Telco startup engagement: Is a fresh approach needed?

Operators have long aspired to also be startup platforms. The expression “long tail” emerged in the 2000s as a euphemism for “how can we securely automate activation on our network for a wide range of developers?”. Even when it came to SMS hubbing and wholesale operator billing numerous providers persisted and took many of the spoils based on their network agnosticism. These were often described as “over-the-top” (OTT), typically international, connectivity brokers like Twilio and Sinch. If a digital content provider wanted to access all subscribers, in a particular territory, across all three or four operators that typically existed in that territory, they would typically source connectivity via such a wholesaler rather than go to each operator. Connecting directly to each operator could take months or years or it may not happen at all.

This is not to say that operators have not had their share of success with incubation. On a per-territory basis, they have tended to do quite well. Orange, for example, has diversified nicely into banking and home security. But such ventures can take years and may be quite limited to a country where the operator brand does well. Even then it may be limited to the operator’s existing subscriber base – perhaps 30% of a country’s subscribers.

What seems to be missing are scale, reach, and automation. From time to time, groupings of operators emerge to standardize interface access for developers to a pool of international operators. “Alaian” is another attempt to do this via an alliance of operators – with an explicit aim of “discovering disruptive startups and providing access to 700 million subscribers”.

The challenge for operators remains the same. Although they are strong brands locally or even in some cases internationally, they usually cater to a proportion of their market/s. This is inconsistent with the preferences of developers who would like to address all subscribers in each market – and preferably in many or all markets. This opens another brokerage or wholesale opportunity for specialists in a 5G context as new features become available. In the 5G era, hyperscalers may have a role to play in this regard but they also don’t always understand or have sufficient access to the spaghetti that is the combined 4G/5G network. This is where more neutral providers can act as a catalyst for service providers.

In the realm of eSIMs and iSIMs and a wider array of new device types, it might be that one operator in each market can be proactive. Recall how the exclusivity agreements with the iPhone drove huge shifts in market share in certain markets. The same may occur again if particular operators obtain the exclusivity of distribution for whatever 5G devices, platforms, and partners come along in addition to smartphones.

Whatever the shifts in market share and the various roles that operators, wholesalers, integrators, and hyperscalers position themselves into, operators have 5G features that will ultimately need to be exposed either directly or indirectly to optimize 5G returns. These are the “currencies” of 5G related mainly to latency, speed, coverage, capacity, and density that new devices will crave. There will be jostling for position amongst market makers and room, perhaps, for several models.

Exposure of 5G assets will remain a valuable opportunity for the coming age of 5G, whether via partners or bundled with devices that are promoted “all the way” by service providers. The 5G Network Exposure Function (NEF) has the specific aim of tackling the scale, reach, and automation issues mentioned above. How service providers prioritize it to engage partners and which partners they choose will need testing, but it will be a necessity if they are not sufficient tool for 5G success in the coming years – and a means to get a jumpstart on competitors.