Are We Entering the Age of 'Frenemies' in Telecom and IT?

Carl Weinschenk

The worlds of telecommunications and IT — taken as both separate sectors and where they overlap — are vast and complex. Big carriers and vendors offer such a wide array of products and services that they compete in multiple areas. But it also is true that this landscape offers them the opportunity to cooperate to their mutual advantage. This is the age of “co-opetition.”

This is not new, of course. But it seems likely that it will grow as market penetrations rise and the “low-hanging fruit” slows in each sector.

A case in point is the growing relationship between Verizon Wireless and the cable industry, led by Comcast. Verizon and the multiple system operators (MSOs) offer many of the same services, especially if the wider Verizon family — which offers FiOS — is thrown into the mix.

Last week, Comcast and Verizon announced Xfinity TV Player. Subscribers of the two companies’ services will be able to use Verizon’s LTE network to download content from Comcast to their mobile devices. Here is how Telecompetitor describes the service:

According to a Verizon Wireless blog post Xfinity TV customers who subscribe to Showtime, Starz, Encore or Movieplex can now download “thousands of hit series and movies.” To use the offering, Apple iOS or Android device users will need to download a free Xfinity TV Player app.  In addition to working with Verizon 3G or 4G, the app also works with WiFi.

The details of the service and whether or not it will succeed of course are important issues. But what is perhaps even more important is that the companies see the mutual benefits of working together.

This also isn’t the first time Verizon and the cable companies decided to tango instead of tussle. A year ago, Verizon Wireless entered into deals to buy spectrum rights from Comcast, Time Warner Cable, Bright House and Cox. It was perhaps even more startling that the companies agreed to sell each other’s products in their stores under certain conditions. The Federal Communications Commission signed off on the deals in August.

It is not only carriers that see the advantages. Late last month, Larry Dignan at ZDNet described a “frenemy” relationship between Netflix and Amazon. The two companies compete in the video-streaming realm, but Netflix is using Amazon Web Services for its infrastructure. Wrote Dignan:

Simply put, the Netflix and Amazon relationship is complicated, nuanced and in some regards just plain weird. The Netflix-Amazon relationship also highlights why Amazon Web Services (AWS) is successful.


The entire telecommunications sector hasn’t adapted as well to the need to forge frenemy relationships. A good example of companies with less than peaceful play dates is Google and device makers. Google purchased Motorola Mobility during the summer of 2011. Motorola, of course, makes handsets. Thus, Google put itself into the position of competing against other companies that use the Android operating system it controls. The other vendors clearly weren’t happy.

Natural selection is at work. The companies that recognize that cooperation is more sensible — especially as subscribers become increasingly locked into their providers and “stealing” them becomes more difficult and expensive — will thrive.



Add Comment      Leave a comment on this blog post

Post a comment

 

 

 

 


(Maximum characters: 1200). You have 1200 characters left.

 

null
null

 

Subscribe to our Newsletters

Sign up now and get the best business technology insights direct to your inbox.