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Can telcos compete with Google and Apple? TMF thinks they can and it's fighting on multiple fronts to get them ready
December 4, 2012
3 Min Read
ORLANDO -- Management World Americas -- The TM Forum is using its final event of 2012 to showcase its major new strategy -- helping communications service providers reinvent themselves to compete with the likes of Apple Inc. (Nasdaq: AAPL) and Google (Nasdaq: GOOG) through a major Digital Services Initiative.
On that front, the organization unveiled on Tuesday a new action group of service providers and vendors, new Catalyst projects and a new release of Frameworx, its suite of best practices and standards. To bolster it all, the TMF also released new research into service provider attitudes on the shift from legacy services that are losing competitive steam.
The action group, called the Open Digital Economy Group, consists of five service providers in China Mobile Ltd. (NYSE: CHL), Orange (NYSE: FTE), Telecom Italia (TIM) , Telefónica SA (NYSE: TEF)'s Telefonica Digital organization and Telstra Corp. Ltd. (ASX: TLS; NZK: TLS), along with IBM Corp. (NYSE: IBM), Microsoft Corp. (Nasdaq: MSFT) and Oracle Corp. (Nasdaq: ORCL). Its purpose is to focus on what service providers need to be doing to create enterprise services that are reliable, secure and scalable and to provide that insight to the TMF for its broader Digital Services Initiative.
"We know that whatever way the digital ecosystem works, it needs to be open and interoperable," said Nik Willets, chief strategy officer for the TMF. The next generation of digital services will be built on cloud platforms and networks that are flexible, using digital capabilities that can be pulled together with "minimum integration complexity," he added.
The concept of multi-cloud management is a big part of the Digital Services Initiative and is also heavily featured both here at Management World, as one of the new capabilities of the Frameworx 12.5 release, and in the Catalyst demonstrations.
The other major focus is on openness and helping communications service providers move from controlling their own environments to being smart about choosing partners and learning what kinds of data can be shared and what pieces of the business process can be handed over to other companies, Willetts says.
The digital services survey, taken in October, asked 150 executives from within TMF's service provider members how they plan to become digital service providers and followed up with interviews of 15 C-level executives. Among the most interesting findings of the survey:
Only 15 percent of service providers say they derive more than 20 percent of their income today from digital services -- i.e., non-core voice, data and messaging services. About 40 percent said digital services were 10 percent of their income. Others said they didn't know the revenue for digital services or that it was very small to nonexistent.
More than a third -- 34 percent -- said their company's culture still inhibits their ability to attack the digital services market. Problems cited included difficulty gaining consensus among departments, fear of cannibalizing existing revenues and an aversion to risk.
Fifty-seven percent said it's difficult to find the right partners and, conversely, that other companies aren't anxious to become telco partners. The TMF interpretation of that is that telcos have been difficult companies with which to do business, particularly for smaller companies, and that needs to change.
Almost a third admitted digital services are stifled by lack of funding support within their companies, either because the business case is weak, there is stiff internal competition for funds or only a small number of opportunities gets funded.
— Carol Wilson, Chief Editor, Events, Light Reading
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