When does disruption happen? It happens when a competitor offers a new basis of competition. In other words, you elevate the game orthogonally to what the incumbents are doing. It goes beyond parallel competition where everyone is following the same trajectory. In the disruptive scenario, you chart a new path, different from others.
WhatsApp is a great substitute to some telephony/broadband-enabled services but WhatsApp would need telcos to be in business. Without telcos, there would not be any WhatsApp or WeChat in Nigeria. Home Wifi is not still common here. Yes, even though WhatsApp could destroy value, the telcos would always have remnants to pursue.
But hold on: something new is coming in town. SpaceX has the blessing to run satellite-based broadband services around the world. This one is not a substitute, this is creating a new basis of competition, and it is potentially disruptive. Simply, you do not need a telco to have access to SpaceX services. SpaceX broadband would displace services offered by telcos. That is a challenge which telcos must deal with.
A US regulator backed SpaceX’s plan for satellite internet service. Federal Communications Commission chairman Ajit Pai urged the approval of an application by Elon Musk’s rocket company to offer broadband access in the United States and around the world. (Quartz)
I noted this last June when I wrote:
The biggest threat will come from satellite companies like ConnectAfrica which will reach communities at cost model that can keep the terrestrial players looking for cover. Elon Musk, not Glo or Airtel or Etisalat, may be the biggest competitor to all telecom operators in Africa in 5-10 years, with satellite broadband. He can crash broadband cost by 90% and suddenly GSM will be recorded only in museums. But that will happen if MTN Nigeria and others do not take action today.
And this continues to converge to my prediction that by 2022, we would attain equilibrium in most enablers for online services in Nigeria. That is the year I am telling clients to wait before they launch most ecommerce and online operations in Nigeria. Data does not lie, and using my internal model, and how it happened in China, Brazil, US and selected EU countries, I concluded that 2022 would be it: a year of immersive connectivity.