At a time when traditional sources of revenue no longer suffice, telecoms operators need to create a range of value-added services. Turkcell, a leading mobile phone operator in Turkey, is pursuing a strategy of opening up to the outside, working especially with startup companies.
L'Atelier: In Turkey, banks and telecoms operators have the reputation of being particularly innovative. Why is that?
Alaadin Alpay: For a long time, the margins earned by telecoms operators were large. Operators still do earn comfortable margins, but the landscape is changing, especially with the increasing power of web and OTT companies. So we have to do everything possible to differentiate ourselves and to strengthen what I would call our competitive muscles! The other aspect is that mobile devices themselves are getting better and better, and the penetration rate is constantly rising, both in mature markets and emerging countries. This means that consumers are ever more demanding; they expect us to provide them with the services they want and to enhance their digital experience.
And to speed up innovation, you decided to look outside the company?
Exactly. In order to get things moving, we set about creating a sizeable bag of innovative tools. We did this through our own R&D department, but also by collaborating with universities, companies, startup firms, and so on… We took the decision not to rely just on internal innovation. We work with a hundred or so partners, who specialise in a number of different verticals – design companies, user experience companies, etc – in order to have a large number of different approaches available.
How do you collaborate with the startup world?
By identifying those young companies that can help us to innovate if we combine our strengths. In order to identify the startups we might collaborate with, we work for example with incubation programmes in Turkey. These help us to spot the most promising startups and they also prepare them to become operational. We also participate in these development stages, helping them to grow through mentoring, for example. Once they’ve achieved a certain size, we see whether we can go into partnership with them. In the 2000s, for example, we launched one of the first incubators in the country together with Ericsson, called CreaWorld. The purpose of the centre was to help young startups to develop value-added services. These days, some of our regular partners are among those who were just starting up at that time. We chose them because we saw their development potential and believed in their ability to see a project through to implementation.
A good example as a success story from those incubation days is our partner, Done. They were a young startup at the CreaWorld, developing first examples of value added services in mobile space. Now they employ over 20 employees developing and managing a wide range of products and services from entertainment services. They have also been developing capability for user experience and now they are in a position to incubate young startups.
In Turkey how do major companies and startups work together? Aren’t startups ever afraid of being swallowed up?
It’s true that many startups are rather hesitant and still fear that corporate partners will try and steal their ideas. If they’re not patented, then there’s clearly a risk of that happening. But very often the key aspect is not so much the idea itself as the ability to carry it through. I think that for a major corporate, it’s really a question of culture, of image. What we do is, we send a message to the startups, asking them to come over with their product and we see what we can do together. We need to build a sense of trust, so that companies with whom we’ve worked will talk publicly about what Turkcell has done for them.
Apart from your R&D activities, do you also encourage company-internal innovation?
Yes, we have an online platform on which our staff can post up and exchange ideas. The best are selected for further consideration and we hold competitions to find the most promising, which then receive a prize. If possible, we implement the winning projects. If the person who came up with the idea has the necessary skills to develop the project, we let him or her go ahead. If not, we allocate the job to other people.