Research has highlighted the need for telecom companies to embrace the new app culture as emerging solutions result in the demise of more traditional product offerings.
Research by Vision Mobile, entitled “The Telco Innovation ToolBox”, says that telcos must reinvent themselves in order to survive.
The report says operators must focus on apps, as most mobile users are shifting from models that provide basic services to platforms that give versatile functionalities. A typical telecom platform has only four apps, namely voice, text, data and camera, as opposed to mobile computing, which hosts over 700,000 applications.
In addition, mobile phone network operators have to look for ways to sustain revenues as well as relevance in the ever-changing tech landscape. Telcos such as Kenya’s Safaricom have since diversified their operations into innovative models such as the M-Pesa mobile money transfer service and the M-Shwari banking platform.
According to the report, telcos are being disrupted because the basis of competition in mobile has fundamentally changed from ‘reliability and scale of networks’ to ‘choice and flexibility of services’, driven by the transition from ‘mobile telephony’ to ‘mobile computing’.
“To adapt to the market shift, a telco needs to be seen as an entity comprised of three distinct business layers: access, connectivity and distribution,” the report said. “Ecosystems are a new distribution channel similar to ‘value added resellers’.”
Releasing APIs to some products is another road that telcos can take. Developers can latch on to the APIs and create new and innovative solutions while attracting users to the company brand.
Applications such as WhatsApp and other mobile chat apps have threatened revenue from text messaging in various markets around the world, prompting the telecom companies to look beyond the basics and provide solutions for the future.