Q&A: Telenor on digital media

Think about why you bought your very first mobile phone. Was it because it was blue? Or was it because it was a flip phone that fit nicely in your pocket? Chances are it wasn’t because it came with great photo-sharing and music streaming applications. Fast forward to 2010 and it’s all about the apps. More and more customers now put services first when evaluating their next mobile phone purchase.

Telenor’s Erlend Krogstad is working on digital media strategy within Telenor Corporate Development. He and a group of about 20 people are working to unify digital media offerings across all of Telenor’s business units, using global scale to leverage better deals with major media providers.

Q: Why is it important for Telenor to have a digital media strategy?
Erlend: The mobile business has always been communications-centric. But the new handsets that are entering the market, coupled with the availability of mobile broadband, are serving as enablers for service innovation and we have more advanced digital media services for mobile phones than ever before.

Q: Is the popularity of digital media services exploding in Telenor’s Asian markets as well?
Erlend: Definitely. The Asian markets have leap-frogged some of the development stages that we in the Nordics underwent; they don’t follow our historical patterns. The mobile phone is the information hub in many of these markets and the customers in these markets are often more aware of a phone’s capabilities.

Q: What are some of the trends that you are studying?
Erlend: We are now looking at trends in the US, as many of the new handsets enter the US market first. More specifically, we are looking at how people are using apps and what kind of apps they prefer. For example, we see that gaming companies such as Zynga and Playfish have based their entire business models on delivering games through Facebook. These are simple but addictive games that have a fundamental social element. Today we see that approximately 20 percent of all apps in apps stores are gaming-related.

Q: So when you see a trend such as gaming, how do you apply that to Telenor?
Erlend: We take a look at the implications that these trends may have in our markets, and we look at the forecast for these games in our markets. We know that in the Nordics, mobile gaming uptake has been moderate and will grow, but not massively. However, gaming in Asia is set to explode.

Q: How does Telenor prepare for the explosion of mobile gaming in Asia?
Erlend: We prepare by partnering with key stakeholders in the gaming industry and by trying to facilitate development for our local markets. Up until now we have primarily been working with the Nordics, but now we are going global and working with all the business units across Telenor.

Q: Why change to a global focus now?
Erlend: In order for us to be attractive to the best services providers within digital media, such as gaming, we need to operate on behalf of millions of customers and provide the kind of scale that is required to do business with the top digital media brands. These types of Internet services require scale when partnering, as integration with too many companies is expensive and hinders their agility.

Q: Is it only gaming that’s going global across the Telenor Group?
Erlend: No. Music is another example. More and more music services are Web-based streaming services such as Spotify or WiMP. These types of services have global ambitions and Telenor can provide them with a go-to-market model. This results in a mutually beneficial relationship where they may have access to some of our assets, such as billing, brand or customer base, on a large scale. Through these partnerships, we can also create value for our customers and enhance our brand through association with innovative, new Internet services.

Q: What are we doing with social media providers such as Facebook?
Erlend: Many of Facebook’s mobile products are widely available to our customers today, either through Facebook’s own mobile site or through manufacturers’ application stores. However, Facebook Zero (0.facebook.com) is an example of a product that requires operator integration in order to be available to customers. This is a Facebook service where Telenor could potentially benefit from a unified approach, especially in terms of integration with our core products, such as SMS and MMS.

Q: What about other services, such as e-mail? Are they no longer relevant for users?
Erlend: E-mail and other services are still relevant for Telenor as long as they are relevant for the customers. But defining services such as e-mail and SMS is no longer as clear because it’s getting all mashed up into a broader category of messaging services. What is Facebook actually? Is it a messaging service? An e-mail service? Services are merging and taking on new forms. There are new ways of communicating in new settings; for example people now use online gaming platforms to talk to each other. This is why the social element is so fundamental in all services.

Q: So everything is becoming social media?
Erlend: The social element is something that is going into all service areas, whether it’s TV, music, gaming or pure communication. The social element is fundamental in all these areas, as there seems to be a basic human need for sharing.

Telenor is adapting to the new business logic where we see our services spread through social networks such as Facebook and Twitter. The key to successfully working with these service providers is to operate as one unit and use Telenor’s scale to its advantage.