Breaking away from a margins culture

Joseph Waring and John C. Tanner
19 Dec 2013

This has not been not a typical year for telcos - "it's been a year when the burning platform is a clear and present danger," said Olivier Carnohan, emerging businesses intrapreneur, SingTel Group Enterprise.

He said telcos are moving slowly toward a partnership model by bridging the gap between the old and new (telco) world.

Thomas Clayton, CEO of Bubbly, a social networking site with 30 million users, said he's seen partnerships moving ahead in markets where they've been "punched in the nose" by competition and falling revenue. "But in markets like Vietnam and Thailand, telcos still have an old-school mentality."

Carnohan, speaking during a panel session on "What do telcos want to be in the future", insisted that the biggest enemy is "ourselves". He said telcos have two things working against this whole partnership model, which have probably delayed us by five or six years.

"The first is we have a margins culture. We've been sitting fat and happy for many years, and every time an OTT partnership was on the table, we thought it would be margin diluted and we'd walk away. That culture has to change, and I believe it is changing. We're more humble in our approach and we are more receptive to partners, even when it competes directly with our cash cows. Look at some of the work Globe is doing with the OTT players."

His second reason, which comes from a McKinsey consultant, is that telcos are like white blood cells that kill everything that isn't telco.

"That is true when you have complete control. We have core assets that we understand as long term that we bring to the table - things like billing relationships and the prepaid base in developing markets. We also know the partners in front of us have assets, and now we start to value that. This white cell DNA has taken a beating."

Looking at the speed of innovation from carrier initiatives like WAC, joyn and RCS, Clayton said that governing by committee is slow and just doesn't work.

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