Firefox OS… and the future of the telecom companies

Two months after Mozilla announced it was suspending development of Firefox OS smartphones, Spain’s leading telecoms operator, Telefonica, is formally withdrawing support for the now defunct project (link in Spanish).

Firefox OS was one of many projects begun by a foundation that has contributed to the development of the internet, but that like all such organizations is obliged to constantly make decisions on how it uses its resources. Launching an operating system for smartphones in a market polarized between two highly popular platforms for which there are an infinity of applications available was always going to be a tough gig. The idea of making apps redundant through the use of open web applications proved impossible in the face of users who weren’t interested in the system unless they could access their favorite apps.

Why did Telefonica get involved? Quite simply to break up the duopoly that currently controls the mobile market. Like every other telecoms operator, the last thing Telefonica wants is an environment dominated by Google and Apple, now the world’s two most valuable companies, and where the only way to impose limits on them is by appealing to anti-trust authorities. Telefonica is still prepared to support any initiative that could undermine the duopoly, which is why it hung in there with Firefox OS. For Telefonica, Firefox OS was simply a way to produce cheap, accessible phones.

Except for China, Google and Apple pretty much run the global cellphone market, and manufacturers, other than Apple, have little say and struggle to hold on to their margins.

Similarly, the big telecoms players can do little more than compete with each other to provide connectivity at increasingly lower prices, and will soon lose their roaming revenue stream. At the same time, their main hold over their customers, the SIM card, is increasingly under threat. As the public demands more broadband, the telecoms operators seem unable to do anything about the process simply managing dumb pipes.

For the telecoms there are few options. They can try to muscle into the content business, they can move into the Internet of Things market, or they can try to distort the market and breach internet neutrality by offering businesses priority access — something that will be difficult in the United States, but easier in a Europe that seems prepared to give them whatever they ask. Otherwise, they will just have to stand by while the two giants, and possibly another, apply more and more pressure through initiatives to develop the internet such as Google Fiber, or cheaper connectivity through Google Loon, or MVNOs with strings attached such as Project Fi. But they don’t seem disposed to accept their destiny as mere infrastructure managers, at least for the moment. In an increasingly connected world, right now it’s not looking too good for the telecoms companies.


(En español, aquí)

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