Operators are getting a rough ride when it comes to analysing how innovative they have been in response to the OTT threat in particular, and the battle for communications services more widely.
As European Communications reported last week, they are being urged to just “do something”.
TeliaSonera’s approach is to invest directly or to partner with companies it views as adding value in four key areas: m-payments, open APIs, M2M and what Kennet Rådne, head of mobility services product management at TeliaSonera, classes as “new ways to communicate” such as RCS.
“Our strategy is to invest in new or existing companies close to our own core business which support mobile behaviour and add value to our customers,” continued Rådne.
This approach is now a year old and the operator is “trying different angles and approaches” to see what works and what has “a positive impact” on the business, he added.
Last week the company announced two new investments; one in digital ID specialist NorthID and one in m-payments firm Accumulate.
“These investments will create more value for our customers and also differentiate our services from our competitors,” said Rådne.
Despite claiming that they will also benefit TeliaSonera “in the long term”, Rådne added that there was “no timeline” given to these companies to be successful.
“You have to be prepared to fail – some of the technologies and services we are involved in are so early days you don’t know if they will fly,” he said.
So how does TeliaSonera search out new companies?
“It happens in different ways; often they come to us but we also go directly to them after, for example, seeing them at conferences,” said Rådne.
“We look for specific technology, patents and then the quality of the people running the business.”
Two of Europe’s biggest operators, Telefonica and Telenor, reorganised their corporate structure last year to launch new digital business units in an attempt to regain some initiative in the innovation stakes.
However, Rådne said this approach was not one that TeliaSonera is looking to emulate.
“The problem with that approach is that it’s so easy to distance yourself from your core business – a gap can be created and cross fertilization opportunities can be missed,” said Rådne.
“We try not to fall into that trap and keep [innovation] close to the core.”
Of the investment approach, Rådne believes operators have some specific advantages over other rivals.
“We are different to venture capitalists, for example. We primarily invest from a strategic, industry perspective [rather than a purely profit-driven one].
“We bring industrial knowhow, our brand and we are still seen as an innovator.”
On the partnership front, TeliaSonera’s most eye-catching deal has been to acquire exclusive rights for online music platform Spotify in the Nordic region.
However, there has not been a similar headline deal since and the approach seems to be to play the long game.
Critics will no doubt argue that more could and should be done in the short term, but the accusation that operators are not doing anything seems wide of the mark.
Whether they are doing enough remains a fair question, however.
TeliaSonera has a team of 15 people – “a small brain and muscle to help us” according to Rådne – that looks at all areas of innovation but on the whole it appears stymied by an R&D budget that is much smaller than it used to be.
Although Rådne claims this team is working to enhance the rich communications concept, there is an admission that they are not the source of much innovation.
“New pure service innovation will come from the outside, it is best done by smaller companies,” he said.
Consequently, this jars somewhat with his overall assessment of how innovative TeliaSonera really is.
“On a scale of 1-10 we are an 8 – we have tradition of driving the mobile industry forward and being brave early on,” concluded Rådne.
While they should certainly not be castigated for investing in start-ups, the suspicion has to be that, in the services domain at least, they are simply creaming off the innovation of others and eight looks a rather optimistic score.