What a difference a year makes

Tony Poulos
19 Feb 2014
00:00
News
Commentary

Over a year ago I wrote in this column that the communications industry was at a crossroad. The premise then was that service providers, regardless of the type of network they ran, would have to make some life-changing decisions if they were to survive the end of this decade.

Here's a reminder of what I had to say back then. "What the industry needs is an epiphany - a sudden realization that things have to change and they have to change pretty damn quickly. There lies the core problem - telcos, by their very DNA structure, don't like change and they certainly don't like moving quickly."

At that time I singled out Telefonica and SingTel, as examples, of CSPs making bold moves outside of their traditional comfort zones and heading down the digital services route. Even these two shining examples had "taken very different routes - one establishing an arms length innovation and investment vehicle headed by bright young unfettered minds, and the other investing in people and acquiring technology that they see as viable and giving them competitive advantage."

It is gratifying to report that since then many Asian CSPs have embarked on what can best be described as "journeys into the unknown". Many are increasing their investments in innovation and acquiring new digital technologies, both of which require different management skill sets to those inherent in CSPs of old.

Choosing the right sector to address is obviously critical, and can be a bit of a lottery. Telstra in Australia, based on its latest activities, is keen to address e-health as a primary business line. With an aging population and rising health costs this makes eminent sense. However, mobile operator EE in the UK recently retracted from that sector, giving no reasons, after having made sizable investments. Perhaps it was an area outside its own comfort levels or showed little promise of substantial incremental revenues.

SingTel's investment in the mobile ad space positions it not only in addressing its own markets through partner networks, but also to offer services to non-competing operators outside the region. Others addressing the mobile payments space have already discovered it is no cakewalk and dreams of being able to displace banks and card issuers with full mobile device based, in-house offerings have largely failed. The exceptions include countries like the Philippines with a massive overseas workforce demanding low cost international remittances.

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