Wireline and wireless companies in the United States, Europe, and Asia can no longer afford a business model in which most of their customers pick up the telephone and talk with call-center sales and service staffs hobbled by inefficient back-end sales and support systems. Customers dislike the slow, confusing, labor-intensive processes they must negotiate to choose a new product, solve a service problem, or request a repair. Telecommunications companies soon won't have the margins to support the current inefficiencies, in any case. To reduce costs and simultaneously improve service, these companies must persuade their customers to move to far more cost-efficient automated channels—the Web, automated telephone systems, or wireless transactions—and streamline their internal sales and support operations. If they don't, they will not be profitable in the years ahead.

The case for automated self-service has been well made: companies in most sectors can boast of significant cost reductions as a result of its implementation. In 2003, one major airline saved $200 million by selling more than half of its tickets over the Web, which for airlines is 90 percent cheaper than phones. Amazon.com has built a business model based on its customers' willingness to buy goods and to ask—and receive...