Telco 2.0™ Research

Messaging services are increasingly enabling interactions and transactions between consumers and businesses. Largely pioneered by WeChat in China, the growing integration of digital communications and commerce services looks like a multi-billion dollar boon for Facebook and a major headache for Amazon, eBay and Google. It also poses a strategic dilemma for Apple and telcos: Can they turn their communications apps into shopping channels while championing privacy and security? (February 2016, Dealing with Disruption Stream)

In 2014, AT&T launched its Domain 2.0 Programme to virtualise 75% of its network functions by 2020. So how is it going, and what are the lessons for others on the complex journey to the virtualised / agile Telco 2.0 digital vision? (February 2016, Telco 2.0 Transformation Stream, Future of the Network Stream, Cloud and Enterprise ICT Stream)

Partnering is a key competence for building telco digital services offerings, but many past attempts have failed. So what does it take to succeed? In this briefing we review viable strategies, key success factors and barriers, and profile the highly effective approach used in AT&T’s Drive Ecosystem. (Telco 2.0 Transformation Stream, February 2016)

The last few years have seen attempts by many leading telecoms operators to refresh their business model and generate new sources of growth and value. Now many digital initiatives are being scaled back. Telefonica and Telenor, two companies in the vanguard of the ‘drive to digital’ have both disbanded their digital organisations. In the first of two reports, STL Partners explores why efforts to yoke platform and product innovation businesses to a traditional infrastructure business have proved so difficult. The financial and operational constraints associated with traditional telecoms – particularly the need for long investment cycles in ‘one-function’ infrastructure – have made achieving the switch to ‘agile digital innovation’ all but impossible. But all that may be about to change and the future could be a little brighter. (Executive Briefing Service, January 2016)

Digital commerce continues to be held back by the lack of straightforward and consistent mechanisms for consumers to authenticate and identify themselves, share information and complete transactions with merchants. Telcos could address this fragmentation by creating a single framework through which individuals could interact with merchants, content companies and other service providers.  Such a move would shore up telcos’ relevance and could ultimately increase their revenues. We show how, and review case studies from Deutsche Telekom (DTAG), Vodafone and KDDI. (January 2016, Executive Briefing Service, Dealing with Disruption Stream)

It’s reasonably clear that standard cellular networks will only carry a fraction of the data of the Internet of Things (IoT), but how should telcos be involved in the fast growing range of low cost, disruptive networks that will carry the bulk? We examine the alternatives and outline strategic options. (January 2016, Future of the Network Stream)

If telcos in certain markets act swiftly, there is a major new and addressable opportunity in cloud created by profound recent changes in data sovereignty and security requirements. We outline the market opportunities, specific customer needs, and market sizing in our latest research. (December 2015, Cloud & Enterprise ICT Stream)

There has never been a better time for telcos to establish a profitable role as a market enabler in the mobile advertising ecosystem. STL Partners analyses how 3 telcos – Sprint, Turkcell and SingTel – lead the way in leveraging permission-based subscriber data and highlights the role that each has chosen to perform. The report assesses each company’s strategy and execution, outlines the core reasons for their success, and identifies 6 ways in which telcos can accelerate time to market with advertising and marketing solutions. (December 2015, Foundation 2.0, Executive Briefing Service, Dealing With Disruption Stream, Telco 2.0 Transformation Stream.)

Customer experience is fast becoming the new mantra for operators across the globe.  But while improvements are being made in broadband speeds, customer experience and so forth, app latency and errors have largely gone ignored. This is despite the fact that both are important drivers of customer experience and of app developer profitability. Find out the relationship between latency and app errors and our analysis of those operators that are performing well and those that are ‘lagging’ behind. (November 2015, Executive Briefing Service)

Widespread use of open source software is an important enabler of agility and innovation in many of the world’s leading internet and IT players. Yet while many telcos say they crave agility, only a minority use open source to best effect. We examine the barriers and drivers, and outline six steps for telcos to safely embrace this key enabler of transformation and innovation. (November 2015, Executive Briefing Service)

Online entertainment is increasingly dominated by 5 big platforms but 6 forces are likely to shape the market going forward and could have profound effects on the dominant platforms.  We analyse the relative strengths and weaknesses of each player and explore the potential opportunities for telcos to compete and collaborate. (October 2015, Executive Briefing Service, Dealing with Disruption Stream.)

Huawei’s business performance in recent years has been impressive, based on sticking closely to what its customers wanted and making the results easy to buy. But fierce price competition will challenge near-term profit ambitions, and Huawei’s 5G vision is ahead of the market. So could things be about to change? (October 2015, Executive Briefing Service)

Our latest analysis shows staggering differences in 'app-lag' (the time it takes for an app to get a response over the Internet) across France, Germany, Italy, Spain and the UK, and twenty mobile operators. This has significant consequences for customer data experiences, and potentially operator market performance too. Operators in France, particularly Bouygues and Free, are delivering a superior customer app experience while 3 in Italy and Movistar in Spain are European laggards. (October 2015, Foundation 2.0, Executive Briefing Service.)

Drawing insight from the experience of early adopters (including Telefonica, Singtel and DTAG) and exploring the technology options available to operators, we show how operators can best use their distinct advantage over other players in the $5bn location insights marketplace. (October 2015, Foundation 2.0, Executive Briefing Service.)

Over 5 years, BT Group's share price has more than tripled, outperforming Apple's and Google's, while its revenues have shrunk. Why, and what can other telcos learn from its success? (September 2015, Executive Briefing Service)

Baidu, China’s answer to Google, is one of the world’s leading Internet companies by market capitalisation. But can Baidu break out of the Middle Kingdom? Fast-growing smartphone maker, Xiaomi, is building a multi-faceted ecosystem and a tribal brand among young people. What impact will Xiaomi have in Western Europe and North America? DJI, the world's leading drone manufacturer, could become an anchor for a major ecosystem in the consumer robotics arena. But several obstacles may knock DJI off course. (September 2015, Dealing with Disruption Stream)

Microsoft faces the post-monopoly era, having had to write off its $8bn adventure in mobile and cope with significant disruption across the piece. Collaboration and communications are key to its new strategy, leading to significant implications for telcos and others. (September 2015, Dealing with Disruption Stream, Cloud & Enterprise ICT Stream.)

We believe that the global telecoms market is approaching a critical moment of change, as strategic drivers and enablers are combining to open the door to a fundamental shift in the industry. We show how and why with highlights of our recent research, and set the scene for a new vision for Telco 2.0 – what telcos should be in the future, and how to get there. (September 2015, Executive Briefing Service)

Both Alibaba and Tencent have created formidable Internet ecosystems within China. However, the increasingly competitive Chinese economy is now slowing, and their continued growth depends on weakening the control of Google, Facebook and Amazon over the global digital commerce market. In the first of two reports on China, we examine Alibaba and Tencent’s services, business models, and aspirations, and explain how and why telcos should support their international expansion. (August 2015, Dealing with Disruption Stream)

Enthusiasm for creating novel so-called “digital” services is pervasive in the telecoms industry. There is a major shift afoot in the way telcos create, integrate, sell and manage value-added propositions. But how much is enabled by – or dependent on – the network itself? In recent years, most investment has been solely for improved connectivity, but there are signs that future network capex might drive new service opportunities directly, rather than just by empowering 3rd parties. (August 2015, Future of the Network Stream)

When Amazon Web Services (AWS) landed in Australia in 2012, everyone expected carnage for Australian carriers. Telstra’s Network Applications & Services division, though, is growing fast and making some interesting moves. How did Telstra do it, and what else can be learned from its successes and its latest moves into the Healthcare market? (August 2015, Cloud & Enterprise ICT Stream)

Seven predictions and four scenarios for how the industry might play out in Europe in the next 5 years: 'Digital Renaissance', 'Back to the Future', 'Commoditised Utility' and 'Telco Trainwreck'. Plus what are the take-outs for other markets? (July 2015, Executive Briefing Service, Telco 2.0 Transformation Stream.)

In the first of two reports, STL Partners evaluates how several powerful forces, within and beyond the control of telcos, look set to change the shape of the European market and considers the options for how these forces might develop going forward. (July 2015, Executive Briefing Service, Telco 2.0 Transformation Stream.)

How agile are telcos today, what are the barriers and opportunities, and what can be done to improve agility? We look in depth at the findings from the Telco 2.0 Agility Challenge, and identify some key steps for telcos and partners to take, including specific organisational strategies to be 'Agile by Design' and the need for an ‘information intensive’ culture. (July 2015, Executive Briefing Service.)

As they seek new sources of revenue, many telcos around the world are attempting to disrupt adjacent markets, such as digital commerce, IT, entertainment and financial services. While many of these moves have proved to be too little, too late, several disruptive plays have had a significant impact on both the telco’s revenues and relevance. These include NTT DOCOMO’s Smart Life portfolio, Globe Telecom’s GCash service and KT’s media business. Why do some disruptive moves by telcos succeed and others fail? (July 2015, Dealing with Disruption Stream.)

Mobile Authentication could be Telcos’ key asset in the digital economy, but they are in danger of losing out through insufficient action. There are good case studies and an excellent blueprint in the GSMA’s Mobile Connect initiative for how to monetise their assets and stay relevant. So why aren’t they getting on with it? (June 2015, Executive Briefing Service, Dealing with Disruption Stream.)

As several operators in Europe downsize their Telco 2.0 Digital Services activity, some are seeking to reframe the Piper strategy as a premium-priced differentiation play based on network quality. This report argues this is deluded and dangerous – a Piper strategy is viable but only by developing cost-leadership in a commodity market. (June 2015, Executive Briefing Service)

A primary benefit envisaged of 5G networks is that latency (i.e. delay times for users) will be massively reduced. This would deliver major benefits for many applications providing that the software for those cloud-based applications is located near enough to the users at the edge of the network. This is likely to drive a massive change in the architecture of the cloud and the network industries. This report outlines likely scenarios and identifies some early moves that are starting to play out now. (May 2015, Executive Briefing Service, Future of the Network Stream.) 

Cable operators are on the verge of a massive and remarkably easy capacity upgrade. Where it has begun, fixed incumbents are already being forced to deploy fibre. Gigabit WiFi is coming too, so mobile operators are very much concerned. (May 2015, Executive Briefing Service, Future of the Network Stream.) 

5G. SDN/NFV. Gigabit cable. WiFi. IoT. Spectrum policy. Vendor consolidation. Despite carefully-constructed business cases for future network investment, the goal-posts are always moving, and even the best-laid plans face possible disruptions – positive or negative. To kick off our ‘Future of the Network’ research stream, we outlined the key questions determining the business case for future investments in the network. This is Part 2, which covers critical network-technology disruptions, the impact of government and regulation, and the shifting vendor landscape. (May 2015, Future of the Network Stream)

Companies that can provide quick and robust authentication mechanisms will be in a strategically important position in the digital economy, and this is sparking an arms race among the major Internet ecosystems – Apple, Google, Facebook and Amazon. This race is intensifying as biometrics and wearables promise to make two-factor authentication easier and more cost-effective. What are the strategies of the internet players, and where do they need help? (May 2015, Dealing With Disruption Stream.)

In Q4 2012 Verizon was No.1 in Strategic Business Services (SBS) and had just bought a huge data centre provider. In Q4 2014, AT&T had overtaken Verizon in revenues from this segment. What happened, and what are the lessons for other telcos in the Enterprise SBS market? (May 2015, Executive Briefing Service, Cloud & Enterprise ICT Stream.)

Amazon has revealed that its cloud services arm is growing very fast and is surprisingly profitable. An analysis of the strategy that underpins the exceptional performance of Amazon Web Services provides important pointers about the future of the cloud computing market, how to balance the trade-off between convenience and cost, and where there may be scope for others (such as telcos) to succeed. (April 2015, Dealing with Disruption Stream, Cloud & Enterprise ICT Stream.)

What is ‘agility’ and what makes it meaningful to operators? We explored the concept and characteristics of ‘operator agility’ through 29 interviews with telco senior executives, found three main barriers and five key opportunity areas, and identified some surprising and important conclusions about both what it means and the key steps needed to achieve it. (April 2015, Executive Briefing Service)

How will getting into the MVNO business help Google shore up its business model? We examine Google’s objectives, how it could price the service, and the implications for telcos and other players. (April 2015, Executive Briefing Service, Dealing with Disruption Stream)

We outline our ‘proxy model’ for valuing Digital Services Businesses, based on current best practice, which has significant advantages over traditional approaches. This report, our second of two on valuation, gives a worked example of a telco’s digital business in Asia that is already worth $1bn, and includes an analysis of approaches being taken by some leading telcos today. (April 2015, Executive Briefing Service, Telco 2.0 Transformation Stream.)

Facebook has changed substantially since we first analysed the company in 2011. In our latest major report we explore the accuracy of our 2011 predictions regarding users, revenue and strategy. We also examine Facebook's current aspirations and challenges and explain why, where and how operators should be working with Facebook to build value. (March 2015, Dealing with Disruption Stream)

A high-level analysis of the M2M market, including the strategies of Vodafone, AT&T and Telefonica, and the impact that the Internet of Things and new entrants such as Google and others will have with new business models. What are the implications for operators, and where is it all leading? (March 2015, Executive Briefing Service)

NFV (Network Functions Virtualisation) potentially offers operators benefits of up to 80% network opex reduction and significant improvements in agility, and threatens a shake-up of the vendor landscape. What are the challenges to making it happen, and what do telcos and vendors need to do to succeed? (March 2015, Cloud & Enterprise ICT Stream)

Digital initiatives are an important part of the telecoms growth story.  However, because they are so different to the traditional telecoms business, they require different performance metrics: a digital dashboard.  In this report, we examine the importance of metrics in shaping business performance, explore the contribution of metrics to 3 telco digital success stories, and reveal how a cutting-edge approach to metrics is driving digital execution at Telkom Indonesia. (February 2015, Telco 2.0 Transformation Stream)

The valuation of digital businesses is vital because it drives key strategy and investment decisions, yet highly contentious, as there are many different possible approaches. In the first of two reports on this topic, we appraise the main external valuation methods, and their suitability for use or otherwise with new telecoms business models. (February 2015, Telco 2.0 Transformation Stream)

The network is one of telcos’ key assets. The case for investing in it was once straightforward: the bigger and faster the better. Yet today, many forces are combining to cloud that picture, such as virtualisation, regulation, the success of Internet services, network sharing, market consolidation and in some cases saturation, to name a few. To kick off our ‘Future of the Network’ research stream, we outline the key questions determining future investments in the network and our forthcoming work to address them. In Part 2, we’ll outline the key disruptive forces on the network. (February 2015, Executive Briefing Service, Future of the Network Stream.)

The Future of the Network stream addresses new business models and strategies for next-generation fixed and mobile networks: managing disruptive forces and improving business performance. This page outlines who its for, what it will cover, and why.

Netflix’s success in the US and in Western Europe has demonstrated that consumers are willing to change how they watch and pay for TV and movies.  As a result Netflix’s OTT proposition is challenging traditional pay TV models and changing how new broadband services are looking at content.  For some players Netflix is a threat and for others an opportunity.  So, how should content owners, channels, pay platforms and broadband providers respond? (February 2015 UPDATE, Executive Briefing Service, Dealing with Disruption Stream.)

STL Partners' industry transformation analysis, including a recent global survey of telco executives, suggests operators' digital ambitions are rising fast but, given 9 substantial implementation challenges, too little is currently being done to engender successful industry-wide business model transformation. We also look at the lessons from NTT DoCoMo, one of the operators that has made the most overall progress towards a 'digital' model. (February 2015, Executive Briefing Service, Telco 2.0 Transformation Stream.)

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? (January 2015, Dealing with Disruption Stream)

BT's attempt to acquire EE in the UK presents the regulator and its competitors with choices that could re-frame the principles of regulation and competition in an era of consolidation, with consequences for many other markets. Will BT succeed, and if so, what will be the terms of the deal, and how will the market subsequently play out? (January 2015, Executive Briefing Service)

AT&T’s residential fixed operation is underperforming as faster cable connections take over. It would probably like to trim its footprint or get out, and invest in fibre and its content business model. Is that really an option, and what are the lessons for other telcos? (December 2014, Executive Briefing Service)

Apple is weakening Samsung Electronics’ grip in the high-end of the handset market, lowering the Korean company’s profitability and capacity to compete effectively. After a series of largely unsuccessful attempts to break into software and services, a daring option for Samsung is to seek a strong, strategic alliance with Google to enable both companies to mount a serious challenge to Apple’s dominance in the affluent demographic. Telcos could back such an alliance in return for a profitable role in the service layer. This report analyses the strategic rationale for such an approach. (December 2014, Dealing with Disruption Stream)

What is disruption, when is it a good idea, and what do you do when it happens to you? We illustrate five principles of disruptive strategy based on our analysis of the telecoms and adjacent markets over the past eight years. The analysis covers both principles of creating and defending against disruption. (November 2014, Executive Briefing Service, Dealing with Disruption Stream)

Service providers need to grow new revenues. The cloud market looks potentially attractive, and is growing at about 30% CAGR, but it is dominated in many areas by Amazon, Google and Microsoft. So is Cloud part of the answer for telcos, and if so how? This report looks at the role of the service provider in the cloud market and products that service providers might offer in 2015. (November 2014, Executive Briefing Service, Cloud & Enterprise ICT Stream)

The multi-trillion dollar commerce, communications and content markets are developing fast, and Google, Amazon, Apple, Facebook and others are key disruptive forces. The Dealing with Disruption Stream covers this, plus: the roles for telcos and others, strategies for success, key emerging players, how to compete / collaborate, case studies of disruptive innovation and competion, and principles and lessons for innovation and defence from all markets. (November 2014, Dealing with Disruption Stream.)

Major transformation is required to grow $350+Bn of new revenue in the telecoms industry by 2020. Building on 8 years of proprietary research, we outline the agenda for the Telco 2.0 Transformation stream, a new service to helps executives identify opportunities, counter threats and manage change (October 2014, Telco 2.0 Transformation Stream.)

$Multi-billion Cloud, Enterprise Mobility, eHealth and other advanced enterprise ICT markets are among the key opportunities in the Telco 2.0 business model. This is an outline of the agenda and objectives of our new programme of research that identifies threats and opportunities, leading thinking, and real world examples and models to implement and manage success in these areas. (October 2014, Cloud & Enterprise ICT Stream.)

A small and surprising set of national operators are delivering outstanding performance in the challenging European market. Our analysis shows how they’re achieving differentiation with smart strategies that target the hottest customer need, and the considerable ramifications for the rest of the market.  (October 2014, Executive Briefing Service, Future of the Networks Stream).