When you look at the latest innovations in the mobile space they are hardly coming from operators. Apple has set a new level of user experience and introduced the concept of the on-device application store; Google created the Mobile Linux that operators never succeeded to deliver through their various initiatives; RIM invented the mobile email; etc.
Now operators are dreaming to come back at the cutting edge of innovation and it is for them a question of survival.
They want to be able to achieve what any internet start-up is able to do: deliver a new service from inception to delivery within 6 months. Whereas Operators service life-cycle is much longer than that today. It is roughly around 18 months which is 3 times longer than the Internet life cycle.
The real issue for operators is that they are now competing with Internet companies which have a dramatic competitive advantage of being able to launch a service 3 times faster than they can.
Operators are process oriented as they have built their business skeleton around the billing process: from Call Data Records to invoices. During the years of their exponential growth they have strengthen this process to cope with the flow of new customers but now there are like dinosaurs: very strong but not able to adapt to their surroundings any more. They are rich but their growth rate is flat and they start to see a fall in their margin. The data communications may allow them to offset the voice decline for a while but if the operators aren’t providing the service they will become just pipe providers and the main value will be going to Google like in the fixed broadband business.
What operators are (or should be) trying to do is to organize their business around enabler bricks. Once the enablers are in place, the internal teams should be able to assemble the bricks to create the services as Internet companies create mash-ups with the APIs of the services. The key challenge here is to be able to connect those bricks with the ‘billing’ brick in order to get a revenue stream from it.
And what could be even a stronger value proposition would be to open these APIs to partners to develop new services around: location, authentication, payments, etc. In doing so Operators would leverage the creativity of the whole ecosystem and would be still at the centre of the game.