Everyone thinks telcos are utilities except the telcos

It’s a trend which the telcos have been fighting hard to resist, but the growing wave of commoditization is seemingly starting to swallow them up.

The telcos continually deny they are utilities, but the fact they seem unable to branch off into value added services with any notable success is a damning trend. New research from The BIO Agency is just another stick to beat them with.

Let’s start with the most painful statistic; nine out of ten correspondents, all of which were UK consumers not necessarily industry figures, perceive their telco provider as a utility. According to this research, it’s not just journalists, the tech industry, regulators, enterprise organizations and vendors who view the telcos as utilities, it is Joe and Jane Blogg on the high street as well.

To support this claim, 64% of the respondents also consider there to be little or no difference between the telco. And to be completely honest, when it comes to selecting a new provider, your correspondent will tend to agree with the 64%; decisions are based on price alone. Sure, there might be the added bonus of content thrown in, but experience to date says this content isn’t very good. Excluding sport of course, but this isn’t something produced by the provider, just relayed to the consumer. And it generally costs extra as well.

Should the telcos want to continue this battle against commoditization, the perception of the brand and the business certainly needs addressing. Content is an area they thought this could be done, and quite frankly it hasn’t worked, perhaps the smart home is an area where this could be done, facilitating the relationship between the customer and the range of new services which will be prominent before too long.

Whatever it is, some value added service needs to be created, as you can guarantee the race to the bottom (in terms of data pricing) is certainly not going to change. Data is no different whether it comes from O2, EE or Three, the only thing which might differ is the quality of accessing it, which varies depending on where you are. Certainly sounds like a utility.

The final area we would like to draw attention to is the following:

  • 76% of people would not switch their telco provider if they had the opportunity
  • Though only 27% are likely to recommend their current telco provider

What this says to us is that customers can’t be bothered about going through the painful process of changing provider, but they certainly don’t give a monkeys about where their data is coming from. In this sentence, ‘data’ might as well say water or electricity or gas, the same attitudes are seemingly present.

The telcos are losing the battle of perceptions, but we’re not 100% sure this is one which they will be able to win.


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