‘Telcos need to change business models to survive disruption’

TM Forum, a non-profit industry association consists of 850 members that cater to telecom industry suppliers and service providers, which include outsourcing companies like Infosys. The association believes that telcos need to change their business models to survive the onslaught of disruption. In a conversation with BusinessLine , CEO Nik Willetts spoke about the kind of disruptors that are forcing this change in which telcos need to look at their relationships with suppliers and should learn from the codeshare experience from the aviation sector.

Would there be a clash of interests when telcos and different outsourcing companies all come under the same roof? How can companies differentiate?

We believe collaboration is the way forward. When they are coming together they are moving the industry forward. It benefits all. There will be competitive edge but in the forum we provide a neutral environment that shapes the future. We help companies understand customer needs through the use of analytics.

Are all the stakeholders in the same page regarding collaboration?

Our effort is to prove that a concept can work and problems can be overcome, create best practices. We have been around for 28 years. In reality, what differentiates companies is no longer their operational efficiency but how it thinks, acts and puts itself in the marketplace. The stakeholders often come from different industries and ‘speak’ different languages. This makes it difficult for everyone to understand the requirements for collaboration. Additionally, standard application program interfaces (APIs) are needed to facilitate communication between systems centred around the importance of using standard APIs, such as the Forum’s Open APIs. IoT companies often operate in markets worldwide so they want a platform-based ecosystem in one region to operate the same way it does in another, regardless of who’s providing it. So, if they’re dealing with Vodafone in Europe, AT&T in the North America and China Mobile in Asia, they want each of those platforms to use the same APIs. It should be like how the airline companies use codeshare.

How do you assess Infosys in this regard?

Infosys is a signatory of Open API Manifesto, which is critical for telecom companies adopting digital journey. In 2017, Infosys took part in six projects, out of which three won awards.

What are the opportunities and challenges you see amongst the 200 telcos who are in your forum?

Firstly, traditional revenue streams like voice and SMS is getting squeezed with people migrating to WhatsApp and Skype. While overall telecom market is growing, profitability is shrinking and consolidation is happening. This is forcing them to look at new segments like smart cities. The telco has capabilities beyond connectivity have presence in people’s homes, with technologies like IoT. The challenge is that they have not built them to adapt and innovate in this market.

As far as India is concerned, smart cities have not taken off. How relevant is TM Forum for India?

In most places around the world, smart cities have not really taken off. There are example but not widespread.. the bureacracy of the government and the challenges in monetising it come in the way of adoption.

The telco market has been very flat since the last few years. What is changing and are you seeing an uptick?

There is a blurring of lines in all the industries. Telcos are interested in fintech now and to traverse them can be challenging. The ability to combine different experiences could be essential. The next wave of growth will come from two areas. Larger investments will be made by telcos in new markets.

Then there will be joint go-to-market. For example, BT has partnered with some of its suppliers to provide the entire gamut of technology.

Historically, a BT would have considered of building this itself. Telcos need to understand their customers better.

In automotive sector, OEMs assemble the car. The tier-I, -II and -III all come together from design to manufacturer at every aspect they are all together. Is there something new in the telco and its suppliers business?

It is a good analogy. With the car manufacturer, to customise a car, re-use components etc. you can draw parallels there. If you apply that logic to the telco industry, it can be said that telcos can go beyond connectivity. They can provide security for example. For that the telco industry has to change its culture.

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