2 min read • viewpoint

Innovation Quest for Telecom Operators

The heat is on!

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Telecom operators still have ground to cover

The topic of innovation is not new to telecom companies per se, with the industry having cycled through myriad forms of financial and organizational investments. Telecom operators were among the first to introduce corporate accelerators, invest with venture capital and introduce a variety of corresponding managerial roles. They have launched speedboats, innovation labs or Fab Labs, but realizing value from these innovation efforts have proved elusive. A telltale sign is that professional investors shy away today from start-ups whose business models build on telco collaboration, focusing instead on those disrupting the slow-moving giants.

This state of affairs is why we, Match-Maker Ventures, Arthur D. Little and the Telecom Council of Silicon Valley, launched a truly global study of ecosystem leaders from corporates, start-ups and investors. Our joint study exposes the increasing perception divide across stakeholders: On the one hand, telecom operators have furthered their open innovation efforts but face headwinds to achieve meaningful scale or realize value, barring a few isolated examples. On the other hand, start-ups and start-up-like entities continue to shun telecom operators as partners of choice.

We are strongly convinced that there is little time left for telcos to gain back relevance. To do so, telcos need to truly transform – this requires a radical relook from within and facing up to the unavoidable transformation challenge that pits core business needs against new-business imperatives. Succeeding with breakthroughs across market spaces and customer shares requires clarity of purpose from the top, engagement models for the long run and co-opting the internal organization to the extent needed. As observed with our clients, this transformation journey is not an option anymore; at the same time, this is easier said than done, and challenges will persist along the way. But change is unavoidable, as the alternative is a slow, painful fading into irrelevance at the innovation table.

We trust this study will bring you up to speed on the current situation and spurs you to revisit current efforts within your organization.

At this stage, we also want to thank the participants in our online survey as well the many senior executives for the time they took to be available for our 1:1 discussions.

 

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