Most telcos are very aware that they need to embrace digital transformation if they want to remain competitive. But the huge market upheaval, and the ongoing rapid pace of change, makes it difficult for operators to settle upon a strategy, let alone invest in the capabilities they need to see it through.

One common sticking point over the years has been the extent to which telcos should partner with the digital disruptors themselves, in developing and monetizing new digital services. For a while, it looked as though there would be a split: between those operators keen to collaborate with third parties, and the rest, launching their own ‘in house’ services in direct competition to ‘over the top’ digital service providers (DSPs).

But there now seems to be broad agreement that partnerships have a critical role to play in operators’ digital transformation strategies.

With that in mind, we were interested in how operators rate their approach to digital partnerships, and whether their ambitions match with their capabilities. If you would like to benchmark your operator’s approach to digital partnerships then please take part in STL Partners’ survey.

Making partnerships work

Telcos keen on working with third parties need to make technical and commercial integration as easy as possible. So – which players are making progress in this area, and have adopted an approach that makes them really attractive to their fast-moving digital partners?

Dialog

Dialog, a Sri-Lanka based operator, has embraced the partnership challenge with its Ideamart platform – an end-to-end solution that gives third party content providers access to Dialog’s network assets (via shared APIs), to develop, deploy and market digital applications, with minimum time-to-market.

What makes it successful?

The platform makes it easy for developers to ‘consume’ Dialog’s APIs. Developers can choose from a range of ways to leverage the operator’s backend cloud infrastructure – from easy-to-use web templates to highly-capable web portals. The platform offers user-friendly web-based wizards for non-developers to create applications in a matter of minutes
Ideamart also provides a Telco Applications storefront by the name ‘Allapps’ – a market space where app creators can promote their apps and drive revenue. It is the marketplace for consumers to discover apps provisioned on Ideamart
Dialog is monetizing these apps through a transparent revenue-sharing model, which gives 70% of revenues generated through the app to the developer, while Dialog receives 30%. Third parties only pay a commission to Dialog once their app starts making money, thus removing any barriers to entry.

Deutsche Telekom

Operators who are serious about digital partnerships need to become fully-fledged Internet companies, with software DNA. This enables cross-enterprise collaboration on an industrial scale.

This is the approach that German telco, Deutsche Telekom, has taken with its Qivicon platform – a vendor-neutral solution that orchestrates different Smart Home brands, to deliver a unified subscriber experience. Qivicon is a great example of an efficient operator/ OTT partnership model, working in the Smart Homes segment of the IoT space.

What makes it successful?

Deutsche Telekom has leveraged its customer insights to develop an innovative, customer-focused product.
By involving many connected home vendors in the development of an intelligent Smart Home network, Deutsche Telekom has led the way in the connected home ecosystem.
Qivicon offers an attractive licensing model and has also signed partnership deals with its B2B customers to serve as their platform provider.

China Telecom

Foreseeing the need for a platform to enable collaboration with digital partners, China Telecom started deploying a solution back in 2011 – much earlier than many of its counterparts. China Telecom wanted to develop an innovative B2B digital services that enabled them to:

Converge their products with those of the OTTs and other digital service providers, creating offerings worth more than the sum of the parts that can be sold through multiple channels
Act as an API hub, opening up their back office IT and network systems for third parties to use.

What makes it successful?

Today, this solution allows China Telecom to:

Cross-sell OTT services to their existing customers (and gain a share of that revenue)
Up-sell communication services
Win new customers through innovative products and offers that include OTT services
Monetize their IT and network capabilities

Research from Northstream showed that Western European operators stand to generate gross profits of €2.2 billion over the next three years from their OTT partnerships, if they implement an OTT Collaboration Platform. This contrasts with expectations of only €160 million in gross profits from OTT partnerships from the one-time integration/ non-platform approach.

What examples do you see of operators successfully working with digital partners? Let us know in the comments!