Operators should give greater consideration to partnering with startup companies rather than procuring their services, a new report has concluded.
According to management consultancy Arthur D. Little (ADL), telcos would see more success in the development of innovative new products by leaning on the flexibility and “consumer-centric ethos” of startup companies.
Being the case, operators need to adopt more startups as partners, rather than seeing them as services to be procured, ADL said.
However, it added that this could only be achieved if operators “fundamentally change their mind-set.”
ADL’s report suggested that rather than acting as gate-keeper to services, operators should openly collaborate with startup companies and allow those taken on board to develop their own internal capabilities, which will in turn benefit from the “scale and scope” of telcos.
Further, ADL suggested that shared “innovation goals” should be made the focus of operators’ overall business objectives, which can be helped by operators opening up their R&D models.
ADL said this approach would allow operators to move on from being “facilitators” of basic access technology platforms to drivers of innovative new products and services.
As we reported earlier this year, operators’ accelerator vehicles and venture capital arms are shifting focus as they attempt to find a model that works.
Last month, Deutsche Telekom, Orange, Telefónica and Singtel revealed plans to link up their respective incubator programmes in a bid to bolster their overall prospects.
Karim Taga, Global Practice Leader of ADL’s Technology, Information, Media, and Electronics Practice, said: “Many large global telecommunications providers are crying out for a fundamental re-set of their innovation efforts and capacity.
“As counter-intuitive as it sounds, some of the world’s biggest telcos will see their innovation efforts bear more fruit by opening up their R&D models, embracing fast-moving start-ups, and actively engaging with potential partners at every level in the global supply chain.”