Mohammad Chowdhury
Mohammad Chowdhury
I offer unfettered insights into the world of Asia Pac and India telecom

(Photo: Shutterstock)

Didi Chuxing’s takeover of Uber China last week is another vindication of the notion that global dominance of ecommerce by a few brands is a lazy and superficial theory.

Internet giants are finding around the world that the next stage of market penetration (ie the interesting bit beyond acquisition of subscribers to where you actually make money from them) is difficult without significant localisation of distribution, content, offerings and business models. All the big players see this: Facebook is trying to figure out how to market better in Asia, LinkedIn is growing its sales teams on ground in key emerging markets around the world, Amazon realises that it has a real fight on its hands to win against the likes of India’s Flipkart, and Netflix has fallen foul of local tax regulation in various markets, in some of which its service has been stopped.

Didi taking over Uber may feel like a prophetic truth-coming that reassures us that the world is not about to be dominated by a small number of Western brands. Just as Francis Fukuyama was wrong in the 1990s to say that we are experiencing “the end of history” because democracy will become the dominant political system, whoever said the first to scale in internet wins is wrong too.

But in my mind there is a grave concern raised by the Didi takeover too, and this is about customer choice. With the China rides market to be dominated by one player, what happens to Chinese consumer choice? Will customers be able to benefit as they would from several players vying for their service, doing their best to keep their taxis new and clean, their drivers the most courteous and their fares the most competitive? All of that requires agility and costs money: Why bother if there isn’t anyone threatening your trade?

Services such as taxi rides must have reasonable competition (or highly regulated service standards and fixed fares) to offer quality of service and value: Taxi service is not a monopolistic industry by nature. In Indonesia, Silver Bird and White Horse both provide great service partly because there is fierce competition for customers.

I haven’t seen what the Chinese competition authorities are thinking, and Didi clearly has grand visions for bringing more to its customers, but we must hope that the week’s events do not result in China’s millions being “taken for a ride”.

In the 21st century, technology will be the pivot to enabling a greater degree of connectedness and participation between citizens and the economy, and between citizens and their local and national governments (Image: Neil Hall / Reuters)

In the 21st century, technology will be the pivot to enabling a greater degree of connectedness and participation between citizens and the economy, and between citizens and their local and national governments (Image: Neil Hall / Reuters)

Whether you are a Brexiteer or preferred for the UK to remain in the European Union (EU), one thing is for sure: The result of the UK’s referendum on EU membership has changed everything. This is because the results revealed a staggering and angry disconnect between Westminster and London, and that of much of the rest of the country.  London voted comfortably in favour of Remain (as did Scotland and the youth) whereas residents of other towns and cities across England and Wales (and the elderly) voted in favour of Leave. What is surprising is how little anybody expected to see such polarisation, including the very politicians who claim to understand and represent the needs of the nation at large. Not only did the politicians get it wrong, but their Brexit scare tactics were met with the angry, and perhaps irrational, rejection of the forgotten, the bitter and the excluded. This disconnect between politicians and masses applied to the Conservative and Labour parties, both of whose leadership have seen significant casualties of last week’s result.
Part of the reason why the vote to Leave has destabilised global markets reflects speculation about how much Brexit may resonate emerging patterns elsewhere: The erstwhile fear of a global contagion. Whilst such worries may prove to be exaggerated, there is no shortage of signs from across the world that politicians are out of touch with their respective masses. In the US, we are seeing its own brand of polarisation with the hitherto unimaginable rise of Donald Trump as a voice for many who have rejected established voices among the Republicans and Democrats.  This side of the Atlantic, there are calls from the hard right in France for an EU referendum too, a Frexit, so to speak. Others could follow. Further afield from the confines of the Western bloc, there is ample evidence of alternative forms of polarisation, most acutely in the pseudo-democracies of the Middle East, Asia, Latin America and Africa where the steady rise of religious fundamentalism and nationalism provides ample warning of this, as does the huge shifts in popularity felt by leaders who have gone from hero to zero, or vice versa, is short spaces of time. Dilma Rousseff of Brazil is a pertinent illustration of a hero to zero leader.

All of this points to technology. Why, you may ask.

In the 21st century, technology will be the pivot to enabling a greater degree of connectedness and participation between citizens and the economy, and between citizens and their local and national governments. In the technology and communications world, we already have an established rubric for notions of connectedness, including: Smart Cities, G2C, Digital Divide, Net Neutrality, Roll-out targets, Financial Inclusion, Mobile Payments, ICT4D, Universal Service and so on. All of these terms have a common denominator, which is the desire and ambition to connect all and to provide access to services to as many as possible.

Now, more than ever, the world needs this connectedness to be taken seriously in deed as well as in words. Connectedness needs to become universal, and participation in opportunity to become as broad as possible. The more that people at large can benefit from the social and economic fruits of technology, and the more degrees of connectedness it brings, the less likely it is that elections will serve up the shocking surprises that can’t be good for any political system. Here are three examples of how achieving connectedness boils down to technology:

• The Internet of Things (IoT) promises to break down national barriers by globalising the value chain, enabling small-time entrepreneurs to play on the world stage with their goods and services
• Financial inclusion, in its various forms such as Mobile Money Transfer and Micro credit, promises to enable those without assets or access to financial institutions to be able to borrow, save, invest and make and receive payments: Critical to enabling more to participate in the economy
• Smart Cities offer solutions which encourage a greater degree of citizen participation in urban planning and development, as well as in improving civic services and holding local governments more accountable

Every nation in the developing world needs to think about this, particularly the policymakers and big businesses who shape technology and communications – as the role of ICT is going to be vital to 21st century politics. Brexit serves as a timely clarion call to all the world’s leaders and policy makers that they exclude their populaces and electorates at their peril. Countries such as India, who have taken huge steps toward implementing a national, digital citizen ID system (the UID), have an advantage by having a platform which can be leveraged immediately. Now it is high time for others to take the steps necessary to realise the benefits of inclusion through technology.

Mobile is the primary channel for internet access and internet-based transactions in China, and for this reason the challenge of mobile security is becoming a priority for individuals, enterprises and government ( Photo: Shutterstock)

Mobile is the primary channel for internet access and internet-based transactions in China, and for this reason the challenge of mobile security is becoming a priority for individuals, enterprises and government ( Photo: Shutterstock)

The pervasiveness of the internet in China surpasses that of any other country on earth. China has 668 million internet users, more than anybody else by a long way. But it isn’t just a numbers game in China; it is the propensity of internet users to use the access to the net to do stuff that is compelling in China:

  • Some 80 percent of retail customers use their mobiles while shopping to check for deals and alternative options online: The phenomenon that is referred to as “O2O” or online to offline
  • WeChat eCommerce customers in China average 50 transactions per month online, compared to 25 transactions per month for US debit card users
  • The 450 million customers who use Alipay, China’s leading online payments service provider, between them transacted, saved and transferred over $1 trillion in value in 2015
  • Internet advertising by value in China surpassed TV advertising value in 2014, and this year is forecast to surpass 50 percent of all advertising revenue
  • Of the top seven retailers in the US, the highest ranked pure-play ecommerce firm is Amazon, at number five; whereas in China, the top two retailers nationwide are pure-play ecommerce, Alibaba and

Mobile is the primary channel for internet access and internet-based transactions in China, and for this reason, the challenge of mobile security is becoming a priority for individuals, enterprises and government. Mobile devices are highly personalised, used almost 24×7, very accessible, contain multiple sensors, carry data which provide individual context, are frequently used on publicly accessible networks (example, unsecured Wi-Fi hotspots), and many are used as BYOD (bring your own device) at work. On top of that, China is forecast to have over 5 billion Internet of Things (ioT) devices by 2020.

So while the demand for mobile-accessed internet is high in China, the security risks associated with it mean that the readiness to use the internet safely is low. Globally, the threat levels from security breaches are escalating. According to PwC’s latest Global State of Information Security Survey, during 2015 we saw:

  • 25 percent increase in the compromise of customer records online from the previous year
  • 45 percent increase in detected security incidents from the previous year
  • 45 percent escalation in the value of financial losses from security breaches

When Talk Talk, a UK mobile service provider, had a customer data breach in late 2015, within a few days of disruption, the operator saw 157,000 customer records hacked, 28,000 customers’ credit or debit card details compromised, around an GBP 80 million loss from the hack, and a stock price fall in the same week of 7 percent.

What I saw at Mobile World Congress in China this week is that whilst the current readiness to deal with the threats is still low, things are beginning to happen.  The Government has published the first draft of an eCommerce law, companies are beginning to think seriously about cyber security, security-based frameworks and threat assessments.  A number of security firms and consultancies are coming up who are skilled at the identifying and handling the latest hacking and threat issues, and in driving awareness.

Given China’s love affair with the internet and the quiet determination of both public and private sectors to harness the growth of the internet and keep the growth sustainable, there is no doubt that China will get on top of mobile security, though we may expect some hiccoughs along the way.  Other countries in developing Asia, especially India, Bangladesh, Vietnam, Indonesia and Myanmar need to take note: this is a challenge that is coming to mobile screens in these countries soon.

Sources: Mary Meeker’s Global Internet Trends 2016; PwC Global State of Information Security Survey, 2016

Indian Farmer checking growth of rice paddy farm and making call with smart phone, concept for technology help available to farmers in today's world ( Photo: Shutterstock)

Indian Farmer checking growth of rice paddy farm and making call with smart phone, concept for technology help available to farmers in today’s world ( Photo: Shutterstock)

Recently, a journalist from a prominent international newspaper asked me whether “traditional sectors such as agriculture” could benefit from the Internet of Things (IoT).  I found this to be a very interesting perspective.  For those of us who live in concrete jungles and are conditioned to conceive of GDP as consisting of producing “stuff” and services alongside, agriculture is easily forgotten. When remembered, it is assumed to be too old-fashioned for the internet. It is, of course, an assumption that is as erroneous as it is easy to make. For centuries, today’s most advanced economies have exploited bleeding edge technology to extract huge agricultural productivity gains, enabling their economies to free up millions of labourers to focus on producing new types of goods and services that rocketed their societies beyond the existence of subsistence, the beginning of what sociologist Thorstein Veblen famously coined as “conspicuous consumption.” The productivity gains in agriculture that resulted in the Industrial Revolution came from the application of successive waves of new tech: Ranging from seed and crop science, to irrigation and water pumping, to mechanisation of sowing and harvesting, and this technology often was proven in agriculture before it was scaled into manufacturing.

It’s worth thinking more about how much today’s new wave of internet-based technology can contribute to agriculture in developing countries, for perhaps three reasons:

1.     Agriculture in developing countries is big: According to the World Bank, 98 percent of the world’s agriculture labour force is in developing countries comprising 1.8 billion people and contributing $2.5 trillion of output annually.  Developed countries’ agriculture output is only 20 percent that of developing countries.

2.     Agriculture in developing countries lags in productivity: While the labour to capital mix in agriculture is understandably different between Europe and Africa or Asia (due to divergent input costs), what is less clear is why the productivity per hectare of land should still be so inferior in developing countries: Average output is 4.8 tonnes per hectare in developed countries, compared to only 3.3 tonnes in developing.

3.     Farmers are, by and large, business people, and they look for realisable value from the services they procure. Their behaviour in buying technology will be driven by seeking business benefit, which means that the services provided to them can be monetised immediately if they provide value at reasonable prices.

Reimagining the journalist’s question, what more can be done in developing countries to increase agricultural productivity and value, particularly through the uptake of easily implemented and high impact internet-based technology? If we are to see revolutions in the cities and factories of the emerging economies of Asia and Africa, we certainly need it to continue in the fields too.

Technology provides new options, and in the form of the Internet of Things, the solutions are coming thick and fast, affordable and accessible.  We are seeing the early signs of emergence of “Agri IoT” in a number of countries, where new services are cropping up which directly address specific market and farmer challenges. According to a report by the GSMA in 2015[1], there are already some 40 agricultural sector value added services in Asia, addressing issues such as:

  • Poor knowledge of agricultural practices (eg crop information), addressed through information services delivered to handhelds
  • Inability to real-time monitor field equipment (such as irrigation pump activity), being addressed through machine-to-machine (M2M) devices which provide read outs to farmers through apps onto their phone
  • Gaps in supply to demand for produce, being closed through real-time trading platforms which are mobile-accessible
  • Supply chain inefficiencies, being addressed through smart logistics such as monitoring trucking movements using GPS and carton location through RFID tagging or M2M Non-availability of insurance for farmers, now being addressed through services that enable micro-insurance and mobile money solutions

According to a PwC study[2] in 2013, the food output of Africa that could be saved (about a third) from rotting through smart transportation solutions could feed the population of Kenya. The GSMA report referred to above predicts that 50 million farmers could be using such services by 2020, spending some $480 million, double what it was in 2014. Given the size of the agricultural economy, and the speed of smartphone uptake and data usage, I am given to think (and hope) that this is an under-prediction.

I assert this bullish view because the farmer’s concept of service value is highly time and location-specific because the value of their output can change by the minute when it comes to timing the interventions they need to make. If you think about it, the farmer’s world is almost ready-made for mobile services which can be used outdoors and on the move, and for real-time data analytics that provides instant price, crop and livestock intelligence.

We still don’t see the emergence of widespread, agricultural IoT solutions that offer a compelling enough service for millions of farmers to adopt, across many markets. We need services that go beyond the gimmickry of crop pricing services that rely on a single source of information from one market, whereas farmers have several such markets to choose from in their area. One suspects that technology is not the constraint here, but the design and specificity of the business model, with more involvement and innovation coming from the farmers and fishermen themselves – they know the problems they need addressing better than most.

I am about to get a taste for what might be the real potential. Next week, at the Islamic Development Bank’s Annual Shareholder Meetings to be held this year in Jakarta, I will be facilitating a room full of Indonesia’s best young technology entrepreneurs at a Youth Development Seminar to see how many agricultural solutions we can come up with – payments, insurance, data, information, and anything else they care to think of (  If the findings are interesting, I will report back soon!

The Didi Chuxing investment by Apple may turn out to show how to do digital investments right and.. if successful, provide an opportunity for Apple to extend its current business model  (Photo: Jason Lee / Reuters)

The Didi Chuxing investment by Apple may turn out to show how to do digital investments right and.. if successful, provide an opportunity for Apple to extend its current business model (Photo: Jason Lee / Reuters)

Last week, Apple acquired a $1 billion stake in Didi Chuxing, the Chinese ride-hailing business. This investment will let Apple look more closely at how to serve taxi riders better, and with a partner such as Apple, it will enable Didi to see how to use mobile technology more effectively. Didi has only 1 percent of the Chinese commuting market, but since China generates 1.1 billion journeys a day, Didi’s 11 million daily rides is already substantial and the number is set to grow. China has such potential: The number of rides hailed in Beijing is 5-6x what is done in New York City.

But while the behemoths of the technology and communications industries have proven to be great at building businesses, they have generally been weaker at investing in emerging areas. IBM, AT&T, Telefonica and Vodafone have all built global businesses through carefully executed steps over decades, resulting in huge revenue growth and healthy shareholder returns. But several of the world’s major TMT players over the past few years have undertaken investments that haven’t gone right, or they have not invested where and when they should have. Impatience, in one form or other, seems often to be at the root of such failures.

There are at least three patterns around digital investment not working for impatient capital:

1.    A bridge too far
Faced with stagnation in growth because markets are saturated, TMT companies are usually looking for new areas out of their current strategic comfort zone. In an attempt to do this, some go for a bridge too far, a good illustration being Vodafone’s foray into social media when it launched “360” in 2009, a service underpinned by a homegrown social media platform to compete with the likes of Facebook, along with apps, maps and other services and a dedicated range of devices. The company overstretched into businesses, such as apps development and social media, which it wasn’t fit for competing in, which required a brand and core skills that Vodafone didn’t have, and in specific market segments where customers were already happily wedded to other offerings.  The result was a rapid demise of the investment proposition, resulting in 360 being quietly withdrawn following the fanfare at launch.

A bridge too far is a form of impatience because the company tries too hard to change its fortunes, rather than taking a more sustainable, perhaps longer, route.

2. Bet small, win big
Some TMT companies have purposely decided to do the opposite which is to be cautious and keep their hands-off by investing small in high growth potential companies. Some companies have set up “ventures” arms which invest anywhere between $10 million and $50 million in targets, kept in a standalone entity at a distance from the core business. But ventures arms are notorious for not being clear about whether the investee is a pure laboratory experiment, a possible candidate for mainstreaming or a business to be integrated in the near term. Often investments start with the right idea, but then objectives drift as time goes on. There are countless examples of such ventures, usually run through a satellite office located in a technology hub by executives who have limited access to the mother ship’s senior board. Common examples are “extension” businesses invested in areas such as health care, education, logistics, and other IoT-related opportunities.

Bet small, win big is a form of impatience because investors expect big things from small investments, and the management can come under fire for not delivering when the growth or synergies expected don’t materialise. One example of such impatience is of a major European telecom operator’s decision a few year’s ago to sell of its minority stake in China Mobile, a fast growing telco with whom there could always have been future opportunities to collaborate.

 3. Putting the devil in the dashboard
TMT players are used to managing businesses which scale first and then provide stable, predictable returns against well understood metrics. And so they love creating management “dashboards” and “enterprise performance management” tools that show where the business is headed. These tools are essential for stable businesses in predictable times, but they don’t serve well new ventures in market segments which are not yet understood, because the operating patterns are not stabilised. Too often major players impose overarching management oversight on new ventures, where the investee doesn’t get an opportunity to breathe or prosper at its own pace and pattern, and often, doesn’t have the opportunity to fail fast either. Telefonica Digital in 2011 is a good example of this, where the mother ship placed unrealistic and impractical measurements on a number of small, emerging digital businesses it acquired.

Putting the devil in the dashboard is an example of impatience as it shows how the mother company is not willing to give space for a new flower to blossom.

The Didi Chuxing investment by Apple may turn out to show how to do digital investments right:

  • Apple is investing a substantial sum, $ 1billion, but not one which bets the company – it is less than 1 percent of Apple’s cash stockpile
  • The investment represents a 1.64 percent stake in Didi, so Apple will not be trying to run the company or impose KPIs on how it measures performance
  • Apple joins experienced investors such as Tencent, Temasek and Softbank
  • Didi itself is an investor in Lyft and in OLA – other ride-share businesses – giving Apple indirect access to other ride-share opportunities
  • If successful, it might provide an opportunity for Apple to extend its current business model
Whats App is unique because it sits in between, using the internet for communication but relying on numbering and device information to authenticate the user

Whats App is unique because it sits in between, using the internet for communication but relying on numbering and device information to authenticate the user

Image: Jakraphong Photography /

Last week, WhatsApp announced encryption on all messages across their billion-plus subscribers worldwide, meaning that users can send and receive messages without worrying about who might be intercepting the content. This has caused excitement with those who support improvement to free speech, and consternation with those who worry about national security being hampered by making interception of messages harder. How this lands in countries such as India and the US will be intriguing as they have frowned upon encryption by others, such as Apple and Blackberry.

Setting that particular debate aside, what is interesting about WhatsApp is how step by step it has carved out a niche for itself with clever functionality to enrich the messaging experience like no other. In general, messaging happens either over the internet or switched through the network. WhatsApp is unique because it sits in between, using the internet for communication but relying on numbering and device information to authenticate the user. Here is why WhatsApp has created a role for itself as a provider of very specific messaging functionality: Numerous OTT players offer messaging over an internet connection. As long as the user is logged into the app, they can send and receive messages. But sending a message requires logging in, opening up to all sorts of other distractions, and selecting the messaging function.  Messages can only be sent to users who are connected to you in the social medium itself. Conclusion: Messaging is laborious and time-consuming and more relevant to people using the app for social media who then decide to message, rather than message-sending in its own right. You may want to message all sorts of people, but not be on social media with them – the sets don’t coincide.

Telcos provide messaging over the network, known as text or Short Messaging Service (SMS). SMS has been a mainstay for over a decade now despite recent stagnation as WhatsApp, BBM, Viber and other alernatives substitute it. SMS has made operators lots of money (a European mobile operator once reported that 10 percent of its gross profit came from SMS, which represented only 2 percent of revenue), but it is shocking that little has been done to enrich the service. Conclusion: SMS works but it is cumbersome and outdated, requires opening up a phone book to locate users, and does not facilitate group messaging, sending videos, sound files or photos.

WhatsApp offers distinct advantages over both OTT and telco services. Here are six key differentiators: Messaging focussed, directly addressing our need to chat without distractions, intelligent information that enriches the service, such as letting you know when a message is delivered, versus when it is actually read easily lets us create and personalise groups, is mobile-enabled and not PC- or tablet-enabled, suiting users on the move or who want to message discreetly during meetings, or gatherings (ie most of the time), you receive far less junk than via SMS or social media, as there is no easy way you can be reached on WhatsApp without someone having your number. It is free, saving users money, especially on international communication and video sharing.

Being a core messaging tool now, WhatsApp should be looked at as an essential asset in any communications provider’s armory. Until it is evident what Facebook wants to do with WhatsApp, one question remains unanswered: Why isn’t the telco industry making a play to buy it from Mr Mark Zuckerberg, or at least to partner with him in delivering a specialised WhatsApp service to their customers? Telcos could monetise WhatsApp services to enterprises due to encryption, arguably better than Facebook ever could, and eat into intra-firm, principally PC-based messaging such as IBM Sametime from which telcos make little money today. They could also enable WhatsApp to more easily phase out SMS rather than watch it die, by looking for ways in which they could at least gain some sort of subscription revenue from it, and also by working to ensure more volume substitutes to WhatsApp rather than to alternatives such as Viber.

Mr Zuckerberg paid around $19 billion for WhatsApp just over a year ago. Analysts have said it isn’t worth that much to Facebook, by a long shot. But in my view, it should be worth considerably more than that to a consortium of the biggest mobile operators in the world who could either buy it outright or pursue options to run an enhanced version of it for their customers. But therein lies the conundrum – it is only worth that much to operators because they’ve got that much sitting in invested positions in the market already. Even if the industry wants to buy, Facebook might not be interested in making a quick buck today, for the prospect of really giving operators something to worry about in a few years’ time.

pwcEvery year, I feel a sense of anti-climax when I depart from a week of buzzing around in the noisy halls of MWC at Barcelona, the world’s mobile capital. But this time, when I stepped out of an event that draws almost 100,000 visitors to run to a client dinner across town, any feelings of sadness were scotched by the urgency of how much I have to do when I get back to office: The conclusion from MWC16 is that the Internet of Things (IoT) isn’t hype and hockey sticks anymore, but a real work in progress.

As a relief from the incessant waves of hyperbole that accompanied the advents of WiFi, 3G, 4G and mobile internet, there was virtually no discussion this year of numbers for the Internet of Things. All that was clearly done and dusted in 2015.  This year, numbers talk was replaced almost completely by an industry of use cases, experimental demos and real, on-sale objects which put the IoT into everyday use.

At the GSMA’s Innovation City (renamed from years of rapid evolution as the Connected City), you could look at Tumi bags ready-equipped with tracking devices (yes, I bought one), a beautiful Jaguar SUV connected car, and an Audi equipped with numerous machine-to-machine connected devices to help track its performance and safety. There was an intriguing teddy bear which I never got to test out, and the gimmicky mobile-enabled toothbrush of last year was gone. There were more stands hosted by auto manufacturers and appliance makers and telco executives spent more time walking around and less time standing at booths showing people how a network works.

At the MWC’s prestigious Ministerial Programme, my panel this year focussed on the Internet of Things. I hosted the Global CEO of Orange, the head of ARCEP (France’s telecom regulator), senior government leaders from South Korea and Brazil and the director of Jaguar Land Rover’s Connected Car programme. What an enlightening panel this was, with a number of important messages coming out of it:

  • The IoT is here to stay and is the biggest development the industry will see this generation
  • The IoT must not be “regulated” to death, but rather must be nurtured and supported to grow and transform our society in the way that its potential promises
  • Industries as we know them (including the telecom industry) will be overhauled and transformed by the IoT and we are starting with logistics, agri, cities and health
  • Industries are colliding into each other, disrupting each other’s value chains with new services being created for hungry customers and enterprises who want more functionality, in real time, and synchronised across multiple formats and devices
  • Vision is required from policymakers and regulators along with an openness to listen, learn and experiment
  • Every industry player must be given an equal chance to play in the IoT
  • Public-private partnership has to be the way forward for complex, all-encompassing projects such as smart cities
  • Policymakers are working together across industry boundaries and borders, and some are even providing tax incentives for high growth sectors to scale quicker
  • Industries (such as the auto industry) are getting on with it: Already deep in implementing new technology that connects the car and overcoming, one by one, the cross industry obstacles that have to be overcome to do so

text_boxFurther afield in the MWC, there was ample more evidence of how things in general are moving on. Mark Zuckerberg, the CEO and founder of Facebook, spoke passionately about how he wants to see the last few billion people on earth get connected to the internet and how Facebook is investing in drones, fibre and satellites to enable this. He hosted a private dinner with top telecom CEOs to discuss how they can work together to do this.

PwC hosted its first Digital Revolution Summit (DRS), with speakers from various industries grappling with the specific problems they see and possible solutions, to implementing the IoT. DRS took place in the once distant Hall 8, now emerging as a magnetic zone at the Fira where upstart innovators and kick-ass new developers have stands popping up showing off the latest innovations. In an era where the playing field is levelled between the behemoth MNC and the unknown SME, watch out as some of the Hall 8 vanguards become global businesses which take on the internet giants in the next decade.

IoT wasn’t the only acronym on show. How could it be? No matter how much the industry transforms, it doesn’t seem to be losing its letters and numbers yet. 5G was talked of a lot, as was LPWAN, Low Powered Wide Area Networks. Both are highly relevant to the next steps in the journey. 5G will put in place network architecture that enables more harmonisation across transmission technologies which today are still distinct (such as CDMA and GSM). LPWAN will enable network operators to repurpose some of the network to run on low power, carrying bits and bytes of data only, perfect for IoT uses over huge areas. Doing so will allow networks to reach up to 7x as far as they do today, meaning that agriculture, another big candidate for IoT-enabled value, will benefit through solutions which enable farmers to track how effectively animals are grazing, control irrigation levels and monitor crop sunshine exposure. (Connected cows, on show in Hall 3 this year, may actually become a reality soon.)

All in all, a workmanlike MWC this year with less of the shiny suit stats and more of the sleeves-rolled up conversations that will no doubt continue beyond the event.  These are the conversations that will transform our business models, digitise our user experience and revolutionise how we manage our enterprises. Until one day we wake up and realise we’ve changed our world so completely that it is unrecognisable from what we had before.


The 2000's saw people moving from address book to the mobile phone to locate. Now social media is the way

The 2000′s saw people moving from address book to the mobile phone to locate. Now social media is the way

Image: Shutterstock

In the 1980s, the way to permanently locate someone was through their home address for post and fixed line for communications. Remember how mum and dad would keep a telephone book on the sideboard by the landline connection? This would usually be a dog-eared fake-leather bound volume with the letters of the alphabet running down the side as section dividers. ABC, DEF, and so on, down to WXYZ all clubbed together. Familiar entries would have addresses and numbers crossed and re-crossed out, and when all the white space on the line was finished, they would be re-entered sideways in the margin of the page. The address book was the most important reference book in the household, and took centre stage for occasions when we’d send cards such as Christmas and its cultural equivalents. Our fixed communications provider and the postal service (often the same organisation) were the gatekeepers, and as far as telephony was concerned, we paid a fairly hefty price for the privilege of being connected.

By the 2000s, our permanent locator no longer contained a physical address because most of us were no longer posting each other cards or letters, so we didn’t need to write down everyone’s address. In fact, the address book had almost disappeared completely. And for most, we didn’t record a fixed line number either, as this would change whenever people moved homes. There was a much better alternative now: The mobile phone number. Mobiles took over as the new constant because as we moved from street to street or city to city, the mobile number would remain the same (thanks also to number portability). Our mobile communications provider became the new and more reasonable gatekeeper, and we paid a keen (and not hefty) price for the privilege as there was a lot more competition in the market.

By the mid-2010s, our permanent locator no longer contains a physical address or a fixed line number; not even a mobile number. Now the permanent locator of last resort has become the social network profile. No matter where we live or work, anywhere on earth, or whether we are temporarily away from home on holiday or business, our LinkedIn profile, Facebook page or WhatsApp accounts are the surest way to reach us. We can use these methods to even reach people we know but who we haven’t spoken to in 20 years (such as old school friends), or to find people we don’t know! There isn’t a single gatekeeper any more, and the price to be reachable is virtually free, because all of this is done over the internet and the only cost involved is anything being paid for internet access.

I lost my phone last month and with it a clutch of phone numbers, the ones which were saved to my device rather than virtually. How am I retrieving lost numbers? By sending people LinkedIn or Facebook messages. Losing the numbers has therefore been irritating rather than devastating, thanks to social media.

The three phases of permanent locator we have been through in the past 30 years illustrate how the centre of gravity has shifted in the communications world from fixed to mobile to social media. But while fixed line players have conceded relevance in this matter, mobile operators don’t need to, provided they can show customers that they bring essential value to the delivery, security and enrichment of the communications experience.

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According to GSMA analysis conducted by PricewaterhouseCoopers (PwC), the Internet of Things (IoT) is forecast to create an economic impact to the 100
tune of $4.5 trillion by 2020 . That’s a mindboggling number, but thinking about how pervasive the IoT will be, it shouldn’t be surprising.  We already order taxis using apps which use our and the driver’s location, wear devices which track our healthiness and drive cars that have SIM cards embedded to help us avoid road accidents.

The IoT is reshaping how the world produces goods and services, trades and consumes them. New sub-industries are being invented (cash-on-delivery ecommerce didn’t exist five years ago, and neither did pay as you drive insurance) while others are being torn as IoT-enabled innovation enables disruption as we have never seen before.
Telecom operators regularly remind us that they built and manage the vast communications infrastructure upon which the internet operates. A task that began a century ago, without the world’s dispersed communications infrastructure miraculously connecting billions of people and machines from anywhere to anywhere with wonderful reliability (a few black spots in Mumbai, Yangon and other places excluded), billed and charged, the internet simply wouldn’t work. But one of the results of what was first called “packet” communications is that customers can access services “over the top” of a network and pay for them separately.

Hence a lot of the revenue of Google, Twitter, YouTube or Facebook is out of reach for the telcos who carry traffic to and from their sites.

Ever since data services started taking off in Europe in the early 2000s, and now in countries such as India, Indonesia and China as affordable smartphones come flooding into the market, telcos have been challenged. But despite this, telcos’ revenues continued to grow as hundreds of millions of new paying users took to mobile annually.

With IoT, the context and extent of challenge, and the scale of opportunity couldn’t be more different. Firstly, mobile operators no longer have subscriber-driven growth to rely on.  And while data services challenged telcos to manage OTT services from a few companies, the internet of things challenges them from any number of industries who can now access their customer base. Scale is manifold bigger than before: Gartner predicts there will be over 20 billion connected devices by 2020. Mobile data was about transforming communications; IoT is about transforming the economy.

Ill-equipped to deal with data, telcos cleverly maneuvered into making more money from data through network offload strategies, new marketing paradigms and tiered pricing. For IoT, telcos are again short of skills and face new types of challenges:
•    Too little fresh talent coming in from outside the telecom industry – In India, the best telco talent has been moving into the internet sector, for example high profile executive moves into Snapdeal and Flipkart
•    Leaders too telco-focussed – Finding it hard to understand the lenses of the different industries where IoT takes them, as diverse as retail to automotive. Telco executives used to managing billion dollar revenue streams can also lack the patience to let new revenues grow. Telcos in Singapore and Indonesia are beginning to think harder about patiently growing new revenues
•    Difficulty in finding common ground with partners – Telcos are used to working with network and handset players, but unused to figuring out how to work with shops, banks and taxi firms – in India, the major telcos have been absent in roles to work with fast-scaling new internet players. The intent is there, but business development meetings don’t result in solid outcomes often enough because the folks across the table don’t understand each other’s businesses.
•    Lack of IT and solution development skills – Which are critical to developing real, IoT solutions as this requires setting up solutions into an enterprise’s operating environment, implementing with delivery excellence the feed of information, background analytics and all within a secure environment.
•    Piecemeal business case approach rather than a “no regrets” view – CFOs are used to evaluating telco market propositions on the basis of a business case. The challenge is that in the nascent IoT world, some ideas will thrive but most will fail – so a portfolio view is more appropriate than a case-by-case ROI evaluation.
•    Marketing and sales too much an extrapolation of voice and data – Telcos’ sales and marketing teams are institutionalised around selling minutes and megabytes but the same brands, teams and sales channels struggle when it comes to selling services across other industries (such as health, air travel or logistics).

There are three areas that telcos need to be proactive in to build up in-house skills or find partners who can deploy the capabilities needed:
1.    Partner management – This telcos must learn to do better themselves
2.    Sales and marketing – The new skills required could be developed in-house as well as accessed through channel partners
3.    Solution development, integration and maintenance – Only a handful of telcos, such as BT, Orange or NTT have the skills to build and deliver solutions, whereas most have to work harder at creating go-to-market alliances with SI companies and hardware players.


Right now some of the world’s telcos are dabbling in IoT “adjacencies” in pursuit of new revenue growth – some are building and others are buying into new internet of things businesses, such as eHealth solutions or payments platforms.  Most of the activity is being undertaken by the largest, most advanced market players who face revenue stagnation in their established markets. But no operator is embracing the opportunity in a way that addresses the skills challenges above, for the long term. There is much to do, and given that most of the scale opportunity sits in emerging markets, it is time more of the telcos of India, China and other South East Asian countries got started.

Data monetisation to move away from telcos: this continues a theme from 2015, and predicts that new revenues in the industry generated from data service will flow more and more to data service and applications providers, and not to telecom operators

Data monetisation to move away from telcos: this continues a theme from 2015, and predicts that new revenues in the industry generated from data service will flow more and more to data service and applications providers, and not to telecom operators

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Now in its fifth year, PricewaterhouseCoopers (PwC) has published its “Five trends for Indian telecom in 2016”–a preview of what the market may expect from one of India’s most dynamic industries of late:

  1. Consolidation towards a 5+1 market: The market will settle on five private sector players, and one state-owned one. Combinations may come in the form of outright mergers, or of spectrum sharing such as recently announced by Idea and Videocon.
  2. Network experience prevails over customer experience: In other words, operators will continue to focus on providing a high quality, consistent network experience offering the speeds and coverage expected by customers.  Differentiating that experience (reference net neutrality debates) is not for India, just yet.
  3. Data monetisation to move away from telcos: This continues a theme from 2015, and predicts that new revenues in the industry generated from data service will flow more and more to data service and applications providers, and not to telecom operators.
  4. OEMs to climb the value chain: Network technology providers are expected to do more to leverage their potential in usage analytics, packet-probing and pushing content-based offerings, all in a bid to protect their challenged revenue base.
  5. More regulatory scrutiny on quality: The regulatory authorities are likely to go harder on ensuring operators keep to their commitments for providing a quality service, and doing so transparently and responsibly.

For 2016, PwC introduces a “big wish” too, dedicated this year to seeing India’s National Optical Fiber Network (NOFN) finally start to show some real, on-the-ground progress.

Have a look at the five trends for Indian telecom leaflet:  Have a look also at PwC’s brand new “5 trends in South East Asian telecoms”, which provides interesting contrast to the India predictions: by considering the trends for countries such as Malaysia, Indonesia and Singapore.

Wishing you a Happy New Year!

Mohammad Chowdhury
Mohammad Chowdhury is PwC's Telecom, Media and Technology consulting leader across Australia, SE Asia and New Zealand. Until recently he built the practice in India where he became one of the most quoted industry experts in the country. Mohammad has served as an adviser to telecom sector reform in Saudi Arabia, Zimbabwe, Ethiopia, Slovakia, Poland and Slovenia and during 2015 as national telecommunications adviser to the Government of Myanmar. Previously in his career he has conducted significant strategic roles at Vodafone and IBM. He is quoted regularly by the Financial Times, Wall Street Journal, BBC, CNBC, TV-18 and NDTV.

Mohammad has worked in 83 countries, lived in 7 and speaks 6 languages. He has a BA in Politics, Philosophy and Economics from Oxford University, an MPhil in Economics from Cambridge University, and strategy training from Harvard Business School. He was born in London, has family origins in Bangladesh, and is married with two sons.
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August 12, 2016 16:18 pm by Mashid
Smart move by uber. They can now not only expand to other markets but shall be able to focus on their driver less auto manufacturing plant in Pittsburgh.
June 06, 2016 18:06 pm by Alok Kumar
Hi, It is impossible for consumers/end-users to move away from telcos for data usages because of mobility factors. Off-course significant parts of data monetisation is with application provide but operators have their own share for providing uninterrupted data services on go. And with latest availab...
June 05, 2016 19:00 pm by Syed Hussain
Thanks for the in depth writing.
May 04, 2016 19:26 pm by Khalid
This is a very good article. People like me,who work in Telco,hear tio much buzz words about IoT,Digital etc..But,actually very liitle work is done in helping people to solve problem,which is the real need in society.
April 30, 2016 09:11 am by Mohammad
Thank you for reading!