Whatsapp Calls is awesome. It comes with fantastic clarity and it’s free. That’s just one of the many OTT (over the top) services that are taking away revenue from telcos around the world. In double-whammy fashion, these OTT players ride freely on a telco’s data pipe. What makes it worse for telcos is subscribers (like me) love these free apps. And to keep subscribers subscribing, a fatter pipe is required for continually improving user experience. It is no wonder that telcos are hard-pressed to transform. What would you do?
So here’s a compilation on what some telcos in South East Asia and around the world are doing, and Mike’s Take on navigating these initiatives.
Becoming a Cloud Provider. Telco’s have been going into IT services for the past 5 years. Telcos try to capitalize on their position as a connectivity and mobile service provider. But the attempt above does not have strong synergy. By virtue of having the connectivity, does not make a telco a great public cloud provider. Most telcos here lack the size and the agile development DNA to churn out features and services fast enough to compete with the likes of AWS and Azure.
Mike’s Take : Telcos might be better off focusing on being an IT broker. Be a conduit for end users to consume digital apps and services in public clouds. At the same time, provide DC hosting services for critical, locally regulated systems. That way, a client can consume bi-modal IT services from the telco. The telco will then need to double-down on service management and consolidation technologies.
M2M / IoT Platform Provider. This is an area of opportunity for mobile operators. Most IoT “wearables” connect to the mobile device and hence, a mobile service. Instead of just providing a mobile connection, leading mobile operators are investing in M2M platforms that take care of data push, device interfaces, hosting the apps to collect and mine the data, etc. One recent operator who launched an industrial IoT platform is Vodafone. However, the market is getting crowded very quickly. Azure, and then AWS recently launched their platforms. And GE recently with an unprecedented, all-encompassing industrial internet called Predix.
MIke’s Take : Taking a leaf from GE Digital, telcos could go into this for a long haul by building an agile software development competency to build an IoT platform. Also, it might make sense to partner with industry platform specialists, since use cases seem to vary immensely between industries.
Major Internal Transformation. Transform or be extinct. And this is the arguably the safest route for most telcos to stay above the waterline. Transforming business support systems like CRM, convergent billing, provisioning, mediation etc just to be faster, more flexible, more engaging than the other operator. Transforming operational support systems to be more cost-effective and nimble. In the short run, it is clear the main goal is to win the other’s customers and market – to survive.
Mike’s Take : Since this is the safest route, the telco cannot afford to have a botched up job. One of the larger telcos in this region had to endure loss of market share and business because of a transformation effort that was plagued with development, integration and technology issues. One of the often overlooked aspect is the fundamental technology to run the new systems. Telcos need to keep their core systems running, and keep their attention on the core transformation works. Use technology vendors that are leaders and proven, not stacked-up freeware.