Whether Telcos can monetize intangible assets is a question that’s been debated frequently in recent weeks. Trust may be one of the most valuable of those assets. We’ve seen the security industry struggle with keylogging and trusted encryption schemes, like RSA, have been hacked. We’ve also seen companies like Facebook struggle to drive revenue through online commerce because of a lack of consumer trust. In a recent discussion with TM Forum Chairman Keith Willetts, author of Unzipping the Digital World, we sought an informed opinion on whether Telcos can export and thereby monetize trust.
Willetts suggests that companies like Facebook are struggling with trust because they have business models that encourage customers to share intimate details about their lives with approved groups of people, but then monetize that data by offering it to unapproved 3rd parties. He argues that Telcos must be extremely careful about this kind of approach. Telcos have been successful keepers of consumer trust for decades, specifically because they do not – or are not perceived to – sell data about customers to third parties. In other words, the trust equation is about perception as much as it is about actual security. So helping companies like Facebook stuff the cat – fear, uncertainty, and doubt – back in the bag may not be possible. Telco-style trust may be incompatible with the social business model.
More importantly, Willetts says, the stakes relating to trust are far greater in the enterprise world than they are in consumer markets. Breaches of trust can result in billions in losses for enterprises. They can also lead to massive exposure to legal liabilities. In some cases, breaches of trust can even result in national security violations. In this sense, Telcos already monetize trust as they provide secure communications to their enterprise customers. As Telcos offer more cloud-based services – like applications and data storage – trust becomes an even more important component of their value propositions.
Whether Telcos can export trust to value-chain partners is a more complex question. But here’s a simple idea… If much of what we’re talking about is perception, then brand association plays a role in exporting trust. If more than half of Facebook’s user base accesses the social network via mobile, then Telcos play a direct role in the value chain. If within the flow of a commerce transaction, a simple co-brand is inserted that says “Trust & Security Provided By (Insert Telco Brand Here)”, then that may be a very simple way to export the perception of trust.
But, here’s the downside; if the value chain partner gets hacked, and it results in fraudulent commerce committed against a large number of consumers, the trusted Telco brand may go down with the ship. And in a world of mega-brands and social media, where enterprises also act based on perception, the undermining of a trusted brand in the consumer market could certainly cost billions on the enterprise side. A CEO might simply say, “We had no choice but to switch providers for our mobile services and cloud storage because our Board reads the news and got all over us about risk exposure.” It’s somewhat illogical; irrational even. But we’ve seen people and companies behave in exactly this way; just ask Toyota and Knight Capital about the long term cost of one-time lapses.
The bottom line, according to Willets, is “if you have trust, treasure it.”