“In the end, technology is not what matters: it’s services, it’s applications, it’s experiences… we must not allow ourselves to become bit pipes and let somebody else do the services work.” So said Arun Sarin, CEO of Vodafone at a Mobile World Congress keynote back in 2008 and seemingly every carrier agreed with him. It was the very early days of 3G networks and the carriers were all worried that the “real” money was in the content business, not in simply facilitating access to the content. No carrier simply wanted to be the “dumb pipe” that let others get rich off their backs.

And so began the era of mobile telecom company expansion, with many of them looking to own the end-to-end experience and make revenue from the consumer at every step along the way. Content, as the saying went, is king.

It was a flawed strategy that came to an abrupt end – at least in the U.S. – this week when AT&T announced its plan to drop its media business, including Warner Bros and HBO. This came just a few weeks after Verizon likewise announced plans to divest itself of its media business – primarily Yahoo! and AOL. Ironically, both announcements come at the very time when everyone is scratching their heads (still) at what the so-called “killer app” is for 5G services.

But of course, it is because of 5G that the carriers need to offload superfluous businesses. Purchasing spectrum is never cheap and 5G spectrum has proven to be more expensive than ever before due to the different bands of spectrum that are necessary. The most recent C-band auction alone saw AT&T spend $23.4 billion, while Verizon spent almost double that, to increase their spectrum holdings necessary to build out a comprehensive 5G network.  Companies that were already weighed down by a significant debt-load – particularly AT&T – were going to struggle to pay off the debt, especially as they still need to build out the new networks having bought spectrum.

As the cost of building – and maintaining – networks has increased, not to mention the increasing cost of retaining customers, carriers are beginning to realize that the network they have is the true king in the consumer/content relationship. Yes, content and programming may be what consumers ultimately want to view, but without the intermediary pipes to deliver it… well, we’d all be back to watching DVDs delivered by the US Postal Service again. Content is the darling princess: the network is king.

But more to the point, perhaps, is that owning the content has proven to be not only unnecessary, but somewhat of a burden. The content business is in flux as it transitions to a streaming-first focus and, as T-Mobile has more than proved, it’s easier to partner with these services (such as Netflix) rather than trying to compete against them. What’s more, the combination of wireless carrier and content is a complete culture clash: wireless is based on science and engineering while video content is far more of an art. A key success metric for a company like HBO is winning an Emmy; that’s a far cry from the minutiae of metrics that drive a carrier’s business.

The whole tenet that this expansion into content was based on – and Vodafone’s Sarin was just one voice among many muttering about “dumb pipes” – very much missed the point: mobile IS a service, with an ongoing revenue stream and third party content sources simply drive more and more consumer demand for bigger and better wireless “pipes” to deliver it on. The so-called pipe is king, and is far from dumb.