Innovation in Traditionally Monopolistic Firms - A Telco Case Study

Abstract: The telecom industry is moving from a stable environment to a very dynamic industry where the entrance of new players and the macro economic factors like crisis have been pushing it towards commoditization. In spite of the fact that the Telco consumer base is increasing the value generation capability of this industry has been challenged in the past years. The management is well aware of the situation but due to the traditionally monopolistic nature of these organizations finds it difficult to push any radical change. The purpose of the study is to identifying those factors which contributed to the success of these firms in past and later identifying those elements which are needed for these organizations to foster an innovative culture capable of bringing the needed changes. The major objectives of the research include identifying the main reason behind the need for innovation today and factors that have been hindering the innovation process in these firms. The next step was to study the best practices outside the Telcos industry which have helped other firms to be the Innovation leaders. Finally the study identifies those strategies and best practices which are viable in the Telecom industry. It has been found that the size and political nature of these organizations makes it difficult to push ideas to reality. Therefore the first need is the need of a culture change and a separate path (apart from the traditional line management) for the escalation of ideas. Secondly the Telco industry is not able to keep pace with the innovation of its complementing industries and therefore there is a dire need make innovation a priority from exploring new revenue sources to the innovation of business models with its existing partners. In the past the industry has tried the industrial silos model by decentralizing and given complete autonomy to its major revenue generating services but now it needs to demolish these departmental silos and be open to provide services which cut across many of its existing services without thinking too much about cannibalization.