Heavy Reading Research

Are Telcos Adapting to the Collaborative Economy?

The collaborative economy is a growing movement in which consumers have decided to share and rent rather than own things. A number of factors are influencing this increasing trend, including recession, the growth of community and trust through social networks, and the overall consumer attitude shift by millennials.

This consumer shift is keeping all verticals on their toes, from retail to automotive, hotels and beyond. A prime example is Zipcar, a shared car service that was eventually acquired by Enterprise. Airbnb is now used by 40,000 people a day in 30 cities as an alternative to hotels. And the startup Cookening even allows people to cook for each other, instead of eating at a restaurant.

To survive in this collaborative economy, large corporations will have to adapt their brand to accommodate this paradigm shift in consumerism, and this does not exclude the telecom industry. As more and more subscribers cut the cable cord for their Roku box, is the industry doing enough to prevent churn? Operators are giving their customers more self-service options (such as allowing them to set their own parameters), but is this enough consumer collaboration to keep subscribers loyal?

As big hotel chains are trying to adapt and work with Airbnb, telcos should be doing the same. I know it is always a topic of discussion, but working with over-the-top players and even the right startups will be crucial. For example, as ONF and ETSI are still trying to hammer out issues with SDN and NFV, Facebook and Amazon are quickly hiring SDN talent behind the scenes.

There are already conferences being held on the collaborative economy and the sustainability of big corporations in these changing times. Hopefully, telcos will be asked to speak as keynotes very soon.

— Sarah Wallace, Analyst, Heavy Reading

MordyK 10/25/2013 | 8:19:43 PM
Re: Trust and security Its more than just adapting, its changing an entire corporate mindset. Carrier's face a choice of either being a simple utility which is a profitable business model, or they can become platforms of innovation.

To date I've heard alot of talk about innovation but seen very little of it expressed in the moves made by carriers.

They do go into some digital stuff, but in those cases they dont really bring anything unique to the table. However a true mindset shift can allow carriers to focus on things in which they bring a unique set of assets and capabilities to the table, and only then will they succeed IMHO.
SarahW 10/25/2013 | 7:31:25 PM
Re: Trust and security My prediction is that if traditional operartors do not adapt to the collaborative consumer shift, then something very distruptive is going to come along (possibly any day now) and shake things up very quickly and instead of adapting they will be scrambling...
MordyK 10/25/2013 | 7:28:10 PM
Re: Trust and security Sarah,

In today's environment not being ahead is being behind. 

If you look at it from a US carrier's perspective they're doing fairly well providing the service that theyve been established to provide, so in that sense they're exactly where they should be. In terms of missing out on a massive opportunity which can be both extremely rewarding and engender real customer loyalty, then my answer is a resounding yes! 
SarahW 10/25/2013 | 7:23:32 PM
Re: Trust and security So MordyK, do you feel that the telco industry is behind compared to other veritcals who are trying to adapt to the collaborative economy?
MordyK 10/25/2013 | 7:17:37 PM
Re: Trust and security You both make good points about the "trusting" relationship between customer's and telco's.

If telco's want to to really gain the trust, they need to create services that create loyalty.

This "collaborative economy" is a perfect example: Imagine if the mobile carriers used their real time awareness of all their subscriber devices are, and empower applications that utilize that information. 

An example use case wold be that while my neighbor is shopping at Wholefoods I go online and order something to deliver, at which point my neighbor is promoted as to whether they are willing to deliver it.

This is a sharing economy in which instead of replacing one driver with another, you are effectively dynamically car-pooling.

Gives a whole new meaning to "going green".
sarahwallace 10/25/2013 | 9:54:08 AM
Re: Trust and security I might argue that from a consumer standpoint that telcos are more tolerated versus trusted. I plan to do more blog posts citing how operators, manufacturers and vendors are or are not adapting to this consumer shift.
[email protected] 10/25/2013 | 6:52:18 AM
Trust and security Telcos can certainly play a role here because what consumers want is to be confident that their security (personal or digital) will not be compromised and that the third parties through which they are dealing are trustworthy.

Telcos are known and, by and large, trusted brands. Now they need to do tow things:

- get to grips with security, interms of how they can secure apps and services in a virtaulized world

- let go of the legacy midset that they can do everything themselves and that they can control processes end to end, because they can't.

And, as many operator execs are starting to realize, if they don't embrace the new way of the world, somsone wekse will and put them out of business. 

SarahW 10/24/2013 | 11:23:30 AM
Re: Sharing in telecom Thanks Sarah.

Very good point about the handsets. Will be interesting to see how things play out over the next 12 to 18 months.
Sarah Thomas 10/24/2013 | 11:01:41 AM
Sharing in telecom Great article about how this sharing trend might bleed into telecom, Sarah. I think it already is -- just this week Fon launched in the US with its WiFi-sharing model. OTT partnerships are a good example of how operators can get more collaborative. I also wonder if consumers predilication to leasing and sharing over owning wlil affect how these smartphone plans shape up. We'll see if they like the model of paying to own handsets outright versus essentially leasing them from the operator.
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