Balancing technology and service innovation

10 Jun 2008
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With technology traditionally driving new telecom services, instead of the other way around, operators have a lot to learn about innovation. And with internet companies encroaching on their once secure domain, telcos are rethinking everything from what is core to business and IT transformation to revenue sharing models. A group of telecom executives explored these issues in a roundtable, sponsored by Nokia Siemens Networks, held in conjunction with the Telecom Asia Awards in Phuket in April.

The panel was moderated by Gartner VP of research Martin Gutberlet and comprised Aircel CIO Ravinder Jain, Reach CIO Sundi Balu, Nokia Siemens Network head of South Asia Joe Doering, Satyam SVP for telecoms practice Subrahmanyam Ivatury and Telecom Asia group editor Joseph Waring.

The panelists explored the topic "The wave toward carrier evolution, business transformation and convergence." The discussion focused at the start on how roles are changing as internet companies and new content providers make their presence felt in the telecoms market.

With the growing importance of partnering with non-telco entities, Gutberlet playfully asked the panel if they're willing the share at least 50% of their revenue with the media guys.

Aircel's Jain said, "If you look at the important part - it's the access to the subscriber. At the end of the day, I'm the carrier and I would not like to share too high of a percentage of the revenue."

It comes back to who owns the customer, and most operators continue to hold a more traditional view - it's their subscriber and they allow partners access, so they feel they should get the lion's share. Gutberlet argued that this perspective is bound to evolve as operators develop more balanced partnerships with the others in the value chain.

Given the core capabilities and competencies of most operators, he asked if they have a chance to compete with the internet players

NSN's Doering said telcos' core competencies start with providing data pipelines to embrace the internet via broadband access and ensuring high-quality telephony services - that is the fundamental of the current business model. "Beyond that, interactive multimedia services with a premium quality of service will create unique value propositions beyond the standard internet access. An example, is "Ëœforensic watermarking', a telco application that assures content owners, such as the Hollywood studios, that their blockbuster movies are protected against unauthorized copying."

He added that another area is location-based services. "These mainly mobile applications are things that the internet model per se cannot provide as they leverage on the core capabilities of the operators."

Ivatury from Satyam pointed out that one of the things that operators are not as good at as the internet companies is in creating innovative new services. "The primary difference is that the Googles are a lot more nimble."

With most operators' service portfolio fairly limited and supporting a sluggish pipeline, Gutberlet suggested that operators have to learn a lot of about new innovation and how to manage innovation. "This means you have to take risks in order to fund innovation, and that is a fundamental difference."

As more operators move toward mobile TV, the question on many people's mind is anyone is really making money and how can operators improve the business case.

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