Prison to Hotel: In Telecoms and in Boston
November 29, 2007
If Google’s bid for 700Mhz spectrum materializes in January, it will bring the trillion-dollar infotech and telecom industries into direct competition for the first time in 50 years. That’s how Daniel Berninger starts a rather gracefully-written post on infocom vs telecom. I particularly liked this passage.
A survey of companies will reveal a range of approaches, but the prevalence of competition leaves telecom and infotech populating opposite ends of a spectrum analogous to that of prisons and hotels. Hotels and prisons offer similar functionality, but the range of available choices produces opposing experiences for their respective inhabitants.
The typical telco pursues a lock-in strategy in which the resources consumed to keep customers captive exceed those applied to refine service offers. The absence of lock-in options, on the other hand, makes innovation imperative for the survival of infotech companies.