IBM Study Shows Telco CEOs Struggling to Adapt

Eric Riddleberger, IBM's global business strategy leader, who heads up the company's corporate social responsibility consulting efforts, said rather than competition or regulatory changes, the biggest issue haunting the executives at major carriers is how to keep their businesses from becoming a dumb pipe. "That's the thing that keeps them up at night on the innovation front," Riddleberger said. "They aren't worrying about competing with the cable guys. They worry about someone like a Google or Apple coming in and totally disintermediating them from the consumer." Seventy-seven percent of telecom executives plan to change their business models extensively over the next three years, while the remaining 23 percent plan to make more modest alterations. However, instead of tackling the issue of being a dumb pipe through wholesale innovation, 40 percent of the survey respondents are looking to alter their revenue model through changes in pricing plans, such as metering, or new services such as figuring out an acceptable way to leverage their customer knowledge for advertisers. Another 30 percent are looking at ways to change their operational model such as by outsourcing their network.