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The ‘Big Picture’: Disruptive Strategies for Growth

This week, we’re publishing a post each day that summarises our recent research in key areas, and the new research we’re working on for the Americas Brainstorm in L.A., 27-28 Oct, and the EMEA Brainstorm in London, 8-9 Nov. It’s also the ‘last chance to see’ the material from our first ‘Best Practice Live!’ online event, with the videos coming offline on 28th September, so please watch the ones you want to see before they’re gone.

NB. To watch the ‘Best Practice Live!’ videos in this post (links marked* below or here) you will need to register on the first page that the embedded links take you to, or log in if you’ve already registered. If you have any problems please email us at contact@telco2.net.

Disruptive Strategies for Growth

We’re currently working on a major new research report, titled ‘The Roadmap to New Telco Business Models’, articulating our perspective on the development of new and ‘Two-Sided’ Telecoms Business models initially described in The $125Bn ‘Two-Sided’ Telecoms Market Opportunity, and following on from the recently published report Telco 2.0 Case Directory - 5 ‘Use Cases’, 10 Case Studies. This new ‘Roadmap’ report examines international comparisons of operator strategies against our innovation framework, and explores what different types of operator should be doing in each region to maximise their chances of success in a Telco 2.0 world.

As part of this, we’ve developed ‘Ten Principles for Disruptive Innovation’ that we’ll be featuring at the forthcoming events. But why do we think it’s necessary for operators to think and act differently, and what should they do?


An Uncertain Environment

The post-Credit Crunch global economy is still highly uncertain, and teetering on stagnation. Yet investors and cash rich tech companies are faced with the most dynamic period of technology innovation for 15 years, irrational valuations, and economic uncertainty - so what will they do? See this Investor View*.

In New Telco Growth: is Time Running Out? We argued that at a time when telcos are being re-rated as quasi utilities by investors, the importance of creating sophisticated and effective strategies for new growth is becoming ever more pressing. The clock is ticking fast and the opportunity could slip away from Telcos as nimbler competitors from adjacent industries take the value.

These forces for change are not new, and have been seen in other markets, so what lessons can be learned from Opera and the Browser Wars* and Amazon’s ‘Flywheel’* business model concept?

Time to Change

It is now becoming widely accepted that the existing Telco 1.0 business model is under pressure, but how should the Telecoms industry think about developing new business models with new customers, revenue sources, cost profiles?

In Telecoms 2015: New Game, New Players, but Who Wins? we argued that the connected ‘digital economy’, underpinned by telecoms, is evolving fast, and examined scenarios of how will it play out in the next 5 years, the rules, and who is likely to win.

So what should operators and vendors do to counter threats and exploit potential ‘Telco 2.0’ opportunities in this environment?

The View from the Top

In the ‘Best Practice Live!’ sessions, senior keynote speakers gave their views:

Ericsson’s CEO* gave his vision of how the future roles of telcos and vendors will change;
Deutsche Telekom’s CTO* presented on strategy, new revenues, cloud services, and the WAC;
BT Wholesale’s CEO* discussed new models of operator wholesale consolidation driven by the ‘20 x’ data explosion;
Telco 2.0’s CEO* described how business model innovation is instigated by leading telco exponents such as Vodafone and adjacent players like Amazon;
Telco 2.0’s MD* described the “gold ore” model of the API value chain and operator collaborative payment services.

What’s Next?

At the next brainstorms, STL Partners/Telco 2.0 Initiative will share extracts from the upcoming new ‘Roadmap’ research, and there are great new line ups of Americas speakers and EMEA Speakers. The agenda on ‘Disruptive Growth Strategies’ covers the following hypothesis:

• Traditional voice and messaging services are being replicated or bettered by freemium internet services;
• A future based on access and connectivity is one of low-growth and low-margin for the Telecoms industry;
• Fresh thinking is needed to determine how the Telecoms industry can add more value and what specific steps are required to deliver this;
• Different strategies will be required for different types of operator;
• Selective collaboration among operators will be required to realise success.

Key questions to debate:

• What principles should the industry consider when developing new strategies and business model?
• What specific opportunity areas will drive value creation and growth in the next 5 years?
• What should the industry do more of/less of/differently to exploit the opportunity areas?
• Where and how should operators collaborate?
• What should different types of operators be doing to mitigate risk and maximise their chances of success?

How to Join In:

Please visit ‘Best Practice Live!’ before 28th Sept 2010 for a last chance to see the videos, join us at the Americas Brainstorm in L.A., 27-28 Oct, and the EMEA Brainstorm in London, 8-9 Nov, and use our research portal at www.telco2research.com to keep up with our ongoing analysis.

We’ve also made strategy articles easier to find under on our research portal under Strategy & Finance.

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