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Who Do You Trust?

Carol Wilson
3/28/2011

1:00 PM -- At last week's CTIA show, both AT&T Inc. (NYSE: T) CTO John Donovan and Telcordia Technologies Inc. VP-Strategy Grant Lenahan laid out a strategy for carriers to deliver highly advanced and personalized new services designed to delight consumers into paying more for their wireless services. (See CTIA 2011: AT&T's Donovan Backs Innovation Through Openness and Telcordia: Telecom Needs More Marketing Savvy.)

At the heart of both of their presentations was the notion that wireless carriers make much more intelligent use of information they already own -- about their customers and about their own networks.

This is hardly a new idea, but it raises an old concern: Are consumers willing to trust their service providers enough to allow them to use information tied to presence, demographics and interests to make services more interesting and timely?

Lenehan argues that,if service providers offer discounts or other deals in exchange for opting in to provide specific personal information and a guarantee that such information is only shared anonymously to augment service and never sold, consumers will take a chance.

I admit I remain a bit skeptical, jaded by past experience. A year ago, I changed service providers and discovered with my first bill that my new carrier had added an "e" to the end of my first name. That became an easy barometer of how often my information was misused and it was frequent. Among the most persistent of unsolicited sales pitches that arrived to Carole Wilson were those from competitors of my new service provider -- apparently in the zeal to make a buck on my new info, the service provider wasn't particularly discerning about its sales.

Lenehan may be on track in saying carriers will have to essentially "buy" the right to use customer info, but I think they will have even larger barriers to overcome. Large incumbents, in particular, are too closely associated with "Big Brother" oversight for many consumers, and that could be a greater challenge to overcome to new potential services than any challenges of technology or integration.

— Carol Wilson, Chief Editor, Events, Light Reading

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paolo.franzoi
paolo.franzoi
12/5/2012 | 5:09:23 PM
re: Who Do You Trust?


I am actually not talking about the privacy bit.  I am talking about the location based services bit.  Here is the issue from a consumer's standpoint - they already exist and those leading edge folks have already bought them.  So now a consultant (basically) is trying to talk carriers into developing services that the consumers already have bought.  By the time a carrier introduces a service, the app companies will be on their 3rd generation of solution.


This is what I mean when I type about the innovation problem at the carriers.  They just can't.  To expect them to is wrongheaded.  What carriers are good at is mass deployment of high take rate services.  These are all commodities but hey "It is what it is." 


You know what is very funny?  When AT&T broke up, everybody bet on the Long Distance side of the business.  That was where the margin was.  Then it was broadband.  Now its wireless.  Why not just admit you are a commodity and move on?  Investors I assume.  If you did admit it, you would never be able to invest in something like FiOS.


 


seven


 

WilliamofOccam
WilliamofOccam
12/5/2012 | 5:09:21 PM
re: Who Do You Trust?


I wonder if there is a law (federal or state) prohibiting operators from sharing costomer information without their consent. In the absence of such a law, it is hard for consumers to trust their providers. 

bollocks187
bollocks187
12/5/2012 | 5:09:21 PM
re: Who Do You Trust?


In this day and Age the answer is simply "nobody or computer"  is to be trusted.


Trust has no place in the Internet Age - Fact not Fiction


 

DCITDave
DCITDave
12/5/2012 | 5:09:20 PM
re: Who Do You Trust?


For AT&T, I'll believe only what I can see. They've done a great job offering consumers a reasonably competitive services bundle -- DSL, TV and mobile broadband (in U-verse areas).


What they haven't accomplished yet is a single sign-on customer service portal where all of those services can be managed at once. They've come close, but not close enough.


My point: brookseven is right. It is difficult to believe AT&T is capable of real innovation when a basic service like consumer billing completely confounds them. 


Last year, in fact, they sent me a $0.62 check when I switched from my AT&T landline to my AT&T U-verse account. The silos are alive and well.

paolo.franzoi
paolo.franzoi
12/5/2012 | 5:09:19 PM
re: Who Do You Trust?


I want to add that what I am saying is NOT intended as a slam against carriers.  They are big and slow because they have to be.  I recognize the Executive's need to improve margins.  The attractive way of doing this is offering incremental services, especially ones that folks pay top dollar for.


I think they all look back to the heady days of CLASS services and forget that all those features (and a whole lot more) were available on PBXes.  So could the carriers build a nice little online business that makes money? Yes, I think they could.  Most of them already provide e-mail hosting, e-mail filtering, AV downloads, and some web storage/website hosting for free.


The problem they have is that the web has switched from a paid model to an advertising model.  So, unless they plan on hosting popular sites it is losing out on this revenue.  This is where a CDN business that they host could make money (and no this is not entirely thought out).  Suppose they cache content and allow for local add insertion on their caching servers.  They can then sell the ad space and lower the bandwidth to popular sites (thus saving money for the content owner).  Heck they might even do the caching for free if they can get the local ad revenue.  Then we end up with a broadcast model for ads (some are local/some are network). 


seven


 

OldPOTS
OldPOTS
12/5/2012 | 5:09:18 PM
re: Who Do You Trust?


7s important statement - "The problem they have is that the web has switched from a paid model to an advertising model."


Therefore they need the trust of their subs as a utility provider to get support to stay viable and reduce churn.


OP


PS -I used to support carriers as value added services providers





jepovic
jepovic
12/5/2012 | 5:09:10 PM
re: Who Do You Trust?


// brook


Agree completely with you, but a key point is that most of the carriers, most of time, are quite profitable. In some cases very profitable. How many app companies are making money? Profitable commodities can pay dividends, downloads can't.


As regards to the privacy problem, I'm personally much more worried about Android and iPhone than about the carriers. The amount of personal information (including location) which is collected by Android is terrifying.


http://www.theonion.com/video/...

paolo.franzoi
paolo.franzoi
12/5/2012 | 5:09:09 PM
re: Who Do You Trust?


jepovic,


I agree with the profitable bit 100%.  One of the funny things is that all these carriers are crying poverty and the need to in essence up their price per bit.  Their investment model basically guarantees an ROI - they just argue about how long it takes to make money not IF it will make money.  That is why I have little sympathy for them on the whole Title 2 front.  I say make FTTH a Universal Service and mandate it be installed within 5 years.  They will cry poverty and yet make money off of it.


seven


 

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