By
Barbara Lancaster and
Trevor Hayes
In this piece, we hear from Pipeline contributing editors Barbara Lancaster and Trevor Hayes on what two weary travelers have learned from the companies that transmit people through the from point to point that they can pass onto the companies who transmit our bits and bytes from point to point.
Here I am on an airplane trying to write an article for Pipeline about alternative ways for communications service providers to make money. That reminds me that, much like telecommunications, air transportation is also a capital-intensive business: subject to fickle customer sentiments, constantly searching for ways to increase revenues and/or reduce costs, and often successful in annoying their customers in the process.
Yes, the core business of airlines is cramming people into steel and aluminum cylinders that are hurled through the air from A to B so that the people can be transported safely from where they are (A) to where they want to get too (hopefully, B). For this, the people pay the airlines money. While perhaps a little over-simplified, that’s the essential business the airlines are in.
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Much like telecommunications, air transportation is also a capital -intensive business. |
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already irritated, because that has less impact on the customer survey statistics.)
Come to think of it, the airlines have been pretty unimaginative about these “alternative” services. Why no in-flight cabaret? Where are the poker tables? In-flight medical procedures for very busy executives?
On the other hand, the phone companies have come up with some really good ideas, focusing on content, and entertainment, and social
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Now, from time to time, executives in the airlines ponder that key question: “What can we do to get some alternative sources of revenue?” After all, this moving-people-about game is getting a bit tight on margins and those customers can get so picky. There must be an easier way to make money, preferably without having to employ too many smart (read: expensive) people.
So over the years, they’ve come up with some cool ideas, like arranging hotels and resorts and entire vacation experiences for their passengers. Fair enough. Or like charging their passengers for low-def movies and years-old TV shows. Or charging me for a Bloody Mary whenever my points upgrade doesn’t come through. (If you plan to annoy a customer, it makes sense to annoy one who’s
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networking, and cloud computing: an impressive list of cool things that are made possible by the amazing new networks that the telcos are building just as fast as they can. (According to figures published by speedtest.net, the US has dropped to number 28 in the list of countries ranked by average Internet connection speeds.)
One slight challenge for the telcos here: none of the novel services that telcos would like to offer is new. None of those services really needs a telco to do much more than to carry the bits, reliably and fast. And lots of other companies are already putting them in place, some of them are doing passably well, and in a few cases actually making money from them.
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