Dumb pipes, smart pipes

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