The Mythical Carrier-Startup Deal: Real or not?

Author: Derek Kerton, Managing Partner, Kerton Group 

@derekkerton

It used to be that changes in the services of telecom carriers needed to be followed closely mythical carrier photoby developers and entrepreneurs…with a check in about once-a-decade! Telecoms earned a reputation as the classic dinosaurs – slow to change, and resistant to any innovation that didn’t come out of their own labs. But things are quite different in the new century. Fiber, wireless, IP packetization, digital core networks, and virtualization have radically changed the structure of telco networks, and pressure from Over-The-Top (OTT) competitors has lit a fire under the telecom industry, and standing still is no longer an option.

That’s good news for startups, developers, and entrepreneurs. While going OTT or direct to customer is an easier option than ever, it’s also true that striking a carrier partnership is easier than ever. Not only have carriers learned a lot about working with smaller partners in the past 15 years, but also they are deliberately upgrading their networks to allow greater flexibility, more agility, and a better ability to integrate best-of-breed solutions from partners. One of the key agility objectives of carriers is to be able to work with more partners in a modular fashion, and avoid the vendor lock-in telecom historically endured. Carriers have seen first-hand how platforms like Android and iOS empowered the independent software community to deliver incredible apps, and they want that versatility working for them, too.

On the network side, Network Functions Virtualization (NFV), SDN, hetnets, adherence to standards, and a switch to all-IP networks is liberating carriers from a single-vendor world. And on the business side, incubators, Venture groups, and innovation outreach offices like those in Silicon Valley are helping carriers make deals that in prior years would not have been possible.

So, how do entrepreneurs, developers, and startups find and engage with a carrier? What’s the first step? For the answers, we at the Telecom Council of Silicon Valley turn to our carrier members, who represent 2.5 Billion cellular subscriber accounts worldwide. Once a year, we take the usual Dog and Pony Show, and turn it upside-down at the TC3 Summit. We put the carriers on the Hot Seat and ask their answer to these three questions:

  1. Why should entrepreneurs choose to work with you, as opposed to another carrier or OTT?
  2. How does an entrepreneur engage you? Specifics, please.
  3. What are your main areas of interest for the next 12 months of innovation partnering?

Some cynical readers might be wondering “Do carriers even make any deals with startups, or is all just talk.” Turns out, it’s not just talk, but it is a funnel like the VCs have. Each carrier will look at hundreds of potential partnerships each year, will meet with dozens, but will partner with just a handful. But multiply that across the dozens of global carriers with offices in Silicon Valley, and quite a few deals get made. At TC3, we’re going to hear some of the successes. There will be at least 12 carrier presentations featuring a case study of a successful startup partnership. The startup will join the carrier on stage, and discuss how the relationship was built – useful information for entrepreneurs hoping to reach a similar deal.

If you are interested in hearing more about what the carriers will be discussing at TC3, real, actionable information for 2016 will be revealed from over 20 global carriers at this year’s TC3, September 30 – October 1. You can also download the carrier’s wish lists for this year from the Telecom Council’s website.

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