Comviva NewsLetter The Futurist - September Edition, 2019 | Page 18

DIGITAL DISRUPTION
SEPTEMBER 2019
an advantage (especially when its
activated using the targeted approaches
outlined above), the total cost of customer
acquisition can still be substantial. It is
critical for telcos to bring in risk capital
(Venture Capital or Private Equity) to help
fund this. This risk capital is best suited for
financing such ventures with high
uncertainty in outcomes. It also creates
the option for the telco to hold a minority
stake in the digital services company so
that the losses due to customer
acquisition costs don’t have to be
consolidated with the main P&L. Finally,
these investors bring valuable
perspectives from their experience with
digital natives, which can help balance the
traditional telco thinking in governance of
the digital services venture(s).
Using these simple learnings, a telco can today spawn a new digital ecosystem, use both
its online and offline assets to drive adoption of the new digital services, add a range of
new services using partnerships with best-in-class players, and bring in external investors
for both money and perspective. Each of the services provided will have its own revenue
model, but the largest source of revenue and profits in such eco-systems around the world
is advertising. The sophisticated targeted marketing capability discussed above can be
deployed for other brands, running true “performance marketing” campaigns, and this is
most likely the primary source of monetization. If executed properly, and with a bit of good
fortune, the market valuation of the digital ecosystem, can soon surpass the value of the telco!
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