TIP offers start-ups a new way into the telco business

With internet traffic continuing to accelerate and innovation starting to stagnate, new ideas are needed to stimulate the telco industry. For the Telecom Infra Project team, start-ups could be the answer.

There have of course been numerous examples of start-ups disrupting an industry or creating an entirely new segment. Think of WhatsApp impact on the world of messaging or Netflix on content delivery, though navigating the waters of the telco industry can be a rough ride for start-ups. Few achieve the recognition their ideas deserve, possibly to the detriment of the industry.

“If the big players would buy them [start-ups] at a time when there is a product and they acquire them not to kill the product it would be okay,” said Axel Clauberg, VP of IP End to End & Infrastructure Cloud at Deutsche Telekom and Chairman of the Board at TIP. “We saw a couple of positive examples where it happened in the past, however many good ideas just don’t make it to that stage because when people start running a company and want to get funding by approaching a venture capitalist, suggesting their market is telco, the answer is no, sorry.”

“We were routinely being approached by start-ups who had really innovative ideas, but they were running out of money really quickly,” said Aaron Bernstein, Director, Connectivity Ecosystem Programs at Facebook and a TIP Board Member. “It was impossible for them to get the attention of VCs, and it really comes down to how do they go from zero to dollars as quickly as possible. That is what led to the creation of the TIP Ecosystem Accelerator Centre programme. How do we connect VCs who are interested in infrastructure with start-ups and operators who can create the idea of coaching to get them from zero to dollars much quicker.”

The TIP Ecosystem Acceleration Centre (TEAC) programme is an initiative which looks to creative the wrongs of telco life and bring new innovation into the fray. Several of the world’s largest Telecom Service Providers are hosting TEACs in the UK (BT), Paris (Orange), Seoul (SK Telecom) and Germany (DT), with the aim of creating breakthrough technologies that reimagine telecom infrastructure. TIP is an initiative which is all about doing something different to stimulate innovation, and accessing untapped ideas in the start-ups is certainly one way to go about.

Whether it is the procurement cycle, the cut-throat nature of acquisition or simply running out of funds, gaining traction in the telco world is an incredibly difficult task for start-ups. Perhaps this is the reason the industry moves at such a sluggish pace compared to the internet players of Silicon Valley who embrace the concept of start-ups, but for a healthier ecosystem, all ideas need to be taken into account.

For the moment, the TEACs are small scale, but every idea has to start somewhere. Start-ups could be the saving grace the telco world needs to stimulate innovation and recapture lost revenues, but the ecosystem has to change to embrace them.