Wireline Evolution: Barriers Begin to Crumble

While the debate still rages in the wired industry over so-called dumb pipes and smart pipes, I think the use of the term “pipes” focuses our attention away from the real battleground in the competition for consumers.

The ubiquity of IP interconnection and services being provided directly to the consumers via the Internet is driving the competition for service revenue and customer relationship. Pipes denote footprint … a fortress to reinforce and defend. In the evolution to an IP-centric world, attacks can be launched from the anywhere on the globe. Just as your favorite local retailer now competes with a supplier in China via a storefront on eBay, the traditional fixed service providers now compete with Netflix, Apple, and Google via their Internet connectivity service (DSL/Cable/WiMAX/etc.)

Clearly the CSPs have a need to move to IP-based networks for the delivery of their own services, but in doing so they also open the gates to a whole new class of competitors. The CSPs must find ways to leverage their customer intimacy and relationship to remain relevant and competitive, as would your local pharmacy or florist. You might start by taking your CMO out for a coffee. (Hint: Leave the “dumb pipe” PowerPoint slides in an office drawer somewhere.)

Adan Pope is the chief strategy officer for Telcordia, a global leader in the development of fixed, mobile and broadband communications software and services. He also serves as CTO for their OSS and service delivery businesses.