The end of the beginning, or toward the True network of networks

The long phase inaugurated by the emergence of the Internet at the beginning of the previous decade is coming to an end, or at least undergoing a radical transformation, due to the universal availability of new wireless technologies and, in particular, the mobile phone. The current stage of convergence is so different from what was initially anticipated that, from an analytical perspective, it may be more appropriate to begin defining it in different terms.

Indeed, the profound transformations in the way content is produced, distributed, and consumed—in other words, across the entire classical value chain—have redrawn the old communications landscape to such an extent that the term Convergence has effectively become synonymous with New Market, with all the structural changes this implies.

The earlier, desired formulation of convergence implied that market actors would come together around the same platforms to address the same users. This clearly did not occur, since all participants in this market have completely altered their nature and, consequently, their business models. Content creators can now address consumers directly (D2C), bypassing distributors that once acted as market bottlenecks, and achieve higher revenues at lower cost. At the same time, network owners are no longer required to specialize in specific services or content; they can offer anything that can be digitized. This means they can deploy different business models depending on the type of bits they commercialize—television programs, music, voice calls, news, and so on.

Likewise, equipment manufacturers are no longer tied to a specific type of network. They have come to understand that their business lies in selling an access platform, leaving it to users to choose which network they want at any given moment. Finally, users themselves, within this new convergent market, have reinvented the old concept of “Interactivity,” moving away from what the industry—and many national governments—initially envisioned.

The “New Interactivity” implies almost complete freedom of action and the ability to adapt the access medium to individual needs. It is therefore fair to say that true convergence was not achieved until wireless networks were incorporated. A “network of fixed networks” not only limited reach and diffusion, but also failed to reflect the habits of millions of users who move freely. Accessing the universal network through a fixed port makes little sense in a mobile world, because the sine qua non for a network to be global is ubiquity. Consequently, one basic indicator of a market’s level of development is the number of access networks available at a given point. The networks that were the stars of the new market in the previous decade have now become invisible from the user’s perspective, since users consume content and services, not networks—something operators often seem to forget.

Markets, or rather new market niches, are generated by consumer demand, not by access technologies. The recurring mistake of operators and manufacturers has been to assume that each new technology creates an additional market niche to be added to existing ones. This view has only further fragmented a market already divided by the specificity of local markets and by consumers’ demands for personalization. The most compelling lesson taught by the mobile phone in its maturation as a universal access technology is that users are not willing to pay more—or much more—for the same content available on other networks, often free to the user. If some analysts have interpreted the arrival of television and Internet on mobile devices as the long-awaited end of the convergence process, they are far from grasping the complexity of a process that has only just begun and whose consequences remain, for now, unpredictable. In other words, technological convergence alone does not exhaust the phenomenon of distributing all content across all networks and making it available on a growing number of access terminals.