Telcos understand they need external inspiration to compete with the faster moving digital services providers. Their challenge, however, is finding the right partnership model and devising a process to select the future winners.
These were the key takeaways during a panel discussion on industry partnerships at Telecom Asia’s Insight Summit in Singapore on December 5.
The telecom industry recognizes that innovation isn’t going to come from within, it’s going to come from more innovative external companies, said Amrish Kacker, partner at Analysys Mason. “But to filter that and add to their portfolio is where telcos struggle. Because it costs money and they don’t have an unlimited budget to take every interesting idea.”
Referring to the perceived gap in the speed, thinking and execution between telco and IT industry, Bubbly chief executive Thomas Clayton said: “I’ve worked in Silicon Valley my whole life, always on the start-ups and have worked with operators. It’s not just operators. It’s big vs smaller, nimbler companies. It’s a fundamental cultural difference between how Silicon Valley works and how any operator or big, bureaucratic, hierarchical companies works.”
Clayton made of a point of telling the telco audience that app companies don’t even know what OTT means. “OTT is what telcos call them. And if you ask Line, Skype, Viber, Facebook or Twitter, not one of them would say they are a competitor to an operator. It’s a one-way competition here.”
Laurent Chivallier, founder and chief executive of ApiLinx, and previously with SingTel, acknowledged doing innovation inside a telco is always very difficult, but noted there is an opportunity for telcos when they work with others.
“If you look at the wholeseller/retailers, like Walmart and Carrefour, what do they do? No more than telcos. They are just picking products, putting them together and selling them at the best price. They even do house brands now, and the differentiator is the house brands. So here is a model that operators can learn from or get inspired from,” he said.