Nazareno: Digital expansion is crucial for telcos to survive

CEBU, Philippines - For telecommunication companies to prosper and remain competitive in the increasingly changing industry, digital diversification is vital for them, a top telecom executive said.

Napoleon L. Nazareno said the “value in the telecoms industry is shifting from access to platforms to end-user applications and services,” quoting analyst Chetan Sharma.

“Thus, the opportunity for operators is to transform themselves into platforms for delivering new digital services – both their own and those of other players in the digital ecosystem. In this view, the name of the game is compelling digital content and powerful digital solutions,” said Nazareno, the president and chief executive of Philippine Long Distance Telephone Co. (PLDT), at the ongoing 11th Asian Carriers Conference in Mactan Island, Cebu.

He said the telecom giant has adopted digital diversification which, he said, is a two-pronged strategy.

Nazareno said that first, PLDT is partnering with global digital content and solutions companies.

“Second, whenever it makes sense, we are also investing in them and setting up joint ventures in ancillary businesses that add value to our core network business,” he said. “We are putting not only money but also our own innovations into these ventures.”

Nazareno pointed out that digital content and services are driving customer engagement and are improving revenues that is why they had done such innovations.

Last year, the CEO shared, PLDT invested in a global e-commerce group. “Alongside that investment, we are setting up with Rocket Internet a joint venture e-payments company that will use our award-winning Smart Money platform,” he said. Smart Communications is PLDT’s mobile subsidiary.

He said such e-payments service will help Rocket Internet’s e-commerce businesses in the Philippines where majority of consumers are “uncarded and unbanked”.

PLDT has also partnered with global video content providers such as Fox and Disney and invested in Asian video streaming firm iFlix. Smart, for its part, has also created the homegrown music service Spinnr and partnered with music content providers such as Deezer and Apple.

“The digital economy of course goes far beyond movies, music and games. It is very much about development and inclusive growth,” the official said.

In the Philippines, Nazareno said, they have rolled out digital solutions to help the government in its development work.

He added the telecom giant gave last year over 1,700 tablets with a broadband connection and a special pre-loaded mobile app. The app enabled municipal agriculture officers to calculate and report the fishing capacity of boats of small fishermen in the country. — Carlo S. Lorenciana (FREEMAN)