Many of today’s CSP’s (Communication Service Providers) are eager to transition to successful platform businesses such as Amazon, Uber, etc. Prima facie, one would imagine that telcos would develop platforms that curate communication services and/or service components. However, digging deeper into the assets of the Communications business, one realizes that CSPs can leverage their customer reach, connectivity, trust relationship etc. in a positive way in their march towards the platform business. Communications services form fundamental and non-replaceable components of most, if not all successful platform businesses. However, the Communications industry is not driving these. Can CSPs exploit this to their advantage? If so, what is the opportunity space? Let us explore the same in this paper.

New age and even many legacy businesses have started providing app-based interfaces for customer interactions and some of them also have started exposing APIs which may be integrated into any third-party solutions. There are also platforms specializing in specific services where both producers and consumers can enter the newly created market place through exposed APIs. Phenomenally successful platform businesses like Amazon, Uber, Airbnb, etc., have created their own proprietary APIs and are either publicly exposed or made available to bonafide consumers and producers. Following the footsteps of these pioneers, many next-gen platforms have also created their own APIs.

However, we see that very few of these new second-generation platforms are growing virally like their predecessors. One of the key characteristics of a successful platform business is the lowered entry barrier for consumers and producers. It should be possible for consumers and producers to be onboarded with minimal effort and cost. This is all the more so if there are multiple competing platforms, and producers and consumers have to choose where to participate.

The Platform Business Model, largely, relies on its ability to break the traditional moats created by established businesses by creating a marketplace where producers of all hues and backgrounds can participate, and are able to attract consumers, purely based on the quality of the service they render. This also means that the consumers are sure that they are paying for a service rather than, for example, the brand value. One must remember the Platform host is also a business providing curative service to producers and consumers. The Platform host needs to compete with other similarly focused platforms and the basis for this competition for the next generation Platform businesses will be the quality and effectiveness of the curative service. The first-generation successful platform businesses had the first-mover advantage wherein the first round of lowering of entry barrier was sufficient to rapidly attract producers and consumers. This is no more the case and now, the next generation solutions must compete to build their eco system. The Platform hosts must provide a standard bidirectional interface and compete on the basis of their curative abilities. As the telecom industry has been grappling with integration problems since decades, industry standard APIs like TMF Open API, GSMA OneAPI etc., have evolved to cater to different communication industry needs and can be leveraged by telco companies. In comparison, other industries are yet to catch up with the Communications industry on developing industry standard APIs.

5G talks a lot about the concept of Network Slice, whereby SLAs are guaranteed, for an end-to-end connection, stretching across network domain, service provider domains etc. The Network Slice needs to be cost effectively rendered as well as have the ability to dramatically scale bi-directionally as and when needed. This requires the CSPs to be able to dynamically leverage each other’s resources on a need basis through a marketplace. Standard APIs for negotiating in the marketplace connectivity resources is the only way. This is possible when CSPs leverage industry standard APIs for interaction in the market places.

With continuous infusion of focused platform-based services, and the ever-growing opportunity and demand to connect across services, a new phenomenon of Platform silos is being perceived by customers. Today’s customers are overwhelmed by the need to download multiple applications of different platforms and orchestrate their end to end needs. CSPs not only enable these focused online businesses, but also in many cases, have trusted relationship with the producers and consumers in the ecosystem. CSPs can leverage this unique situation to not only provide effective communication services, but also accelerate their growth by providing pre-canned trust between eco system players.

Regulatory requirements for protection and privacy (like GDPR by EU) of customers, can inhibit entry and growth of new focused solutions, as the quest for new participants may become difficult. CSPs can take this opportunity to offer consent based customer reachability while ensuring privacy and security of the producers and consumers. It must be noted that a Platform business is essentially about transiently bringing together appropriate producers and consumers and CSPs can be the mutually trusted player ensuring privacy and security.

With every passing day, we are stepping deeper into an interconnected world, where every service that we enjoy is explicitly or implicitly connected with each other. For example, if we plan a vacation, there is a lot of planning that goes into every aspect of travel, stay etc. A vacation also means we need to take care of many things back home while we are away. The list of these connected services keep growing. Hence, there is a need for an ecosystem that allows rapid creation of platforms for loosely connected services of different types.

CSPs can be orchestrators of an ecosystem which facilitates rapid creation of these multi domain second level platforms, leveraging their inherent assets (e.g. customer reach, invoicing capability, KYC, global connectivity) and trust relationship, apart from communication services.

In conclusion, CSPs have a clear inherent advantage when it comes to transitioning to Platform Business. While they can certainly be platforms for connectivity services, they have the potential of playing a far greater role across industry domains by hosting multi-domain service platforms, enabling secure customer reach and being explicitly part of other industry platforms.

Vinay Devadatta - Practice Head - Innovation & Industry Relations

Vinay has extensive experience in the Telecom industry and is responsible for leveraging external and internal innovations and creating new service lines at Wipro Technologies. He holds an M.Tech in Computer Science & Technology from IIT Roorkee.