Internet of things, wearables, machine-to-machine communications, mobile apps and Over-The-Top players (services like Facebook, Google, WhatsApp, Skype that are making revenues using carrier networks for free) are already changing the telecommunication landscape – rates are flattening, data consumption is skyrocketing, content becomes ubiquitous.
But bigger changes are yet to come as telecom operators are partnering and even supporting the very transformations that innovative and disruptive startups are bringing to their business. Well, at least some of them are and Telekom is one well known for his accelerations and incubation programs, VC funding and now even private equity investments in the tech area.
So we talked with Alina Cazacu, Senior Manager Non Core E-activities at Telekom Romania to better understand how can a big telecom juggernaut and small disruptive startups can benefit from one another.
Alina is an experienced professional in a wide variety of business fields such as e-commerce, telecom, utilities, pharmaceuticals with focus on e-Business Management, Retail Marketing Strategy, Online Marketing, Project & Program management, Product & New Business Development.
She keeps a keen eye on the SEE startup community in order to boost the interaction & GO to market between the New Product & Service development with the telecommunication online & offline products.
How to Web: Why is it important for a telecom operator to be involved in the startup community and to keep an eye on the tech entrepreneurship scene?
Alina Cazacu: For us it’s very important to have a closer contact with the startup community as this is helping us to work more in the area of innovations and find new and useful ideas which we could pilot. In the end this is creating value for our clients and in the same time for the startup community.
We are looking to enrich the offer to our customers with more than the core telecom services and we believe that working together with startups will bring not only innovative services, but also a way of bringing those new services to the market on a fast track.
We don’t want to be perceived as passive partners who just give our name to a program or a conference, but we are trying to be actively involved in this community, to challenge and push new ideas.
How does Telekom contribute to the local and regional startups ecosystem?
Deutsche Telekom group is helping by rolling out international programs and giving access to its large footprint. The group has many tools to support the ecosystem of startups in Europe: hub:raum for incubation and seed funding, T-Venture for early stage funding and the newly Deutsche Telekom Capital Partners (DTCP).
Most of these tools are available for the Romanian market too and were already used. Furthermore we feature local apps to our customers via our TopApps program.
Operational wise, we are trying to pilot as much as we can with whatever idea we think creates value added for our customers.
To be honest, it’s not just Deutsche Telekom group contributing to startups; it’s a win/win situation. We benefit from young fresh ideas and I think there could be a lot of support for big companies from the young generation. They are motivated and willing to bring the change.
Looking to Romania, we see a huge innovation power and potential for new ideas and startups. In our international contests, usually Romanians are amongst the most active. We have seen several startups which could play a role in the near future in our business here in Romania or in one of the companies within the group.
The ‘New Web’ and Over the Top (OTT) players disrupted the established telecom business. How did Telekom react?
Technology is causing nowadays a rapid design of everything: products, business models, markets; and all these are changing the ways of approaching the customers. Acting in this market we have to adapt to this and create each day value to our customers.
As mentioned before, we welcome innovations, ideas, startups. One can’t talk about THE OTT, since there are many different business models and approaches. We are present on the local OTT market with the innovative www.telekomtv.ro platform, which incorporates also content from some OTT players.
Partnering is one of the best solutions in order the customers to be able to receive the full bunch of services from the same provider – this would increase the accessibility and will empower the customers to discover and access new services and also get better deals at the end.
OTT is a segment on which Telco operators need to be present in order to provide a full TV content. Telekom made this step a while ago, now providing a full multi-screen experience to its customers and this is one of the main differentiation points as compared to the competition.
How do you believe that the telecom industry as a whole will change in order to keep up and not remain just carriers?
Well, telecom sector is changing since it was established. Compared to the overall history of mankind the industry is not even a grown up yet, but has reinvented itself over and over again.
Generally speaking everything will get faster, more efficient, more personalized and more “e”. To be more specific one megatrend is of course mobile payments, especially paying by just tapping the phone, so I would expect more services in this yard. In business I see a clear trend to one-stop-shop offers for SMEs helping them to focus on their core business and to grow there instead of bothering with technology.
The nature of the telecom sector is that it needs to be adaptable and constantly changing or it would have been irrelevant a long time ago. If you think about it, everything we do online right now is being provided by a telecom. From broadband to mobile internet, it simply allowed people to be more connected and deeply integrated with each other.
The recent change in the last few years is that telecoms are expanding their scope outside of pure communication. We build, operate and maintain the infrastructure that allows this modern world to exist and now we started building a lot of things on top of it.
Is the app-centric consumer behavior and growth in data consumption – especially video – changing the mobile operators business model? In which way?
Absolutely, it has been evident for everyone in the industry for a while. Like I mentioned before, we build, maintain and operate a vast communication network, what good does a network do without content that can be consumed through that?
You have numerous examples from HBO GO to Netflix, from Soundcloud to Spotify and Deezer. It is creating a beautiful new over-the-top world with new innovative business models that transform people’s way of doing things in life.
Just a few years ago it was completely normal to download songs one by one and paying it one by one, look at this world right now: streaming ANY song that you like in an instant. Beautiful, don’t you think?
One just needs to look back a few years to see the difference. Does anyone remember the world before YouTube? This vast database of video knowledge, entertainment and information, really quickly it became a normal part of our lives.
How have the ratio of core and non-core business as revenue streams evolved in the last years in the telecom industry?
It’s obvious that the big money comes from the traditional business (the core business of the company). However, it’s necessary that each company should look more into the non-core stuff. A considerable revenue stream cannot be considered, but for the clients is important to know that they can find in one place more or less what they need and an integrated operator is a step forward.
People want easiness in the way of doing everything, they are not that patient, all the information is coming rapidly from many sources and it’s important to be in line with the time and to offer what is needed. If we are speaking about Telekom Romania, we are one of the market players in television including OTT / mobile TV in Romania and we will continue that path.
How will the Internet of Things, wearables and Machine-to-Machine communications change the way people and businesses interact with telecom operators?
Well, I personally believe that this will be the new revolution, not in the telecom industry, but also in everyday life. If you look at it from today’s perspective and look at the big picture today we have only rudimentary connections that go through a few sets of devices that we interact with (smartphones, computers etc.)
The internet of things/everything will allow us to increase the level of communication with the world by orders of magnitude. And this is not different from building the first “internet” in the 60s or 70s. It will be a big effort, but well worth it.
Everything that consumes electricity will at certain point be connected into a vast network allowing us to expand our realities even further. At this point we ask for information when we need it, and sometimes we don’t even bother with it. But in the ‘all connected’ world the information will find us in the exact moment when we need it and it will improve our lives significantly.
From a telecom perspective this is the logical step in the evolution and it is inevitable and we see here a big opportunity – only if you think about access services.
Who do you think will be the key innovators in the telecom industry over the next few years?
It’s obvious that the fast arrival of the internet and IT players in the digital space has changed the telecom landscape. However, the online services should adapt and appear to adapt to the fast changing of the market conditions a bit faster than the Telco offerings.
The role of the operators in the value chain has been challenged quite a lot in the last years and one of the easiest solutions is to allow operators to enable as many and new services as possible. In this way the Telco product cycle will be shorten and will be able to re-position them on the platforms by having and offering new and innovative services.
The brisk pace of technology innovations (mobile devices, apps, social networking, cloud solutions) is showing us a constantly assess in the business implications of disruptive technologies. The development, adoption of whatever is new is rapidly spreading from Silicon Valley epicenter to all the tech hubs around the world.
As we see that Asia is leading the change in mobile communication and e-commerce, the technology pars are springing up in Beijing and China, already the world’s second-largest economy. Today and in the foreseeable future, tech innovation can drive a nation’s economy forward and create jobs.
Can the startup culture and mindset bring some entrepreneurial attitude and positively influence a large telecom organization? In which way?
Anyone who worked in a startup culture and also in corporations can talk endlessly about the difference between the two cultures and mindsets. Of course within a small company there are some pros like the speed of decision making, the “appetite” toward risk, the way of following and breaking the rules in the same time. All these and the people willing to assume are valuable assets even for a big company.
The big companies by the definition should learn how to work with small companies without killing whatever makes them valuable (flexibility, creativity). But on the other hand the small ones should learn how to have realistic expectations of what they have and what they need in order to make their ideas real (e.g. complementary skills, financial resources etc).
Entrepreneurial attitude, proactive attitude, appetite to risk represent criteria on which the people from a team should be definitely chosen and not only the general criteria such as the number of years in work field – the work experience and the number of degrees. I am following these principles in the way I chose the people for my team and the fact that all of them, even if youngsters, are still here even after three years, it’s a proof both parties made the right choice.