Telcos' biggest enemy is themselves

TELCOS have their back up against the wall more than ever before, with services such as the newly launched nanu vying for room in the market. The mobile call app, created by a local startup, allows consumers to make calls for free to landlines or mobile phones in return for listening to a short audio advertisement while waiting for the call to be answered. This is not the first encroachment on telco territory, but it is a larger one. Nanu works on any network, including 2G ones, unlike players such as Skype or Viber.

Since the onslaught of services delivered over the Internet such as WhatsApp and Line, operators have put up a brave front. Some have insisted that the reliability and quality of their own connections will see them through. In short, they can do this better. The problem is, the operators are in an environment where "better" is not good enough. In fact, better is worse than "not good enough"; it is irrelevant. Outside the enterprise space, people will put up with a lot if a service is free.

Consumers also place a lower marginal value on crystal-clear connections or a lower rate of dropped calls than the operators think they do. These features are increasingly seen as the bare minimum, not qualities worth paying a full rate for. This is if people are even still making calls at the rate that they used to, which they are not. Nanu and its kind are not taking away revenue that operators would otherwise have kept.