Can Israeli start-ups help SingTel in its quest to be more like Apple?
SingTel, the largest multi-country mobile operator in the world, is looking to move "beyond the pipe", as Allen Lew, CEO of SingTel's Digital Life group, put it at a press conference in a Tel Aviv suburb on Sunday.
Rather than just supplying the conduit for consumers to get their hands on mobile content and services, SingTel wants to get involved in providing those content and services too. "We want to engage with and work with customers," and position SingTel as a technology company instead of just a telco. And to achieve that goal, SingTel is looking for help from Israeli start-ups.
That's why, Lew said, SingTel has hooked up with telecom applications company Amdocs, announcing the opening of a joint development centre and start-up program known as SingTel LifeLabs@Israel.
Amdocs knows Israeli start-ups very well; it started life three decades ago as an Israeli start-up itself, and maintains its major R&D facility in the Tel Aviv suburb of Ra'anana. "We see ourselves as providing a point for start-ups in Israel to meet with us, the largest telecom app supplier, and SingTel, one of the biggest telecoms in the world," said Eli Gelman, president and CEO of Amdocs, at the event.
Targeting key areas
The project seeks to recruit Israeli start-ups working in several areas that SingTel would like to develop products and services for, said Lew. "Mobile advertising is a major area for us," Lew said, because it's the best way to reach customers in developing markets. "For many poor people, the cellphone is the only electronic device they have. So bringing ads directly to phones, targeted directly at consumers, is important." SingTel already has history with Israel and mobile ad technology: among its only forays into Israeli high-tech so far has been the purchase of Amobee, a Herzliya company that sells targeted mobile ads.
Related to advertising, said Lew, is a big push SingTel is making into digital TV, "which is a major movement in our markets in Asia and developing countries". E-commerce is also at the top of SingTel's agenda; the company thinks it has an opportunity to wrest business away from companies like Amazon and Alibaba, "which took advantage of internet penetration on the PC to expand". Now, in the age of mobile, new opportunities are arising, and SingTel intends to take advantage of them, said Lew.
Other areas SingTel is looking for help in from Israeli start-ups includes targeted gaming (games tailored to specific age groups or populations), big data analytics (the better to tailor ads to mobile customers), and voice and face recognition interfaces for devices.
The LifeLabs project may or may not entail SingTel's purchase of Israeli start-ups that it likes, according to Lew. "In some cases we will work with Amdocs to find companies that can help us with our strategic needs, or find them on our own. If it makes sense we will acquire them. We also plan to work with incubators; in some cases it makes sense to leave companies alone, to grow on their own." But SingTel is prepared for acquisitions, too, he added: "we have a corporate venture fund of about $150m. Part of this fund will also reach Israel."
Besides start-ups, said Lew, SingTel will seek partnerships with Israeli academic institutions, where many of the innovations developed by start-ups are born. LifeLabs@Israel is only SingTel's third start-up recruitment and development programme – the other two being in Singapore, and in Boston, where the LifeLabs project works closely with groups at MIT. "You have here some great universities, close to or just like MIT, like the Technion," said Lew, referring to the Haifa-based science university.
SingTel, of course, is a giant telco, with 470 million-some customers in 26 countries, from Asia-Pacific to Africa. With such numbers, the company feels it could be doing a lot more — capturing the money that customers spend for sundry services from other companies, while utilising the network that SingTel provides.
Beyond the pipe
Companies like Apple? "We were a little surprised by emergence of the digital companies like Apple," said Lew. And while SingTel might not want to take on a company like Apple – at least at first - there is plenty of other "low-hanging fruit" it could pick to capture customers. "We think the ground is shifting," said Lew. "When companies like Facebook and Amazon began using the internet, it was PC-based. Now mobile is surpassing PC, and with this shifting of the ground we believe we can regain engagement of customers.
"We were a little surprised by emergence of the digital companies like Apple" -- Allen Lew
"We decided a year and a half ago that we didn't just want to be a 'pipe', but that we wanted to engage with and work with customers," said Lew. "Thats why we set up the Digital Life division," and it's to help in that effort of developing digital services that SingTel is engaging with start-ups – specifically Israeli start-ups. "With this programme we can move from being just a pipe to a company that is fully engaged, and not just a commodity or utility."
And those digital life changes could have a big impact on US consumers, as well: Amdocs already has a start-up programme somewhat similar to LifeLabs@Israel with AT&T. That programme has been in operation for over a year, said Gelman, and already AT&T has extensively engaged with several Israeli start-ups.
Division of labour
For Amdocs, a major presence in the telecom business itself, the question of division of labour — or in this case, of start-up technology assets — arises. If Amdocs scouts find a really game-changing tech in a start-up, who gets it – SingTel or AT&T?
Maybe both, said Gelman, with Lew agreeing. "SingTel and AT&T do not compete in any markets, I can see this kind of sharing happening, to save time and effort for everyone. I don't see why we shouldn't. Ideas don't have time zones." If both AT&T and SingTel agree, Gelman said, he sees "no reason" why ideas and tech cannot be shared. In fact, he said, "we have some products that we started with AT&T, and he first thing we will do with SingTel is present these ideas to them," pending AT&T approval, of course.
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With that, Gelman said, the two companies have a different focus. "SingTel is organising around the digital life concept, while AT&T would care more about network efficiency. The subgroups of technology, I think, will be more of a factor in the question of sharing technology than other issues." Nevertheless, if an idea can help out both companies, why not? Lew agreed: "If there is a something to work on together for both our benefits, we will do it."
And what about Amdocs? What's in it for them? It's not money, said Gelman, but inspiration. Amdocs is not taking a cut or finders' fee for any of the start-ups - although it wouldn't be surprising if, given the already close cooperation between SingTel and Amdocs (the two companies have worked extensively on projects in Asia), there would be some way for Amdocs to get involved in the tech development process with SingTel.