What if Steve Jobs was a telco CEO?

In a blog picked up by TelecomAsia earlier this week, The Insider’s alter ego wrote about the lessons Apple’s departing CEO, Steve Jobs, might have taught the telecoms industry. It was full of the usual blah blah about the challenges Jobs and Apple caused the telcos and the disruptive nature of its products.

He went on to say that it must have come as a shock that the iPhone, one mobile device, could have had such an impact on the telecoms industry as a whole. Make no mistake, it singularly drove the mobile data revolution that has morphed into iPads and a slew of ‘wannabe’ devices. Remember, there were no Android phones back then. Up to that point we had dongles connected to PCs as the main thrust of the online wireless data revolution and we were offering ’all you can eat plans’ just to get people onto mobile networks. My, how times have changed!

He also stated that there might be a lesson to be learnt for telcos around the world concerned at what the future may hold. Having an enigmatic CEO with foresight able to lead by example and have the guts not to be hampered by overbearing and often conservative boards is one thing, being willing to innovate and fund that innovation is quite another. It’s way too easy to cut costs and hunker down for the short term, but much more difficult to be bold enough to invest in innovation to protect the future. That’s the Steve Jobs way.

However, the bigger lesson was that Jobs and Apple showed us how to make money out of content. Many CSPs had envisioned massive revenues from the sale of digital content to their loyal (and tied, in the case of prepaid) customer base. Their early attempts at selling music and games, primarily, were nothing short of disastrous. The concept of ‘walled gardens’ was howled down by consumers and, tied with their arrogant approach to content suppliers and developers, made them no friends at all.

We rushed, as an industry, to adopt the new-fangled two-sided business models but the idea of having to pay somebody else for products and services, outside of the traditional interconnect agreements, was foreign and distasteful. Our systems were not even geared to tracking sales from third parties direct to customers and it seemed that every major content aggregator had a different business model that had to be accommodated.

The solution was to make demands, particularly with regard to revenue share, that almost all suppliers found unworkable. The Insider remembers attending a telco event in Singapore at the height of the content boom and hearing a high-ranking executive from a Philippines mobile operator claim, in a panel discussion, that without the telcos the content providers could not survive, The operators, he said, owned the customers and managed the prepaid accounts for them. Any content provider wanting to access that market would have to depend on the operators and they would have to fork out 70 to 80 per cent of their revenues for the privilege.

We now know how successful that strategy was! Apple took a dramatically different tack with the music industry and probably saved it from extinction because of iTunes. Jobs proved that people would be willing to pay for music if there was an easy and economical way of buying and receiving the content instantly. With the advent of the iPhone and later, the iPad, Jobs called on the developer and content communities, previously maltreated by the telcos, and asked them to provide their goods via a simple, yet highly efficient app store and then collect 70 per cent if the takings for themselves.

History has clearly shown us which policy works. Jobs taught the whole industry how to make money from content but it is doubtful whether the message has sunk in. Whilst the mobile industry continues to grapple with the Wholesale Applications Community, Apple, Android and most of their rivals are selling billions of applications, not primarily to make money but to support the hardware they sell. To add insult to injury, that same hardware, powered by those apps, is the primary reason for the data ‘tsunami’ our industry now has to deal with.

How different the story could have been if Steve Jobs was CEO of a mobile operator!