More digital content, services needed for telcos to survive

To thrive in this digital age, telecommunications carriers will have to go beyond building data-capable networks and provide more digital content and services.

Citing analyst Chetan Sharma, top telecommunications executive Napoleon L. Nazareno said the value in the telecoms industry is shifting from access to platforms to end-user applications and services.

“Thus, the opportunity for operators is to transform themselves into platforms for delivering new digital services – both their own and those of other players in the digital ecosystem,” he told delegates to the ongoing 11th Asian Carriers Conference yesterday.

“In this view, the name of the game is compelling digital content and powerful digital solutions,” he added.

He cited the Philippine Long Distance Telephone Co., Inc. (PLDT), which has partnered with digital content and solutions companies such as Fox and Disney as part of a two-pronged strategy for digital diversification.

Another approach is to invest in these digital content companies and set up joint ventures in ancillary businesses.

Nazareno, who is president and chief executive officer of PLDT, said they have invested in iFlix and launched a video-on-demand service in the Philippines last June.

PLDT also invested last year in e-commerce group Rocket Internet. Together with Rocket Internet, PLDT has set up a joint venture e-payments company that uses the Smart Money platform to target the “uncarded” and “unbanked.”

“We’re doing this because it is quite clear to us that digital content and services are driving customer engagement and generating a growing share of revenues,” Nazareno said.

Smart Communications, one of PLDT’s mobile subsidiaries, has also set up a homegrown music service called Spinnr and partnered with global music content providers like Deezer and Apple.

Smart has also delved into gaming through GameX online portal and is holding, in partnership with the Philippine eSports Organization, the nationwide search for the best Clash of Clans players in the country.

Nazareno also said they have rolled out digital solutions to help government pursue development work. The telco last year distributed over 1,700 tablets with broadband connection and a pre-loaded mobile app that allowed municipal agriculture officers to calculate and report the fishing capacity of the boats of small fishermen.

The telcos’ core business, however, remains the data-capable 3G and 4G networks.

He cited the Mobile Economy Report, which said that mobile broadband connections such as 3G and 4G will increase to almost 70 percent of total connections worldwide by 2020 from just under 40 percent at the end of 2014.

The report said mobile operators worldwide are seen to pour US$1.4 trillion in data-capable networks until 2020.