Operators at crossroads: Market protection or innovation?

Abstract

Many today believe that the mobile Internet was invented by Apple in the USA with their iPhone, enabling a data-driven Internet ecosystem to disrupt the staid voice and SMS business models of the telecom carriers. History, however, shows that the mobile Internet was first successfully commercialised in Japan, in 1999. Some authors such as Richard Feasey in Telecommunications Policy (Issue 6, 2015) argue that operators had been confused and unprepared when the Internet emerged and introduced “walled gardens”, without Internet access. This comment article reviews in detail how the operators reacted when the fixed, and later the mobile Internet spread: some introduced walled gardens, some opened it for the “unofficial” content on the Internet. The article concludes that most large European telecom and information technology companies and their investors have a tradition of risk avoidance and pursued high-price strategies that led them to regularly fail against better and cheaper foreign products and services, not only when the wireless Internet was introduced, but also when PCs and the fixed Internet were introduced. Consequences, such as the need to enable future disruptions and boost the skills needed to master them, are presented.