….or it won’t for be ONLY a vertical for long. What exactly is a vertical?
A vertical or a line of business (LOB) is general term which often refers to a set of one or more highly related products which service a particular customer transaction or business need.
(from Wikipedia).
So basically, the telecom vertical consists of companies that serve as equipment vendors, tower operators, enterprise data sectors, handset vendors and mobile application providers.
However, at some point, the real potential for telecom omnipresence is going to kick in when the operators look at themselves as horizontals rather than verticals. Like a call centre organization that can provide support to all companies irrespective of which sector they are in. Or an IT company that can provide CRM and ERP implementations that stretches across business sectors like oil and gas, banking or insurance. This is the next phase of telecom growth – Applications and services to assist retail sector by monitoring distribution of goods through location-based services, mobile banking through USSD and secure SMSC’s, media and entertainment sectors through high broadband pipes, etc. An ideal mobile service should also be able to plug-in to the existing CRM and ERP solutions of the client and provide information of company performance through a mobile interface.
One of my friends was in the sales organization of a large bank. Everyday, he would receive SMS-es at home from his team on their day’s performance. Then he would consolidate that into another SMS to send to his boss. That was crazy ! Why shouldn’t the ERP solutions do that automatically? (one reason, I have to admit, was that they didn’t update the system with their sales dockets till the end of the month, but that’s more a process issue) Why aren’t mobile solutions pitched as part of the package of an IT implementation project? Why shouldn’t company executives be able to send USSD short codes to receive their company’s performance much like they do to check their prepaid balance? Hell, why shouldn’t my buddy and his team simply update th CRM system directly through an SMS/ USSD or a
I think part of this mindset is because of history where the original growth for telecom operators has always been through retail subscription rather than corporate solutions. Hence, telecom operators tend to look at the people using their services as THEIR SUBSCRIBERS rather than as looking at themselves as a conduit to provide content to other people’s customers. Take the case of Mobile services (before the GPRS, iPhone and the Nokia Ovi store era). If a subscriber wanted to download a wallpaper for their cell phone, they had to do it from the operators’ preferred VAS vendor. This was because operators asked vendors for a drastically unrealistic revenue share to access the OPERATOR’s SUBSCRIBERS. That’s like IBM asking Airtel for a 70% revenue share for allowing Airtel to bill IBM’s subscribers. Wholly unrealistic but effective till date since, it was the equivalent of a situation that these subscribers could be billed only on IBM’s Billing system.
But now, with the advent of handset apps, GPRS and 3G, it’s a matter of time before operators lose complete control of the content flowing through their “pipes”. The only (and the smartest) thing to do is to jump on this bandwagon and follow that natural course of business. Become a horizontal and support every other vertical to grow.
Update: Interesting question on Quora.
