Partnership is one of the key strategies that operators like to talk about when it comes to providing products and services to their customers.
It is key because it is so essential. Whether it’s Netflix in TV, Spotify in music or WhatsApp in messaging – other providers’ services are what subscribers want.
This has pushed operators, reluctantly in most cases, to sign deals with the very people who threaten to take business away from them.
But while individual deals on a country-by-country basis have been the norm, things are about to change.
According to Marc Sommer, Senior Vice President of Business Development & Partnering at Deutsche Telekom: “The more advanced the global rollout strategies of Silicon Valley start-ups become, the more likely the risk that operators on their own cannot compete."
Sommer was speaking to European Communications in the wake of the announcement that nine operators – BT, Deutsche Telekom, Reliance Jio Infocomm, Millicom, MTS, Orange, Rogers, TeliaSonera and Telecom Italia – have teamed up into a loosely assembled alliance to offer scale to their various partners.
DT has taken the lead as, despite being one of Europe’s biggest operators, it is cognisant of the fact that it addresses only “a small part of the world”.
“For partners it might not enough to prioritise DT on your list of [people you need to engage with],” Sommer says.
The German incumbent has been active in signing partnership deals for several years – Evernote and Airbnb are two of the more blue chip examples.
But Sommer is honest to admit the challenges that it has faced.
“We know how difficult it is to get in touch with organisations of our size,” he says.
He notes that it can be “tricky” to get agreements between DT’s numerous opcos and the partner.
For example, he says he has uncovered “excuses” that opcos have put forward for not wanting to use a particular partner product or service.
“We tend to be slow and replicate mistakes in other countries we operate in. We also have to do a lot to improve your marketing capability to push partner propositions to customers.”
The challenges, clearly, are numerous but is the new alliance the best way forward?
Sommer admits it is not something that their partners have asked them to do directly.
Rather, being a better more attractive partner is something that the operators have decided to do themselves.
It is an admirable goal but the way the alliance has gone about setting itself up does hint at them trying to be something they are not.
“We called it an alliance only at the very last minute,” Sommer admits.
“It’s a bit Silicon Valley style...very informal.”
Sommer notes that keeping this lack of formality is how they want to keep it.
“It’s not a governing body like the GSMA where you sit, listen and then go home,” he says.
“It’s about getting engaged, bringing new ideas, best practice and partners to the table.”
He adds: “We have kicked out people who didn’t contribute or deliver value.”
Partners are “always” introduced by other operators who will often pitch ideas about what they think they could work elsewhere.
“We learnt from Milicom’s business in Colombia about how to sell music services – I would never have thought to look there!” says Sommer.
DT has brought Airbnb, Celltick, Cyan, Spotify, Idomoo, Mojio and Magisto into the alliance, while others have introduced Tessares, Personali, Zeotap and Family Wall.
Sommer reveals partners in the field of security/privacy, entertainment and communication are of particular interest.
Although he says deals have been struck, he is keen not to go into detail.
The alliance is not all about deal making; it is something akin to a self-help group as well.
"It’s just as relevant to know what doesn’t work [at other operators]," Sommer says.
He cites learning about the mistakes being made around pushing security-related apps to customers – “something we should sell easily” – as an example.
Challenges remain, naturally.
Sommer says all the operators do have different objectives, so it is important there is trust and everyone is aware of what each other’s goals are.
He is also keen to guard against the alliance becoming too “inward-looking”, something he says such groupings historically fall foul of.
“We need to understand [market] trends,” Sommer says.
Ultimately, this alliance shows operators are growing up somewhat.
They are happy to admit and discuss their failings, and are attempting to overcome old rivalries both internally and among rival telcos.
It is essential they do so to succeed.