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The larger the bandwidth, the smaller the workforce?

The number of employees at Verizon has been declining by a third in 10 years, and it keeps decreasing. The latest figure of Verizon workforce as of September 2018 was 152,300. Source: Statista

Verizon has increased steadily the capacity of its network and the capacity offered at the termination points over the last decade and it is investing to continue doing that in the coming one, mostly through 5G and its supporting core network(s).

In parallel Verizon workforce has decreased steadily, losing 80,000+ people over the last 10 years (1/3 of the 2007 workforce) and Verizon has just announced that 10,400 employees will take a severance package at the end of this year. What is even more impressive (or concerning) is that the severance package was offered to 44,000 employees, only 10,400 accepted. That means that Verizon could live with an even smaller workforce or that at least there are 44,000 employees that are basically interchangeable, it does not matter who among these resign, in other words they have become a commodity!

The real problem is not what is happening to Verizon, Verizon is just a point in case, the problem is that this is happening to all major Telecom Operators.

I was just brooding this morning, before reading the news on Verizon, on the disappearing need for a SIM card, in the sense of a contract with an Operator. I am presently in Canada and if I were to use my smartphone I would have to pay quite a bit because my Italian Operator has decided that calling from US is fine but calling from Canada is not and I would be charged for doing that.

So I am not using my SIM card in Canada, but I am still using my smartphone without problem. So far I have always been connected  (I had free WiFi as I landed at the airport, I had free WiFi in the taxi to the hotel, I had free WiFi at the Hotel, I have free WiFi at the conference…..): do you get the trend? I have it FREE!

I will be giving a smartphone to my grand-daughter this Christmas time, and I am giving it to her without a SIM. She will be using free WiFi. My youngest son has been living over 2 years in the Netherland, he has a smartphone but not a SIM card. Free connectivity is almost everywhere.

You might say: aha! But it is not everywhere! True, but just 25 years ago, before the cellphone became an extension of our hands, connectivity was not everywhere. We spent hours every day being unconnected and we survived. I am seeing more and more youngster to move into this asynchronous connectivity zone, just using free connectivity where it is available. And, of course, the more connectivity exists the less people will be inclined to pay for it. In this sense, 5G might be more like to decrease revenues than to increase them…

Not a good omen for Telcos..

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the New Initiative Committee and co-chairs the Digital Reality Initiative. He is a member of the IEEE in 2050 Ad Hoc Committee. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.