Smilies

David versus Goliath in Telecom

by John Myers Published: October 9, 2007

Are the deep pockets and resources of traditional telecoms the driving force for innovation and product development in telecommunications? While it pains me to mention this, this fall the sports world provided a great example of how picking “Goliath” to beat “David” is not always the best decision. The example of which I speak is the recent loss by Michigan to Appalachian State (btw – we won’t talk about the oregon game either…). This example shows that “David” can beat “Goliath,” and this message should not be ignored by those in the telecom industry. While there are some who claim that the deep pockets and resources of traditional telecoms are the driving force for innovation and product development in telecommunications, I disagree. It is not a foregone conclusion that bigger telecom providers will crowd out the smaller players due to their superior size and resources. That argument ignores the fact that there is a significant advantage to product innovation, corporate agility and knowledge of customers – three things that are not necessarily done well by all large telecom providers. Mark Twain probably said it best: "It's not the size of the dog in the fight, it's the size of the fight in the dog." For example, if it was so easy for big telecoms to innovate and enhance products, the following would have happened:

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AT&T would have offered the iPhone without the “help” of Apple Comcast would have offered the breadth and quality of DIRECTV as opposed to raising prices 93% in the last 10 years Verizon would have created Skype instead of attempting to sue Vonage out of existence AOL would still be the king of Internet connectivity

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While Apple, Skype and DIRECTV are still not “small” companies, they are not dominant players like the “establishment”...