10 'Innovation Principles' for success in a disrupted telco marketplace

Taking care of a firm's biggest-spending, most-profitable customers is a rational strategy for virtually any company in any industry, and the telecom business is no exception.

But there's a downside to success. When a business model works well, there is resistance to change, and sometimes change is needed.

Analysts at Telco 2.0 point out that one way to jumpstart innovation is to focus on "unattractive" customers. By that they mean a focus on why some customers or segments have proven difficult to serve at reasonable margins, or which have not so far generated enough gross revenue.

That will not be an instinctive reaction, as competitors typically will have incentives to launch attacks at a firm's best customers, leading an incumbent to focus even more attention on the "best" customers.

On the other hand, attackers also have incentives to attack those customer segments that are not well served by incumbents. Short-haul or discount airlines have proven troublesome for incumbent airlines, for example.

The point, say analysts at Telco 2.0, is to seriously examine why a particular customer segment cannot be served at a reasonable profit, and retool the delivery system so a reasonable profit can be made.

10 'Innovation Principles' for success in a disrupted (Telco) marketplace