ANALYTICS 2.0

IT Phone Home.

Have you ever thought about why, if you want to call someone, you call him on his home phone? I mean, isn’t it kind of ridiculous to call a communal place when you are looking for a specific person?

If I need to call someone I just dial his cell phone number, and most of the time he will answer his phone. If that person for some reason cannot answer the phone, I can leave him a message or send him an SMS instead. It’s simple, fast and effective.

On the other hand, if I call my friend’s home, there is the possibility that is not there; even worse, his wife or children may be sleeping and will be bothered by my call.

So why do we still have phones at home? I think there are a variety of reasons: the first is habit; we have always had them so why not have them in the future. The second is the cost; cell phone minutes are so much more expensive (at least in Latam) than the cost of regular phones.

It’s hard to understand why the TELCOS don’t reduce the prices on cell phone minutes. Telecommunications is a scale economy industry, meaning that they have a reduction in cost per unit resulting from increased production. It’s true that they have the technological capacity, and each time they increase their capacity it becomes higher than is necessary at that time. So why should they take the risk of having idle production when they already have a high ROI? The answer is, because of the future: there is nothing more important in every industry than to generate a market, and let me tell you…in this industry that is really possible. After every investment there should be a reduction in costs and, of course, in final price. Every reduction in price introduces a new segment of consumers into the market, who most likely have (as we’ve mentioned in another post) very expensive cell phones but also restricted plans that only allow them to talk for around 50 minutes per month.

This industry has a huge amount of potential, and in my opinion the only obstacle for it to explode is cost.

These days I hear many people talking about the Triple Play (voice, data and video), but isn’t it too early to talk about this in Latam, where someone who earns minimum wage needs to spend more than 20% of their salary just for a broadband connection?