Can telcos become the new FANG?

A telecom service provider needs to move with much speed, agility, and better offerings to deal with the challenge and evolve as a consumer company.

By Soma Tah

The lightning rise of the tech giants – Facebook, Amazon, Netflix, and Google (FANG) – or the likes of FANGs has made it extremely difficult for the telcos to maintain their competitive edge. The FANG companies have always maintained a razor-sharp focus on customers and their needs, and innovations to deliver the best-in-class experience to the users. However, telcos, despite having a huge amount of customer data and insights have fundamentally remained focused on infrastructure, and regulations.

Naturally, FANGs are becoming smarter and stronger by the day and have started to gradually eat telcos’ lunch.

Not only are they getting into the services businesses of telcos, but they are also investing a lot in strengthening their infrastructure by laying fiber-optic cables, building undersea cables and datacenters; in the good old days, these tasks were predominantly done only by the telcos.

So is it too late for the telcos to win the customers back and get their edge back as well?

How telcos can get their edge back

“FANGs are growing very fast and as they continue to grow and become bigger they will be investing in infrastructure to add more value to their businesses. Telcos need to change their directions and embrace the new way of working. If they do this successfully, besides being a strong infrastructure company, they will emerge as a strong consumer company as well,” Softbank India Country Head Manoj Kohli said. He was speaking at the Voice&Data 20th Telecom Leadership Forum.

Interacting with CyberMedia Consulting Group Editor Ibrahim Ahmad on the ;">Evolving telcos: Can they become the new FANG, he further highlighted that the telcos have great customer intelligence. “This is an asset that can be leveraged through the use of artificial intelligence (AI) and machine learning (ML). Sadly, however, telcos despite a customer base of close to 300-400 million, have not been able to really leverage this customer data to build a competitive edge,” he said, adding that FANGs have acquired those insights and are using the power of innovations to create a great customer experience and outrank telcos.

Telcos need to change business strategy and working style

If telcos are ok with being just in the infrastructure business and as a provider of pipe to retail and enterprise customers, the existing business strategy and approach are just fine. “But if their aspirations are much higher and they want to get closer to the customer, offer the services that are very different from what traditional telcos do, they will have to make drastic changes in their way of working and the way they operate,” Kohli said.

“The DNA and the organizational culture of both the business are very distinct from each other. Infrastructure business needs deep planning more mature talent with hardware knowledge and expertise, whereas the consumer business, which is presently ruled by the FANGs, has got more millennial talents with the average age of 27 focusing on customer-driven product innovation.”

But can India do it?

“India may not have a Facebook or a Google or Amazon. But India has fantastic FANG-like companies such as Paytm, Lenskart, OYO, Ola, Delhivery, and Policybazaar. They’re all built-in India by young leaders and young local talents, and have a very youthful and transparent culture,” Kohli stated.

Telcos already have the experience of running the infrastructure business. But the consumer business, which is more of the FANG business needs youthfulness, enthusiasm, a lot of bold decision-making, and innovation focus. “The regulatory part of the business should be managed by the top management for both the businesses,” Kohli advised stressing that, “If telcos want to focus on customer experience, they have to keep their infrastructure and consumer service businesses independent of each other, so that the cultural gap and issues don’t disturb each other.”

He, however, cautioned that maintaining two independent businesses with different mindsets was not an easy task.

There are a lot of things that telcos used to do earlier are done by the FANGs nowadays. So if telcos don't move with speed, agility, more and more consumer services will be taken away by the FANGs eventually. It's important for the telcos to start moving towards that new direction fast – the more they delay, the more intense the competition will become for them.

To be back in the game again, telcos need to strengthen their consumer business in the next 3-5 years, he suggested.

somat@cybermedia.co.in