20 June 2018
Major operators carry out their own innovation so they can look vendors and standards groups in the face. They need to find ‘really cool technology’, writes Alan Burkitt-Gray
Telecoms operators are on the hunt for start-ups to boost
their innovation in key areas. That’s the
consistent message from companies such as BT, Orange and TIM,
all of which want not only to ensure they play a leading role
in such areas as 5G, but also to help steer vendors to deliver
what they need.
And all are aware that the giant over-the-top (OTT)
companies are competing with them to develop new services for
the same customers.
All told similar stories about the areas they regard as
priorities – artificial intelligence (AI), security,
the internet of things (IoT) and 5G appeared in all their
lists. Softwarisation, the new and still awkward term that
encompasses software-defined networks (SDN) and network
functions virtualisation (NFV) is there too.
Most operators are looking for ways to interact with their
customers more effectively – and here Orange is
working together with Deutsche Telekom on a project to compete
with the voice-activated assistants that OTTs such as Amazon,
Apple, Google and Microsoft already have on the market.
"Our personal assistant is Djingo, for the B2B
[business-to-business] and the B2C [business-to-consumer]
market," says Luc Bretones, the executive vice president of
Orange’s Technocentre and of Orange Fab, the
French group’s unit to find and invest in
"It has been invented to be deployed across the Orange
footprint. We began work on Djingo two years ago and
that’s when it was first integrated with Orange
apps." It has natural language processing with a small speaker
in the home "but in the future you will be able to manage
Djingo in a car or with third-party devices."
And Deutsche Telekom has joined forces with Orange to adopt
Djingo, though the German operator will have its own name, says
Bretones. "The customer relationship is our precious asset," he
says. "We cannot address all their needs but it is important to
deliver the service."
Both Orange and Deutsche Telekom will need to adopt the
software for different languages across their markets and for
localised services. "It will be different for different
countries," he says. And there will be business applications.
"We have great traction with Orange Business Services to use it
as a service platform – so businesses can design and
build their own services with Orange engineers. We want to
focus 100% on our services."
Will other telcos be welcomed into the Djingo club? Bretones
won’t say, but he points to SoftAtHome, the
company that is developing middleware for services.
It’s a telco club, he says. For Djingo there
are "a few partners at first, but when you have scale and speed
you join forces with others." At the moment the focus is on
Deutsche Telekom but "the competition is global". He adds:
"SoftAtHome is a great success and we are thinking of this
It’s the bigger carriers that have the
resources to have their own innovation operation. In the old
days when the original AT&T was fondly – or not so
fondly – referred to as "Ma Bell" it ran Bell Labs,
without a doubt one of the most successful industrial
innovation machines ever, with more Nobel Prizes to its name
than most countries.
Bell Labs is now part of Nokia as the latest stage in the
process that began with the splitting up of the old Ma Bell in
1984 – and see page 60 for more of what
it’s doing now. But the 21st century version of
AT&T as well as Verizon have their own labs. Other global
telcos with their own innovation labs include NTT in Japan and
BT in the UK as well as the Orange Technocentre.
Tim Whitley is BT’s managing director of
innovation, based at the company’s Adastral Park
lab in the east of England.
"Innovation has been a thing BT has been passionate about
for 181 years," he says, laying claim again to
BT’s idea that it dates back to the
UK’s first telegraph companies.
Innovation has "got to be useful", he says. "We
don’t do blue-sky research." But the company works
with "40 or so universities" – not to pay them to do
contract research, with a collaboration between BT staff and
PhD and post-doc academics in a number of universities in the
UK, China and elsewhere. He notes 5G innovation at the
University of Surrey in the UK as well as work with the
universities of Cambridge and Bristol and with
King’s College London.
He works alongside Jean-Marc Frangos, the managing director
of global innovation scouting, normally based in Silicon
Valley, but on a visit to Adastral Park when we spoke. BT uses
Silicon Valley as a base to look for start-ups. "We cannot say
today that the world is completely centred in Silicon Valley,"
says Frangos, "but every non-US start-up comes to the US to
raise funding and they sometimes knock on our door."
BT no longer looks to invest in start-ups but Frangos likes
to form partnerships "that give us more freedom of choice", he
says. "We meet 500 start-ups a year worldwide and one in 10 we
do some sort of work with – that could be diligence
that we share back, or a proof of concept." Why? "We have some
of the world leaders and we see if what’s going on
[in BT] is world-class. We ask if anyone has something that is
In Italy, TIM is also on the lookout for start-ups, says
Mario Di Mauro, the company’s chief of strategy,
innovation and customer experience. TIM has what he calls an
open innovation paradigm. "You cannot arrive at a commercial
launch of a new technology and then wonder how to position the
service," he says.
This marks a different approach from the old days, when the
industry delivered a new technology and then people looked for
applications. Di Mauro recalls that he was around for the
launch of 2G, 3G and 4G: the next, 5G, will be different, he
TIM is working with several partners, including digital
companies, small and medium enterprises, universities, local
authorities and start-ups, he adds. "We try to anticipate what
would be the service of the future. We have several trials, not
only technology trials, but new business models. We felt the
need to deploy open innovation for the 5G programme," he
"We need to create additional value and we need to work in
new markets. How can we add value and provide new services? We
absolutely have to engage a lot of partners and new industries.
Otherwise we have to work with the old paradigm."
Whitley echoes this view that the telcos need to work with a
wide community in order to find new services. "Why do companies
continue with industrial research?" he asks. The answer: to
find "really cool technology that improves services that we can
launch into the market".
But there’s another side: a company such as BT
can take innovations to market and "compete on the global
stage". There are two reasons for this, he says. First, a telco
needs to influence the global supply chain, "by conducting
research to understand the art of the possible, particularly
with operator colleagues and the supply base, companies like
Huawei, Cisco, Ericsson and Nokia".
That helps operators – in advance of procurement
proposals – "to guide the global supply chain to
produce the things that we want and to guide international
standards". For an operator to guide the standards
organisations "you’ve got to be an active
participant in international research – you need
technology credentials", he says.
Companies also need to look for what TIM’s Di
Mauro calls "the wow effect". He says: "We need to exceed the
expectations of our customers. We need to see how the whole set
of technology is developing to find what the customers
Di Mauro believes that the industry – in Italy at
least – is emerging from what he calls "a lost
decade", when OTTs gained momentum and telecoms companies lost
value. But the new digital technologies "can give us some of
the great opportunities we lost in the last 10 years", he says.
"If we see 5G as an evolving technology, then if we just look
at throughput speed there will be no wow effect and no
incremental revenue. We lag behind the digital native
We have a problem we need to fix."
Or, as Orange’s Bretones might put it: "Djingo,
we have a problem."