Telcos need to collaborate more, compete less, study says

Telecom operators may be overestimating the threat of OTT and underestimating the value of collaboration, new research from Ovum says.

Telcos, the firm concluded in its report, "Understanding How Telcos Innovate," come up short against the likes of Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG) in the app ecosystem because they are "too selective when choosing partners" and expect too much from those partners when they do collaborate.

"No matter how much telcos try to diversify, their primary role will always be as carriers of voice, messaging and data traffic," said Emeka Obiodu, principal analyst at Ovum's industry, communications and broadband practice and co-author in an Ovum press release. Obiodu co-authored the report with Carrie Pawsey and Jeremy Green. "As Google (with advertising on search), Apple (with devices), and Microsoft (Nasdaq: MSFT) (with software) have shown, a well-crafted strategy can use additional, preferably low-cost new products and services to supplement and shield core products."

Obiodu concluded that "an efficient network that has been updated with new innovations can be combined with innovative business models to continuously deliver value to telcos and their shareholders."

According to an Ovum summary, the report "demystifies telco innovation activities, highlighting what they do right, what they could improve on, and what they should avoid."

The report does not specifically call out IPTV as a new service that telcos could exploit, however the inference is that IPTV would be part of a new business model that net new revenues, net costs savings and net non-monetary benefits, as called out in the press release.

"By using such a comprehensive approach to evaluating new ideas, telcos will be able to avoid the short-sightedness and misunderstandings that have underpinned some of their previous innovation activities," Obiodu said.

For more:
- Ovum issued this press release
- and this report summary

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