This weeks analyst call was a toughie for CWs pilgrim and his team of Energisers. I just watched webcast; skip the bit about the Caribbean, it's all phone minutes.
Times Online reported one analyst saying: “Their plans are far too long term for this market. They need a quicker fix than this.” Mate! Go find something else to analyse! If you haven't worked out that there is no quick fix for telco, you're' in the wrong job.
It's not a CW specific problem; it is the same for all the Telco's: After 100yrs of selling voice minutes somebody invented the Internet, and that's having the same effect that airliners had on oceanliners. Massive increase in traffic, loads of competition, and a huge drop in revenues per head as customer choice expands.
In todays financial markets this is a recipe for volatility, and volatility = risk. SO, vicious circle; everyone's risk averse, so everyone's looking for the quick fix, and there isn;t one. The answer for the service providers is to sell core services, to valuable customers over their own networks, and, once they have those customers keep them. Not so simple as it sounds.
After years of volatility, crashing stock prices and stranded passengers; the airline industry introduced Revenue Management in the '80's. They filled their planes with the customers who provided the best economic return. First class, business, early bookers, flexi-tickets, block bookers, loyalty card holders, late bookers all became categories that were given quota's, and managed using sophisticated booking models. They didn't invent anything, or come up with fabulous new killer services! They just provided a core service and managed their customers more effectively.
Telco's must do what the airlines did, introduce Revenue Management and fill their networks with valuable customers. It was realising this fact about 4 years ago that caused us to give up the day job and start BackChannel.
So, CW, PanAm or Virgin Atlantic? Personally, left to it's own devices I think CW has the potential to become a truly global telecoms provider; they have the network, the services, the contacts and the mindset to do the job. Question is; Do they have the time?