Succeeding in e-service innovation
Over the last few years, the telecom industry has been vertically segmented or separated from other industry. Basically in the past, telecom operators do not poses proprietary technologies. And technology is already matured enough for developing profitable business in this area.
Essentially, all the telecom operators are procuring the technology from same suppliers. The winning strategy depends on technology selection, timing and service roll out, pricing, customer care, and optimum subsidy. Through such practices, a winning firm acquires the price setting capability to make profit, while compelling competitors to incur loss.
Why cannot e-service operators like Uber, pathao, e-currier or Food panda follow telecom strategy to succeed in developing profitable business?
Unluckily, there is a basic innovation issue for this kind of business. Pursed e-services should be better as well as cheaper alternative to existing products, like making food delivery better substitute to going to restaurants and eating hot dinners with friends.
In many cases, just connectivity, apps and data analytics are not sufficient to make it happen. Technology needs to be progressed further to cause strong substitution effect. Moreover, unlike telecom, some operators like Amazon or Uber are developing proprietary technologies to develop competition edge.
As a result, imitation of telecom strategy of financing and management of service roll out is not sufficient to create the secret sauce of success.