‘Leapfrogging the West’: can Asia/Pac and Arabian telcos jump ahead?

Global economic, social and political developments are rapidly accelerating innovation and growth opportunities in digital economies outside Europe and North America. In theory, telcos in APAC and MENA could avoid or at least navigate better the challenges of the Western telco business model cycle. But will they learn the lessons, or repeat the mistakes?


In the last few years we’ve been working a lot with innovative clients in the Middle East and the Asia Pacific regions, and are currently deep in preparations for Digital Arabia in Dubai in just over a week and Digital Asia, 3-5 December in Singapore. For each brainstorm we’ve got a great group of senior speakers and participants from a range of industries – telecoms (e.g. Du, Etisalat, Mobily, Axiata, Globe, Singtel, Telkom Indonesia), technology (e.g. CEA, Ericsson, Google), brands and advertising (e.g. Unilever, McAnn, Saatchi & Saatchi), finance (e.g. Amex, Visa) and media and entertainment (e.g. Walt Disney, Universal Media, Anghami, MBC Group), and we’re really looking forward to the intense but rewarding experience of the brainstorms. We’ve also got a top team of our analysts at each brainstorm.

The Digital Arabia agenda and Digital Asia agenda are tailored to the evolving digital economies in each region, and follow a similar structure reflecting the common strategic industry challenges. Broadly, the agendas cover an overview of the macro and industry level trends in the first day (e.g. new market scenarios and business models, new devices, changing consumer demand, customer experience, and enablers such as 4G, Cloud Services, and Big Data), and on the second day the latest trends emerging in specific opportunity areas (e.g. payments, m-wallets, commerce, marketing, advertising and loyalty, multi-screen and mobile video and entertainment), wrapping up with an overview of the main lessons on implementation and other players who’ve pioneered and mastered new digital business models.

2011 APAC Brainstorm

In full flow at the 2011 APAC Brainstorm…

One theme our clients often voice is ‘what should we learn from, and how do we avoid the mistakes of the West?’ (NB Interest in this has heightened since we published European Mobile: The Future’s not Bright, it’s Brutal.)

We’re always fascinated to learn what the outcome of the brainstorms will be, involving as they do many of the best thinkers and key decision makers in the digital economy, and we don’t want to try to guess or prejudice that.

However, after mulling over our research, the output from other brainstorms, and the ongoing flow of news we see, we’ve come up with three broad principles that we believe will help bring home some of the biggest lessons home from other markets for the brainstorm participants, and indeed, all current and would-be business model innovators.

Look up, look out, listen

Disruptive business model innovation usually comes from outside your own industry. Industries often become increasingly self-centred and insular as they mature, whereas outside players tend to be more alert to gaps and opportunities, and have less to lose and more to gain. As well as destructive competition from substitute products (e.g. iMessage Vs SMS) there can be partnership opportunities in adjacent markets, as well as new market entry possibilities.

2011 Asia/Pacific Brainstorm

Main session at the 2011 Asia/Pacific Brainstorm

It is critical therefore to look outside just your own company and your current industry to scan for threats and opportunities – and that is a key objective we always aim to achieve with our brainstorms. At Digital Arabia and Digital Asia there will be a great mix of senior people from telcos, banks, technology companies, media and entertainment companies, plus our own analysts – all with the agenda to share, understand and explore different approaches to the future.

Moreover, today’s competitors may be tomorrow’s partners, and things can move fast in the digital economy – stability isn’t what it once was. So it this is one area where you can down the boxing gloves and at least be ready to discuss ideas politely (though of course within the remits of commercial confidence and anti-trust).

And good (and bad) ideas can come from anywhere. They can come from inside or outside your company, be completely original, or be a copy of something someone else has already proved or at least tried. So you have to start looking and being ready to spot them.

Don’t forget the humans

Secondly, it’s tempting with the incredible pace and scale of technological change to get over-focused on the nuts and bolts, the bits and bytes, etc. There are indeed some amazing achievements and innovations out there, with smartphones, tablets, 4G and the Cloud high among them – and we’ll be looking at some of the findings of our new report on Cloud 2.0: Telco Strategies in the Cloud, and our work on personal/big data with the World Economic Forum and others.


Participants debate at a break in proceedings

But the real driver of all the progress, and usually the main inhibitor, is homo sapiens – people: us. People out there are always seeking to gain advantage, to improve, or get richer. They are intelligent, sensitive, habitual and occasionally blind to the obvious.

They want ever improving experiences, and if you can’t deliver it, someone else will. But they may not be able to tell you about what they want as they may not know until someone else shows them it.

Not only are all of your customers humans (even M2M and Cloud solutions are bought by people), but so your organisations, their leaders, and their stakeholders. Catering to people’s tastes, influencing and persuading colleagues, and getting leaders’ buy-ins to the latest initiative is a subtle art. Driving a change from the cultural norm (which is what business model innovation almost always requires) is particularly challenging. It involves creating new cultures and organisations.

Even for the most leading-edge of the current technology driven innovations, such as Cloud Services and ‘Big Data’, the key risk / enabling factors are how people’s fears (e.g. of identity theft, privacy breaches, and ‘data sovereignty’) can be assuaged by creating and delivering legitimate and appropriate solutions.

Lead: design, decide, align, do

The classic ‘Innovator’s Dilemma’ is when to start innovating. It’s hard to start early as the motivation is low when rewards are high from the core business at that time. Equally, starting late is tricky as the opportunity may well have been missed. This is a particularly difficult challenge for long lead-time infrastructure and platform type businesses like telcos and broadcasters, although internet and other technology platform businesses (like Apple, Google and Facebook) tend to do better at this. So how do they do it? This is another issue we will analyse at the brainstorms (see also Digital platform strategy: how Google, Apple and Amazon keep winning).

To do new things it is necessary to take some risks, or at the least experiment. We are at last seeing signs of progress (e.g. as we reported in Innovation Strategies: Telefonica 2.0 Vs. Vodafone 2.0) from some telcos, but in our role as a catalyst of change we often seem to find ourselves taking a somewhat critical tone (e.g. Euro telcos: fiddling while the platform burns?).

Themes we are exploring in depth in our report on A Practical Guide to Implementing Telco 2.0 are:

• How should Infrastructure based organisations make space for innovation? Should they try to build it in to the core business or create new businesses?
• What decision making and resource alignment processes do telcos need to put in place to change the profile of innovation?
We highlight some of the issues in and this extract from Telco 2.0: from infrastructure to customer intimacy and innovation) and will be exploring this more at Digital Arabia in Dubai, 5-6 November, and Digital Asia, 3-5 December in Singapore.

APAC Exec Forum 2011

A panel in full flow with ‘Mindshare’ Interactive Software in the Background

Read our latest analysis and insights on our telco research hub here.