Telcos fear Big Tech will bleed them until they can’t afford network builds

Telcos risk missing out on revenue needed to fund new networks, despite demand for their services soaring – and Big Tech is to blame. That’s the thrust of GSM Association’s 2022 Internet Value Chain Report, released yesterday. The Association considers the internet value to chain to comprise revenue won by all players …

[Duncan Macdonald]

Hardly surprising

Telcos are basically like shipping companies - they ship data instead of steel containers but the value of the contents makes little difference to their fees or profits.

Like electricity distribution firms they are utility companies with the same fairly flat income prospects. Their days of being high flyers has gone however much they may dislike the fact.

Looking at other utility companies suggests that their share price should be around 10-15 years annual after tax profit - not the much higher multiple that several currently have.

Icon for the directors faces when the market does downgrade the share prices ======>

[goldcd]

Indeed

Bit like how it use to be buying stuff from amazon.

Your order would have a charge for the item you bought and another line charge for the price going to the shipping company to get it to you.

Similar to how your eyeball pays google a fraction of a cent for the search service and then your phone/internet bill pays a similarly small fraction for getting those results to you.

Amazon could beat down the courier prices to the bare minimum as there was competition between them - but in the end worked out it was cheaper to cut them all out for most deliveries and do it themselves.

Telcos hate being called dumb-pipes, but there's absolutely nobody other than themselves who wants to them to anything more.

[sten2012]

Re: Indeed

So much this. None of their "value adds" are valuable to me. Just ways of overcharging us for crap services that other people can do better.

Sat for so long on their monopolies offering overpriced, outdated services and first to cry about it when people come in to fix that gap they create.

Edit: and now they have only one job to do, they still aren't particularly effective at it either.

4 years of intermittent copper cutouts, finally install fttp at massively inflated prices and I get stuck with two weeks of downtime because the muck up an install up the road.

[DS999]

Re: Hardly surprising

That's an apt comparison.

Imagine if Fedex saw your package comes from an expensive store and said "whoa you obviously have money to spend so we're going to add a surcharge based on who sent you that package". That's basically what telcos want to be able to do if net neutrality didn't prevent it.

Telcos probably look back with misty eyes at the old days when they had complete control of phones and could charge $1.99 for a ringtone because they controlled the OS and could make it difficult or even impossible to load them any other way. They could charge $1 per megabyte for WAP and we had no alternatives other than to forgo the internet entirely.

Imagine how little things would have progressed, and how much more expensive doing anything with your phone would be if they still exerted that level of control. Say what you want about Steve Jobs, he did the world a service when he was able to wrest that control away from the telcos and allow the smartphone market to mostly proceed outside their limitations. (Not totally, just yesterday I decided to convert to eSIM on my iPhone and the automated method didn't work, but at least I was able to get it done via text so I didn't have to wait on hold)

[ChoHag]

Boo hoo

I will cry a small tear for the non-maintainers of our 18th century telecomms network now that the money they were _also_ chasing along with "Big Tech" has run out.

[Colin Bull 1]

I am crying in my beer

Not only does our monopoly suppler for most of the country BT use hyper inflationary mid contact price rises, they are advertising it as super fast fibre when it is not fibre at all - it is hybrid fibre/copper. And meanwhile Ofcom sit and watch without a murmur.

Luckily for me I have just had the pavement dug up by Wildanet so it is full fibre in a week or two :-)

[Anonymous Coward]

Re: I am crying in my beer

Hey … so does Virgin Media (especially), Sky, Vodafone etc.

Also DOCIS @ VM is not fibre. Same as BT it’s FTTC…. hence the perpetually crummy uplink bandwidth due to the shaping of the async.

[Pascal Monett]

"181.1 petabytes in 2020"

And, during lockdown, that exploded into what ? 300 petabytes ?

[genghis_uk]

This sounds like a pre-cursor to another attempt to get Netflix, Google etc. to pay Telco's for transport despite the end customer already paying for it.

Give it up guys - you are infrastructure!

[sten2012]

Agreed.

If anything they should be paying google/netflix/amazon for edge caches if they can't provide the service they charge customers for - not the other way round.

[Fazal Majid]

Sense of entitlement

This just goes on to show the Telcos stunning sense of entitlement to value-creation they have no direct credit for.

[CommonBloke]

Here's an idea to increase profit margins

Fire 90% of all directors and C executives, cut down their salaries and remove all those bonuses from "making the company profitable".

Hey, you'll only have 100 idiots complaining instead of 80k for the same amount of money saved! And, let's be honest, they're much easier to replace than the actually skilled workers.

[M.V. Lipvig]

I work for a telco

and the profitability problem has nothing to do with services provided and everything to do with useless people trying to prove they are providing value. I'm one of the people who actually fixes broken stuff, but spend half my day doing useless customer service junk. I don't mean the stuff like listening to the customer complaint, I mean stuff like running a network snapshot progran twice, before and after picking up a case report, in order to check a box on a director's report. Or, a required minimum customer update to tell them crews are digging up a cut fiber and expect the job to be complete in 4 hours... 3 hours... 2 hours... 1 hour.... instead of crews expect to have the fiber dug out in 4 hours, next update in 4 hours unless something changes, because a box on a report needs to be checked.

Then there's the circuit layouts our Install department puts in. No set format, and nobody held accountable if the circuit doesn't actually go where it is supposed to. Well, I SAY nobody's held accoubtable.

I am, because I have ever smaller amounts of time to restore services.

And don't get me started on our IT department who give us passwords ever increasing in size and complexity, and kick us out of our tools in shorter and shorter amounts of time, even though we can only access any of it behind a VPN, then another VPN, which requires another VPN. If they cut the time we can be logged in much more we'll spend 10 minutes logging in just to get a minute in the system we need before the first VPN times out and drops it all. And that's when they're not just removing useful tools because they're not "secure" (even though you have to log into half a dozen token passwords just to see it) without a replacement.

I'm glad I'm close to retirement. There was a time when I was a technician, but today technical work is only 20 percent or so of my job, with the rest of it checking boxes for director reports ao THEY can look busy while drawing 10 times my pay.