Martin Pasquier

French entrepreneur & digital innovation expert in Singapore/APAC

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Are telcos bound to be dumb pipes in the startup economy?

Posted on June 4, 2013December 7, 2018 by Martin Pasquier

Telecom operators (telcos) have long had a bad reputation of customer (mis)management, abusive prices, overall poor service and rigid mindset. This can be partly explain by their business model. Having invested billions into a fast-changing infrastructure, they want their money back. Be it at the expense of consumers who in any case have little choice to join often similar looking carriers.

 

The telcos gang, South-East Asia
The telcos gang, South-East Asia

 

Things have changed a lot with smartphones, apps, and data. The startup economy, with its creative and ultra agile innovation, are making the best of consumer experience. They overwhelm physical networks with data use, and make the most of the consumer wallet with beautifully designed services that actually make jobs for us (and for them).

 

South-East Asia telcos are in the same situation as anywhere in the world, but with a more fertile background. Philippines is the SMS capital of the world. Singapore has the highest smartphone penetration in the world. Thai have more simcards than people, and Indonesia is seen as the next big regional giant with 1.5 million more middle-class users every year.

 

And how much for the telcos?
And how much for the telcos?

 

Telcos face many challenges, among which:

  • the rise of OTT apps (over the top), meaning any app or service that provides a product over the Internet and bypasses traditional distribution, such as Hulu, Netflix, Skype, and more locally, messaging apps such as Whatsapp, Kakao, Line.
  • rising cost of acquisition, with Singtel for instance putting aside $1.6 bn for acquisition in the coming years (to be compared to the cost of in-house innovation)
  • different mindset, fueled by a business model that is not understood by users or startupers

 

innovation ecosystems martin pasquier agence tesla echelon 2013 telcos

All hope is not lost, and there are a few remedies telcos can use to avoid the dumb pipe effect:

  • create/nurture an innovation ecosystem. Innovation is open to anyone, telcos included, and most of them are now leading companies in innovation funding. Singtel has its own incubator, Innov8, to name only one. It’s a good connector.
  • share the distribution channel, still a strong propriety of telcos. Their ability to reach users, per mail, SMS or other means, is still unparalleled. This is an asset to share with new ventures in the form of partnerships
  • Make ventures travel and adapt to local markets, are telcos have big user base, and can help startups localize better, they can also help open markets.

Thanks Echelon 2013 for this great panel, and speakers Srihathai Prammanee (AIS, Thailand), Edgar Hardless (Singtel Innov8, Singapore), Chen Chuan Loo (Singtel Digital Life, Singapore), Thomas Clayton (Bubble Motion), Marina Kacaribu (Telekomsel, Indonesia), Peter Bithos (Globe Telecom, Philippines)

 

Hello!

I'm Martin, a French entrepreneur based in Singapore. My day job is to help large companies to be more digital and think like startups. This is why I'm taking my clients to visit innovative cities across Asia. When I'm not working, I love to write, explore alternative forms of investment, run and build myself a body to live until at least 100, I'm a big gamer, and I challenge myself by trying to play the hardest scores on flute. Check my LinkedIn and Twitter too!

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