About Electric Cars and Telecom
I am in the market for a new car. I am looking at all the possibilities (and boy, are there possibilities – how am I supposed to make a decision?), weighing the pros and cons of each brand and model, and taking into consideration my budget.
And then I stumbled upon Better Place. For those of you who don’t know, Better Place is the first company to bring a viable 100% electric car to market. Their proposition is as bold as it is attractive – with a grid of battery-switching stations supplementing ubiquitous charging spots around the country, they believe they can replace our dependence on gasoline-fueled vehicles. I, for one, believe not only that they can, but that we should look for alternatives to our non-sustainable practices of today.
But what really caught my attention were Better Place’s car and service packages. Because it seems to me that they took a page from the telecom bundling book. We all know about bundling – it involves combining two or more services to provide an attractive package for the customer. It can be mobile and fixed voice, internet, video, etc. The sky can be the limit when you think about all the possibilities of bundling. But what’s attractive about Better Place’s packages is that they are simple. There are basically two options: a one-time payment for three years, or a monthly payment fee, depending on how many kilometers/year you usually drive. All the elements within these packages are pretty self-explanatory and don’t change much from plan to plan.
This is not quite the case in the telecom world – there is still a lot of confusion on what’s included in each plan, and how much of a discount the consumer gets on a bundled offering. Most operators have recognized the need to simplify their offerings to make it easier – and more attractive – to their customers, but we are not quite there yet.
Part of the problem is that the telecom world is not building its offerings from scratch, like Better Place. Once it embarked on the electric vehicle market, Better Place took it upon itself to build the infrastructure from zero – including all the battery-switching stations and charging spots. Telecom operators must cope with an infrastructure that was deployed years ago, and has been evolving according to the always-changing demands of the market. Changes are, after all, the one constant in the telecom sector. Operators’ networks must cope, simultaneously, with legacy and next-generation traffic – TDM-voice, and IP data traffic and video, both in their wireline and wireless networks, and for residential and business customers. It would be the equivalent of Better Place coping with both fuel and electric cars in a hybrid gas station/battery-switching station…
But operators have to, and do cope. Telecom networks have been built in layers – starting with voice, and then adding data gradually for advanced services and video. However, the answer lies in convergence. With a converged infrastructure, operators can play the bundle game effectively. Convergence brings simplicity and incremental savings in both capex and opex. Convergence is not a “nice to have” or a luxury, but rather essential if operators are to remain competitive in the provision of next-generation services. They may not be building their network from scratch, but they might as well revolutionize how their customers communicate with each other.