Telecom firms keep on being disrupted, so will they disrupt banks?

Speculation alert; I am reporting on what could/should happen, not on what just happened.

Poor old telecoms companies – who loves ya? Consumers feel they have been paying too much for years, first for log distance and then for mobile roaming. So we all cheer when Whatsapp and Skype and others come along to use their “dumb pipes”.

Quick quiz – which of these corporates do you love the most:

  • Telecoms?

  • Health Insurance?

  • Banks?

There is not a lot of reputation daylight between those three. So consumers cheer anybody who disrupts them to offer a better deal. What if the firm doing the disrupting is one of the ones who is being disrupted?

Telecoms are fighting the “dumb pipes” narrative with their own OTT services. One option is clear. They play defense in the home market and offense in a foreign market. That is what T Mobile (Deutsche Telecom in their home market) is doing. France Telecom is doing the same with Orange. Swisscom is offering free calls over Wifi to any phone using Swisscom IO.

The other option is what Vodafone is doing with M-Pesa. They are going after the 70% of the world that is unbanked. That is a massive market. While it is working for Vodafone, a more open approach using Bitcoin could be huge. Telecoms firms have two huge advantages that they are not leveraging today:

  1. In a world where networking is king, they own the pipes.

  2. They have subscriber relationships with millions of consumers.

One alone is not worth that much. Two together is a big deal. I do not know which Telecoms firm will be first to seize this opportunity. When I see that I promise to be your faithful reporter.

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