Telcos ignoring tablet commandments

Telcos ignoring tablet commandments

Summary: Our two major telcos have jumped onto the tablet bandwagon with cheap and uninspiring devices that offer nothing that's new. It's an unimpressive effort in a market that could, if approached more creatively, keep paying customers more engaged, and forge a trail into the new content world. But can Optus and Telstra think far enough outside the box before it's too late?

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If you've ever had a grandmother, odds are that you once received a Christmas present that wasn't quite right — that sweater that was way too big or way too ugly, the kind of toy car you stopped playing with years earlier, that underpowered MP3 player you wouldn't be caught dead listening to in the schoolyard.

Well-meaning people often try to do the right thing, but go about it in all the wrong way — and it's not just limited to holiday gift-giving. Indeed, this affliction has manifested itself in our telco industry over and over again as carriers work hard to figure out new ways to siphon money from our wallets, but they either fail to offer something we need, or offer the right thing — but in the wrong way.


(Regal image by tutu55, Royalty Free)

The latter seems to be the modus operandi for both Telstra and Optus, which wasted no time jumping on the tablet computer bandwagon last year, but have subsequently failed to deliver platforms that serve as much more than underpowered novelties. In so doing, both companies are selling themselves short and leaving themselves exposed to nimbler rivals that fundamentally get the idea of selling a unique value proposition.

That proposition, of course, is content. Telstra has spent much of the last decade trying to find new ways of flogging its music, movies, mobile pay TV and other online content but — as I noted after the iPhone's initial Australian release in 2008, and again when the 3GS bowed a year later — it has struggled to find a balance between the phone that customers want, and the services it wants to sell to them. Inability to customise the iPhone interface left Telstra unable to sell the device with links to its own content services, leaving it in a fierce content catch 22: sell the device and become a conduit for users accessing Apple's rival iTunes content, or act like the device doesn't exist, and blindly hope that users value Telstra's media services enough to bypass the iPhone.

Fortunately, Telstra was realistic enough to realise that the latter option just wasn't going to fly; iPhones, unencumbered by Telstra's walled-garden content approach, are hugely popular on the company's Next G network. They're also big at Optus, which targeted iPhone buyers early on and is happy to be a dumb pipe for them to download all kinds of iTunes content. Optus, after all, lacks the deep content infrastructure of its rival, instead positioning its 2003-esque MyZoo portal into a sort-of internet value add. Suffice to say, I doubt that many customers are rushing to sign up with Optus, because it struck a partnership with Google to integrate YouTube into MyZoo.

Telstra, Optus and all their putative competitors desperately need to take a bigger-picture view of their content delivery strategy if they want to remain relevant.

Optus chief Paul O'Sullivan knows that the company has to do better with its content; he said as much in his CeBIT keynote speech earlier this year, when he called for more openness in content and blasted the proposed Austar-Foxtel merger, which would all but lock Optus out of the content market. Yet, Telstra, Optus and their putative competitors all desperately need to take a bigger-picture view of their content delivery strategy if they want to remain relevant. And this means looking beyond the usual suspects.

Consider the market in the US: Asus, for example, recently started bundling access to the US Netflix service in its US$349 Eee Pad Transformer, which has transformed from being a solid Android tablet into a tablet and media gateway for a major content service. US consumer-electronics brand Vizio has bundled the Hulu Plus video-on-demand service with its US$299 Vizio 8 tablet. And others are following suit.

Here in Australia, you can get your iPad in any flavour you want, as long as it's Apple. Android tablets are something less than universally revered, largely because they're all more or less similar. And Optus and Telstra continue to innovate in dribs and drabs, preferring to pitch underpowered tablets that offer access to the same old, same old. Both the Optus MyTab and the Telstra T-Touch Tab are the equivalents of that Cabbage Patch Doll that your well-meaning grandfather bought you for your 14th birthday, and they're both going to have about the same impact. The net result is that consumers are being sold a wan vision of content delivery that repeatedly cudgels itself in the head with its mediocrity.

Now, I realise that Netflix and Hulu and their ilk are still unavailable in Australia, so the options are more limited here. But carriers are showing a damning lack of creativity when it comes to finding ways to make people want to buy their underspecced devices. Instead of offering tablets that have bare-minimum functionality and get pushed through online discounters after a few months because they're pale imitations of the A-list tablets that people actually want, why not push those tablets as content portals that also happen to be the only way to access new content services?

By negotiating a subscribers-only content deal with the likes of Netflix, Optus could easily restrict access to the service to a defined user base that's constrained to its own network. Content could be easily controlled, and Optus would finally have an on-demand content proposition to rival that of Foxtel. Its tablet would quickly mature from being a me-too curiosity, into a set-top box that could also serve as a content hub for Optus households. Hell, telcos could even offer to assist the likes of AFACT — which has long demanded much from them, but offered little in return — fighting piracy in exchange for realistic content rights that would stop treating Australians like second-class citizens by blocking access to two thirds of the decent content that's out there.

If I could buy an Optus tablet, use it to get streaming access to Netflix and plug it into my TV using a built-in HDMI port, now that would be worth paying for. If Telstra repackaged its T-Box software into an Android tablet that I could not only hook up to my TV but could unplug and take with me on the train, that would be worth paying for. If either company added a VoIP client that would let me charge calls to my home phone at discount rates while on the road, that would be worth paying for.

Telcos could even offer to assist the likes of AFACT ... fighting piracy in exchange for realistic content rights that would stop treating Australians like second-class citizens by blocking access to two thirds of the decent content that's out there.

Both companies' tablets are utterly useless when it comes to these things. Without front cameras, for example, videoconferencing is pointless. Of course, carriers don't necessarily want to encourage that sort of thing, which users are accustomed to doing for free using Skype. And Telstra continues to push its bench top T-Hub, which is even less capable. Meanwhile, the likes of Harvey Norman are pushing boxes that actually let customers get the content they want — and telcos are getting no benefit, other than possible revenues from increased data usage.

This head-in-the-sand approach will only last so long. Consider the new threat from Sony, whose lounge-room-and-phone-and-tablet aspirations pit it against Samsung, Panasonic and LG, who all want to funnel content straight to your lounge room. That field will be complicated by Google's purchase of Motorola, which makes an entirely decent tablet that will inevitably be decked out with Google TV and streaming media services to create an entirely new bandwagon onto which our telcos really should consider jumping.

If Google can turn its devices into the new set-top box and feed it with an endless array of shows and movies from YouTube — or, better still, an Australianised version of NetFlix — our carriers will face marginalising forces that will keep them at the bottom of the content food chain, scrabbling for the industry's scraps for the long term.

Have you bought an Optus or Telstra tablet? What are you using it for, and what could make it even more valuable for you? If you haven't bought one, would you be more inclined to buy one if it were an exclusive portal to on-demand services that are currently unavailable? Or do the carriers need more than tablets to save their content strategies?

Topics: Telcos, Hardware, iPad, Mobility, Piracy, Tablets

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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  • I have argued for some time that telcos risk becoming just another dumb pipe. This is a very insightful article. Very true. Either value add the data or brace for some serious headwinds.
    ianpmcleod