COMPTEL PLUS: CLECs = Shark Bait?

Nothing ever stands still and especially in telecom, and especially in competitive telecom, and I think the trends competitors need to think about are shifting again as we speak, just in time for another COMPTEL PLUS Convention & Expo, which kicks off this week in the Lone Star State. The problem is that those trends are setting up telcos to be in a powerful position to quash competitors.

Dallas will find itself host to a referendum on VoIP and mobility, if I had to guess. The sheer complexity of the marketplace and the technology that’s enabling new business models is making for shark-infested waters for anyone who’s not a big incumbent. It’s time to identify real, differentiating competitive models – or risk becoming chum.

Consider that by 2012 there will be 62 million VoIP subscribers in the United States, according to In-Stat. In fact, over the next five years, more than 51 million PSTN lines will be eliminated. By 2014, VoIP subscribers are expected to exceed PSTN subscribers

“The eventual migration from PSTN voice services to VoIP-based services is an irreversible trend,” said Keith Nissen, an analyst at In-Stat, in his report on the subject. “The days of voice services tied to physical cables are over.”

That would seem to be good news for traditional competitors, new market entrants, cloud-based operators (paging Google), virtual service providers (paging Skype) and wholesalers supporting any of these segments. But of course, there’s a catch:

“As voice services become integrated and bundled with other wireless, broadband and video services, cable and telco VoIP operators will gain a market advantage over virtual VoIP service providers,” said Nissen. Well, thanks for bursting our bubble there, Keith.

The problem is that telcos and cablecos can do it all: voice, data, video and in many cases wireless, for residential and businesses alike. That’s not something a lot of competitive segments can say, except for some of the more traditional facilities-based CLECs and Clearwire, but it’s about more than offering a quad-play. Fixed-mobile convergence services (T-Mobile is bringing its dual-mode Wi-Fi-cellular offering to businesses, for instance), faster wireless broadband, a continued blurring of the line between home and business, the ability to bring on exclusive devices like netbooks (so far, AT&T is the only one trying out that model) and productivity-enhancing smartphones, plus the ability to leverage unified communications and collaboration approaches – like what Microsoft is doing with Vodafone plc – all of these are burgeoning needs in the marketplace that incumbents will surely leverage to smack down competitors.

Furthermore: “Mobile telephony and fixed-line VoIP services are becoming integrated into a single voice service,” Nissen said. “Consumers will benefit from having a single calling plan, a unified voice mailbox, and a network-based address book that is accessible from either mobile or fixed-line handsets. The convergence of mobile and fixed-line voice services will position companies, such as T-Mobile, Verizon Wireless, and AT&T, dominant providers of voice services nationwide, independent of the operator providing the broadband connection.”

The good news is that these trends are only now starting to become concrete in terms of commercial offers. There’s still time!

So, competitive telecom providers, you need to take a look at these trends, embrace them, become them. It’s not enough to look at what’s happening with VoIP and decide to throw in some SIP trunking services to your product mix. It’s time to leverage the virtual nature of IP communications to build up some interesting, productivity-enhancing services, it’s time to wrap in wireless in a very integrated way, to forge smart partnerships with equipment providers, to talk to UC specialists like Siemens and FMC vendors like Agito, and start changing your model now to block and tackle the onslaught from the telcos.

Or fine, just resign yourselves to being chum. Ick.

Oh and good luck in Dallas this week. Have a Shiner Bock for me.

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