What should a telco really do (appear.in)?

For the last 18 months, appear.in has operated a nice WebRTC video-chat service, there are plenty of technical reviews and as one of the many P2P video chat services. The service works well as they’ve spent considerable time ironing out bugs, but I’d like to focus on the “why” piece.

appear.in is a small group within Telenor, a somewhat traditional telco. Not a titan amongst telcos, nonetheless Telenor’s USD $15b in revenues does buy you a lot of Pinnekjøtt and Kjøttkaker. appear.in lives within Telenor Digital, a separate operating unit with $100m in revenue, whose portfolio consists of new and emerging services.

I spoke with Svein Willassen, who has the great title of head of appear.in, about why Telenor is funding appear.in. His answers should be guideline for other telco types to follow.

Telenor is one of the lucky ones, who as a fixed line operator, saw the big move to mobile and in a heroic move transformed themselves into a worldwide mobile operator (Jon Fredrik Baksaas, Telenor’s CEO is as well the President of the GSMA). They recognized that borders were different in this new connected world and hence they have mobile properties throughout the world (helped no doubt by the fact that Norway isn’t all that big).

Svein had some interesting bullets I’d like to share:

1. Get into production: Making demos that never get to a production (and serve only to amuse board members) isn’t a path to product innovation.
2. Be aware, the world is changing: Telenor’s management foresaw the transformation to mobile and now sees it underway to Internet-based Communciations, where the notion of wired or wireless is nearly irrelevant. Revenue or not, Telenor needed to figure out what this Internet communications would be and simply being a casual observer wasn’t the path to success.
3. Leave the old behind: Making things easier has been the key to all things on the Internet and dragging 1970 era telco ideas into this modern space is not the answer, you need to start new, a clean slate.
4. Organization: People who understand this new space are equally important, so you have to find them, entice them to join the company and allow them to be successful (and don’t overly annoy them with the machinery).
5. Partner: Cooperating with a new set of partners may be important to this success and understanding this new ecosystem and how it function is important.

appear.in has 14 employees, not a lot but about what most start-ups have. They continue to enhance the service (which is free) as they figure out API’s and what mash ups make sense. Can it generate revenue? Who knows for the moment, but that’s not the primary motivation., real life learning is more important.

Telenor is unique in the construct of their approach to new markets. The nearest contemporary would be Telefonica Digital, who too has a history experimenting with new concepts. This innovation comes as at price of a willingness to accept change and if it doesn’t work out the fortitude to shut it down. It’s a risk profile large businesses normally don’t possess.

While telcos aren’t in immediate danger of going out of business, we no longer expect them to do anything bold or new and hence their brand loses relevance over time. Telenor Digital’s model would seem one that many operators around the world might well adapt. The challenges have nearly nothing to do technology, but everything to do with people and organization.