Telcos look beyond mobile services, up digital game, say analysts

India’s telecom operators are looking beyond traditional connectivity services and strategising to provide complete digital solutions to their subscribers, either by building in-house technologies or partnering with other players, to ensure stickiness.

Analysts said digital solutions could be collaborations, much like the strategies adopted by Bharti Airtel Ltd and Vodafone Idea Ltd’s (Vi) strategies. Another way could be acquisition of stake in over-the-top (OTT) video streaming platforms and broadcasters, much like Reliance Jio Infocomm Ltd’s move.

“Jio clearly leads in monetisation of digital opportunities due to its stakes in various digital platforms, presence of a large number of apps that ensures subscriber stickiness, and an efficient business structure which demarcates core connectivity business and digital business,” JM Financial said in a research report.

It said Airtel is increasing focus on digital business, mirroring Reliance Industries Ltd (RIL), which created a subsidiary Jio Platforms Ltd for this.

Jio Platforms houses RIL’s telecom business and a slew of other digital services such as healthcare, payments, gaming, cloud, OTT content, music, among others.

Airtel on 17 February announced setting up a special committee to unlock value of its digital businesses. The committee will evaluate the rejig of subsidiaries to increase focus on digital and non-telecom businesses of the company, including music streaming app Wynk, content platform Xstream, cloud-based communication service Airtel IQ, among others.

On Wednesday, Airtel launched an advertising platform that will connect any brand to its customers. The Airtel Ads platform will enable brands to curate consent-based and safe campaigns for subscribers of the telco, it said. Airtel has more than 320 million customers across businesses—mobile, direct-to-home (DTH) and homes.

“The B2B2C (the business-to-business-to-consumer) approach followed by Bharti might be apt for it given it’s an asset-light model and ensure quicker monetisation,” JM Financial said.

The telco is also developing packages bundled with video conferencing applications, cybersecurity software and cloud platforms, either by using its existing technologies or buying new products as demand continues to evolve, Airtel’s chief product officer Adarsh Nair had told Mint. Livemint