In the 20th century strategies for carriers were to a certain degree universally applicable. In 2010 there is no universal best strategy for all carriers. Increasing competition in saturated markets for pure access products causes significant and continuous price erosion. Given the commoditization of access services, carriers face a major decision: They can either focus on efficiency and cost-leadership or differentiate by offering superior services and enhancing access products with additional value propositions.

Cost-leadership in access offerings has an opportunity-risk profile comparable to the utility industry and is not the preferred prospect for most carriers today; in the telecom industry this strategy is usually referred to as the ‘dumb pipe’ option. The two strategic options for differentiation are ‘Smart Pipe’ and ‘Entertainer’. As a ‘Smart Pipe’ a carrier offers existing parts of the telecom value chain such as billing and customer care to other businesses. In that way carriers at least get a small slice of the application, content and services cake and the associated revenues generated by players ‘Over The Top’ (OTT) of carrier networks such as Facebook, Flickr or Twitter. While ‘Smart Pipes’ mainly focus on B2B services in their value-added services portfolio, an ‘Entertainer’ strategy requires a carrier to offer additional content services directly to retail and business customers and to compete directly with OTT players on their home turf.

To allow a decision for a strategic option in this framework, economic prospects and opportunity-risk considerations are to be identified. Clearly, most capital expenditure is to be spent on the next generation access (NGA) networks using FTTx, LTE, Wimax or similar technologies. In 2009 alone carriers around the globe spend about 300 bn USD on access equipment (Infonetics 2010). Yet investment in fixed-line NGA technologies apparently is only viable in high-rise areas (Analysis Mason 2009). The additional CAPEX for implementing a ‘Smart Pipe’ or ‘Entertainer’ strategy is rather small compared to the investment necessary to at least be a ‘Dumb Pipe’. As in most countries access business is characterized by already small but still declining margins and high CAPEX, growth prospects need to arise from other areas of business. Hence, the dump pipe strategy is not appropriate for most carriers. Thus, in most cases the crucial strategic decision boils down to enabling other businesses to use platforms and services developed by the carrier (‘Smart Pipe’) as many suggest today or staying in the competition for content business to earn returns on the next big wave of investment for new broadband access technologies.