This report from HumanIPO (they are still posting it seems) speaks of MTN’s recently declared focus on data, digital services and leveraging the power of the internet. One of their executives said –
“In the past the focus was on voice- that is the ability to connect people so that they could make phone calls. This industry has achieved that well over 100 million active subscribers in Nigeria of which MTN has 60 million subscribers as at the end of 2014. That dispensation was Telco 1.5. Now, we are moving to Telco 2.0 which is characterized by full scale focus on data and digital services leveraging the power of the internet.”
We see what you did there, MTN, we know you like slinging obscure buzzwords.
That said, this telco 2.0 thing is a real thing. An excerpt from this 2012 blog post by Telefonica describes it quite well.
“Telcos needed to move away from being utility companies to become complete carrier service providers (CSP), with emphasis on the “service” part. This change was triggered mainly by third party companies coming to play in the digital communications landscape – for instance, developers, vertical industries and governments looking to improve public services.
In due time, these players became interested in taking full advantage of the possibilities thrown up by digital communications. Telcos needed to add new capabilities and services to create new, complete B2B platforms, effectively transforming their business model into something much more complex.
This is what we’d call the Telco 2.0 ecosystem – a multi-sided business model with the CSP at the centre, acting as an enabler between upstream partners (software developers, content providers, consumers, public sector, vertical industries) and downstream private and enterprise customers.”
In plain english, Telefonica is explaining how the services like Whatsapp and government initiatives to accelerate broadband uptake are coming together to squeeze the traditional business models of telcos, and how they can pivot to avoid disruption.
Of all the telcos in Africa, MTN is the furthest along the curve. They’ve been building data centres, hocking cloud services and even selling domain names in direct competition with Google’s GNBO programme for years. They are investing in internet startups and ecommerce companies. The only question is what internet business will MTN not do? Because from where we’re standing MTN is no longer a telco, and hasn’t been one for a while.
An except from the last referenced TechCabal article:
“MTN’s moves on the internet seem to be simultaneously offensive and defensive…They’ve seen the damage OTT services such as Whatsapp, WeChat and Facebook have done to telcos all over the world. Their move into the internet isn’t just for no reason – it’s a matter of survival.”
Publicly calling dibs on Telco 2.0 is nice positioning, in an industry where the perception game is almost as brutal as the actual operations. It might even catch on. Observe:
Telcos around the world are biting their nails anxiously as Whatsapp prepares to enable voice calls in the first quarter of 2015. But not all are losing sleep. Some like Africa’s MTN are going the Telco 2.0 route…
Something along those lines.
Of course, one increasingly obvious side-effect of these powerful companies moving in on the internet is a systematic balkanisation of the web and internet experience, especially for first-time users. And just as OTT startups threaten to disrupt telcos, telco 2.0 also threatens to disrupt a ton of fledgling internet startups. We won’t be able to say what else is going to happen until we’ve observed these trends for a while more.
Image credit: Warrenski, via Flickr.
