Does The Telecom Industry Still Exist?

by Colin Berkshire

Colin here:

Does the Telecom industry even exist anymore?

I am in Vancouver Canada and am having a conversation with a branch office there. One of the questions came up as to why our company still has a Telecom department. After my knee-jerk explanation that they supply phones, inter-communication services, and manage our gateways the manager stated simply:

But Telecom is simple. It’s just an application on the Internet. It isn’t any more complicated than email, and we don’t have an email department. I hardly use my phone anymore, it isn’t very useful.

This caused me to pause and think. And, it gave me a headache.

I grew up in an era when the telephone network was the largest, most complicated machine ever built by mankind. I remember those wall-sized displays showing a call getting routed across the country, meeting congestion, and then getting re-routed. Clattering central offices filled skyscrapers in our cities. Operators handled calls, routed around problems, provided “person-to-person” calling. Billing systems handled WATS, collect, Zenith and Enterprise services. Huge cables had nitrogen pumped into them to keep them pressurized and dry, and to detect leaks. Subscriber-line concentrators and TASI (Time Assignment Slot Interchange) systems optimized cables. The phone network was infinitely complicated.

Today, none of that is the case. The phone network of today is a small, tiny fraction of the Internet. The entire direct distance dialing (DDD) phone network simply runs as an Internet application. Most of the long-haul phone network is just packet switched and is routed along with Facebook and torrent streams.

The fact is that telecom is trivial. It’s trivially simple compared to the past. And, it is trivial in its value added complexity compared with the past. Apple FaceTime provides free video calling. Skype provides video conferencing, and they are free.

When you take a step back, telecom just has no value added anymore. Voice Mail is a least-preferred way to communicate. PSTN voice calling is low-quality audio. What else is there? How can we even claim that telecom is an “industry” when it is nothing more than $100 Grandstream telesets and an asterisk software package.

The value add of telecom is small. The complexity isn’t great. The devices are cheap and largely are brain-dead and inflexible. What part of this equation adds up to being an “industry”? It is as much of an industry as is the CD-music industry.

It kills me to admit this. I grew up in the halcyon days of Bell Laboratories being the greatest R&D organization in the world. I was proud that mankind had managed to create switches able to handle 100,000 calls an hour. I marveled at the 15 story buildings filled with clattering machinery.

Today, a cell tower has a battery pack in a hut that can power the tower for only a couple of hours. No longer are there dual diesel generators with a third natural gas backup, two independent power feeds off two separate grids. No, telecom isn’t important enough to justify such infrastructure any longer.

So what does this mean?

I don’t know.

But the basic problem is that there is very little value-added happening in telecom. That means that it is just getting commoditized away. And, it withers on the vine.

I don’t think telecom is dead. But it needs a swift kick in the pants if it is to survive.

I will give you an example: I was calling in to my voice mail to pick up messages., and I was frustrated that I had any messages at all. I wondered why when I traveled from one country to the next my corporate phone number just didn’t automatically follow me? Forget the technical excuses, just solve the problem I thought. When I fly to a country I insert my SIM chip for that country. Then, I have a local number for people to call me locally, and I pay local rates for my airtime. Why can’t my corporate number just know I have done this, and start sending my calls to me immediately?

In the very worst case, when I call my voice mail and log in, it should see the number I am calling from and just start sending my calls there. But it can’t even do that…a feature that to me seems trivially (ridiculously) simple. I mentioned this feature to my telecom contact and he started to explain how the voice mail system didn’t get the caller ID passed to it, and how the voice mail system didn’t have the ability to set up call forwarding on the main switch that hosted my number. My eyes glazed over. The feature is trivially simple and we cannot do it.

No wonder telecom is doomed.

Folks, if telecom is to survive it is time to get down and start adding value. It is time to make things simply work.

In case simple isn’t clear let me explain: simple things like setting up a VoIP telephone instrument just cannot take 152 separate settings in the endpoint. (the Grandstream sets can have up to that many!) and, you cannot have to set up things by trial and error (touch-tone out pulsing is still largely trial-and-error on whether you use RFC-2822 or in-band or SIP, etc.) This non-value-add complexity is killing telecom.

And, can anybody explain why the pay phone on one side of the hall in a mall charges 50¢ for three minutes to call Japan while the pay phone on the other side of the hall charges $9 per minute? I understand about the free marketplace, but the $9 rate is a silly rip-off and undermines the entire credibility of the industry.

But then, can anybody explain why it should cost $2,100 a gigabyte to use your AT&T iPhone in Hong Kong?

There is a basic distrust of all telecom players by the general business and general public. That doesn’t help any of us survive.

How do we fix this mess?