Comments on: How can Mobile network operators innovate?

By: Ajit Jaokar

Ajit Jaokar — Sun, 05 Apr 2009 07:39:46 +0000

very insightful Paul! I think its a bigger topic and I also had other posts to follow up as well. I think the question is very significant. As we see the newspaper industry struggle for ways to innovate – I think that there is a lesson to be learnt from it ie. complacency has a problem even if the existng business model works, When I see the G20 summit, there is a petituon from Operators for more spectrum http://www.theregister.co.uk/2009/04/03/gsma_g20_letter/ – this is all well and good but still tries to extend the ‘old’ i.e. continues to work on the model that spectrum is valuable(which it is) but as you said, cannot be sold directly to the customer. Thanks again kind rgds Ajit PS: I may make this into a new book/newsletter – ideas for Operators to innovate in the age of Google. Good title!

By: Paul Golding

Paul Golding — Sat, 04 Apr 2009 18:56:01 +0000

Interesting post Ajit.
In the first place, there is a cultural corporate DNA issue. OpCos are not built or run in any way that supports innovation. Unlike Internet companies, OpCos did not have to invent their monetization model at some point in the future – they had a very real and successful financial model from the start. Thereafter, the game has been about incremental enhancements to the existing model to squeeze every last drop of revenue from the core product, and about the significant marketing effort that attracts (and keeps) users to the core product. There has been no need for any significant innovation to extend the product base. Hence, the organisations are heavily loaded with a culture and structure that is one of operational expertise (which has its own innovations too, not to completely knock OpCos) and not creativity.
OpCos have realised for a long time that the future is about value-added services. However, what they don’t seem to appreciate yet is that the core network is probably unable to support any additional value in a world that has moved into a realm where the very concept of service (and value) is rapidly evolving – i.e. the Internet. They are in denial because they want to believe that the huge investment in the network MUST surely count for something.
OpCos are still talking about Smart Pipes, which has to be the greatest oxymoron of the century. I have not seen any evidence yet that the so-called “operator assets” are actually that valuable. Even if they are, then they are likely to remain as diamonds buried deep in the earth because the OSS/BSS stack is like the anti-matter of open platforms. The ONLY solution is to create new assets, which means innovation.

By: Ajit Jaokar

Ajit Jaokar — Sat, 04 Apr 2009 10:44:04 +0000

thanks for your comments Srikant. I agree – emerging markets have a different set of motivations. However I still dont think that patents is the way. kind rgds Ajit

By: Srikant Harihar

Srikant Harihar — Fri, 03 Apr 2009 15:11:03 +0000

Hello Mr. Jaokar,
My two bits on your blog..
1. I am looking at your article from an Indian telecom perspective. The business economics of Indian telcos is veered towards quantity rather than quality. The overzealous efforts towards garnering more and more subprime customers (if I can call anyone with a basic need of voice and text feature on the mobile) is supremely evident by way of cheap phones and still cheaper call rates.
Innovation in the domain of content and features is relegated to a few content and application developers. The concern that I have is these Application and Content providers are operating on shoe string budgets and even smaller margins (being squeezed to the core by the operators). The innovation created becomes a commodity and in no time one can see replicas of the same across different operators. How can the innovators monetize these innovations in the absence of a strong and regulated Patent license framework. Global giants like google or youtube have the wherewithawl of sustenance because of the huge number of users and a kind of a near monopoly because of which users are not tempted for choices. There are so many search engines but how many of us use anything but google?
A firm regulation for patents could pave way for innovators to invest and eventually monetize their innovation for a specific period before it becomes a common good.
Your comments on the same would be highly insightful.
I came across your blog on Telephonyonline.com
I work as a Telecom Expense Management domain for BT Europe through Tech Mahindra Ltd.
Regards
Srikant Harihar