3 existing, 1 essential and 1 under-exploited capabilities of Telecom operators

My last post (Corporate DNA Alignment and not Culture Changes) was a bit of a set-up for this post. In the telecom operator industry, very few companies have made a consistently successful business out of going up the "vertical stack" for enterprise business, higher value services (mobile wallets, mobile IDs, personal telecom operator clouds, walled garden services) or got high ROI across integrated media and communication assets. It has not been for want of trying but several natural constraints of the industry (regulatory restraints, nature of underlying telecom infrastructure, sales team maturity) but even more critically, the corporate DNA of telecom operators has prevented this expansion to adjacent space.

I believe that by deeply understanding their corporate DNA, further differentiating around their natural existing capabilities and making most of the 2 emerging yet under-exploited capabilities, the normal telecom operator will continue to not only be essential but provide consistently profitable returns to its stakeholders.

The 3 capabilities that the best of telecom operators exhibit and are most intrinsic to their corporate DNA are:

1. Organizing and deploying CAPEX: most good telecom operators know to tap capital at the right costs, keep the CAPEX at a long term average of 15 to 20 % of their revenue, secure/build communication real estate (wireless spectrum, towers, strategically located central offices, right of way for long distance fiber, secure last mile wire-line distribution infrastructure etc) and get returns on this real estate while connecting businesses and consumers, mostly across the geography in their scope of operations.
2. Large ICT infrastructure deployment in their geography: this is what most of the organization in telecom operators gets most excited about and good ones do a great job of it. They deploy telecom and supporting IT infrastructure (hardware, software) effectively in their geographies. Huge efforts and great skills go into engineering networks that are best suited for the geography in scope keeping the needs of the targetted customer base in mind and the topology of the land while adhering to regulatory requirements (street furniture, emission norms, ecological and sustainability targets). Supply chain (services, products, spare parts management) and program management are well-oiled machinery in the well run telecom operator companies.
3. Running reliable and secure operations 24 by 7: No one expects Google or Facebook to be available all the while, but every end user requires instant, reliable connectivity wherever they are and at any time of the day. In fact, the only time most users think of their operators is when they don't get instant, reliable connectivity during a Netflix session at home or on a call gets dropped on their smartphone while they are driving in their cars. Therefore, reliable and completely secure telecom infrastructure and associated IT operations are at the heart of great telecom operator organizations. It is an obsession at telecom operators, key metrics are developed around these for every part of the organization and incentives of several senior executives tied to it.

These above 3 capabilities are the common hall-mark of the most profitable and the most trusted operators across the world. These capabilities are deeply ingrained in all successful telecom operators.

However, ALL telecom operators have 2 other capabilities they need to focus on but NO telecom operator has mastered either of these. Instead of spending time and resources on trying to get into very risky business areas, getting super creative about going up the vertical chain, establishing massive sales channels for new complex business solution sales or spending tonnes of money in integrating media operations, MOST telecom operators should focus on honing their expertise in 2 areas that are aligned to their native capabilities:

1. Having a well structured cloud strategy, common governance for cloud, and effective cloud operations (see my previous posts - Communication Cloud and Operations and 3 types of clouds at telcos) or communication cloud mastery is the most critical and yet to be built capability. While the industry is currently developing all the technologies, standards and frameworks to allow all the telecom workloads to effectively integrate, this is the capability that telecom operators have to get ahead of and build deep in their DNA. Successful telecom operators are already the masters of large infrastructure deployment and running reliable and secure operations (as outlined above in this post), so running their business efficiently and effectively on cloud technologies is an evolution, not a revolution for them; but the investments in employee education, hiring of expertise, setting up the governance and effective operations around cloud is the 1st thing they all need to do and right now. Nothing matters more.
2. Data and analytics advantage: Much has been written about this but worth reiterating as it is a highly under-exploited capability of telecom operators. Only the telecom operator (not even the hyper-scale players like Facebook, Microsoft, Google, Amazon ..) knows who/what the real end user is (not some online unverified identity), where the user/device is physically and and at at all times and across the applications the user/device accesses. Simply no one knows it all other than the operator. Operators are seen as trusted and secure and have to build off their all pervasive awareness of users/devices. Data governance, data mobility, data security and data brokering capabilities (while observing privacy requirements) have to be built into the evolving DNA of the modern telecom operator. The wind is still on their side and has to be taken advantage of.

The above established, essential (cloud) and under-exploited capabilities aligned to or adjacent to their DNA will allow the telecom operators to continued to be essential for future and secure consistently high returns. They may even allow the telecom operators to have the foundational blocks in place to be in a stronger negotiation position with hyper-scale players as the next wave of the connected economy (IoT, mobile edge, communication technology enabled business processes and new mobile communication technology enabled business models) gets established deep in our society.

(Disclaimer: All the views expressed here are solely mine and do not reflect those of my past or current employers or customers/clients).