Vodafone CEO Vittorio Colao recently said, “Vodafone wants to be the Amazon of telecos”, not in terms of selling but top-class customer service (according to WSJ). While I think that the presented strategy of vastly improving service at store locations combined with making it easier to buy Vodafone services and handsets online makes perfect sense, what threw me off was the Amazon reference. Does Vittorio even know what Amazon is really good at?
No disrespect to the Amazon customer service team (I’m sure they are fantastic) but they are not what the company is known for or even close to what makes Amazon the money printing press it is. If Vittorio would have used Apple as an example of where Vodafone would like to head, he would have been spot on. Setting aside the Apple products for a while, their integrated online and store sales and support channel is almost unrivaled and an integral part to the success of the company..
The core of the Amazon success is their ability to create a platform for their services and then be completely agnostic about reselling the platform to others in different versions. They are geniuses at selling what they already have, multiple times.
Amazon started out as an online bookstore, later expanding into other product segments using the same IT and logistics platform. When they found that their delivery pipe could handle more than they sold themselves, they let other companies use their sales pipe with logistics and IT support, acting as a storefront for thousands of businesses. Later, when Amazon had consolidated the IT backbone which supported this sales behemoth to a semi-standardized platform, they came up with the idea that maybe they could re-sell this as well and AWS was born.
Amazon is all about innovating and reinventing what they already have at hand. Unfortunately Vodafone and telecom carriers in general are the exact opposite of Amazon. They sit on the greatest IT platform ever created, but because of the inertia of history and fear of cannibalizing their current profits they have been unable to innovate a single product since the introduction of the text message. As a consequence they have ceded the entire market to OTT players and are now likely to become “data-pipes” for services that they have no part of.
Vodafone is an especially haunting example of this as they single handedly could have prevented players such as Skype to even exist if they had utilized the near global carrier presence they had when Chris Ghent left Vodafone. They could have innovated and introduced inexpensive Vodafone to Vodafone calls across borders which would not only have creamed the carrier competition but also prevented Skype from existing. There are hundreds of missed opportunities like this for Vodafone and telecom carriers in general.
Some carriers have realized this today and are desperately trying to limit the OTT success through lobbying and restrictive policies at the same time as they are trying to get in to the content business. This is in no way similar to what Amazon is good at. The carriers are trying to innovate by getting into a business that they don’t control in order to avoid having to change anything in their core business.
There is no amount of lobbying and data restrictions that can make that strategy a success.