The start-up arms of Orange, Deutsche Telekom, Telefónica and Singtel are joining forces to offer select entrepreneurs access to their collective mobile customer base of over one billion people across four continents.
The plan to bridge the start-up ecosystems across Southeast Asia, Africa, Europe, Latin America and the Middle East, announced September 9 at the DLD Tel Aviv conference, is a bid by the operators to be as attractive to entrepreneurs as working with Silicon Valley tech giants such as Facebook, Google and Apple.
Building a bridge between the programs for entrepreneurs at the four telecom companies “allows us to have a harmonized way of working with start-ups that will help them to scale globally,” says Mari-Noëlle Jégo-Laveissière, Orange’s vice-president of innovation, marketing and technologies.
There is a big benefit to the carriers as well.
“Operators are facing double competition,” she says. “We have local competition with new entrants and we are facing worldwide competition. What is at stake is the position of the operators in the value chain. In order to ensure the position of the operators we have to make it easier for the start-ups to work with us.”
Telcos’ Start-Up Support
Orange’s Fab start-up program has so far launched in 10 countries in Europe, Africa, the USA, the Middle East and Asia and has so far worked with 107 start-ups. The Orange Group has said it aims to support 500 start-ups across the world by 2020 through commercial partnerships or joint ventures, via Orange Digital Ventures, its investment fund for early age start-ups.
Spain’s Telefónica has already invested in a portfolio of over 500 start-ups worldwide. Its start-up initiatives include Wayra, Think Big, Talentum, crowdworking spaces, Telefónica Ventures, Amerigo and the Communication Innovation (CIP) platform, a partnership with venture firm Coral Group which aims to form a $1 billion investment platform in disruptive next generation networking, Big Data, machine learning and Internet of Things technologies.
Singapore’s Singtel Group has launched Innov8, a venture capital fund with offices in Singapore, Silicon Valley, Tel Aviv and Beijing. The Singtel Group also takes part in start-up support and funding initiatives across Southeast Asia.
Germany’s Deutsche Telekom’s hub:raum start-up program targets Western Europe, the CEE region and Israel, offering seed investment, incubation and acceleration.
Telcos have tried—and failed—to form global partnerships in the past. For example, 24 mobile network operators, representing some three billion customers, formed the Wholesale Applications Community (WAC) in 2010 to avoid fragmenting the apps market and to give developers one point of entry to all the members’ network APIs.
The initiative failed because although developers could create a WAC app that would work on any operator’s network, they had to negotiate individual deals with individual carriers to gain access to the APIs and then work out a revenue sharing model with each.
But much has changed since WAC was launched five years ago and operators, like multinationals in most sectors, are increasingly acknowledging that they have to bring innovation in from the outside in order to stay competitive. “The big transformations we are facing are shaking us but also helping us to move forward,” says Jégo-Laveissière.
Orange is progressively changing the way it works, she says, in order to “co-innovate” with start-ups. For example, during Orange’s the first cohort MyBee, a start-up that offers a contactless payment solution for event planners, signed a contract with Orange Event Solutions in France. The collaboration allows the branch of Orange that organizes conferences in France to improve its own offer while allowing MyBee access to Orange’s large portfolio of clients.
And Afrimarket, a mobile remittance “cash for goods” service which allows migrants to send funds to specific point of sales where they can be redeemed for specified goods or services such as food, medicine or tuition fees, was integrated into Orange Money Services in Africa.
But Orange has not yet rolled out any start-up’s technology globally.
Telcos need to be sure of a product before introducing it to millions—or in the case of the new alliance—over a billion customers, says Jégo-Laveissière. “We need to see how we can scale things and when we can scale them.”