Text by Pyr Marcondes, Senior Partner at Pipeline Capital Tech.
I’ve been the bore in the boots disturbing the lives of telecom companies with articles (which I don’t suppose anyone in the business reads) that have always pointed – and will continue to point – to the fact that they ate – and continue to eat – a giant ball for not leading the way. revolution in the production and distribution of content, anabolized by the business model based on subscriptions, data, advertising and commerce. The game was theirs for over a decade. But they entered the field late. Now, they’re chasing the damage.
As much as they invested heavily in the heart of their business, which is undoubtedly capex intensive, pulling nets and wires and poles everywhere, they failed to create value for the industry as a whole. This among other ball foods more.
To give some technical support to what I find out of sheer observation and pettiness, I share with you an excellent McKinsey study on the subject.
In the opening, McKinsey says: “Despite the huge capital investments made by operators to keep up with the successive waves of new technologies over the past decade, their core business has become increasingly commoditized and growth has slowed. Instead, most of the value created in the industry has been captured by so-called edge players – those who make devices, develop apps, build infrastructure or provide streaming or other digital services.
The performance gap with the big streaming companies and digital services like Netflix, Amazon, Facebook and Apple is particularly wide, whether measured by revenue, earnings or market capitalization.”
The study also shows that, as I mentioned, the telcos have decided to move for some time now, although not with the desired success. And that the value is no longer, nor will it be, in its core, but in all the promising adjacencies to it. Again… content, data, advertising and commerce.
Well, so I don’t repeat myself here, read the McKinsey study, that you do better in life.