individually."

The Technology Liberation Front lauded the Economist, but said the story was misleading in some ways.

Jupiter Research said the Ecomonist's view was a crock, and has some detailed reports for sale to back up its view.

Never too shy about announcing an industry's death, The Economist ran a similar cover story on newspapers last month.