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Successful Strategies for Convergence

Overview

Undoubtedly, this is an age of industry convergence.

The biggest difference between the current era of convergence and the past two decades is that the drivers of reform come from divergent directions. A new industry will emerge that combines communications, information, entertainment, media, even finance, retail and logistics. The telecom industry will be but one part of it, but might no longer be a driving force with marked changes largely steered by other industries that blend into the new industry mix.

Those in the telecom field must fully understand industry reforms, and go beyond the industry to consider issues from the perspective of industry convergence. Otherwise, it will be difficult to see future trends and confusion will reign.

Major players like Apple and Google show us that in the new industry convergence game, operators need to play with their inherent advantages, rebuilding a commanding position and profit points into services.

Changes from convergence

Industry transformations appear to be complex with many elements entangled, but no matter in which industry or era, the bottom line is that development must meet and cater to end users. The right direction for most new industries should:

Be greater affordability. Low cost, accessibility, and easy use of products or services are crucial.
Products and services should enhance and improve the lives of the users both at work and play.
Services should generate a more enjoyable, fuller user experience and follow the trends in entertainment, fashion and social interaction.
From the angle of the value chain, a convergent industry must encompass three elements: application, network, and terminal.

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Leading player strategies

In the future, the primary operational mode for large players will be as integrators of massive services. Google, Apple, and Microsoft are all striving to achieve this goal and so are operators.

The key to gain a bigger market share is to open the platform and gain as much partner power as possible. Yet, service integrators must have commanding positions and profit points, otherwise openness becomes a non-profit enterprise. By studying the leading players and their strategies, we possibly can draw some conclusions.

Apple's trump card

Apple's control point is terminals, which attract a large number of fans with fashionable design, high technological sophistication, and ease of use.

Google's super platform

Google has developed Android, a terminal operating system, and offers free source codes with it. This move has turned out to be quite powerful.　

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New operation direction

Strong alliances are imperative	Using inherent advantages	Extend the value chain and support partners
The first order of business is consolidation. Against the backdrop of globalization, local operators are not in a position to compete with the industry titans. Eventually, they will either turn into mere conduits or be acquired. Telecom giants must keep expanding through mergers, and control more users, thereby gaining the foundation to compete with the service titans and even become new service integrators.	Operators should fully leverage their advantages in legacy networks and large subscriber bases to press ahead with the deployment of new services and build their brand and image presence as a service integrator to terminal users. Also, they should build an open platform, utilize their long-term operational resources and experience to integrate more and better services and provide desirable services to end users.	In addition to owning a subscriber base and attracting partners, an operator should be able to provide powerful support for numerous service providers at least in the following four aspects to reinforce its core position: market expansion, application delivery and service, brand support and Billing & settlement.

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