LIVE FROM THE GREAT TELCO DEBATE, LONDON: Experts from across the industry called on mobile operators to reinvent business models to break out of zero growth sectors, and fuel increased consumer and investor confidence.
During a lively debate former Veon CEO Jean Yves Charlier (pictured, right) said providers needed to fundamentally transform their outlook, adding the industry was in a “zero-growth model” where both investors and customers were “voting with their feet”.
He noted in many European markets it was easier to open a bank account then sign-up for a new mobile line, adding many operators had not developed a strong relationship with customers, and should focus on improving engagement and expanding their scope.
“Fundamentally this is an industry in contraction,” Charlier added. “Returns on capital in Europe have been fundamentally below the cost of capital.” This, he noted, resulted in the telecommunications sector underperforming comparable sectors across the world’s stock markets.
While Charlier urged the need for operators to widen their outlook, SoftBank executive business strategist Akira Tada (pictured, centre) highlighted the opportunities in forming joint ventures in new sectors.
Pointing to the wide range of investments made through the SoftBank Vision Fund, Tada illustrated the need for operators to think strategically and work with new partners.
He noted advice from his company’s founder Masayoshi Son, asking: “Do you want to be a kind of bacteria or not? The notion is if you are a type of bacteria, you just keep propagating cells for 4.5 billion years. If you want to improve yourself you need to interact with some other things.”
Google’s head of Telecoms Strategic Relationships for EMEA Mike Blanche (pictured, left), urged operators to work with internet-focused companies as both types of providers had different strengths.
He noted mobile providers could offer not only offer network infrastructure, but also billing relationships and a strong high street presence. By partnering, Blanche added, operators would not need to make the huge investments required to move into some sectors, for example competing with the likes of Netflix to offer content.
Playing down competition between operators and companies such as Google, Blanche said: “It’s not a zero-sum game, there’s a bright future for us together.”
He added: “Telcos need to play to their strengths and consider the benefits of partnerships.”Subscribe to our daily newsletter Back