GE last year unveiled plans to help consumers achieve what it calls a “Net Zero” home — as in zero utility bills — by bringing together solar, wind, fuel cell, smart appliances and interfaces with smart grids and other technologies. The conglomerate’s efforts are the subject of a case study in my new book on technology-enabled business innovation, “The New Polymath.”
Beyond GE, as I learned during my research, there are German consumers producing surplus electricity from their solar panels and selling it back to the grid. There are companies “following the moon” — processing at the cheapest nighttime locations around the world. Certain utilities are actually excited about this environment of changing consumption patterns — they refer to it as their “virtual power plant” — since it would allow them to potentially postpone investment in additional power generation capacity. And so it occurred to me, why are similar innovations not taking place in telecom? Why isn’t there a carrier out there touting net zero phone bills?
If that makes you burst out laughing, I don’t blame you. After all, we’ve been conditioned to expect all kinds of shortfall, overage, early termination, roaming and other creatively named charges on our phone bills, never mind the additional 20-25 percent in taxes. For many people, landline, mobile and cable bills far exceed those of electricity, water and other utilities combined.
But as I wrote about the telecom market for the book, I cataloged many signs of consumer/community ingenuity and at least some telcos that are looking at more creative business models:
Take the Lafayette (Louisiana) Utilities System. After five years of bruising court battles with AT&T and Cox (the local cable company), the community can now take advantage of broadband download speeds approaching 50 megabytes per second (Mbps) for $58 a month. The maximum AT&T offered the community was 6 Mbps; Cox did somewhat better with 15 Mbps (although more recently Cox finally started to increase speeds — it started offering the Cisco DOCSIS 3.0-based “Ultimate Internet” service with up to 50 Mbps). Of course, both companies wanted customers to sign up for triple-play packages, as well as the spoils that come from long-term contracts and installation fees.
Bharti of India is letting its equipment suppliers like Ericsson and Nokia Siemens operate and — importantly — absorb the capex of its network. This is somewhat similar what cloud computing offers the enterprise — on-demand, low-waste investment with savings that can be passed along to consumers. (For more on cloud computing, attend Structure 2010, June 23 & 24 in San Francisco)
Another example is MAXroam from Cork, Ireland, which envisions the world under one giant area code with no roaming charges. It currently offers voice coverage in more than 210 countries and data coverage in over 140. Plus, each user can get up to 50 numbers associated with the MAXroam service, enabling travelers to give out a number local to the country they’re in while saving their callers an international toll.
Karin Morton of Rio de Janerio, Brazil, after fattening local telcos with hefty long-distance charges on her frequent trips outside the country for years, has now conditioned herself to use Skype on her iPod touch wherever she can access Wi-Fi. She carries a basic phone as back-up for emergency calls, but saves herself the monthly voice and data charges by using an iPod instead of an iPhone.
And Martin Geddes, formerly of BT, brims with new business models for telcos, specifically those that involve the removal all kinds of supply-chain inefficiencies. “Call center operators are paid to transcribe names, addresses and credit card numbers of people for whom the telco they are placing the call from already knows. Trucks deliver parcels to homes where the telco knows you are already out.” In his world, these new revenue sources would subsidize customers like Morton and in turn, provide access to her global social and business network, which could then be leveraged for other revenue sources.
It may take a large influencer from outside the industry like GE to pull it all together, but if the stodgy public utility industry can embrace it, surely the telecom industry can as well. May be someday soon we’ll hear telcos glowingly talk about their “virtual power plants.”
Vinnie Mirchandani is a technology adviser, blogger, former Gartner analyst and author of the upcoming book, “The New Polymath.”