Dumb Pipes Don’t Exist and Technology Doesn’t Drive Differentiation

Many so-called telco truths are myths and are diverting Asian Service Providers from understanding the true path to success. This was the message given today at the CommunicAsia conference by Telstra Global Managing Director, Martijn Blanken.

Blanken told his audience that many notions, including the concept of dumb pipes and ‘owning’ the customer being a certain path to financial success, are myths proliferated within the industry.

“Core telco basics will always remain. The best way to achieve success is by focusing on customer experience to achieve financial outperformance and working in concert with partners,” said Blanken. “Getting the basic elements right, like having solid network coverage, is a pre-requisite to success, along with ensuring secure and high quality services.”

Blanken added that the threat from over the top (OTT) players is very real in some sectors but for everyone else there is enormous potential.

“Of course OTT will eat into the revenues of retail telcos and these organisations must fight hard in these markets to maintain their position. But in other markets OTT providers should be helped. They are driving utilisation on networks and platforms and are actually boosting revenues,” said Blanken.

Throughout the presentation Blanken referred to the importance of partnerships and the increasing understanding in the industry that “not everything can be done in house’.

To finish, he gave his thoughts on building the future telco.   For him, determining which markets telcos can win in and committing to them is key. He also noted that a focus on quality over cost will always be most beneficial to the business.

“You can’t cost-save your way to sustainable shareholder value. There are many examples where incumbents are stuck between a rock and a hard place. I believe that for those markets where you can’t win, wholesale is better than no sale.” Embracing partnerships and driving quality of service will enable differentiation, forging the path for the telco of the future.