The path to innovation

Luc Grimond and Monte Hong/Accenture
25 Sep 2013

Many communications service providers (CSPs) in the Asia-Pacific region have thrived over the past few years. Fueled by the rising middle class, demand for mobile phone and data subscriptions has soared. However, even before this rosy background recedes, CSPs' business models are under threat, and innovation has become more important than ever, especially as convergence continues to blur the line between competitors and collaborators, and CSPs must work harder than ever to compete.

The International Telecommunication Union reported that mobile phone subscriptions in the Asia-Pacific region grew by 325% between 2005 and 2013, reaching 3.5 billion. This represents almost half of the world's mobile subscribers. Meanwhile, mobile data traffic across the region increased 95% in 2012 alone; and that by 2017 mobile data use in Asia will account for 47% of the global total, according to the Cisco Visual Networking Index (2012-2017 forecast).

Despite the growth, CSPs are challenged by fragile consumer loyalty, intense competition from new internet players, plummeting growth in mobile phone subscriptions and convergence, with a global marketplace dynamic in which different companies and sectors are being brought together, both as competitors and collaborators, across traditional boundaries of industry and technology. How can CSPs survive - let alone thrive - in this new environment? The answer is clear: innovation.

CSPs need to find ways to increase revenue through new business models and deliver superior customer experiences. Companies in the past have successfully changed strategies to grow sales by meeting new customer needs, including through converging voice and data services. In the future, new business models may harness the growth in rich customer data to unlock new revenue streams with commercial partners.

But innovation is one of the toughest tasks for all companies. According to Accenture research, more than 80% of corporate executives said they are unhappy with their company's innovation efforts. Their top reasons for innovation failure included a lack of customer relevance, slow speed-to-market, incorrect pricing of new products or services, and lack of new or unique value propositions in the innovation offering.

To make sure they stay on track in terms of innovation, CSPs should consider a number of guidelines that will keep them on the path to successful innovation.

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