Leverage core strengths to profit from broadband, says Hutch

08 Jun 2007

Telecom carriers should focus on their core strengths, namely network, customer relationship and marketing, to monetize IPTV and broadband, says Eric Chan, business development and planning general manager at Hutchison Telecom.

With bandwidth no longer an effective tool for customer retention, carriers are looking for killer applications like IPTV to increase customer stickiness. While some take a "betting" step on multiple applications, others take a more aggressive approach by investing in most, if not all, so-called killer apps and even trying to turn themselves into a content provider.

However, says Chan, such approaches are yet to prove effective, even though there are a few successes.

For one thing, he says, there is no single application that can provide the revenues telcos want.

More significantly, telcos' key competence is their network and their capability to serve existing customers, and their understanding of different segments - not content or the IT business.

"When we go beyond the connectivity space, and stretch our muscle too much in getting into R&D and trying to build end-to-end capability by ourselves, the life cycle will extend from 9 months to 12 months," Chan says. "Then we will miss a lot of opportunities in the market when something comes up."

As such telcos should collaborate with content providers application providers to monetize broadband, instead of trying to do all of the things on it own, he says, citing some telcos in Hong Kong which trying to build their own content and set up their own TV station as an example.

"I'm not saying they are wrong but even content providers and application providers nowadays are struggling in generate revenues in this new business model," he says. "If we jump into the same game, I don't think we could do any better than them because it's not what we good at."

In the end, customers will tell telcos what they want and telcos' role is to test the market for new services and content quickly for their content partners and application partners, he says.

However, a challenge in embracing such a model is to provide guaranteed quality of services for all these different applications in the long run.

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