Discussion Post: What if Coles and Woolies Entered the Telco Business?

Did you know that when the first supermarkets arrived in Australia, supermarket promoters hired instructors to provide induction training to adults and children demonstrating how to push shopping trolleys down the aisles.

How Did People Shop Before the Supermarket?

Until the supermarket, Australians had been accustomed to queuing at a counter and presenting a shopping list to their green grocer or their butcher, who would then select the items on the list on the shopper’s behalf.

Those first supermarkets offered what I would call ‘bomb shelter supplies’; the kind of non-perishable foods (canned goods, condensed milk, etc.) that you’d stock your bomb shelter with in case the sky fell – or the H-bomb did, at least.

Their Own Network of Suppliers

Today, supermarkets offer so much more than that. The limited fresh produce they once supplied has been expanded to a full range of fruits, vegetables, seafood, meat and poultry supplied directly to them via their own network of farmers and suppliers – an entirely unsurprising direction for the Wesfarmers-owned Coles to take.

Over the years, Coles and Woolies have also entered the petrol market by entering into agreements Shell and Caltex respectively; more recently they’ve even entered into the financial game, offering credit cards and insurance.

Like it or not, our supermarkets are the early adopters of new social trends and they’re shaping our entire shopping experience as a result.

The Evolution of Telecommunications

Now that we’re living in an age of smart phones and high-speed internet, the telecommunications industry has been turned upside down. Whereas you previously only had a small number of telcos to choose from and a limited range of services, these new technologies and methods of communication are forcing traditional telcos like Telstra to take notice.

Skype

Take Skype as an example. There was a time not so long ago when if you wanted to make an international call it would cost a bomb. Then Skype came along. Now you can make free international calls using your broadband connection and at the same time see the person at the other end.

iMessage

Apple did the same by introducing the iMessage function on their iPhones, which allows iPhone users to text each other for free, using their mobile data.

VoIP

These technological advancements have seen the share prices of voice-over IP (VoIP) companies go through the roof, which Ken Maswell of Virion, a small bespoke VoIP provider in Sydney can attest to.

According to Maswell, the share prices of VoIP company, myfonenet, have increased by 57 percent since May last year. “When it comes to telecommunications, customers are now exercising their choice in what was previously considered the dark arts of telephony,” he said.

Coles and Woolies have long offered handsets and prepaid mobile sims; even more recently, Aldi entered the mobile space as authorised resellers of Telstra prepaid mobile sims and handsets at highly competitive prices.

But there’s plenty of demand for a Coles or Woolies-brand mobile service – ideally one offering greater data usage given most people use their mobile phones to send and receive emails, watch videos, communicate via social media, and so on.

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What do you think? Do you think Coles and Woolies will soon become telcos as well? How do you think they would fare pitted against the like of Virgin and Vodafone who have each been in the game quite a while now?