Telco 2.0 Mashups - an alternative to IMS?

There’s a fascinating debate currently around how mobile and fixed operators should develop new revenue-generating services. The now traditional view centers around IMS and SIP. But some are now saying that instead operators will have to adapt to the Web 2.0 world, using the concept of "mashups" to quickly create new Web-based services. A recent report from Light Reading delves deep into this idea: Telco Web 2.0 Mashups: A New Blueprint for Service Creation.

Basically, the argument goes something like this:

Should mobile and fixed telcos:

1. Continue on their path of trying to become media and content companies or
2. Move toward a ‘network abstraction’ model where they back away from providing content directly and instead provide APIs which are valuable to 3rd parties (e.g. location API, identity API, micropayments…..).

To be successful at (1) you need economies of scale. You’ve got enormous burdens of content licensing, content management and delivery technology, market research costs, software development, etc. If you want to put this all in IMS, then you’ve got that burden as well. Then add to it the network-level table stakes – cell sites, FTTx, transmission and routing capacity. Only companies like Voda, Orange, ATT et al have a chance of making this model work. But this model clearly implies (in my mind at least) a mass market approach – again, economies of scale are critical. Anyway, telcos by nature are mass market beasts. Operators that don’t successfully insert themselves in the value chain, probably by wielding their sheer mass alone, will be disintermediated. They’ll be forcibly transformed into a utility as their data/internet-hungry customers churn away.

Model (2) requires a bit of enlightened self-interest. Operator realizes that they could not succeed at (1), but rather than be relegated to utility or pipe status they create a position in the value chain for themselves. What can an operator offer Google, MySpace and every dinky web developer out there? Info about the customer that only they have access to – location and identity pop into my head but there could be more. This model reaches the long tail as well and encourages web companies to come to the operator rather than the other way around which is how it is today. This space is wide open at this point in time.

My thoughts on the matter….. I think operators who use IMS to go head to head with web and media companies will lose. The only exception to this could be Voda, Orange, ATT and the like. Due to their sheer size they could entrench themselves in the value chain and refuse to budge. But model (2) is still a long way away. So, in the short/medium term operators should stick with what they are good at - mass market services. During this period they should continue to drive costs out of their businesses which will give them longevity. Also during this period they should work with web companies to develop the tools needed to make model (2) work. I don’t have an opinion on standards based vs proprietary at this point. A well-respected colleague of mine has a more stony view on the situation - he believes that this trend will accelerate telecom operators’ transformation into utilities – no matter how much they fancy themselves to be “content providers”.