The Mobile Innovator’s Dilemma

1 Feb

The mobile industry is never going to look the same. Mobile operators, having received blows from OTT players, now realise this and more and more are taking action.

Some of the ways they are fighting back include introducing bundled offers including (virtually) unlimited messaging, and most importantly, innovating their service portfolio by developing rich IP services such as RCS’s “joyn” initiative.

But some are still holding back. The commercial introduction of RCS, orchestrated on behalf of the mobile industry by the GSMA, frequently experiences delays due to the practices of standardisation, accreditation, establishing interoperability and testing. While in the long run, this is all to ensure and contribute to the biggest strength of RCS – “it just works, it is just there” – it just takes too much time!

And just yesterday, Deutsche Telekom said they are delaying their launch of joyn (already moved twice, from ‘1H12’, to October 2012, to December 2012), now ‘indefinitely’, as a result of blocking service stability issues.

Yet we never see such announcements from WhatsApp or Skype. And yes, we all know about the quality issues associated with these OTT services, but this still hasn’t killed them and as time passes, they introduce improvements.

Clearly, two very different paradigms. Clayton Christensen described this phenomenon as ‘technological disruption,’ where market leaders fail because they, out of habit, are trying to compete on the wrong parameters with new entrants. The only feasible way for established players to be successful in such a scenario, according to Christensen, is to create or fund spin-offs that play by the rules brought by the new entrants, using a new set of processes and practices and then have the objective to cannibalise their mother’s established business.

In our example, that means that mobile operators must realise that the paradigm shift required from them is too big a change to expect their standing organisations to make it. Instead, they must set up divisions that operate completely stand-alone, start-up organisations that mimic and behave like OTT players. Telefonica Digital has been a fine example of this concept, with their TuMe and TuGo initiatives and now more operators are following suit. It was announced this week that in February, Telstra will launch its Global Applications and Platforms business to adapt to the agile pace of OTT players operating ‘… as a startup company drawing on the considerable assets of the broader organisation.’

So, who is next?

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