What Telcos do about Web 2.0 - an open source discussion

On Wednesday I was working with Simon Torrance of STL Partners, hosting the Digital Home workstream at the Telco 2.0 Brainstorm.

The overall discussion was about the evolution of the digital home, and we had a number of very interesting presentations, of different people's views on the evolution of areas like IPTV, mobile content (including football rights) and femtocells, plus discussions around the likely maturity of emerging technologies.

Of course, a theme that came across fairly consistently was the issue that the customer is not interested in technology, but in services.

There were a few nuggets that emerged:

- Customers like Capex spend so they have control, Operators like subscription services

- A large proportion of mobile calls are not made when people are mobile - apparently about 1/3rd are from the home to boot

- Confirmation from more mobile surveys that a lot of mobile TV is watched at home

There were also a number of "disruptor" talks, including Slingbox and yours truly, and one from Marty Algire of Radialpoint

Now at the end of Marty's talk he asked a very interesting question...to quote:

What would happen to the stock of a BT, AT&T, or T-Online tomorrow if
they together announced they were halting all internal software
development projects, and putting 10MM each into Nutch for search,
jabber for IM/VOIP/presence, and Zimbra for web based email? The
announcement would also outline their plans to launch each of these
applications on their networks by the end of the year, and would offer
their subscribers discounts on their monthly bills in exchange for page
views and/or ad clicks?

This is a very interesting question.....whether its those companies or not, its basically an argument for Telcos to use some of their resources to create the "next generation" search, social net, unified messaging and similar "Web 2.0" services, and make them open.

I recall discussing a similar thought at BT about a year ago. Most large Telcos have enormous assets and capabilities in the Open source space, and IBM is making some moves in the space as well.

The session used a user feedback system from wireless computers on the delegates' tables, feeding into a backchannel screen and a database - sort of an openly sourced discussion about Open Source strategies. The audience were not hopeful:

- Too slow to get to market
- Can't deal with cross-silo services easily
- New services struggle to get traction above the powerful interests of the main existing services
- Radical ideas are anathema, even to try them out

And yet, and yet...as Marty pointed out, Google's own SEC filings say that in essence there is a risk for them because Telcos can do some of what they do better.

So clearly the competition see the potential threat.

In addition, in the Telcos and Advertising work we did with Chris Barraclough, we had evidence that media advertisers valued some telco assets (e.g. reach, ability to give analysis) more highly than Telcos did.

And work we have done in the past shows that Telcos are fairly well placed for industrial grade privacy, presence, security and online directory services.

So, are Telcos suffering a crisis of confidence? ( interesting thought in an industry normally thought of as arrogant

What do you think?

Should Telcos embrace Open Source and start funding the next gen "Web 2.0" based services?