The cancellation of Mobile World Congress this year leaves a void for the global telecoms industry looking for new ideas to generate growth and create value. As a veteran participant in this decades-long debate, I want to spell out a strategy to give operators a practical way forward.
The key to a successful telecom transformation is to move beyond strategies centred mainly on network and spectrum-driven oligopolies, and conglomerates without strong vertical and cross-regional synergies, towards ones with a clear strategic purpose and vision. This must be well understood and supported by all stakeholders.
I see four distinct strategic options for telecom operators. It is important that each company chooses one option, clearly communicates it, and allows it to drive its entire strategy.
- Consumer-focused digital service provider.
- Industrial digital services enabler.
- Provider of open access communications infrastructure.
- TMT investment vehicle with flexibility to invest in infrastructures, tech and service businesses.
The last two options are mainly about investor-driven optimisation of the ways how telecom assets are owned and utilised. The second option is more long-term, depending on business models and technologies that may not yet be available.
That leaves the most imminent strategic opportunity, which telecoms can pursue instantly: The consumer-focused digital service enabler strategy.
- The telecom company becomes a consumer business, ideally led by management with a technologically focused consumer background. Future ownership and access to networks, other assets and resources will be driven by consumer business demands and not the other way around.
- The telecom company must fundamentally expand its consumer digital service offering, propelled solely by the consumer needs.
- The telecom company must aim to become a trusted party to the consumers, an advocate of their interests in the digital world, differentiating itself by acting as a trust-worthy protector of data privacy, security and personal data identity.
- The telecom company will side with the consumers and help them to mitigate risks of third parties potentially acting against their interests; for example by using surveillance, big data and artificial intelligence to harm their privacy, constrain their freedom or manipulate their mind.
- The telecom company will become an advocate of consumer and personal freedoms in a broader sense, stepping in to fill a gap that currently exists in the digital world and beyond.
- The telecom company will offer various tiers of consumer services ranging from value-for-money up to premium, giving the consumer a choice to balance low price vs. high protection in the area of privacy and beyond. By creating such transparency, telecoms can aim to lead improvement in transparency and efficiency of the big data market.
- The telecom company will aim to take advantage of the enhanced differentiation and improved consumer perception to ease competitive and regulatory pressures.
- The telecom company will re-enter the consumer digital platform market, aiming to act as a trusted aggregator of third-party digital services and hence a gateway for the consumer into the digital world.
- Assuming full transparency and consumer interests in mind, the telecom company will also offer big data to entrepreneurs, including small businesses from different industries, to help growing inclusive local economies, boosting value of human skills, and further improving efficiency of the big data market.
- The telecom company will particularly focus on providing sustainable digital services as superior alternatives to legacy products and services, with benefits particularly to health, environment, social cohesion etc.
I believe that by pursuing the above principles, the telecom industry can once again start playing a pivotal role in economic transformation towards broad-based digital prosperity. This should be rewarding for all the industry’s stakeholders.
Dalibor Vavruska
Founder, DIGITECCS Associates
6 Responses
Fully agree with you about the benefits of a consumer-oriented digital services focus for telcos, consumers and local economies alike. We as telcos should do our share as the trusted guardians of data, using data to create genuine and sustainable value, empowering our customers, and bringing about economic growth at the place where data is generated.
https://www.linkedin.com/pulse/call-free-internet-toll-free-applications-fadi-rabi/
I believe this idea helps in what you discussed.
Telco’s face two dimensions around which to make strategic choices – relationship with the consumer and operation of technology assets, with fierce competition from all sides. Clear focus, prioritization and action are needed to succeed. Resources are limited. It takes courage to choose. The best answer may be different for different telco’s. Change is painful, risk is high and the future is uncertain. It’s why we love this sector!
Totally agree with the need to have a clear strategy for operators, Dalibor. I am a bit unsure though re: ability of operators to actually execute on what is needed to become what you describe “Consumer-focused digital service provider”.
Operators generally havent proven able to compete on digital services or ability to utilise data (whether to exploit it or to position as its protector). Content-telco mergers do not seem to have created new business models for telco either. If you look at the investor sentiment, it seems to me that the simpler the better – FTTH-only operators, tower companies etc are not doing too bad.
In the industrial IoT space, there still might be some value creation and extraction opportunities for operators, but…. if they move too slow and fail to think in terms of end-to-end solutions they will lose them too… Especially, when “regulatory and competitive environment” continues to evolve in the direction unfavorable to telcos (think – UK and German decisions to give 5G spectrum directly to industrial players rather than operators).
Telcos have no other option but to re-engage with consumers and drive a consumer-focused digital service enabler strategy. The industry needs to become relevant again for consumers delivering on broader digital services, beyond the data pipe, and personalising these services. This is fundamental to renewing with growth and delivering more attractive returns for shareholders otherwise the industry will be relegated to delivering dump data pipes.
Having initially grown from pure-telco mobile business, working for consumer and media-focused group at the moment, I do share the opinion that a belief the technological focus as a winning strategy is a wrong way.
If you look at Poland you will notice it was not capex-heavy speed/latency/etc.-obssesed thinking that proved a way to success.
Consumers do not share the same passion for GB/s as we do. They do not run speedtest measurements on a weekly basis, investigating slight differences between MNOs. They frequently do not know which G they use at the moment. Actually they do not care.
But they do perfectly know what sort of content is the most interesting for them, which app makes their life easier. That’s the key.