Imagine being in the room in 2008 when the then-scrappy dot-com startup Netflix came in to pitch its value as an acquisition to the Blockbuster executive team. Saying the $50 million dollar price tag was met with skepticism would be quite an understatement.1
Could an online business ever seriously compete with brick and mortar—especially a video rental giant like Blockbuster with more than 9,000 storefronts across the country? Who would ever want to get their movies by mail?
There are moments of sea change when action isn’t just a wise business move, or even a matter of success, but necessary for survival. The communications industry is experiencing such a moment right now. The telcos that survive will be the ones that pay attention to three key concerns—security, customer experience, and employee satisfaction.
How did we get here?
Digital connectivity has never quite been equal in the U.S. Only 72% of rural residents have access to home broadband, compared to 77% living in urban areas and 79% in suburban areas. When our entire lives went online, this discrepancy gained new urgency.2 During the pandemic, rural areas used telehealth services 30% less than urban areas, a trend that correlates strongly with lack of broadband access.3 4
The Infrastructure Investment and Jobs Act of 2021 aims to close this gap, allocating $65 billion in funding for broadband expansion and access.5 Telcos are rushing to secure grants, build out infrastructure to reach underserved areas, and find new customers, which is increasing competition to provide the content and services running over those channels. Hyperscalers, cable providers, service integrators, and more are seeking to scoop up market share in plays to stay relevant through a combination of new offerings and key partnerships.
How communications companies can own the moment
All this activity comes together to jolt what was once a quiet scene into a revitalized and hypercompetitive market. Local and regional telcos are competing with international giants. Hyperscalers and cable providers are racing to secure IP rights and content partnerships before their competitors do. Businesses across industries are doing everything they can to come out on top.
Winning this moment will require keeping pace and differentiating. Telcos must continue to provide the services and content their customers have come to expect (and keep expecting more and more of) while setting themselves apart from other players. The industry is at a turning point, and it is up to telcos to determine how they will rise to the occasion and become more than connectivity providers.