Carriers must reinvent to keep competitive edge
We all focus on the details about growing our business, stomping on our competition and winning going forward. However, we don’t often stop, pull the camera back and take a longer-term historical perspective on our changing industry. So let’s take a look at where we are today and where we are heading as a wireless industry.
The wave of change is always present. Carriers, handset-makers and in fact every company in the wireless space are always looking to grow.
Winners in wireless seem to be entrenched, but we can simply take a look at the last few years to see how the tumultuous wave of change transformed the industry, on both the network side and the handset side.
I use the term wave, because that’s how I see this industry growing and changing. Every opportunity and every company is either on the growth side of the wave – the crest side – or the falling side.
We have seen this wave theory play itself out, time and time again, in all different industry sectors. As an industry analyst I follow wireless, telecom, television, the Internet and communications technology in general. Each has seen dramatic shifts in leadership over time.
A look at the wireless industry is a great example. There is always so much change that it reinvents the entire industry every five to 10 years.
That means at any time leaders can fall back and new companies can take the leadership position and change the entire industry. It happens all the time.
In fact, every company faces the threat and the opportunity for both ups and downs on an ongoing basis. This is the wave. Being on the growth side is great. However, before you crest and start to fall you must create the next growth wave to keep your momentum going.
Every opportunity grows, crests then falls. It’s up to every company to make sure it’s always on the growth side of the wave. Companies must continually have updates and innovations or they will suffer when the wave passes on their offerings. They must keep stoking the fire. Keep it hot.
Remember when companies like Motorola, Blackberry and Nokia led in the wireless handset space? Then suddenly a few years ago everything changed. Now the leaders are Apple iPhone, Google Android and Samsung Galaxy.
That’s the kind of threat and opportunity that every company faces, every sector faces, every day.
Look at the networks. We can look at the wireline side as well, but let’s take a look at just the wireless side. Every few years the industry reinvented itself. It grew from an analog industry, to digital, to faster and faster digital with 2G, 3G, 4G and now we are talking about 5G.
All four major wireless carriers were doing well before this shift. Then things started to separate over the last decade. AT&T Mobility and Verizon Wireless continued to update and lead the smartphone and wireless data space.
Sprint and T-Mobile US missed that opportunity and struggled for years. Sprint with Nextel and T-Mobile US, which simply missed the move toward wireless data services.
Now both Sprint and T-Mobile US have started to grow again and that is great for the competitive marketplace. We want to see more, not fewer, competitors trying to win our business.
The same kind of growth wave happened with long distance, local phone, dial-up Internet, cable television and so on. Those are yesterday’s businesses. The wave has crested and they are on the falling side of the growth wave.
Traditional local phone service, traditional cable television service and traditional wireless service are all part of a growth wave which has crested and is on the downside.
However, some companies continue to do a great job of changing and reinventing themselves and growing while others struggle.
Just look at the three baby bells as an example. AT&T and Verizon are still growing and still looking for new opportunities. They no longer offer just local phone service, but have expanded.
They are now providers of not only local and long distance, but also wireless, Internet and television where they compete with cable TV companies like Comcast, Time Warner Cable, Cox and many more. They have shifted to the hot growth areas of the industry.
In fact, both AT&T and Verizon are continuing to expand. AT&T has perhaps the most aggressive plans as they are acquiring DirecTV, Mexican wireless, helping the automotive industry go wireless, health care, home security and automation, U-verse TV and much more.
Verizon is also thinking about growth and change with its recent announced acquisition of AOL, its FiOS television and more. And we can expect more, as both of these companies rapidly reinvent themselves and create the next big growth wave to ride.
CenturyLink is the third baby bell, however, it is less aggressive at change and growth. CenturyLink is not into wireless, and it is not as aggressive at expanding its Prism TV offering.
CenturyLink is still important as a local phone company, but that opportunity has crested on the growth wave and is on the decline. So it will be interesting to watch them going forward.
Even the cable television industry tried to make it in wireless. Companies like Comcast, Time Warner Cable and Cox tried and failed. They eventually sold their wireless business to Verizon Wireless.
As you can see, the marketplace is full of challenges and opportunities. Some companies are succeeding and others are struggling. Some are on the growth side of the wave, while others have crested and are trying to start their growth engines once again.
Some companies that were leaders yesterday are now followers. Other companies were leaders before and still are today. Their challenge is to stay there.
These are just some of the stories in the rapidly changing world of wireless. As you can see, there are plenty of winners and losers. In order to stay in the winning path a company must create the next growth wave before its current growth wave crests and begins to fall.
It’s all about momentum. Every company and every opportunity is on a growth wave. It all depends where you are located on the wave. Are you on the growth side, the cresting side or the falling side?
The next question is: What are your plans for tomorrow? Remember you can be No. 1 or 2 today, but you can quickly land at the bottom of the heap within a few short years if you don’t continue to stoke the fire and add new growth waves to your company.
This is the challenge every competitor faces every day. That’s why some win and others struggle. Keep your eyes on the different growth waves and on each company’s position on that wave to determine whether they will be winning or losing going forward. And remember, that can change over time as the industry continues to change.
So join me each week as we explore the wireless world and everything it touches. I’ll be looking at companies and competition and the wave. There are plenty of companies doing a great job and plenty of others that are struggling, and their leadership position can change at anytime.
It’s happened before and it will most likely happen again.
