Have the Large Telecom Companies Lost Their Minds?

I was reading Fred Wilson’s, a partner at Union Square Ventures in NYC, post earlier today on Net Neutrality and it occurred to me that the large telco companies really don’t understand what’s happening in the industry. They still act like they are the only game around, now and forever, and can call all the shots. Fred nails it about who is bringing value to the table! 

I spent a career at a large telco; in fact, it was the largest telco in the early ’80’s. No more though! And you would think these guys would be smart enough to look at what’s happening in the world and try to be a player versus a controller, but no, their arrogance continues to boggle the mind. 

So, what’s happening? Well, for one thing, the Internet really began to take off in 1995, ten years ago. If you consider that 12 and 13 year olds back then are graduating college and joining the workforce. Now people under 25 have had a seriously different experience with communications and technology than I have. 

They mostly watch recorded TV or DVD’s, they instant message, surf the web, and game. They may even do all of these things concurrently. They are the “always on” generation. They have no brand loyalty to the phone companies, are flocking to VoIP services like Skype (why not, they all use computers and what’s better than free?). 

Another point to consider is that this group is the elusive 12 to 35 segment that marketers continuously try to reach. Add to it that each year another layer of the demographic is added to the bottom while another one enters the workforce. 

If I still worked at a large Telco, I would be wondering seriously about my future. Consider this, when these 23 year olds were born, AT&T was a Fortune 5 company; when the Internet took off, AT&T was a Fortune 30 Company; and now as the always on generation enters the workforce, AT&T was just bought by one of its original children (SBC). Who would have believed that a company that was that dominant a market force could be disintermediated in such a short time? 

Now, this blog is about Southern California and San Diego is known for our development of telecommunications companies. My question is do we have any Sky Daltons (EarthLinks 22 year old founder) working on the next generation networks that don’t rely on the SBC’s or Verizon’s of the world? If you do, get your business plans together because it sounds like Fred Wilson might be interested hearing about you.

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1 Response to “Have the Large Telecom Companies Lost Their Minds?”


  1. 1 John Nelson February 11, 2006 at 5:58 am

    Your observations are spot-on! This is sort of like Yogi Berra’s “Deja vu all over again…” observation. Didn’t IBM not ‘get it’ in the same way 25-30 years ago? They strategically misunderstood the impact of microcomputers, and the way that applications (software) would supercede the importance of the containers (hardware)?…


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