The Enterprise of Future: Telecom Industry Edition Part-III

7 05 2009

Do you agree if I say Telecom Companies are more local in their outlook, as compared to their peers in other industries? Probably IBM study highlights the same fact about outlook of Telecom Industry and it is a well known fact that Telecom CEOs are more interested in leveraging global capabilities to defend their core business, than expanding abroad.

IBM has done Data Clustering Technique to identify the responses of CEOs who participated in the survey. Sixty four percent of CEOs are “Globalizers”; while remaining are “Localizers”. Now, if you compare the same with Telecom Industry responses, then only forty seven percent are “Globalizers” as compared to fifty three percent “Localizers”.

Now some more stats, seventy percent of telecom CEOs are concentrating on defending their core business, compared with just 25 percent survey population. Similarly, 64 percent are focusing on optimizing their operations locally (OPEX Management) and 47 percent are concentrating on localizing their brands & products, as compared to 33 percent & 32 percent of overall sample.

Does that mean Telecom is Local in nature/outlook completely? Not actually, CEOs are keen to change the mix of skills, knowledge & assets they possess and they are keen on partnering with other companies (Global Partnership), than their peers in other industries.

That is why, while mentioning the third trait of ‘Organization of Future’ it is rightly mentioned that a telecom company should be ‘Globally Integrated’. They will go global, no doubt, but their main aim will always be to defend their core business. So either they will enter into new market (remember only to flourish their core business) or bring global expertise into local products, any route is right way to global integration.

In India, if you look closely, all new mobile operators have already partnered with some other globally known mobile company to leverage the expertise of operation (E.g. Swan with Etisalat). Analyst may cite number of reasons behind the partnerships, but one prominent advantage for Indian mobile operators will always be there; Global expertise of operation at local circle level.

Implications:

So message is clear, if you are a telecom “Globalizer” you should concentrate on building global center of excellence to optimize your company’s capabilities & speed up innovation. But if you are a telecom “Localizer”, who is focusing on home markets, can leverage global resources (In form of global partnership) to access specialized skills, reduce costs, modernize their technologies & manage their risks.

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