The telecoms sector has undergone a digital revolution since the launch of the first iPhone in 2007. This revolution has been made possible by the confluence of different microeconomic trends, in particular with the sweeping changes brought on by digital computing and communication technology. These trends have enabled the emergence of new categories of digital services that have seen a high consumer and enterprise adoption recently and with it, new streams of revenue. At the same time, carriers have seen a stagnation of revenues and profitability in their traditional core services such as voice and messaging and are being substituted by data access revenues, which come at lower margins.

It is only fitting then than the operators have turned to the digital services space as a key area that can provide the growth avenue operators need to sustain their business for the future. Operators are now investing significant amount of resource, time and capital by building proprietary digital services that most often compete with the services provided by the pure digital players. It is not clear if these investment and initiatives have yielded any significant results or returns for the operators.

Delta Partners believe that the digital opportunity exists and is feasible for the operators. Our advice however to operators is not to compete directly with the pure digital players but instead, focus on developing partnerships with the digital players. There are two ways digital players and operators can partner with each other for a win-win situation for both parties, in particular in emerging markets. Firstly, digital players can enhance their value propositions to end customers by leveraging the existing assets operators have on the ground such as distribution, network infrastructure and customers insights. Secondly, digital players and operators can develop strategic and/or equity partnerships to cover specific geographies and become the reference digital competitor in a specific product or service.

With a dedicated practice team based in San Francisco, California and with our deep telecoms expertise and close relationships with the pure digital players, we can help operators define their strategies and capture the digital opportunities. 

Our clients rely on our TMT expertise to help them navigate today’s challenges while shaping them to be the pioneers of new business models tomorrow
Daniele Pe,
Associate Partner, Head of the Digital Practice