Opening up for change

Joseph Waring
Telecom CEO

The challenges for telco CEOs have never been more daunting. The only way out of dumb-pipe hell is differentiation, which requires innovation - something operators haven't been known for. Last month Telecom Asia surveyed a handful of consultants, equipment suppliers and operators about the obstacles and opportunities for service providers to innovate.

Analysts have pointed out for years that operators are not organized for innovation. Their primary strength is operational efficiency.

Guillaume Sachet, Accenture's communications, media and high-tech ASEAN strategy lead, said telcos are not employee-centered and do not stimulate creativity. "Telcos traditionally have not been talent-oriented but process-oriented, with a culture driven by traditional services, limiting creativity and speed."

The result is that the innovation process lacks speed, flexibility, user involvement and is cost driven. "The time-to-market is too high at 1.5 to two years, with an inflexible development process due to silos between IT and the technical infrastructure," he explained.

Nokia Siemens Networks' head of technology for Asia Pacific Michael Murphy agreed that culture is a huge obstacle. "Most operators have people, processes and systems based on 120-year-old telephony practices, largely aimed at optimizing voice and SMS. To innovate, many of these things must be changed," he said.

While the culture of an organization is important in how it encourages people to innovate, Frost & Sullivan managing director for Asia Pacific Manoj Menon said it's impossible for any company to keep pace with outside innovation.

Not developed here

"Telcos need to leverage the innovation happening outside and make it available for their customers. They need to focus their innovation on business models, customer intimacy and integrating the multitude of communication applications," he said.

Softbank Mobile senior executive VP Tetsuzo Matsumoto pointed to another cause: government regulation and unfair competition.

He noted that Softbank Mobile is more focused on developing new business models rather than technical development. Echoing Menon, he said technology can be bought from the third parties.

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