Vision 2014: Time to change your mindset

Claude Achcar/Actel Consulting
telecomasia.net
It’s time to stop the debate over OTT "threat or opportunity" for the telcos. 
 
Arguments have been made in abundance, especially for the former, and the telcos have chimed in on the debate. Most blame the OTTs, but surprisingly many are resigned to their fate. 
 
Let's agree both are valid. OTT is an immediate opportunity because they provide the content and user traffic that justify the data revenues telcos are earning, and an immediate threat because they take away most of the legacy revenue telcos have depended on over the years including voice, messaging and especially roaming. But it's also a mid-term opportunity, given the various foreseen partnership models, and a mid-term threat, given the convergence of markets they both have in their service roadmaps. 
 
So like them or hate them, the OTTs are here to stay, and mostly likely, they will grow in scale and variety. So what's the path to restoring revenue and profit growth for the telcos as we head into 2014?
 
First, the telcos are not one monolithic bloc. In fact, those who have anticipated the current trends are doing just fine, though most have enjoyed better days. A shift in attitude is required. And for that, telcos need an injection of new mindsets, operating models and in some cases people (from outside the traditional telecom industry). The first steps for telcos must take include learning to work in synergy with each other (and their eco-system partners which, by the way, includes OTTs), focusing on win-win scenarios and outbidding/blaming each other less.
 
The most successful OTTs have scale due to borderless reach. Until the telcos start collaborating with each other, they will continue to be at a disadvantage on that front, except for places like China and the US, where telcos do enjoy scale and fare better than most. 
 
Second, emphasis on services vs network is overdue. Networks - just like devices, operating systems, etc - have been largely commoditized, even though they remain strategic assets if leveraged properly. It is futile for telcos to outspend each other when they will end up with rather similar network quality and coverage. We are living in an age of very few network vendors, device makers and even fewer operating systems developers. Hence, it is hard to differentiate based on these traditional parameters, unless one takes the lead with disruptive networking technologies, which is a rarity. 
 
Instead, telcos should agree, when appropriate, to work together to share the burden of ever-expanding network resources. Initiatives like tower sharing and other passive (and in some cases, active) infrastructure sharing, are already common. More can be done and should be done, such as a neutral host for extending capacity and coverage in crunch areas. Such initiatives will free-up capital and focus, enabling telcos to invest in differentiated services and emerging cloud deployment models. This will make them more agile and competitive - not only with each other but with the OTT's as well. 
 
This article first published in Telecom Asia Vision 2014 Supplement
 
 

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