TM Forum - Telecom Must Parner and Expand to Grow

TM Forum Chairman and CEO, Keith Willetts, kicked of the group’s Management World conference in Nice, France this week with a reminder that the organization must continue to look outside telecom if it wants to keep growing.

The TM Forum has grown 25 percent each of the 10 years Willetts has been in charge. He has had plenty of help along the way and together he and the forum have grown its membership to approximately 700. It also has expanded into other market segments. Once known as the Network Management Forum, the group has since acquired and begun integrating the billing forums known as IPDR.org and the Global Billing Association. And in just the last two years, the forum has attracted approximately 17 cable providers and formed a cable interest group.

This week, the forum took a step in a new, but not surprising direction by registering the Ogilvy Group advertising agency as a member. It also featured an executive from Paramount Studios as a keynote speaker, a sign of its intent and need to reach out to content players as partners for the future.

“The value chain is an important revelation for telecom,” Willetts said. “We have always had a one-sided business model where the telco delivers services and end user pays the bill. That’s a great business, but it is changing and it is no longer sustainable on its own. That’s why telecom has to learn how to partner.”

Willetts said the organization can’t focus simply on telecom anymore if it expects to achieve its anywhere, anytime, any device vision. “Services are no longer just communication services. End-to-end, content-based services and advertising-based services start with the content provider and end on the device, and telecom’s role is to provide the end-to-end service quality,” he said.

Willetts said that the industry has woken up to the emergence of the two-sided business models of companies such as Google that rely on advertising and that all the talk over the last 10 years about the need to transform has finally resulted in action. He cited Telstra and Telecom New Zealand, whose CEOs followed Willetts as keynote speakers, as two companies engaged in large-scale business transformation projects.

He then pointed out that the large-scale transformation, while risky, is the right approach. “You can’t transform slowly; that’s a good way of dying,” Willetts said. “On the other hand, it is very high risk and if you transform and get it wrong or if you don’t transform at all, you also die.”

He said the forum’s mission over the next few years is to help the industry go through that transformation. Perhaps by doing so, the forum can help the industry get over what he calls its hangdog feeling and self-flagellation and to begin to see its worth to advertisers as the pinnacle of high tech that it is.

There is about $250 billion in potential revenue at stake in the advertising market, Willetts said. And if Western markets are running out of steam in terms of growth they should be looking for things to run on top of the network. That is where partnerships with content companies come into play.

“The telecom industry is just massive. That’s why it needs to change. It can be the vehicle through which existing revenue for advertising can flow if it gets this right. There is a one-time opportunity to transform from a communications play to a digital commerce play over the next few years,” Willetts said. .

There also is opportunity in staying true to its nature as a network provider, Willetts said. “I think being a pipe provider is perfectly fine. Service providers can be the digital Fed-Ex. That’s their core competency, but there is more that telecom could be doing under that guise such as security and authentication,” he said. “It would mean they would be less visible as a brand, but some telecom companies are already splitting their retail and infrastructure base in two. And we will see that trend continue.”