Dumb pipe vs. smart pipe: A futile discussion?

Monica Zlotogorski
14 Apr 2010
00:00

But how many parties are involved before that pair of shoes that I want to buy reaches my local department store or that cup of iced vanilla latte is made at my local Starbucks? The retail business is more than anything about the art to manage a long, complicated value chain and bring the product to the store in a way that, regardless of what happens behind the scenes, the customer gets the same experience time and time again.

We’ve been talking about complex value chains for a while, but the issue is that the focus should be placed in a different direction, which becomes a lot clearer when we compare CSPs to retail services, as opposed to pipes. It’s simply about managing the value chain and enabling the distribution of their products.

There are some very creative steps towards this retail scenario that I’ve already seen in emerging markets even without the availability of smartphones (that is, the latest technology or gadget) or network infrastructures that work with zero faults. For instance, supermarkets that let customers know about discounts and coupons while they shop or stores offering loyalty programs on mobile phones, just to name a few examples.

My experience in some emerging markets has told me one thing: it’s not exactly about just winning the technology battle, but about enabling channels that make money at all times. I’m not implying that acquiring the latest communications technology is not substantial, but there are far more options that CSPs can take advantage of while they “walk the walk” that can help them generate additional revenue, change the way they bill for things and share the profits across the value chain if they think retail all the way.

In conclusion, if we could just see CSPs as entities offering retail experiences and we build the next business model on that image, as opposed to pipes, then the next big thing may not be such a long, complex process. The control of the communications retail experience can actually begin now.

Monica Zlotogorski is editor of TM Forum’s Inside Latin America and vice chair of its Latin America Advisory Board

This article originally appeared on TM Forum's Inside Leadership newsletter

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