Frank Meehan, Horizons Ventures VC: Why Operators Should Follow Telefónica & AT&T Innovation Blueprint

CHETAN SHARMA MOBILE BREAKFAST SERIES PREVIEW: Frank Meehan, part of the Horizons Ventures VC team, tells us how mobile operators can stay relevant by moving innovation activities outside of the company (like Telefónica Digital), or by identifying and claiming a lucrative niche (example AT&T and its Digital Home connected home and security offer).

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While messaging traffic continues to grow, the revenue generated by mobile operators has declined significantly. So – What has changed? In a word: everything. The spread of affordable bundles, the increased popularity of group messaging apps like WhatsApp and the advance of over-the-top players (Google Apple & Co.) have transformed services – and the value chain that enables them.

Mobile operators still generate around 70 percent of the global mobile industry revenues, but how do they make sure they have an equally significant share of the profits? How do they stay relevant? And — in a software-driven world — how do they stay nimble?

Tough questions — and all the more reason to attend the Mobile Breakfast Series organized by mobile analyst and authority Chetan Sharma. The event, aptly titled Operators and OTT, (over the top), takes place on June 29 in London.

Chetan’s events — as a rule ­— offer a great opportunity to network and discuss the big picture trends that matter most. As one executive comments on the event website:  Chetan’s events are “unique” with “all the right people sitting down together to tackle the hardest problems in our industry.”

To give you a better idea of what you can expect from the event this June I catch up with Frank Meehan, part of the Horizons Ventures VC team. Frank is speaking at the London event along with James Finn, Director, Product Design, Telefónica Digital; Andreas Bernström, CEO, Rebtel; and Patrice Slupowski, VP, Digital Innovation, Orange FT Group.

Who is Frank Meehan?

frank meehanFrank Meehan is part of the Horizons Ventures VC team, based in London, San Francisco and Hong Kong. Horizons is the private investment arm of Mr. Li Ka-Shing. Frank also has a long and impressive track record in the mobile industry. He was on the board of SIRI (prior to Apple sale) and Spotify, and is currently on the boards of Trap.it, Fixmo, Tout, Summly, Tripboard and Magisto. (He also tells me he has a new startup, which he kicked off at the end of last year. As Frank puts it: “I’m going into the hot and very interesting world of educational technology.”)

Frank also founded and was the CEO of INQ Mobile, which won best handset at the premier mobile event – the Mobile World Congress – with the innovative INQ1 in Barcelona 2009. Prior to that the INQ team won best runner up with the 3 Skypephone which was developed in a far sighted partnership with Skype and Qualcomm. Frank worked for Hutchison Whampoa in many capacities since 2001, and prior to that worked for Ericsson in Sweden, Singapore and Hong Kong. He originally started as a coder and troubleshooter in Stockholm.

What must mobile operators do?

Yes, OTT players have had a hearty meal at the expense of the mobile operator, but there is still money to be made if mobile operators concentrate on what they do best.

As Frank puts it: “Going out and trying to build a social network is probably not the right thing to do, but there are some great things that operators are doing.  I particularly like the way Telefónica Digital has set up really a separate company which is designed to go after digital opportunities.  That’s the right way to do it.”

Frank also gives high marks to AT&T for going after the opportunities around connected home and home security. (Indeed, kudos to AT&T, which launched its path-breaking solution at Mobile World Congress. It’s great timing for me to reach out to Clay Owen for an interview, and while we wait for his response, check out the demo below.)

 

Facing the talent crisis

Operators should stake their turf (connected home, security, the Cloud, etc) and build their business. But, Frank warns, the biggest challenge for operators is talent. “A lot of the young and upcoming talent is going off to work for startups.”

What can operators do to stem the flow of talent to startups (that may one day be their rivals)? A lot! Follow the Telefónica Digital blueprint and give your talent freedom to innovate. “You’ve got to have incentives that compete with startups, or with the Facebooks and Googles otherwise it will become very difficult.”

When it comes to software solutions or the way they are developed, mobile operators should see these are the work of a “separate team outside of the operator standard operations.”

What awaits operators?

As a VC, Frank is convinced there is money to be made. “Operators are cash rich and it’s still a good business and they will snap up things, so certainly there’s an opportunity for investments to crystallize, particularly from a sale — then operators are very interesting.”

Overall, Frank says 2012 has been a great year from “an investment and a start-up perspective.” In his view, it’s “booming” — in part thanks to the Facebook IPO and the excitement it has generated around other companies that tap into our mobile Zeitgeist and requirement for social, sharing and connectedness. “Facebook is literally now the electricity of the Internet … and it’s a huge shift — you’re seeing the big companies like Spotify and others — and it’s just really dragging a huge start-up industry along with it, and it’s accelerating.”

London Mobile Breakfast

To get the inside track from Frank about precisely how mobile operators can build competitive advantage by doing innovation the right way, listen to the complete podcast interview [13:13] by clicking the player below.

Connect with Frank and his panel at the Mobile Breakfast in London (June 29). MobileGroove is proud to be a media partner –and you can find more about the event and how to register at mobilebreakfastseries.com .

LISTEN TO THE PODCAST HERE. [13:13]

[audio:https://s3-eu-west-1.amazonaws.com/mobilegroove/2012/05/MobileGroove_Frank-Meehan-Horizons-Ventures-VC-Mobile-Breakfast-Series_Chetan-Sharma_-5-2012.mp3]

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