The trouble with network operators is that they’ve always been big companies and the people who get to the top of big companies are usually politically ruthless operators intent on their personal advancement rather than people who create new products and revenue streams.
Now the operators are complaining that the companies which provide services over the networks – Facebook, YouTube, Google etc – are getting infinitely more money than the operators. ‘Fair shares’ they’re bleating.
“The risk for us is being excluded from the world of services. If that happens, we’ll be downgraded to simple pipes,” says Orange’s CEO Stephane Richard.
If the operators are excluded from the world of services, they have only themselves to blame.
When Hans Snook founded Orange in 1994 he introduced innovations at launch such as Over-The-Air-Registration – allowing new purchasers of phones to take them home and decide on the tariff and get help and advice – and an automatic linking of a phone with an account so customers were greeted by name when they phoned Orange.
This was revolutionary stuff in 1994. Snook preached the ‘phone as personal electronic servant’ making life better for phone-owners. Snook was a services guy.
Two years after Orange launched, the company IPO’d at a value of £2.5 billion in 1996 and six years after launch, in 2000, it was bought by France Telecom for £30 billion.
That’s value creation on a scale which the politically ruthless self-advancement types seldom achieve.
The network operators have had nearly 30 years to develop services. As operators they’ve been in pole position to develop new services but they’ve pretty much failed and the Googles, Facebooks, YouTubes etc have done the job instead.
Somehow one thinks France Telecom were a bit daft to relinquish Snook’s services in 2001.
They weren’t to know it then, but they were setting Orange up to be a ‘simple pipe’.