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A fragmented market

Industry Outlook 2013: Cultural change

Posted By Cerillion , 07 November 2012 | 0 Comments | (0)
Tags: Cerillion bssoss honda Informa OTT Partnerships Telefónica

Dominic Smith reports back from Informa’s recent Industry Outlook 2013 event in London.

Under the banner of ‘The Innovation Challenge’, this year’s Industry Outlook event blended in-depth insights from Informa’s own principal analysts with some well-chosen guest presentations from the likes of Telefónica Digital, Honda Europe, Deutsche Telekom, Colt, Vevo and Evernote, to provide a well-structured and thought provoking conference.

 

An interesting mix of analysts and guest speakers dovetailed perfectly as we were taken on a journey from customer innovation – what customers want; to network and infrastructure innovation – how to deliver it; before finally looking at the wider issue of service and business model innovation – how to make money; with the knowledgeable and experienced presenters sharing many lessons learned along the way.

 

From the number of times the word ‘fragmented’ was used it is pretty clear that the complexity and diversity of customers / devices / services / networks is the root of many challenges, and as you may expect there are no easy answers. However there is cause for optimism with some notable CSPs leading the way when it comes to innovation.

 

Telefónica Digital is heralded as the shining light for OTT innovation, and the conference kicked off with its CCO, Stephen Shurrock, running through the latest news about its services and revealing how it is using ‘big data’ to create a completely new line of business. Due to its high profile, Telefónica Digital is coming under the most intense scrutiny, however there’s no denying it appears to be making significant headway and in doing so is giving other operators the belief that they too can become players in the OTT market.

 

Shurrock gave a progress report on the TU Me service, launched earlier this year, which appears to be gaining traction and not just amongst the Telefónica customer base. With TU Me, they have specifically made this a generic OTT application which can be used on any network, which contrasts with the imminent TU Go service which will be restricted to Telefónica customers only.

 

It will be very interesting to see how the market responds to TU Go which is based on proprietary technology rather conforming to the GSMA’s RCS specification, joyn. However, in positioning it to provide a ‘consistent communications experience’ Shurrock is confident that this ‘cloud phone’ service will tap into the trend for using the same service across multiple different devices (smartphone, tablet, laptop) and help to ease some of the concerns about a fragmented experience.

 

Most interesting was the information about Telefónica’s new big data business – Telefónica Dynamic Insights – where Telefónica is not just using big data to improve the efficiency of its own business, but is actively packaging up the data to launch and enable other businesses to use this information.

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The initial ‘Smart Steps’ offering will present aggregated and anonymised network data to external companies and local government, allowing mapping of footfall and crowd movement patterns.

 

It’s also notable that Telefónica has partnered with market research firm GfK to help make sense of all the information. So it will be fascinating to see what applications can be distilled from this big data, and it shows once again how important partnerships are in addressing new markets.

 

The other presentation that really caught my attention was from the slightly leftfield Phil Dix of Honda Europe. Having a presenter from Honda was something of a surprise at a telecoms event, but it was also something of a revelation in my opinion. Too often the industry gets stuck navel-gazing, and to hear from a hugely successful outsider can provide enlightenment and inspiration, and Dix provided some fascinating insights from what may seem like a parallel universe.

 

I have always thought of Honda as a hugely successful car / motorbike firm. Wrong. Dix described Honda as an engine company – 1 in 3 engines sold around the world is a Honda. They focus on making this core element, the engine, the best it can be and tuned to the needs of each particular sector, and then they build the rest of the product around the engine – cars, motorbikes, lawnmowers, and so on. Sound familiar? Well operators would do well to take a leaf out of this book when it comes to building applications and services on the core network.

 

Dix also explained how they focus on creating friends and not just customers. This may sound like marketing hyperbole, but when he explained the steps they take to communicate with their customers and understand their needs it was impressive in its simplicity – different survey methods (paper, phone, email) for customers of different products; and the use of different language and terminology according to the segment - for example, rather than using a scale from ‘very unsatisfied’ to ‘very satisfied’, they use ‘miserable’ to ‘magic’ for some customer groups. Simple, but apparently hugely effective when it comes to really connecting with their customers.

 

However, the most significant difference between this presentation and probably every Telco presentation I’ve ever seen, came with the culture of the company. Most Telcos will put up one slide which talks about their vision and goals, but then the rest of the presentation will be almost completely independent. Whereas the culture of Honda came through loud and clear on every slide and in the way it was presented.

 

Dix referred to the company principle of “The Three Joys” – The Joy of Buying, The Joy of Selling and The Joy of Creating – which is as strong now as when it was first devised by Soichiro Honda in 1951. Moreover Honda doesn’t build products and hope someone will buy them; they listen to their customers, understand their needs, and then apply technology to build the solutions. And that’s another bit of advice the telecoms industry should well heed.

 

Overall, the Informa Industry Outlook event provided some great insights and much food for thought as we look ahead to 2013. No doubt fragmentation will continue to be one of the biggest challenges, but for companies that can create the right sort of culture they have every chance of succeeding. 

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