Who's innovating now?

Jonathan Dharmapalan, Ernst & Young
23 Apr 2010

Cultural shift

This is not to say that operators won't have to create their own internal innovation culture. To drive service innovation, operators will also have to create organizational structures and processes that make creative thinking and challenging the status quo a way of life.

Such changes are not easy - but they are possible.

We must remember that operators have already been extremely innovative in their efforts to provide a low-cost service to an incredibly broad population base. They have proved the masters of pricing and cost structure innovation and restructuring their business models to reduce their infrastructure and people costs substantially by significant orders of magnitude.  Over the last few years they have learnt how to share infrastructure, created highly flexible cost structures via outsourcing and leveraged every possible distribution mechanism to deploy their services into previously inaccessible areas.

Thanks to their efforts, telecommunications is one of the few services available to the public that is accessible to almost everyone - reaching people who still don't have electricity or clean drinking water. 

Thus, operators have shown themselves capable of innovative thinking and moving into new business models. If they now deploy their resources decisively toward service innovation, operators have a real chance to begin to play a greater role in shaping the future of the industry.

While they still have the advantage of holding primary consumer relationships, they must invest in R&D, attract new talent and partner closely with service providers to create more compelling services that will forge a loyal customer base and allow them to control their own destiny.
Jonathan Dharmapalan is the leader of Ernst & Young's Global Telecommunications Advisory Services

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