Thursday, 02 December 2021

A partnership power balance: Vodafone talks ecosystem dynamics at TTC

by Harry Baldock, Total Telecom
Tuesday 26 October 21

Mutually beneficial and balanced partnerships will be the key to going beyond connectivity, according to Vodafone Group CTO Johan Wibergh at this year’s Total Telecom Congress event

In the opening session of this year’s Total Telecom Congress, a major theme of discussion was something that telcos around the world are coming to know only too well; namely, that they must go beyond just connectivity if they are to succeed in this ultradigital age. The past two years have made it very clear that traditional telco model will no longer deliver the consistent growth of the past. At the height of the pandemic, some telcos were experiencing increased network traffic of over 50% and…

In the opening session of this year’s Total Telecom Congress, a major theme of discussion was something that telcos around the world are coming to know only too well; namely, that they must go beyond just connectivity if they are to succeed in this ultradigital age.

The past two years have made it very clear that traditional telco model will no longer deliver the consistent growth of the past. At the height of the pandemic, some telcos were experiencing increased network traffic of over 50% and, partly due to the transition to home working, this increase in traffic is here to stay. But despite this major uplift, telco profits remain relatively flat. 

Clearly, something needs to change.

For Vodafone Group’s CTO, Johan Wibergh, the answer to this considerable challenge is inevitably to tap into emerging technology markets that are enjoying major growth, such as the IoT, smart cities, and Industry 4.0.

“No longer enough to be connectivity provider – we must become digital enabler,” he said.

But this is not a transformation that telcos can deliver alone and so partnerships with new players, from cloud hyperscalers to new industry verticals, must be nurtured.

For Wibergh, the maintaining a balance in the relationship between telcos and this emerging ecosystem will be crucial to the company’s success in years to come.

On the one hand, Vodafone has demonstrated their eagerness to retain control of their network and its technology, with their Tech 2025 strategy showing a major focus on in-sourcing, especially when it comes to software. Wibergh notes that the company already employs around 9,000 software engineers and, as of last week, has announced plans to hire and train 7,000 more by 2025.

Part of this focus on in-house reliance for developing technology and services comes as a response to a classic telco problem: service differentiation. When it comes to traditional connectivity services, telcos are all too often viewed by customers as interchangeable, especially in the consumer space, and this cannot be allowed to happen when it comes to emerging digital services.

“It’s imperative to have enough add-on products or differentiation compared to your competitors,” Wibergh stressed. “You can’t buy them from suppliers because then your competitors will have the same. Hence you need to create them yourselves.”

On the other hand, it will be necessary to develop diverse partnerships to tap into some of these rapidly growing markets, and Vodafone has been very active in this regard, regardless of whether the topic at hand is Open RAN, the IoT, or mobile edge computing, or cybersecurity. 

“Partnering is great, it’s a good way to bring value to customers, but if the only thing you bring into the game is the connectivity, nothing will change,” said Wibergh. “It’s really important to add something that will drive revenue growth.”

Ultimately, striking a balance in these partnerships is often difficult. Telcos are typically used to being the driving force in these discussions, but their transition to a digital enabler means a more collaborative approach will be needed.

For Wibergh, this is an area where evolving telcos need to do better, perhaps taking a step back from their typical role as the lead partner and instead learning how to create a more balanced relationship.

“This is my biggest concern,” explained Wibergh. “I think it’s the biggest weakness in our industry.” 


Total Telecom Congress is taking place right now! Don’t miss out on Day 2 tomorrow and keep up with the action using the #TTCongress hashtag 

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Being the agent of change for cloud native network architecture

 

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