STL classics: The original Telco Cloud business model

Telco cloud model

At STL Partners, we see a clear rationale for telco cloud beyond more flexible, agile, cost-effective, OpEx-centric networks and operations. Telco cloud is also about enabling further telecoms differentiation and growth through application and use case-specific networking, and ultimately about creating technology, practices and organisations fit for the Coordination Age.

We have been talking about this transformation since 2012. In our report Transforming to the Telco Cloud Service Provider (Part 2), we identified how Telco Cloud can spur transformation across the entire telco business. A Telco Cloud Service Provider (TCSP) that only changes its product development processes to an agile cloud-based model will fail. The benefits of agile product development will only be realised if the rest of the organisation adapts too:

  • New (product) marketing skills. No longer will telcos need (or indeed be able) to rely principally on corporate brand marketing but instead will need to develop digital marketing skills to promote a broader portfolio of products.
  • New sales capabilities. Selling minutes, texts, data, hosting is relatively straightforward and very different from selling complex cloud-based services consisting of different packages of devices + software + services + consulting – especially in the enterprise market. And these new sales processes will need to be commissioned in new ways – with major implications for the HR function at the TCSP.
  • New commercial models. No longer will consumers and enterprises be offered a limited number of product bundles by telcos – instead they will be able to demand specific solutions and commercial models that meet their needs. The TCSP will need to be able to create a commercial proposition instantly and this may involve more than one party (for example for sponsored services).
  • New partnership models. As already noted in the sponsorship idea above, partners will be much more prevalent in the development and delivery of products because the TCSP will increasingly be offering combinations of traditional telco functionality integrated with other IT-based software and applications (often provided by third-parties). The ability to bring on partners as quickly as Google does with Adwords will be central to the success of the TCSP.
  • New customer engagement. As well as pre-sales marketing engagement outlined above, the TCSP will need to be much slicker in interacting with customers during the delivery of products and services. Customer care will need to move from being a reactive fault-initiated interaction into a proactive process in which issues are anticipated and dealt with before they arrive and the focus is on providing further value to the customer through self-care, additional services and offers and so forth.

All of these operational changes will be enabled by ruthless automation that, in turn, will be the result of using big data coupled with artificial intelligence so that the ‘system’ learns the appropriate response to, for example, an inbound customer query or a network fault.

Read more research on our Telco Cloud vision and how it has evolved

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