The Vault

Mapping Global Mobile Operator Innovation
White Paper / Oct 2018

The Mobile Operator Innovation Map showcases how the world’s top operators are fostering, investing in and supporting innovation. After surveying and researching top operators from across the globe, we classified operator innovation efforts into four categories. Some operators are particularly strong in research, whilst others have great internal innovation cultures. Some are just great innovation allrounders

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The Mobile Operator Innovation Map showcases how the world’s top operators are fostering, investing in and supporting innovation. After surveying and researching top operators from across the globe, we classified operator innovation efforts into four categories. Some operators are particularly strong in research, whilst others have great internal innovation cultures. Some are just great innovation allrounders. Internal Innovation Programmes: These initiatives give operator staff the ability and potential to act as innovators, driving new ideas and technologies through the operator business itself, or even starting adjacent businesses. Programmes may include competitions, secondment and sabbaticals. Programmes such as these can help to motivate and interest staff, to afford potential career opportunities, and exploit a key mobile operator resource - their own people. They can also influence the culture of an organisation, a key element of innovation “soft power” as operators change their ways of working in the digital and webscale economy. Funding power: How much financial muscle can operators exercise? Operators’ financial power in tech innovation can be expressed in four main ways: via their own corporate VC funds set up to finance new businesses, through investment in third party tech funds, in direct M&A activity to acquire companies with leadership in tech adjacencies, and via commercialisation of internal/external R&D. Wielding innovation financial power means operators can be well placed to benefit from and react to major disruptions and opportunities in core and adjacent markets. Research reach: Operator R&D takes three main forms. It can be internal, taking place in operator’s dedicated research labs. It can also take place in partnership with academic institutes, via sponsorship and co-funding. It may also take place in partnership with the research arms of large vendors. R&D can be fed into the operators’ own internal business processes and network, as well as monetised externally. It can also be leveraged to influence standards and government investment in accordance with operators’ own preferences. INTERNAL Ignite – Telenor’s internal innovation program, launched in 2016 has already seen 3 Ignite-incubated products to market — with seven more ongoing in 2018. In 2018 there are 18 teams, 2-3 employees per team, and 150-200 employees have been through Ignite in 2016-2018 Telefónica runs Innovation calls - a startup financing round-like process where projects have to pass successive stage gates in order to get access to increasing funds. It also has a programme called 10 Fridays, in which Employees can use up to 10 Fridays to develop their Innovation Call ideas. Its annual Initiative for Sustainable Innovation Investment is open for any Operating Business Unit to propose new ideas for sustainable products and services, internal projects or commercial actions. KT’s “Career path” is a programme for cutting-edge expert training in research and development. Outstanding R&D achievements receive several awards, including the “No. 1 KT Staff Award,’ CEO Award, CTO Awardand Best Award. The awards are accompanied by cash rewards. When a researcher proposes a project, targets in revenue, profit, potential subscriptions, etc. must be included. FUNDING POWER: Verizon has been investing in startups through Verizon Ventures for over 10 years. To date, there are over 45 startups in its portfolio. Sample portfolio companies include Brit + Co, iguazio, Lumina Networks, PrecisionHawk, Urban Airship, Versa Networks, and The Void. The Hive is a venture fund and co-creation studio that builds and fosters startups focused on AI-powered applications. The Fabric is a pre-Series A startup foundry designed to co-create, fund, and accelerate companies in the cloud and IoT infrastructure space. The Fabric has successfully built and launched VeloCloud (acquired by VMWare), Perspica (acquired by Cisco), Appcito (acquired by A10 Networks), IoTium, Pensa, Spanugo, KMesh, and Rosetta Cyber Sec. Telenor has invested in 70 early stage startups via its joint fund with investment firm FJ Labs. In partnership with Rocket Internet, Ooredoo powers the Asia Pacific Internet Group (APACIG), helping to incubate technology companies with proven business models and help entrepreneurs to become leaders in Asia Pacific. Deutsche Telekom Capital Partners invests in revenue generating companies in the expansion stage, ideally with an annualised revenue run rate of multiple million euros. DTCP’s current scope lies within the enterprise software and infrastructure, including Big Data, analytics, IoT, Cyber Security, Cloud & Network Infrastructure, and AI. Telefónica Ventures, a Corporate Venture Fund owned 100% by Telefónica, invests in mature, technological startups mostly from Silicon Valley and Israel’s startup ecosystems. It has participation in 24 companies investing a total of 69 million of Euros. Six exits include Amobee in 2012, Quantenna IPO in 2016, Mindmeld in 2017. Amerigo fund, managed by third parties with Telefónica co-investing, operates eight funds that operate in seven countries: Spain, Germany, Brazil, Chile, Colombia, Peru and Mexico. 185 million Euros have been invested so far in 103 startups. Orange Digital Ventures is a EUR100 million corporate Fund. The fund has made 15 investments, most of the time in Series A or B ranging from EUR500,000 to EUR3 million as a first investment. ACCELERATION & INCUBATION: Orange Fab is its seed accelerator, putting start-ups in touch with corporates and vice versa, and giving advice on funding, etc. There are 14 Fabs around the world — from San Francisco to Tokyo. Alongside Fab Orange also has a business grouping called Technocentre — which brings together marketing and design in charge of all product development for the group. DT’s hub:raum is a dedicated incubation programme that supports and invests in startups. Beside hub:raum a dedicated Business Development Team has offices in Silicon Valley, Germany and Israel scouting fields like IoT, Cyber Security, M2M, VR/AR, Automotion, Health and AI. Telenor runs Accelerate Asia — a cluster of five startup accelerators in Asian markets: Thailand, Bangladesh, Myanmar, Pakistan, Malaysia. Thailand’s Accelerate has a total valuation of $130 million, with 20 VCs invested. Telefónica’s Wayra Academies (corporate accelerator) has the structure of an open competition where anyone can apply with their project and after analysis, a certain number of them are selected, receiving acceleration services and funding. RESEARCH REACH: Internal BT’s internal research and its Innovation Hub at Adastral Park is part of its half billion pound R&D programme China Mobile Research Institute has lead on 5G research. Telekom Innovation Laboratories (T-Labs) is the R&D unit of Deutsche Telekom. It has a close partnership with the Technische Universität Berlin, and sites in Berlin, Darmstadt, Beer Sheva (T-Labs@Ben Gurion University), Budapest and Vienna. AT&T operates 5 Foundry Innovation Centres in the USA and Israel. Universities and institutes Verizon has executed over 100 projects in the last 4 years across 20+ universities. Telefónica has an innovation network of 79 Spanish and foreign universities and research. Acceleration and Incubation: These are programmes that give help to early stage companies that doesn’t involve financial investment. Scouting teams in tech hubs identify companies that offer growth opportunities in areas with a strategic match to the operator. Companies are given mentorship, networking opportunities, locations to work, and most importantly access to operator networks and customer bases for trials and soft launches. The goal is for the operator to act as a hub for tech innovation, benefitting directly or indirectly through a company’s success - for instance by usage of an operator’s APIs by a growth company. Explaining the scoring: TMN has carried out primary research, surveys and background research on the different innovation practices and investments on leading Tier One operators. Here are some examples of particularly strong leadership. TOTAL 33 TOTAL 26 TOTAL 22 TOTAL 30 TOTAL 25 TOTAL 29 TOTAL 24 TOTAL 25 TOTAL 26 USA LATAM EUROPE INDIA AUSTRALIA MIDDLE EAST JAPAN SOUTH KOREA TOTAL 28 TOTAL 25 TOTAL 30 Key Internal Innovation Programmes Funding Power Acceleration & Incubation Research Reach Verizon AT&T BT Telenor KT NTT DoCoMo Orange DT Ooredoo Reliance Jio TOTAL 26 TIM (Italy) Telefónica TelstraCHINA TOTAL 28 China Mobile MAPPING GLOBAL MOBILE OPERATOR INNOVATIONThe Mobile Network // SPONSORED BY