Chapter 10 of Clayton Christensen’s Seeing What’s Next addresses disruptive and sustaining technologies in the telecommunications industry. Growing focus on mobile and IP solutions have forced the incumbent landline companies to address new business models and ward off upstarts threatening to encroach on their space and steal their customers away. Anyone with a laptop and/or a mobile phone (which I suspect accounts for 99.9% of the people reading this post) can attest that telephony in its traditional form is archaic and no longer provides the services that today’s customers require. The growth of free or inexpensive Wi-Fi, mobile 3G (and now 4G) networks, and the refinement of VoIP services have severely disrupted the incumbents’ residential and enterprise businesses.
Christensen notes that customers increasingly use wireless phones instead of landline service, tolerating poorer-performing technologies in exchange for convenience and lower cost. (Christensen, Kindle location 5006) Since his writing, broadband has become faster and more reliable. This has allowed VoIP companies to improve the quality of their services while continuing to offer lower rates than incumbent organizations.
In one sense, I’ve taken one small step away from traditional telephony by switching to a cable provider for the landline at my home. Christensen suggests that cable companies that offer voice services are following a sustaining, not a disruptive, strategy. I would contend that their voice offerings are extremely disruptive to traditional phone companies. I chose a less-expensive home phone option from the cable company that came bundled with Internet service. Before that, I always relied on a phone company for my landline. I contend that mine was the telecom’s business to lose. And it did. On top of higher prices, my local telecom did not offer broadband service in my area. Its inability to compete cost not only Internet service, but phone service as well.
After reading this chapter, I am giving serious consideration to cancelling my home phone altogether. Mobile has become my primary medium of communicating, whether using voice, text, instant messaging, or email. Coupling newer VoIP options such as Google Voice, Skype, and Magic Jack, the need for a landline is becoming increasingly less relevant in my day to day life – especially since they are available on the computer and mobile device. Taking into account the number of computers in my household (three) and mobile devices (two), I effectively have five phone lines for only two users. In addition, the various VoIP options at my disposal offer more novel features than the traditional phone such as transcribed voicemail, free texting, email alerts, and unified phone numbers across my devices accessible anywhere with 3G or Wi-Fi. Why am I still paying for a service I rarely use?
The same holds at my place of business. When I started working at Microsoft, I was surprised that I had to actively request a phone number and a desk phone. When the device arrived, it had one cord – a USB cable to connect it to my computer. As I’ve adapted to the way the company does business, it became clear why they only provide phones upon request. Voice communication is not relevant for the majority of our interactions. More remarkable still is the notion that wherever I take my company-issued laptop, I’m also taking my office phone. As long as I have Internet connection, I can make or receive calls as if I were in the office without worrying about turning on call-forwarding or remembering to turn it off when I return.
As Christensen addresses throughout the chapter, one technology alone could not disrupt traditional telecoms’ business in any meaningful way. However, when combined, cable broadband, Wi-Fi, mobile, and non-voice communications are taking a serious cut of the incumbents’ business. Time will tell if the landline will become a relic like the telegraph before it. I for one won’t miss it or the 34 unheard (and likely unimportant) voicemails waiting for the next time I dust it off to use it.
- In light of the technological growth during seven years since Christensen published Seeing What’s Next, does traditional telephony have a place in today’s market?
- What are the most important voice features to you? Does the traditional land line provide those features?
- Can traditional phone companies compete with the disrupters? How will they have to adapt to increase revenue?
Christensen, C. (2004). Seeing what’s next: Using the theories of innovation to predict industry change. Boston, MA: Harvard Business School Publishing Corporation.