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Partnerships now: The Telco Digital Service Partnerships Benchmarking Tool

Why, and how, should telecoms operators partner with businesses that provide digital services? How will the relationships between operators and their potential partners change in the coming years? STL Partners is currently working on a research project to provide operators who take part in our online benchmarking exercise with answers to these questions.

Digital services - from consumer streaming services such as Netflix and Spotify to business productivity services such as Office 365 - are becoming increasingly indispensable for a modern digital life, from both consumer and business perspectives. At the same time, it is essential that these services are fully mobile. A video streaming service (for example) that cannot be accessed from a smartphone app while on the move is simply not viable. Put another way, from the perspective of digital services the mobile network has never been more important.

Yet from the operator’s perspective, finding value in digital service partnerships can be quite complex. Operators used to have a near monopoly on direct access to the mobile customer, and could bring this valuable resource to partnerships. With the rise of smartphones and app stores, this monopoly has been eroded. But this is not to say that operators should not look to partner: it is clearly evident that a wide range of innovative partnerships are being developed by operators all over the globe, as operators look to improve and transform the state of their partnering businesses. STL Partners’ Telco Digital Service Partnerships Benchmarking Tool hopes to capture just some of this range and diversity.

We have covered some of the ways in which operators have partnered successfully in our recent research. To take one example, AT&T have developed the AT&T Drive platform. In our Executive Briefing, “Digital Partnering: Success Factors and AT&T Drive Case Study” we explored how AT&T was able to look beyond short term revenue growth and towards the longer term, transformative possibility of developing a platform that could support an ecosystem of multiple partners. In short, the AT&T Drive platform sought to accelerate the wider opportunity for connected cars, and therefore position AT&T as a talented, advanced player in this ecosystem, and an attractive partner for automobile manufacturers.

Perhaps a more typical - though also successful - telco partnership is found in the ongoing relationship between TeliaSonera and Spotify, discussed in our Executive Briefing “Partnering 2.0 - How TeliaSonera Makes Beautiful Music with Spotify”. While Spotify is now a global giant, its partnership with TeliaSonera began in 2009, just after Spotify was launched in its first market, Sweden. Like AT&T, TeliaSonera was able to look beyond revenue: this partnership allowed the telco to position itself closer to all-important youth markets. Furthermore, the nature of this relationship was allowed to evolve organically: from an agreement for TeliaSonera to market Spotify to its customers, to a close partnership that includes multiple joint initiatives and (in June 2015) direct investment in Spotify by TeliaSonera.

Beyond these two clear success stories, STL Partners is keen to investigate the wider state of digital service partnerships: we have launched the Telco Digital Service Partnerships Benchmarking Tool. If you work for an operator, and would like to compare the state of your partnering business with your competitors, answer the questions now. Every participant will receive a personalised benchmarking report, and all responses will be anonymised and treated with the strictest confidence.

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