« Why a bank is like Lebara Mobile | Main | Credit Crisis, Part 8: Show Us Your Labs »

Vodafone: “Smart Cooperation” = Telco 2.0

Vittorio Colao, CEO of Vodafone, has been saying this recently:
I don’t like the word ‘carrier’. A ‘carrier’ is not what Vodafone wants to be.”
Instead, he’s keen to become a provider of “smart pipes” and perhaps even of “NaaS” - that’s “Network as a Service” for fans of MLAs*. We’re not so sure about that bit - all telcos are providers of their network as a service, and they have been since the days of Alexander Graham Bell. But there’s a nice definition of it here, which in summary says:
Operators are finally moving towards exposing network intelligence to third parties - thus moving from closed network model (NetCo) to an open platform model (WebCo), often referred to as Telco 2.0

Most importantly, Colao has been talking about “smart cooperation”, the limits of walled gardens, and the need to seek new ways to monetise the services that run over your network.

We say: Yes! “Smart cooperation” sums up the essence of two-sided business models, which usually emerge at the frontier between competition and cooperation.

For example, only the biggest and richest companies could provide extensive Internet peering in the 1990s, and most of them didn’t want to. There was no way for competition to resolve this. Cooperation, though, in the form of the Internet exchanges, made it possible for many competing service providers to peer and for non-service providers to compete with the telco wholesale operations to supply their own interconnection needs. Immense value was created. Similarly, no stockbroker can compete their way to having a stock exchange; they must cooperate. At the same time, of course, it’s rare for monopolists to be especially innovative in the absence of competition. Hence the importance of two-sidedness.

It’s great news that Vodafone, as the biggest operator by revenues and a hugely influential leader in the industry, has recognised this, especially now that it’s partnering with China Mobile and keen on deploying LiMo handsets. In fact, the “Vodafone family” as they tend to call it is increasingly rich in Telco 2.0 activity - there is Verizon Wireless’s ODI, the P4P work at VZ itself, M-PESA at Safaricom, which is a Vodafone affiliate, the JIL development environment work, and more besides. Hopefully, now that the decision to go LTE means that there will be no technology barrier between VZW and Vodafone, we can expect some of the innovation there to diffuse through the entire group.

It’s also very good news that Vodafone recognises the problem with the walled garden; it’s not just that you usually can’t keep people in the garden, it’s that the garden itself won’t flourish in isolation from the rest of the world. It is part of both an ecosystem and an economy, and trying to replace those in an autarkic system is both very hard and expensive, and inevitably inferior to the real thing. (The history of actual gardens is telling; despite the huge amounts of money 18th century aristocrats spent on their gardens, they were very much dependent on importing plants raised by deeply middle-class Dutch experts’ businesses and on the work Kew did raising weird tropical plants in European conditions as experiments. On the other hand, as well as spending the money, they were also the leaders of fashion, which kept the Dutchmen in business and encouraged innovators.)

Hence the huge importance of both openness, and also setting up the commercial terms of business and the infrastructure that are needed for all sorts of innovative things to grow. This is why we like O2 Litmus; it’s not just about network APIs, although they are necessary, or handset ones, although they too are necessary, and it’s not just about having an app store, although you’ll need one of those too. It’s about the integration of all these things with a workable business model and a committed user and developer community.

It looks like 2009 is shaping up to be the year when operator APIs, developer communities, and the like move into an implementation phase. Projects are bubbling up all over the place, with operators, with vendors; a whole range of duelling standardisation efforts are on the go, from MEF’s Smart Pipes initiative, the TMF’s invaluable work on BSS/OSS and management information systems, to the GSMA’s OneAPI, RCS, and Mobile Ads projects, passing through a wealth of vendor and technology-driven activity. This slide from Telco 2.0 associate analyst, Dean Bubley, and presented at eComm last week, gives you a taste…


And, of course, Telco 2.0 won’t be left out.

For a start, later this year you can expect a major strategy report on open APIs and developer communities. And we’re also presently in discussions with a group of major European operators, fixed, mobile, and converged, about creating a forum for new business models in the telecoms industry. So far there’s been an enormous amount of work on technical interoperability and standardisation, but there’s been very little on the business side, and not even very much on the technical issues which bear more on the business side than on the pure network-engineering, packet pushing side.

Also, much existing activity is specific to one particular technology or protocol - we intend to be inclusive to a fault, as the great majority of Telco 2.0 concerns problems that affect the entire industry. As a result, at the next Telco 2.0 event, we’re staging an API session with representatives from the major trade bodies and also from interested operators in an effort to brainstorm a commercial model for this kind of business. You still have time to sign up.

*MLAs - Multiple Letter Acronyms. We’ve moved on from Three-Letter Acronyms

To share this article easily, please click:


No doubt that the key to B2B success is through Collaboration. Now this key factor must be fully implemented within network infrastructures for all to co-exist. While API's have also been around for some time, it is time to standardize this front...

Other Dutch example of Smart Cooperation: Teleena (www.teleena.com). Teleena enables brands, corporates and operators to become virtual mobile operators. We control and manage our own garden (sims, 2.0 IN, HLR). We do our own planting and harvesting, billing and operation. While our customers control the retail market. Like our ancestors listened to Kew, we listen to our customers so we know what to grow and where to innovate. Of course we never compete with them. Guess who is renting us the soil (or radio network) for this case?? ..Vodafone!!

I'm very please that Vittirio is taking the position as an industry leader rather than a pure puppet to the City. His longer term vision is a refreshing respite from the City's moaning about quarterly earnings.

The other aspect of this BLOG that is very important to me is that of co-operating from the start. I'd question whether SMS would have been the success that it was if the 3 big )AOL, MSN & Yahoo) IM guys had inter-worked from the beginning.

Could this be a note of caution for the charge to the iPhone to solve the ills of the mobile industry and bring web 2.0 to the handset?

Post a comment

(To prevent spam, all comments need to be approved by the Telco 2.0 team before appearing. Thanks for waiting.)

Telco 2.0 Strategy Report Out Now: Telco Strategy in the Cloud

Subscribe to this blog

To get blog posts delivered to your inbox, enter your email address:

How we respect your privacy

Subscribe via RSS

Telco 2.0™ Email Newsletter

The free Telco 2.0™ newsletter is published every second week. To subscribe, enter your email address:

Telco 2.0™ is produced by: