Imagine you are watching a TV show and you like the Prada suit that one of the actors is wearing. You want to know where to get it from, and your telco allows you to find out this bit of information that you want.
On the other hand, the telco informs the retailer or manufacturer (Prada) that certain customers are interested in their products and they can establish a connection with the interested customers directly (lead generation).
This kind of an interaction between telcos, manufacturers or retailers and costumers is going to be a reality soon thanks to the technology platform developed by Tech Mahindra.
I was talking with Suresh Bhatt, Head of Telecoms in South East Asia, Tech Mahindra, a few weeks ago when this fascinating scenario emerged during the interview.
Indian IT services company Tech Mahindra is a USD 3.1 billion company with 89,000 professionals across 51 countries, helping over 629 global customers including Fortune 500 companies.
Based in Singapore, Bhatt has recently taken over this responsibility that covers the entire region of approximately 4500 employees.
During the interview, we touched upon many areas starting with the state of the telecoms in the Southeast Asian region to machine to machine communication and the Internet of Things.
But first up, I ask him what changes he has brought in his company after assuming the new leadership position.
"We took a step back to see where we have done well and where our competitors have done better than us," he says. "So we took a baseline approach. We identified one or two countries where we can do better so there we have made arrangements-both in terms of sales, pre-sales and support structure. We are going to hire and expand the team."
Main challenges for the telco industry in Southeast Asia
"All these markets are fairly saturated," says Bhatt. "Everyone has multi-devices. So the biggest challenge the telcos face today is cost pressure because they want to increase their margins. Second, there is no net addition available in the market to increase the subscriber base. The last and the most important (question for a telco) is how do I grow. These are three things they are grappling with (in the region)."
Bhatt is more familiar with markets like Singapore, Philippines, and Malaysia but he is learning more about other markets such as Indonesia and Hong Kong.
"I find the market on fairly similar lines," he says about these two markers. "However, the difference is that in markets like Indonesia there are more players in the market. It is a crowded market. There does seem to be some room for consolidation. Some of them are doing relatively better than others."
He finds Hong Kong similar to Singapore. "It is mostly post-paid market and device affinity is very very high," he says. "Therefore, (adding) additional revenue streams seems to be the biggest challenge."
According to Bhatt, Tech Mahindra is also interested in new markets like Myanmar. They are exploring it and they see some amount of headroom in that market as it is uniquely different from all of these. "Subscription growth is still below single digits," Bhatt says. "Grabbing subscription base is what is race is for now."
Singapore: A posterboy for regional telcos
"Singapore is one of those markets that has kept ahead of the game," says Bhatt. "It is a poster-boy for some of the regional market players. They learn from what the telcos are doing here. But they have large market base to play with that Singapore telcos don't have. So their offerings are also different. For example, in Philippines, Globe tied up with Facebook to give free access to Facebook on mobile phones for three months. After three months, obviously they will start charging a fee. That is their plan to beat the OTT (over the top players) players. I think in the long run these strategies will pay off."
On OTT (over the top) players
Telcos in Asia are yet to come to terms with the challenge thrown by OTT players. How do telcos should deal with them? Should they shut them out or partner with them? "Some telcos are willing to collaborate and some are still in a state of denial," says Bhatt. "They still think that they can have their own offerings. In some markets we see that. They are making their own offerings. That is a game you have to see and watch it evolve. Some realise that they cannot reinvent the wheel so it is better to partner with them (OTT players) then to fight with them."
"Most of the regulators in the region, except for the limited few, really have the strength to drive the market," he says on the role played by telecom regulators. "Probably in Singapore it is very vocal and strong and has a rigid control. Same in Hong Kong but in other countries perhaps they are not so much strong. The lobby seems to be much stronger."
Tech Mahindra's offerings for telcos
In the mature markets, increasingly many of the telcos are seeking Platform As A Service (PAAS). Under this model, the initiative and innovation comes from the Systems Integrator (IT Company such as Tech M) which offers a set of solutions and aggregates third party solutions together as an OPEX-based service. The IT company and the Telco work in tandem to share revenue, and often clubs together a third party - the apps developer/specialist services provider. The IT company and the apps/specialist services provider ride on the subscriber base of the telco, who often does not pay upfront for the adoption of the service.
"Tech Mahindra has been formally in the integration business," says Bhatt on the evolution of the PAAS model. "Over the last five six years we have evolved from that into a game-plan where we touch all the CXO touch points including the CMO, the CIO, the CFO, the CTO. We have end-to-end offerings for them. Cutting across all of these we have invested in Platform-as-a-service. We have developed about seven platforms today. All of them have at least one deployment in some part of the globe. The platforms are built with a specific purpose. They would take away certain amount of investment that the customer would have to do otherwise to have the flexibility in their services to meet the challenges and needs of any offerings that they would launch. For example, current structures are built for either voice or data and they can't deal with the OTT services."
"Our platforms are broken down into several component so that it is easier to install and run them," he continues. "In the region itself, we have done one social media implementation which has just gone live in Philippines and that's turning out to be a great story."
Tech Mahindra's Social Media platform provides tools for social listening, tracking of customers, crisis management and pre-emption, campaigning and product development and analytics.
One of the components of PAAS is Lead to cash cycle under which enquiries for telco services or hardware such as handphones (leads) can be converted into cash (paying subscriptions) through a set of services provided by the IT services provider and partner. "This is a platform that Tech M has perfected over several years," says Bhatt. "It involves setting up of IT enabling services for telcos in a quick time frame and with great efficiency, converting leads into cash."
On Machine-to-Machine (M2M) connectivity, Bhatt sees a lot of potential for revenue generation for telcos. While M2M has been adopted in developed economies (armament tracking, tracking of old age people, and of course, tracking of logistics and fleet management, smart metering) there are vast opportunities tap in markets such as Indonesia and Philippines. For example, chips/SIM cards could be embedded into taxis and utility meters which can then beam back usage rates, data and geo-location information to the head offices. But he knows that these are still early days.