Telenor out to avoid the ‘dumb pipe’ nightmare
By Karamjit Singh February 4, 2014
- Telenor figuring out right approach for future Internet world
- Aiming to be partner of choice for global Net players, hot startups
TWO forces are driving the transition of mobile telecom operators into becoming Internet companies in the future: The eventual pervasiveness of sensors into almost all aspects of personal and work lives, or the Internet of Things (IoT) as it has come to be described as; and the strong revenue growth coming from Internet-related services.
To wit, a recent GSM Association study projecting the five-year revenue growth for telecom operators and Internet companies revealed a yearly revenue growth of 3% for the former and 6% for the latter.
With the upside clearly in the Internet space, it is no surprise that many telecom leaders are talking about the need for their companies to become more like Internet companies, as recently happened in Kuala Lumpur during the Global Malaysia Series, hosted by the Performance Management and Delivery Unit (Pemandu) of the Prime Minister’s Department.
This was a key driver behind Norwegian state-owned operator Telenor taking a stake in an online classifieds business in December 2013.
In a deal worth £145 million (RM661 million), Telenor Group and Norwegian-based Schibsted Media Group established SnT Classifieds, which will pursue online classified opportunities in selected markets in South America and Asia.
As part of the deal Telenor has become an equal partner in 701 Search with Schibsted and Singapore media group SPH. 701 Search operates and develops online classifieds in South-East Asia, including mudah.my in Malaysia.
Telenor also owns 49% in DiGi.com Bhd, the third largest mobile telco in Malaysia as measured by subscribers.
Sigve Brekke, Telenor Asia’s executive vice president, shares with Digital News Asia (DNA) the fear that lurks in the minds of all operators: “We are all struggling to be part of the Internet value chain and afraid of being a dumb pipe – that is, just being a place where content is dumped and being its carrier without being part of the content value chain.”
With most services in the future likely to be Internet based, today’s telecom providers will become Internet providers, tomorrow. The challenge is to ensure they are playing in the value-added part of the chain.
To help it find its place in this Internet-based future, the company established Telenor Digital in September, 2011 whose mission is “to shape Telenor for the future.” With Telenor adopting the tagline ‘Internet for All,’ there are no doubts about where it thinks its future lies.
Telenor Digital was behind Telenor’s acquisition in the online classifieds market, a move that signals its latest attempt to make a bet that it hopes will pay off.
Brekke says that Telenor strongly believes e-commerce will be a key part of the digital future and that, more importantly, most people will be relying on their phones to access Internet content.
Next page: 145 million reasons for global Internet companies to partner Telenor