Last year, I wrote about the need for APAC telcos to innovate, embrace disruption, and start taking risks. It seemed the most obvious course of action.
At that time, developed markets seemed most effective in terms of investment in innovation (mainly by acquisition) as well as increasing network capacity and speed. However, most seem stuck in continuous “transformation-loops” in the back office, with emphasis on real-time, online charging, and sophisticated customer profiling using ‘big data’.
But it’s actually the developing markets which demonstrate how homegrown innovation can work - especially at the national level, where they produce content and services in local languages and using local skills. After all, when you have burgeoning populations hungry for content, why bother targeting international markets?
The sheer diversity of the Asia-Pacific region means that what works in one market may not work in another. We’ve seen it in the areas of mobile payments, online games, mobile advertising, and others.
The big question for stakeholders in today’s telcos: should we try to compete with the OTT players and DSPs who have captured markets by innovation or a lucky idea? Or should we ‘stick with our knitting’ and provide the best network to deliver these services? Attempting both doesn’t seem a sound strategy for improving the bottom line.
We’ve heard about the DNA of telcos (and their risk-averse nature) ad nauseum, yet attempts to break the genetic code and introduce risk continue - sometimes with disastrous results.
So what’s the answer for network operator growth and prosperity? Well, it appears that customers are happy to pay for network access (and not much more), so the first priority must be to give them the best network available and allow them to do whatever they want with it.
There is little or no chance that OTTs/DSPs will pay for network access. The net neutrality rules the FCC plans to impose will effectively prevent preferential treatment even if they would like to pay, and have also buried the concept of ‘sponsored data’ where they pay for their customers ‘prioritized’ network access.
It appears that ‘content is king’ - that mantra is used by aggressive telcos as an acquisition and retention tool ( BT and the English Premier League rights, for example). But that can be a very expensive and risky route. Anyway, what do telcos know about content?
That’s why major events like CommunicAsia teamed with BroadcastAsia and EnterpriseIT make sense. The digital world is merging these sectors and common issues can - surprisingly - be addressed by working together. The theme for this year should be partnering: working with others that have the skills, content and services you lack.
The marketing for CommunicAsia2015 states that “the latest innovative technologies from Big Data, Business Analytics, Cloud technologies, IoT, to Zigbee will be unveiled. These advances are poised to change the way we live and work.” But more importantly, it goes on to stress that it is “the source for the latest industry-specific technologies and innovations to adapt and respond to challenges and opportunities” and is the place “to establish strategic partnerships among key players of the ICT ecosystem.”
And there lies the key - strategic partnerships. What better way to overcome all the issues facing the telecoms industry right now? The evidence is conclusive that CSPs must leverage partnerships in order to create new revenue streams. It’s the very same companies that are currently seen as a threat to telcos revenues - the OTT players and DSPs - that are actually key in the new partnership model. Just think of the powerful message that can be delivered to the market if all sides concentrate on what they do best and combine. Individual sticks are easy to snap, but bundled-sticks are stronger.
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