Does Web 2.0 Relate to Telco Business?

It’s a confusing world out there for service providers, particularly the telcos.

The rise of Web 2.0, which includes stuff like social networking and online video, and the broad shadow cast by Google, have many telcos wondering just how all this relates to their businesses. At the same time, plenty of telcos out there, especially those with a focus on business customers, have adopted a largely wait-and-see strategy to these trends, given that they seem to apply initially to consumers as opposed to businesses, and because business models around these new trends have yet to solidify.

Still, as basic voice margins have disintegrated and relatively new technologies like VoIP have lowered the market-entry barrier for new providers, traditional telcos are striking out for new ways to grow. Cable companies, which as Bob Wallace discusses in this month’s cover story "Cast Aside? Why Comcast, Other Cablecos Are Struggling," are facing similar growth challenges, what with the new competition they’re seeing in the TV services realm, among other services, from the telcos.

That has led companies like Sun Microsystems Inc. to push a message that telcos and cablecos can and should leverage existing customer data, as well as potentially third-party data, to move into new growth areas such as targeted services and targeted advertising.

The idea of data mining and analysis is nothing new, to be sure, but even after years of talking about it, it’s surprising how little the industry actually is doing it. That probably can be attributed to the complexity of managing and analyzing this data and then building and delivering product around it. However, perhaps the fact that the competition this industry has talked about for so long, along with new technologies that make it easier to combine networks and technologies, finally will provide service providers with the justification to invest in and employ more sophisticated data retrieval and analysis tools and business strategies.

Doing this ties into the Web 2.0 theme, which taps into the idea of personalized, on-demand access to content. But rather than just being the au courant idea, delivering the content and services customers want when they want them actually could be a true differentiator for those service providers who do it correctly.

Until next time,

Paula Bernier
Editor in Chief

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