Last week I attended the 9th Annual ‘OnFuture EMEA’ Executive Brainstorm & Innovation Forum (formerly ‘New Digital Economics EMEA’) in London, organised by the impressive telecoms analyst and consulting outfit STL Partners / Telco 2.0. Telco 2.0 conferences have a good reputation, and I have enjoyed them in the past, so I thought I would post my impressions and takeaways from the discussions this year.
- Day 1 focused on major cross-industry disruptions, innovations and strategic themes.
- Day 2 focused on how to build disruptive competitive advantage through mobile marketing and commerce.
I have taken away five main messages from the conference. Here are the first three. Numbers 4 and 5 will come in my follow-up post next Friday.
#1. The sense of urgency is increasing
There was a general consensus that last few years of poor telco financial and operating performance is focusing the minds of telcos, especially those in developed markets, where the core business has run out of steam. Only 18% of attendees said that their telco favoured a “happy piper” strategy (connectivity focus) whereas 50% still aspired to the “telco2 service provider” vision of new and innovative service delivery. I strongly expect the balance to shift over the next few years, as reality bites for many: 83% said their transformation programme was behind schedule or barely out of the starting block!As one participant said:
“If you do not change direction, you may end up where you are heading”.
However, it was encouraging to see the sense of urgency increase across the operator community.
#2. An intense debate continues on the future of voice and messaging
With $888M of VC money in invested in OTT voice and messaging since 2004, it was clear to everyone that core communications services are under massive assault.
The insight here is that communications no longer has value in itself. The value is a meaningful relationship with customer. As Facebook is rumoured to have put it, “voice and messaging is mission critical” – owning it means that you increase engagement with your product.
Putting it another way, voice and messaging is offered for free as an the attraction, but the monetization happens elsewhere on the platform: via engagement with brands or commerce activities. Over 50% of attendees agreed that voice was of strategic importance as an indirect means of value creation for telcos. Getting this message to sink in at the executive level will be a formidable task!
The good news is that telcos still own a massive amount of voice and messaging: the onus is on them to leverage and transform this before it is too late. There were some great examples at the Telco 2.0 conference of how operators are addressing this area and achieving some success, but we’ll leave that for another post!
#3. Telco latent assets really are valuable
There were some fascinating presentations from brands and agencies who are seeking more and more relevant ways to engage their brands with consumers. They are crying out for more data, more insight and more access to users. There was agreement from brands, agencies, and even major OTT players that telcos have lots of valuable data to bring to the party – and frustrations that the telcos are not doing enough to make it accessible.
I also had a fascinating discussion on gaming with an executive from a major online game publisher. He started to see ways in which telecoms service providers can bring value to the gaming community. To name three: providing a test bed amongst a restricted user group for initial roll out of new game; increasing visibility amongst consumers in what is a very crowded market; and addressing the connectivity, bandwidth and (crucially) latency issues that prevent certain forms of online gaming from taking off. His view: people would pay good money for improved latency in a gaming context. What an opportunity for connectivity providers!
I will conclude this article next week with messages #4 and #5 from the 2014 Telco 2.0 conference (OnFuture EMEA London). To be sure to catch them, why not sign up for email alerts?