As mobile devices like the iPhone gain in prominence and usage, one has to wonder if the telecom company’s worst nightmare is indeed coming to fruition. Will flat-rate data plans and sexy mobile computing interfaces turn telecom carriers into a bunch of dumb data pipes? While I can understand on a very ‘old skool’ business level the fear of losing grip over their customers mobile user experience – was this not inevitable? Which is precisely why the iPhone is seen as both a boon and a boondoggle for cellular carriers.

On the one hand it’s a boon because better devices will lure new customers and speed adoption of mobile data consumption. On the other, it is a boondoggle because without the constraints of a limited/controlled experience the customer no longer needs to be shackled to the paltry content offerings and archaic tools the carriers want to force-feed to their customers handsets.

Q: What does this ultimately mean for telecom companies?
A: Extend your brand – acquire content companies / destination brands.

Scott McNealy, former Sun CEO (now Chairman) appears to agree.

Telecommunication companies need to go beyond just providing bandwidth and look into acquiring Internet destination sites … I think the telcos have to make sure they don’t get marginalized to being just bit providers and bandwidth providers … There will be some very interesting challenges of who owns the subscriber and who owns the financial and advertising rights to those individuals. … Stay tuned, the landscape’s going to change enormously..

via network world