Emerging market telcos embrace partnerships

Emerging market telcos embrace partnerships

Summary: Telecom operators in emerging markets see partnerships with third-party providers as "critical", and do not see themselves as end-to-end providers like first world counterparts.

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Compared with their first world counterparts which entered the mobile broadband market earlier, telcos in emerging markets do not see themselves as end-to-end service providers, said Amdocs marketing director Erwann Thomassain.

In a phone interview with ZDNet Asia, Thomassain said operators in developed markets design their go-to-market strategies around offering a suite of mobile connectivity services to users. Offering an example, he said players prefer bundling broadband applications such as voice-over-Internet Protocol (VoIP) together with connectivity packages.

On the other hand, the majority two-third of operators in developing markets are more pragmatic and open to partnering existing over-the-top (OTT) applications service providers such as Skype and Google to offer services to customers, he said. He cited findings from a recently-completed Frost & Sullivan survey commissioned by the BSS vendor.

The remaining one-third said they aspired to own the entire value chain, providing services such as healthcare, government support and mobile payments.

"Operators have been slow to react to OTT competition," he said, noting that third-party applications service providers have been able to come out with better services. As such, telcos poised to come to the 3G market are ready to offer their extensive customer knowledge to service providers so that they can present a better combined offering, said Thomassain.

"Average revenues per user (ARPUs) are going down. Voice is a commodity. Existing business models are not sustainable," he said.

While demand for connectivity is going up in these markets, telcos recognize that they are unable to fulfill all the market's demands for services, he said.

The survey found more than 90 percent of telcos believed that new offerings and business models will be required in the next five years, while 50 percent said partnerships with third parties will be "critical".

Telcos in emerging markets are also looking to beef up analytics on the customer data they hold, so that they can go to a services play right out the gates, he added.

Lending customer insight to OTT services will help telcos reduce churn so they don't become "dumb pipes", as well as allow them to upsell services or place mobile ads, he said.

The survey was conducted with service providers in Southeast Asia, Latin America and Eastern Europe.

Frost & Sullivan's director of consulting for information and communication technologies, Jennifer Bates, said in the report: "Service providers in these markets view the connected world as a new revenue source, but they will need to invest in technology to develop and deploy new and changing business models."

Thomassain outlined mobile banking as another opportunity for players in Asia's emerging markets, saying this is especially compelling to the population coming to mobile broadband who do not have bank accounts.

Topics: Software, Apps, CXO, Data Management, Enterprise Software, Mobility, Networking

Victoria Ho

About Victoria Ho

Victoria Ho is a tech journalist based in Singapore, whose writing has appeared in publications such as ZDNet, TechCrunch, and The Business Times. When she's not obsessing about IT, you can find her tinkering with music and daydreaming about which guitar to buy next.

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