Telco to techco: how open ecosystems are redefining telecom business models

If there’s one word on the lips of every telco today, it’s: transformation.

As the need grows for more diversified business models, many more telcos are looking to make digital services plays to stand out from their competitors.

As we see it, this isn’t just a case of telcos asking what additional services they can add to their core offering. It’s about making a fundamental change to how they’re viewed by their customers – a move from telco to techco.

But while the transformation trend is dominating the telco industry, achieving it is far from simple. In 2022, less than a quarter of telcos said that they had successfully delivered on their digital transformation targets – a further 62% said that their transformation had delivered value for the business, but that the change had been short-lived or fallen short of its goals.

So how can telcos make the move towards being providers of digital services in a way that delivers on their targets and without investing in a risky project?

The answer might lie in open ecosystems and partnerships.

Telcos aren’t just going digital, they’re going all out

Transforming a telco into a techco might sound like a complex project. But it’s not actually all that different to what telcos are already trying to do.

You might be calling it a digital transformation, or you might be calling it a move from being a communication services provider to a digital services provider. Whatever the terminology, you don’t have to look far in the telco industry to see examples of these projects in action.

For example, one of BaseKit’s existing partners e&, one of the largest telcos in the Middle East, has been investing heavily in bringing more tech into its ecosystem via partnerships. Last year e& became a majority stakeholder in the super app Careem, which brings a range of digital services including food delivery, fintech and car hire under e&’s umbrella.

They aren’t stopping either. This year e& continued building their digital ecosystem with GoLearning, an e-learning platform that covers topics like business, languages and technology.

For small business customers in particular, this kind of broad digital ecosystem is incredibly attractive. Whether it’s an e-learning platform that helps them earn vital qualifications, or a website and e-commerce store builder that gets their products and services online, any opportunity to get more of the tools they need from a single provider is a huge win.

The path to techco is paved with partnerships

For telcos looking to make the transition to techcos, the most important question is how to bridge the gap between their current business model and the digital services they want to offer.

As we’ve seen with e& investing in Careem, one way is to buy into existing tech and integrate it into your ecosystem. This isn’t the only example either – another of BaseKit’s partners, Telefónica, bought a 20% stake in data centre company Nabiax in 2021, and has also owned the small business-focused hosting provider Acens since 2011.

But investing into and acquiring existing providers isn’t the only way. Partnerships with tech companies and white label vendors are the backbone of these kinds of ecosystems – allowing telcos to furnish small businesses with tools like website builders, accounting software, bookings systems and more, without taking the risk of building or acquiring teams to develop it themselves.

The key for telcos in particular is that to take advantage of these partnerships, they don’t have to build anything they weren’t already planning to. There’s already a trend in the telco industry towards deploying more integrated digital support service solutions to improve network capabilities, efficiency and service for customers, and those moves open up new ways to rapidly deploy digital tools as well.

For example, the BaseKit platform has many integration options, including our own BaseKit API, Plesk, cPanel, WHMCS and most recently, modern billing, sales, and automation platform, Upmind. That means it’s easy for a telco partner to plug in our white label website builder and offer it out to their small business customers. They don’t need to bring in extra resources to build new technical integrations, meaning there’s less risk in experimenting with a new product and seeing what value it returns once it’s out on the market.

Telcos have the power to offer more than digital tools

While partnering with white label providers can help telcos gather the digital tools they need to become techcos, there’s one more piece of the puzzle they need to take into account.

For small business customers, the true value in this kind of ecosystem isn’t just in the tools themselves. It’s in how smoothly they can move between each tool  –  so they can handle all the day-to-day management of their business without running into speed bumps.

That’s where open ecosystems come into play. At BaseKit, we’ve always been advocates for more open ecosystems in tech. The goal behind open tech ecosystems is simple – to increase the ways that different tech tools can speak to each other, to weave together a seamless experience for users, and to create an ecosystem that’s far more than the sum of its parts.

There’s also a philosophy of coopetition at play here. When we participate in open ecosystems with other tech vendors, we’re recognising that there will always be potential partners with tech and expertise that compliments our own.

By linking up with others and opening up our platform, we can work together to find solutions that neither party could find alone – from creating more intuitive systems for small business owners, to helping telco partners deliver greener tech.

We’re on a mission for tech democracy for small businesses – are you in?

Request a demo of our software, or get in touch to discuss what a BaseKit partnership could look like.