Becoming Faster: Product Management View on Partnering

Partnering and co-innovation are core topics in the future. Thomas Heilen, Head of Product Management Telekom Deutschland, speaks with Clemens Aumann, Detecon, about the importance in product management with regards to partnerships with OTT providers and small as well as large Carriers. Thomas Heilen explains the development and opportunities the new digital ecosystem entails for telecommunication providers and various other industries by means of use cases and new emerging technologies.

Clemens Aumann: Topics such as edge computing, low latency and 5G are being heavily promoted by Telekom. In view of these new functionalities, how important will partnering be in the future, i.e. better coordination between telecommunications providers and various industries? How important, how new will partnering and co-innovation be as future focal points in product management?

T. Heilen: Consider our corporation’s partnership with Zeiss that we announced at the Mobile World Congress in 2017. It clearly illustrates two of your points at the same time: One is the necessity of developing concrete solutions as partners, the other is the concrete benefit that is tied to the capabilities of new technologies such as 5G. Generally, for many future applications, the edge computing technology concept is decisive. This is what makes it possible to take the computing performance required for applications and operating systems out of tiny devices and to locate them instead in cloud elements forming part of low latency networks. This is a decisive factor if future devices — like wearables — are to become light, affordable, pleasant to wear with attractive form factors, and supplied with almost unlimited compute power. As far as development in partnerships goes, we will move ahead jointly with our partners to determine the borders of the respective application areas, for example.

Approaches like open developer platforms can help greatly here. These joint efforts are an enormous aid to us as we concretize our specific development for the most widely diverse concepts such as edge computing. This is the only way to define and answer concrete questions, e.g., about size, features and distribution of cloudlets (the physical storage units in mobile networks) or regarding the concrete form of latency. Connectivity is becoming increasingly indispensable for digital life, both personal and business. 5G offers the chance to create tailored configurations for various use cases; that is important for us so that we can continue to make efficient use of limited network resources as well as for customers and users because they also have differing use cases and related requirements.

When we look at 5G use cases, we currently see a broad range of new opportunities, especially in commercial and industrial demand: (Industrial) IoT and autonomous driving are only two of innumerable examples. In the consumer sector, customers will profit in the future from higher bandwidths and lower latency — these factors will make themselves noticeable in a positive sense in video consumption. We do not yet, however, see the revolutionary “new” 5G use case — will it be VR/AR or will it be something else? We certainly cannot claim to be AR/VR specialists, so we are cooperating with other companies, including startups, so that we can become better acquainted with technical enablers as well as assess the market.

How important are partnerships (or will they be) at the service level with OTT providers? Are there differing opinions about cooperation with the Big 5 (Amazon, Google, Apple, Facebook, and Microsoft) on the one hand and with the smaller, more specialized providers such as Deezer, Spotify, etc. on the other? Will we be able to see ecosystems, perhaps aimed at cooperative ventures with carriers?

We at Telekom began to reach out to partnerships very early. I would remind you of the partnership with Apple and the exclusive marketing of the iPhone 10 years ago. Or think about Spotify with whom we introduced an exclusive “volume” partnership to the market in 2012 — at a time when Spotify was far from being as well-known as it is today. We observe certain cycles here as well. The example of Spotify demonstrates that partnerships undergo changes over the course of time; an exclusive partnership that originally supported our differentiation can become a more open model with multiple providers. A number of music streaming providers participate in our service StreamOn today.

We will continue to search for partners, especially in those areas outside our core competence, including, and increasingly, in the TV content sector. You can see this today in our partnerships with Sky and Netflix. The premium concept is authoritative here as well; we look for the partners with whom we can offer to our customers the highest quality in content and experience. Major simplifications can certainly be imagined from the customers’ perspective in this respect. Today, every single partner still asks you to register as a customer—sometimes in greater, sometimes in lesser detail—and to provide your personal data. The “possession” of the customer is viewed as a key value for every company. An exciting development in this respect is seen in the current cross-industry initiatives, such as the data alliance Verimi, which are striking out on new paths. There is active competition with the single sign-on procedures used at Facebook and Google but with data security and privacy in conformity with EU law.

As far as ecosystems are concerned, I see the driving forces here at the global level, including players from Asia such as Alibaba or Tencent, and not only the competition between the EU and the USA. The next few exciting years will reveal what role telecommunication operators will play at the end of the day. Besides the significantly higher number of users in absolute figures, the scope and quality of the data will play a decisive role. WeChat offers many different functions that enable users to spend the major part of their digital lives within this single sphere. Telecommunication providers operating within the European regulatory framework have in comparison a significantly smaller treasure trove of data.