value insights

Enablers of the Digital World: the killer-structure (1/2)- Valutrics

How should Telcos innovate?

Ovumpleted a throrough analysis about Telco’s innovation challenge: ‘Understanding How Telcos innovate’. The entire report by Emeka Obioudu is worth reading as it includes case studies on ATT, Telefonica, Telenor, Orange, DT, Singtel, Telstra, and Vodafone.

A few insights capture quite well the huge innovation challenges Telcos are facing, and the resilience they should develop:

  • Innovation benefits should be epassed in a broader scope: innovation is not limited to new product development but covers building efficient infrastructure, reducing costs, and improving processes. Ovum suggests the notion of ‘net innovation’ as a result of ‘net new revenues’, ‘net cost savings’, and ‘net non monetary benefits’, it draws attention on the fact that ‘saved revenues’ should be appraised similarly to ‘new revenues’ and ‘cannibalized revenues’;
  • Telcos should stress their network as an innovation platform: ‘designing new product as an embellishment of their core product, Telcos can build a veritable shield for it’; by ‘extolling the role of the network as a differentiator’, not imitating, but ‘using the network to drive their innovation activities, making it adaptable and malleable for multi-purpose use’, they will keep their capital intensive asset as a considerable barrier to entry, and shape the network as a ‘killer structure‘;

  • Telcos must ‘<strongpete less and collaborate more‘: digital hub or units, VC units are a way to ‘create channels for the Telcos to engage and assimilate ideas and knowledge from external parties’, and to ‘prevent internal inertia’; Telcos must ‘employ people that have an intimate understanding of external innovation trends’; nevertheless, these units ‘raise the question as to when the new products or services should be handed back to the product teams for development’;
  • Innovation requires ‘agile and lean operations’: Telcos should empowermunity of developers to create Smart services by layering ‘risk-accepting’ accesses to their infrastructure through bold APIs, and cloud services, and setting-up an exchange ecosystem where partners can simply ‘plug and play’; similar innovation flexibility can be achieved internally with ‘modular design‘: ‘ATT has thus separated the building blocks of its innovation structure’;

  • Innovation can not happen without resolute supports: a clear and explicit vision of the ‘what and how’ of innovation, CEOmitment in

Leave a Reply

Your email address will not be published. Required fields are marked *