Telco-Driven Disruption: Hits & Misses (Part 1)

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Although telcos aren’t generally associated with disruption, many operators around the world have attempted to disrupt adjacent markets, such as digital commerce, entertainment and financial services. In some cases, telcos have even disrupted their core broadband and communications markets. While many of these moves have fizzled out or have flown below investors’ radar screens, several have had a major impact on both the telco’s revenues and relevance. These include SK Planet, M-Pesa, Au Smart Pass and BT Sport. Why do some disruptive moves by telcos succeed and others fail?

Description

Format: PDF filePages: 41 pagesCharts: 14Author: STL research teamPublication Date: January 2015

Table of Contents

  • Executive Summary
  • Telcos can and do disrupt
  • Offensive, major financial impact (Strategy, Implementation, Results)
  • SK Planet – an ambitious mobile commerce play
  • M-Pesa – reinventing financial services
  • KDDI au Smart Pass – curating online commerce
  • Offensive, limited financial impact (Strategy, Implementation, Results)
  • Deutsche Telekom’s start-stop Scout 24 investments
  • AT&T Digital Life – slow burn for the smart home
  • Defensive, major financial impact (Strategy, Implementation, Results)
  • BT Sport and BT Wi-Fi – High perceived value
  • Defensive, minor financial impact (Strategy, Implementation, Results)
  • Orange Libon – disrupting the disruptors
  • Conclusions
  • STL Partners and Telco 2.0: Change the Game

Table of Figures

  • Figure 1: Representative examples of disruptive plays driven by telcos
  • Figure 2: SK Planet’s Syrup Wallet stores loyalty cards, coupons and payment cards
  • Figure 3: Shopkick enables US retailers to interact with customers in store
  • Figure 4: SK Planet is an increasingly important part of SK Telecom’s business
  • Figure 5: The flywheel effect: how upstream partners can increase relevance
  • Figure 6: M-Pesa continues to grow in Kenya seven years after launch
  • Figure 7: Vodacom Tanzania has made it easy to register for M-Pesa
  • Figure 8: KDDI’s revenues and profits from value added services grow steadily
  • Figure 9: au Smart Pass is bolstering KDDI’s ARPU
  • Figure 10: Immobilienscout24 has seen a steady increase in traffic
  • Figure 11: AT&T Digital Life gives consumers remote control over their homes
  • Figure 12:  Investors value BT Sport’s contribution
  • Figure 13: BT Sport has driven broadband net-adds, but at considerable expense
  • Figure 14: Orange’s multi-faceted positioning of Libon in the App Store

Technologies and industry terms referenced include: AT&T, Au Smart Pass, big data, BT Sport, business models, Deutche Telecom, digital commerce, Digital Life, Disruption, disruptors, DoCoMo, Innovation, Internet of Things, KDDI, KT, localized commerce, location based services, M-PESA, mobile advertising, mobile commerce, mobile marketing, mobile payments, Mobile wallets, NTT, Personal Data, Scout 24, SK Planet, smart homes, smartphones, Telco, telco strategy, Telecoms