Telefónica’s Carlos Domingo provided an interesting glimpse of the corporate navel-gazing underway at one of the largest fixed-line and mobile telecommunications companies in the world.
The giant Spanish giant isn’t renowned – amongst its customers, anyway – for being at the cutting edge of innovation.
But Domingo, Telefónica’s director of internet & multimedia and director of its R&D center, showed that it is grasping the nettle of change required if the challenges facing itself and the industry generally are to be met.
Speaking at the HiT World Innovation Summit in Barcelona, he pointed to declining revenue growth in traditional broadband and mobile markets and the strong competition for the new revenue sources that are emerging.
Innovation is the key to meeting this challenge, he said, but it means that companies like Telefónica have to change their mindset and innovate differently.
|Carlos Domingo, Telefónica’s director of internet & multimedia|
"The telecoms industry will have to reinvent itself in the face of the challenges ahead," he said.
Until the liberalisation of the telecoms market in 1997, Telefónica was the only telephone operator in Spain and still holds a dominant position.
But the incumbent has faced increasing competition in its domestic market – both in fixed and wireless.
Aside from market changes, Domingo said the evolving telecom ecosystem had created the need for a different approach to innovation.
He highlighted shorter time-to-market and development cycles, the need for permanent betas and the emergence of global markets, but with finer segmentation.
The end result is that companies have to be able to anticipate the moves of competitors while coming up with their own innovative strategies.
"We have to think more as a poker player than a chess player," he said.
Transparency is a big part of this, according to Domingo, who outlined what he described as five "paths to openness".
These cover the consumer, employees, the network, devices and innovation.
The advent of social networking, where people reveal the minutiae of their lives on the likes of Tweeter and Facebook, is one such example.
"The closed way of communicating to customers is something that they do not want because they expect to be treated the same way as they are in other parts of their lives," he said.
"If you’re no longer speaking your customers’ language, if you no longer live in their world, the disconnect will be costly."
As well as the need for transparency over tariffs, Domingo also spoke about how critical it is to have open tools like APIs and SDKs for developers.
He said that telcos have "unique and valuable" assets that could potentially be mashed up with others.
Domingo acknowledged it wasn’t always easy for developers to approach Telefónica with ideas, but he added that they can always email him directly.
A refreshing approach and timely presentation – how that translates through a giant organisation like Telefónica will be interesting to see.