There is a fascinating article in the Forbes magazine this week – (the whole issue is great since it’s the Forbes richest people in the world issue – which I have always read/bought for many years now). It talks of Cincinnati Bell’s Jack Cassidy as the most honest man in Telecoms (honest in the sense of being candid and accepting what the customer wants aka the OpenGardens philosophy).
This brief article captures the essence and also the future of telecoms networks (that the network itself declines in value tending to free). But at the same time, new open mobile based business models will emerge based on services where the provider can create to gain critical mass and competitive advantage.
As I was reading it, I thought that we have to ask ourselves these two questions: Firstly, Is the future of telecoms local? I.e. can a company be profitable by defying the normal trends and ‘super serving’ a specific geography? (Note this is not the same as an MVNO which serves a customer segment and not necessarily geography). And secondly, can the experience of Cincinnati Bell be extended to Mobile data (at the moment, it applies mainly to voice and other services). If indeed, that were possible i.e. a Telecoms company can serve the local population by working closely with local communities and businesses, then it has a truly competitive advantage. An alliance of such networks would then be profitable. The difference being – the approach is ‘bottom up’ rather than ‘top down’
Worth thinking about as you read this article.
The three memorable quotes from this article in my view are as below
“We forecast where the bottom was in long distance, and we just got there first,” he says. To which I add .. Whoever gets mass market and serves the customer will have a unique competitive advantage ..
“If the customer likes it, then it doesn’t matter what it does to your economics–it’s going to happen,”
And the classic
Is the telecom industry facing the hard truths? “No,” laughs Cassidy. “You’ve got the wheels and the tires and the carriage–and you can’t figure out the customer doesn’t want the damn horse.”
Here is a full list of quotes I like .. And it’s really refreshing to see thinking .. May Jack’s tribe prevail .. Seek thoughts and comments. Full link to article below
1) In an industry dominated by nationwide giants, Cincy Bell still serves essentially the same geographic area it was granted in 1878, a circle with downtown Cincinnati at its center. But it serves that circle well. In its region Cincinnati Bell is the most popular provider of home phone, mobile and high-speed Internet services.
2) Unlike its peers, Cassidy’s Bell has come to believe that communication lines must be open. That means not locking customers into two-year cellular contracts. “Such a silly concept,” scoffs Cassidy. It means letting customers switch to new technologies, like Wi-Fi, that are likely to cost him money. “If the customer likes it, then it doesn’t matter what it does to your economics–it’s going to happen,” he (Jack) says. Cassidy’s philosophy: anticipate the inevitable, don’t fight it. In the late 1990s, when Cincinnati Bell got into the lucrative long-distance market, Cassidy set the price of a call at 10 cents a minute, roughly half the going rate but still enough to preserve a modest margin for Cincinnati Bell. Cassidy won an 80% market share in less than six months. It still has 70%. “We forecast where the bottom was in long distance, and we just got there first,” he says.
3) Sitting in his office overlooking the Cincinnati skyline, Jack Cassidy launches into a story about the biggest business cock-up in his hometown’s history. A century ago Cincinnati was home to the Midwest’s horse-drawn carriage industry, and its leaders were very loyal to buggy power. So loyal they let Detroit drive off with the auto industry. “I’m sure the last horse-drawn carriage made in Cincinnati was the finest ever built,” says Cassidy.
4) Is the telecom industry facing the hard truths? “No,” laughs Cassidy. “You’ve got the wheels and the tires and the carriage–and you can’t figure out the customer doesn’t want the damn horse.”
Seek thoughts and feedback .. This article is exactly what the OpenGardens blog is all about ..