The Economic Moment: Carpe Diem

The world’s economic problems continue to lead the news, day after day, relegating coverage of such critical stories as the ongoing political revolutions in the Mediterranean and the social violence in the U.K. to the second act.

World financial markets weave drunkenly from day after day, falling, rising and falling in bewildering succession. Northern Europe and southern Europe drift further apart politically, thanks to different perspectives on the profound debt crisis shaking Europe to its foundations. The economic pain in the States threatens to rend the tattered remaining threads of our political fabric as we here enter the long, long presidential campaign of 2012.

Besides bankruptcy lawyers and psychotherapists, who can feel optimistic about the immediate economic future? Communications service providers (CSPs) can. There are three fundamental reasons CSPs can look with confidence to the immediate future:

First, the economic turmoil will not freeze the profound innovation that drives the industry today. Specifically, the anytime, anywhere, anything consumer is taking center stage regardless of the price of oil or the NASDAQ’s dailies. Tablet and device innovation proceeds apace, no matter how the debt crisis is Greece is resolved (or not resolved), or whether Fitch or Moody’s ultimately agree with S&P on the U.S. federal government’s credit rating, or whether China struggles with massive inflation on the one hand and hunger in the countryside on the other.

Second, one reason that the innovation around this multi-modal consumer is inexorable is precisely that these new devices and services will be economically productive for that consumer. By making the consumer’s life more efficient, by allowing the consumer to mash business, professional and entertainment personas, these devices and services reduce out of pocket costs significantly over time. Interested in personal or professional cost control: Check out an iPad from Apple or a XOOM from Motorola Mobility.

Third, CSPs that put an understanding of the transformative effects of this new consumer at the center of their strategy have a tangible basis to take advantage of the economic opportunities the downturn presents smart, aggressive corporations. Those benefits are significant: lower labor and professional costs, lower materials costs, and more flexible regulators. Perhaps most important, CSPs can benefit from a lower cost of capital as interest rates remain low, capital remains sidelined, creating a pent up demand for sensible business models based on demonstrated demand and away from investment fads that have more in common with the “Tulip Mania" that wrecked Northern Europe’s economy in the 17th Century than they do with any sensible, demand-based investment strategy. In addition, CSPs will benefit from their reputation of solid management in appealing for investment.

The convergence of high-bandwidth services with mobile consumers of those services will be an economically and culturally defining characteristic of our time.

Google’s decision, announced on Monday, Aug. 15, to spend $12.5 billion to buy Motorola Mobility, is evidence of this powerful underlying dynamic. Two things jumped out about the Google strategy:

• Google paid a huge premium (63 percent) against the Friday, Aug. 12, closing price for Motorola Mobility. During a time when many strategists are short selling or bargain hunting, Google defined strategic value and went out and got what it wanted.
• Google immediately reconfirmed its commitment to run Android as an open platform, great news for app developers, consumers and, yes, CSPs. The tablets and devices reshaping mobile computing rely on the type of innovation that open standards promote. Google’s idea is to promote ongoing, sustainable development, not to cash out on a fad by buying before the curve peaks.

No one can be naïve in this economic environment. Danger besets consumers and investors alike today. But many businesspeople around the world must be looking at the CSPs and thinking, “I wish I were in that business. I wish I had those opportunities."

Larry Lannon is group publisher of VIRGO ’s Communications Network, which includes Billing & OSS World , Channel Partners and vision2mobile .