In my post defining the Social Telco I made brief reference to the help telcos need with innovation, but I think it’s worth a post in its own right. This is a topic I addressed in an Ovum comment a while back too – that comment was picked up in a couple of places which are available outside Ovum’s gated community here and here. The focus of that piece was an Innovation Day AT&T held, which was designed to showcase some of the things coming out of the AT&T Labs. My main point was that telcos were lousy at innovation and that substantial R&D investments were probably no longer a worthwhile exercise with few exceptions. That’s essentially the point I’d like to expand on here. 

Telcos do a terrible job at innovation

Telcos are abysmal at creating new services that customers actually want. Part of the problem is that they have historically been very engineering-led, rather than marketing-led, organizations. Engineers ordered parts for the network, which offered certain features. The only decision to be made was which of these features to switch on. Telcos have been very bad at really understanding customers’ needs and creating services to meet those needs. In the old voice world, that wasn’t a big deal, since there were few competitors and they were largely relying on the same infrastructure from the same suppliers. But VoIP changed all that, and provided a view of things to come: when truly innovative players enter markets where telcos dominate, they create real disruption.

There are significant barriers to change

All the major shifts in communication in the last 20 years have come through players other than telcos – the world wide web and email were created by DARPA, IM was pioneered by Internet players such as AOL, Microsoft and Yahoo!, social networks created the next big wave of communication and so on. Telcos are nowhere to be found in that list. The major barriers are:

• telcos are still engineering driven in many ways and buy their apps from traditional players
• they have large installed bases and have defending those bases as a major strategic priority – anything that threatens to cannibalize them is therefore suspect
• the development process for new services has been so long and expensive that they can afford to place only very few big bets, making them risk averse and preventing them from straying far from their traditional services
• all their business models are based on funding new investments through new revenue streams, and mitigate the opportunity for adding new functionality that isn’t paid for directly. They are also not expert in advertising-funded business models.

All of this means that telcos are still bad at innovation and unlikely to get any better. The shift to software-based rather than hardware-based services, including the implementation of IMS, should assist a little in making services quicker and cheaper to roll out, and therefore allow for more experimentation and risk-taking. But a large part of the barrier is still cultural – telcos’ size, scale and history all prevent them from being as innovative or as fast-moving as web players.

The solution: outsource innovation

The logical solution is therefore to outsource R&D to some extent to third parties. That means Web 2.0 players but it also means the armies of developers – both professional and amateur – who love nothing better than to leverage APIs and/or SDKs from existing players to create new and interesting mashups and combinations of functionality to create new services. This means telcos have to make those interfaces available too, in a way that’s attractive for developers. The iPhone is the best possible example of the ideal way to motivate developers: make the end result exciting. The iPhone has tiny market share compared with most of the other mobile operating systems out there, but it captures massive developer mind share because the possibilities are so vast and because of the cool factor. Telcos need to find ways to expose their network functionality which will mimic the success of the iPhone SDK among the developer community.

All carriers need to adopt this model – some with more control than others

Telcos and their equipment suppliers are currently responsible for 90%+ of the innovation which happens in telco services, and that’s simply not going to provide the kind of innovation that’s needed today. However, with an army of developers using APIs and SDKs to create new services, telcos can tap into a much larger base of innovation, and can either allow a thousand flowers to bloom by simply taking a hands-off approach or taking a more hands-on approach and actively selecting and qualifying the most promising applications for a more carrier-endorsed release to customers. The latter approach allows more control and therefore quality assurance, but it also means the telco is once again second-guessing customers’ preferences rather than simply allowing the market to work. Each carrier will have to make its own decisions about that tradeoff. But all carriers should be adopting an open approach to innovation and leveraging all the talent available  in creating the next generation of services.

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Last week I posted a link to the comment I wrote for Ovum on the topic of the Social Telco. While I spent some time in that piece talking about what that actually means, most of it was context, so I wanted to expand a little on what I mean by the Social Telco, starting with the drivers behind this shift.

Two major reasons why telcos need to become social

There are two major reasons why telcos need to become social:

• their users are migrating to other platforms and leaving the telco behind
• telcos are bad at creating services and need to tap into the innovation happening elsewhere.

I dealt with the first of these in the comment I linked to above and in a previous post and so I won’t return to it in depth here. Briefly, customers – especially those we might describe as belonging to Generation Y, and also referred to sometimes as Millennials – are increasingly bypassing the wireline telco (and to a lesser extent the mobile operator) when communicating with friends and family. As such, if telcos want to have commercial relationships with these customers, they need to find ways to re-engage them and that means going where they can be found. 

Secondly, telcos are abysmal at creating new services that customers actually want. I’ll deal with this in more detail in a later post, but the major barrier to telco innovation has been the industry structure. Equipment vendors sold to engineers, who decided together with marketing which features to switch on. Of all the major new forms of communication that have emerged over the last 20 years, telcos have been responsible for none. Telcos are in a poor position to experiment with new services, too – everything they launch has to be scalable, robust and integrated with billing systems and so on, which makes timescales long and requires a high degree of certainty that a new product or service will succeed, which drastically limits their opportunities for experimentation. Internet players are in a much better position and have a far better recent track record, and telcos can benefit from this work. 

Aims of the Social Telco

If those are the two major drivers, then the aims are closely tied. Essentially they are to:

• create alternative channels for customers to access telco functionality
• enable the creation of new services combining that functionality with functionality provided by other players.

Part of the wireline telco challenge is that people don’t see the relevance or benefit of using wireline telco services to communicate, but part of the challenge is also the business models associated with those services. Customers no longer want to sign contracts requiring a large monthly outlay for a service which is only available at a fixed location and provides little flexibility. In part the challenge is therefore to create new channels for customers to access their core functionality in such a way that it becomes useful and attractive again. But in addition, the aim should be to enable the creation of new services which tap into that telco functionality and integrate it with functionality found elsewhere.

It’s not about creating Twitter, Facebook and YouTube accounts

At a very basic level, the Social Telco could include the sorts of things we’re seeing from many telcos today as they seek to take a few tentative steps into the world of Web 2.0. Setting up Twitter accounts to broadcast press releases, creating promotional videos for YouTube, blogging, setting up Facebook pages and so on and so forth. These activities attempt to place the telco on the same plane as the users of those services, as if it were an individual participating in a natural fashion in social media. Of course, this is an illusion, but it may be effective anyway. That Sprint Twitter account has just over 2000 followers, some of AT&T’s videos on YouTube have been watched 250,000 times and so on.

But in these activities, telcos are no different from any other large company seeking to embrace the new media – there’s no real leverage of telco functionality or core competencies. And these activities don’t really overcome the basic problems that telcos need to solve. So although this is related to the Social Telco area and may be part of a larger social media strategy, it’s not the main thing I’ll be talking about.

The focus should be on APIs with effective controls

Telcos need to go significantly deeper than this in becoming social, and this effort effectively comes down to APIs and other technical linkages between telcos and third parties two facilitate a two-way exchange of functionality. Many web players already expose some of their core functionality to third parties in an open or semi-open fashion, and others are moving in this direction. Facebook, MySpace, Yahoo!, Google and many others have openly available APIs which developers can use to create new applications and services.

Telcos on the whole do not have APIs to expose their functionality to third parties. This is again a natural result of their heritage – Internet players are software-based whereas telcos have historically been hardware-based. But that is changing – most new telco services will reside on application servers and be software-based too. As a result, telcos will increasingly need to embrace the software model and so hopefully the opening of APIs will be a natural outgrowth to some extent. 

One of the challenges associated with APIs – as Facebook and others have discovered recently – is that users want the benefits of openness but without sacrifices in privacy and control over how their information is used. Telcos will face the same challenge but on a greater scale – any time the data telcos hold on their customers is released, whether intentionally or unintentionally, it creates a firestorm in the media and among consumer rights groups. They therefore have to be particularly sensitive to questions of privacy, security and user control.

A new model for service creation

All of this will lead to a new model for service creation for telcos. Not all services will be developed in this way, but an increasing number will. The two major models will be operators creating new services themselves either incorporating social web features or made available through social websites, and third parties creating applications that incorporate telco functionality. The former will expose telco functionality to new audiences and create new channels and business models for using it. The latter will enable the creation of many more services which tap into that functionality by an army of third party developers, which will combine telco and social web functionality in innovative ways. Together, these will open up many more commercial opportunities for telcos, allowing them to re-engage with customers they may have lost, and extending the ways in which they interact with their existing customers.

A couple of important points – mobile and enterprise

I have focused in this post on wireline operators, in part because they are in the most dire need of assistance in this area, and in part because mobile operators have some more obvious short-term opportunities around social networking. But these same principles apply equally to mobile operators, and I firmly believe they should be thinking about them too.

Secondly, I’ve focused a lot on consumer trends, but these trends apply to enterprise too. In fact, the first Social Telco activities I’ve talked about were those of AT&T in the enterprise space. The applications are different, and the focus will be more on opening interfaces to third parties, including enterprise customers, than on exposing telco functionality directly within social networks, but the principles are the same, and activities can be shared between consumer and enterprise functions at telcos.

Further reading

I’ll be covering some of this stuff in more detail in future posts, and specifically plan to post on each of the following (I’ll try to come back here and add links as I post them):

• Why telcos need help with innovation
• Do mobile operators have the best opportunities as Social Telcos?
• What functionality should telcos expose?
• How telcos can move beyond one-to-one communication
• Creating new business models and channels

I’d be very interested in any input on any of these topics as I address them in the coming weeks.

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I just wrapped up a day and a half at AT&T’s business analyst event here in New Jersey. I “live tweeted” the event to some extent – see here for a broad view of some of the themes discussed there.

But one of the things I was most encouraged about and interested in was some of AT&T’s activities that I would classify as fitting within my social telco definition. As AT&T expands into the cloud computing space, it will be launching storage-as-a-service and compute-as-a-service offerings in the coming months. But it will also be developing something it calls “platform-as-a-service”. It’s not the best name, because it’s not all that descriptive – as a colleague said, it reminds you of Salesforce’s efforts to expand from its core CRM-as-a-service proposition to something broader. But the concept is good, even if the nomenclature isn’t.

What platform-as-a-service would do is expose both computing and network functionality through APIs to third parties. This would allow those third parties – whether ISVs, enterprises developing their own apps or even web players – to create apps that would be able to issue commands to AT&T’s compute and network infrastructure. The focus in AT&T’s presentation on the topic was on the compute-type commands, but the plan is very much to roll out more or less the full set of Parlay X commands over time in handfuls at intervals over the next year or two, starting later this year. 

One of the things I found interesting about this is how AT&T is approaching some of the greatest challenges associated with exposing this kind of functionality to third parties: namely, verifying identity and providing security in order to protect privacy. AT&T is piggybacking off its efforts on the mobile application side here, benefiting from its DevCentral developer community and the processes and interfaces developed to facilitate the development of mobile apps by partners. This is probably a good model for other telcos with well developed mobile developer ecosystems since a lot of the legwork has already been done. 

I’m going to be requesting a more detailed briefing on these activities, and especially on the linkages between consumer and business efforts in this area, and will likely put something together for publication subsequently. But this certainly looks like an interesting and promising initiative from AT&T in this area, and one that other telcos can learn from.

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A small sample size, to be sure, but I’ve had three pieces of feedback from colleagues on my social telco comment. The first two were brief but confirmed the comments I made about teenagers and their communication habits:

this is my son…”Why would I get a landline from anyone?”…also reminds of PacBell circa 1995…..why would we offer and fund an internet service when all the services on it are free?

My teenagers do not answer the fixed phone even if it is ringing and they are standing right next to it – they know that it is never for them. I bet they don’t know who our provider is. They do use the broadband, and they do know who we get that from, because they compare speed and contract details with their mates.

That’s an interesting point about broadband. I know of other examples where this is the case, and teenagers are aware of and talk about the broadband provider used at home. I’d guess this is particularly prevalent among avid gamers but also to some extent among consumers of significant amounts of online video.

The third comment is interesting because it indicates the trends are similar even once the transition is made to college:

I have two teenagers.. one in college, one in high school.. Both have had cell phones for several years now. Both text much more than they talk, and both rely on Facebook quite extensively as a sort of ‘virtual mall’ i.e. place to hang out and chat with friends, check out members of the opposite sex, flirt, etc… What I find most surprising and interesting about my kids use of communications media is that they very rarely use email. It is seen as something of their parents generation. Something the college or high school uses for tuition notices or homework, etc. Whereas I would use an email distribution list to announce an event being hosted by a club I belong to, my daughter would create a group in Facebook and invite friends to it (and by extension, friends of friends, etc.) To her this is the normal mode of operation.

So my personal experience resonates strongly with your contention that wireline telcos had better find a way to participate and engage with the younger generation on their terms, or risk being relegated to the role of a broadband access utility. Similarly, MNOs should be working like dogs to make social networking easily and cheaply accessible from handheld devices. Google and Nokia probably ‘get’ this in a way the operators haven’t, so far.

I agree with all of this. And I think the point about email is not to be underestimated. Bizarre as it seems to those of us who are members of Generation X and experienced email for the first time as older teenagers or young adults, it’s already become passé to Generation Y. One to one communication has largely been replaced with many to many communication, and that trend will only continue.

By way of explanation, through the Church I belong to and through my wife’s large family I have frequent access to teenagers and get to observe them and their communication habits at close quarters (and many of them are among my “friends” on Facebook). Some of my observations in this blog are therefore based on that anecdotal evidence as well as on more statistically significant published sources such as surveys.

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I wrote this comment this week for publication in Ovum’s Straight Talk Daily publication, and so I’m linking to it in two spots where it can be found in the public domain online:

Ovum’s site – this tends to disappear after a period of time

Telecom Asia site – hopefully, this will be up longer.

It encapsulates (with a 700 word limit – more leeway than Twitter but still not enough to really develop an idea) some of the things I’ve been thinking about recently, and really the key themes of this blog going forward. I’ve previously covered telcos and social networking / web 2.0 separately but more and more I’ll be talking about how the two are coming together.

I’ll be expanding on some of the themes in the piece here in future. I’ve already posted on changing communication preferences previously here.

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I’ve come across a variety of statistics recently from various surveys about communication preferences, and was tempted each time to do a post. Instead, I’m doing one post on all of them, which should allow for some bigger-picture thinking. In essence, the conclusion you naturally come to when reading these articles is that landline telcos are in for a nasty period of rapid decline in their core business thanks to the communication preferences of the rising generation. But there are things they can do to manage and slow this decline and remain relevant.

The first couple of articles concern the trend for greater use of mobile devices and the decline in the number of landlines:

• One in Six Use Only Cell Phones at Home (AP / Discovery Channel)
  
• Number of landline-free households up 10% in US (Ars Technica)
  

The second set concerns the communication preferences of younger people (often described as Millennials):

• Gmail Preferred By Students, But Nothing Beats Texting (ReadWriteWeb)
  
• Email vs. Texting (EMarketer.com via LDS Media Talk blog)
  

Both sets of articles, though, are really about the changing communication preferences of the population as a whole, and the impact of that younger group in particular. Those currently aged 15-25 are growing up with a radically different set of communication behaviors and preferences from those embraced by even 25-35 year olds, let alone the older generations. And this will have a massive impact on the landline telcos around the world, which don’t really feature in this picture at all. As the rising generation makes up an ever greater proportion of the total population this impact will only increase.

Mobile substitution happening from the bottom up

First, the increased use of mobile devices and abandonment of landlines. I remember talking to Gavin Patterson, then head of the consumer retail bit of BT, about six or seven years ago, about the challenge of driving growth in his business, and he told me his worst nightmare was a generation of kids growing up never having a relationship with BT. Sadly for him, and other landline telcos around the world, the nightmare is now reality. The CDC survey both articles are based on tells us that 17.5% of households have no landline but do have wireless phones. However, the most striking statistic for me is this one:

Nearly two-thirds of all adults living only with unrelated adult roommates (63.1%) were in households with only wireless telephones. This is the highest prevalence rate among the population subgroups examined.

You’d better believe that that’s mostly college students and those recently graduated from college and still living with roommates, almost all in the 18-25 category. Here’s more detail on the age split overall:

More than one in three adults aged 25-29 years (35.7%) lived in households with only wireless telephones. Approximately 31% of adults aged 18-24 years lived in households with only wireless telephones.

Remember that a good chunk of 18-24 year olds live with their parents and thus technically have landlines in the home even if they don’t ever use them. The question is whether these people will ever return to the habits of their parents as they get older, settle down and have kids of their own. There’s not that much evidence yet to suggest that they will, and there’s not much incentive to either. It used to be that a landline from the phone company was necessary to get broadband but since ‘naked DSL’ is now widely available and cable competitors offer TV/broadband packages without voice that’s no longer the case.

The next question is whether these future households will have landline connections at all – with the increasing availability of 3G and impending availability of 4G wireless options for web access and an increasing preference for web-delivered rather than broadcast/linear video content, I’d question whether these households will need a wireline connection – from a telco or a cable company – at all.

Voice isn’t even a communication option for most young people

Of course, all this assumes that voice is still one of the main modes of communication for young people, but the second set of articles suggests this isn’t the case either. The ReadWriteWeb article cites an eROI study on the communication preferences of high school and college students and includes this chart from the survey:

One caveat: the survey seems to have asked about online communications specifically, but from other surveys I’ve seen and personal experience with teenagers voice would barely make a blip on charts like this even if it was included. But the other key thing is that email – so newfangled when it first entered most people’s lives in the mid- to late-90s – is becoming distinctly passé. Text messaging already enjoys a much higher use rate, and both the combined social networking categories and the combined IM categories in the chart above already add up to the same as email (26%). IM seems to be on the decline with the exception of social networking IM but texting and social networking are now the major components of online communication for most young people. And none of those services is provided by a telco either. Wireless telcos have the best opportunity for capturing some of this spend by creating easy-to-use and low-cost wireless options for using these things on mobile devices, but landline telcos risk being entirely marginalized.

It’s grim reading, all of this, if you’re a landline telco or someone who works with them. Is there anything they can do? Yes, absolutely. They should immediately begin (if they haven’t already) building partnerships with social networks and other online providers to ensure that the necessary interfaces are in place to allow telco services to be linked in to those environments. BT’s acquisition of Ribbit is a great example of an innovative approach to tying online and landline worlds together, and Telecom Italia has also done clever things with Facebook, allowing customers to make calls from within the Facebook site, for example.

Telcos need to offer deep integration both ways between their systems and these online service providers’ systems to allow address book sharing, easy initiation of old-fashioned phone calls and other methods of telco-based communication from within websites and otherwise make the linkages between the two worlds as clear and easy as possible. Telcos have no hope of creating standalone offerings for young people that will generate any kind of real interest, but partnering with the sites where those young people already spend their time is the next best thing. Allow those companies to innovate, and offer them things they can’t easily do as an incentive to partner.

All is not lost – yet. But it’s certainly heading in that direction, and only innovative telcos willing to really rethink the way they engage with teenagers and young adults will have any chance of staving off the steep decline that seems to be on the cards.

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There’s an interesting article on Generation Y and how it will change the web on the website ReadWriteWeb. It raises a number of important issues about Generation Y, but the most striking thing to me was this paragraph, on Generation Y’s attitude to work:

Work Isn’t Their Whole World: Sure, they’re going to go to work, but it had better be fun. For Gen Y, work isn’t their identity. It’s just a place. Gen Y sees no reason why a company can’t be more accommodating, offering benefits like the ability to work from anywhere, flex-time, a culture that supports team communication, and a “fun” work environment. They’re also not going to blindly follow orders just because you’re the boss. Sometimes dubbed “Generation Why?” they need to “buy in” as to why something is being done. Old school bosses may find their questioning insubordinate behavior, but they would be best to just change their management techniques and adapt. Gen Y hasn’t known much unemployment and they’re not going to put up with being treated poorly just for sake of a paycheck. (Bosses, your survival guide is here).

I’ve seen similar remarks made about Generation Y in the context of the tools this generation will use in the workplace. Instant messaging, text messaging, social networking and other technologies, and not email or phone calls, are the way this generation prefers to communicate, but the most controversial assertion for me, which is repeated in the excerpt above, is this idea that companies, and not these junior employees, are the ones that will need to change.

When the rest of us older folk (relatively speaking) arrived in the workplace, we were handed the tools we needed to do our jobs, which likely included a desktop PC with email and (depending on how much older we are) Internet access, and a deskphone, and told where the stationery cupboard was. We didn’t expect to use our personal tools in the workplace, and absolutely expected to conform to what our employers told us and not what we thought we should do. Why should this generation be so different?

The negative reason seems to be that this generation might also be called Generation Spoiled. Parents, teachers and others have bought into the ethic that there’s no wrong answer, that children need always to be nurtured and given positive feedback and not criticism, and so on. I worry that this attitude to giving Generation Y what it wants in the workplace is a continuation of the spoiling of this generation, and that they’re going to go through life with a sense of entitlement as a result. Will they in turn pass on that same attitude to the next generation (Generation Z?) ?

There are two better reasons for this attitude. The first is that, in order to attract the best and brightest among this generation, companies feel they have to offer the most flexible and congenial working environment possible. To an extent, this actually makes a lot of sense, since they will be actively competing with other employers for those employees, who will choose their first employer partly on the basis of their perceived enlightenment on these matters. In practical terms of course, the companies which are most attractive to these candidates probably already have practices which meet these criteria – think Google, Yahoo! and others.

The second reason is that this trend is part of a much bigger shift in power and in the flow of technology. In the past, including when most of Generation X joined the workforce, new technologies were often experienced in the workplace, whether fast computers, Internet access (and then broadband), mobile phones, email, and so on. However, many of the more recently available technologies have been experienced first in personal life – instant messaging, even faster Internet access, social networking, mobile messaging, video calling and so on. Because this is a much wider shift, although Generation Y may be the first to have grown up in it, all subsequent generations will bring the same experience with them, dragging their personal tools into the workplace because their personal lives are where the innovation is taking place now. We might call this a “c2b” trend, reflecting the fact that technologies are moving from consumers to business rather than the b2c model we’re more accustomed to.

Most of what I’ve said in these previous two paragraphs applies more narrowly to the technology tools Generation Y will expect to use and not as broadly to their attitude to work in general, which still strikes me as more spoiled than enlightened. I think there are some good reasons for empowering these younger employees to use the tools they will work with most effectively, but I’m not convinced that we need to mollycoddle them. In a time of small or even negative economic growth, it seems to me that these employees need jobs at least as much as employers need bodies, and they should be treated accordingly.

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I came across two different articles / blog posts today that discussed the decline but also the staying power of legacy services. The first is a blog entry by David Pogue of the New York Times about dial-up. Here’s an excerpt:

From the mailbag:

Dear Mr. Pogue: Can you explain why big sites like Adobe and Microsoft list download times for 56k modems?

I can’t image that 56k modems are used by the majority of U.S. Internet users (or even in the Western world, really). Wouldn’t it make more sense to tell us what the download time would be for a DSL or cable connection (various speeds)?

I believe my reader is correct: dial-up modems now represent well under half of U.S. Internet users.

Do Web sites list dial-up download times on the premise that dial-up users are the only ones who care how long it will take?

My guess in answer to this question, incidentally, is that probably no-one is responsible for reviewing that policy from time to time to see if it still makes sense. It’s probably apathy as much as anything else that’s keeping those download times in place.

The second is a Wall Street Journal column about landlines. Again, an excerpt:

In last week’s Real Time column about cellphones, I wrote that “a call on my landline is almost certainly a wrong number, a charity or a recording of a politician.” Which led one reader to ask a very reasonable question: Why keep the landline?

The answer, unfortunately, involves throwing my wife under the bus: She’s the one who wants to keep it. But her reasons are pretty good: She notes that our cellphones aren’t charged “half the time,” which I’d dispute specifically but not generally; we have a good phone number that’s easy to remember and to dial; and we’re listed in the directory, without which there’d be no way for people who’ve lost track of us to find us. When I said people would just Google us, she said “I’m an old fogey, what do you want?” which is a kinder version of “Shut up, dear.”

Let the record show that my wife is in no way an old fogey. But the record also shows that the tide — at least in the U.S. — is running against her. A report released last week (see the PDF here) by the Center for Disease Control and Prevention paints a picture of a rapidly vanishing landline business. In the last six months of 2007, at least 15.8% of U.S. households had at least one wireless phone but no landline, and 14.5% of adults — 26 million — lived in a household with only wireless phones. (The CDC’s first such survey, conducted in the first half of 2003, found 2.9% of adults living in wireless-only households.)Throw in the 2.2% of households that had neither wireless or landline phones and 18% of U.S. households are without the traditional phone service that was part of our common culture for generations. Landline phone penetration is now what it was in the early 1960s.

The point is that both of these articles are about technologies in decline. In the case of dial-up, of course, it’s a much newer technology that is nonetheless much further along in the decline – only a small minority still have dial-up Internet connections, whereas landline owners are still by far in the majority. But in both cases, those technologies are going to reach the point where networks and services are being preserved for a smaller and smaller number of customers. At some point, the providers of those services will have to flip the switch on those services to “off”.

They’re not the only such services, and it’s a tricky thing to grapple with. We’ve recently seen the switch-off of AT&T’s TDMA network, and in early 2009 we’ll see the shutoff of the analog TV network. Sprint has caused some problems for itself by providing an off date for its legacy business networks, giving its competition some easy ammunition. At some point, all companies will reach the point where the cost of maintaining these networks for the laggards is outweighed by the benefits of forcing a switch, but the trick is always calling that point accurately. And the downside is getting it wrong and causing a huge customer service and/or sales problem. Luckily, landlines are going to be around for quite some time, but that dial-up market is going to be heading for the chop rather sooner. When does AOL flip the switch on that?

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