The main issue regarding the communications industry of 2040 is who will own the tin cans and string, and who will benefit from it. I started working in the telecom industry in 1994, and firmly believed that everything would change rapidly. But I didn’t know then that the telecom mindset is dominated by its engineering legacy and rampant technophilia.
In the mid to late ‘90s, when I first started talking to telecom operators about social networking and OTT operations (those terms weren’t in use at the time), it seemed the operators would dominate this sector.
But the network operators made a simple - but justifiable - mistake in the early days of the Internet. The desire for dial-up revenues led telcos to offer a revenue share to ISPs and charge directly for access. The ISPs quickly realized that they could give away their core value proposition - content - and make money from the revenue share. Hence the idea of the ‘free’ Internet was born. The OTT players have maintained this myth by recognizing and exploiting the value of eyeballs (and attention data), and making their money from third parties, not customers.
How different would the world look today if telcos had chosen another strategy? But they wouldn’t have, because at the time they were obsessed with the “who owns the customer” question.
Call for change
Now the shape of the industry itself needs to change. Structural separation is rapidly becoming a done deal, as for some time now business and regulatory drivers have aligned.
There will be a key role for a number of “bit-pipe plus” multi-channel aggregated infrastructure owners, supporting the needs of a plethora of service providers, enterprises and community-of-interest customer groups. At the same time, the “communications industry” itself will soon no longer exist solely as an independent vertical, but will primarily be a (commoditized?) layer in every other industry vertical.
A number of the “network-up” vendors have already identified this trend, and are preparing for it - why wouldn’t they, as it opens up a whole new customer base for them?
Looking forwards, we need to understand how generations Y & Z see the world. Ubiquitous access to the Internet, apps, and social media is changing everything. The most critical aspect in determining what will drive the market for content and communications in the future is the evolution of our emotional relationship with physical and virtual objects.
There are indications of a backlash against “virtual everything”. For example, four of my son’s former au pairs (independently of one another) now swap hand-written letters with their close friends. They’ve found a need to establish physicality in their emotionally cherished possessions. For them, social media is ephemeral and disposable, and doesn’t properly satisfy their human need for the triggering of potent personal memories.
There is a tipping point for communications technology in our social evolution: when “Generation App” start raising their own children. Ownership and inheritance issues for virtual content will change in significance, and the current situation - fragmented, proprietary and uncertain - will no longer be acceptable to them.
So will we have the dream of the “total digital lifestyle” in 2040? I doubt it - not because we can’t deliver it, but because we might not want it.