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Co-opetition: No more winners and losers

July 13, 2015

Conor Carroll   

Blog contributor

Not every business deal needs to have a winner and a loser. What’s important is that all participants in the relationship create new value for their businesses.

I believe the “winner takes all” attitude in the international telecoms market is becoming extinct. More and more I am seeing each player depending on the other to be successful.

The term co-opetition refers to collaboration between business competitors in order to achieve mutually beneficially results. Of course, this isn’t a new concept, but it is becoming even more valuable to players of all sizes in the telecoms space.

As cloud, content, unified communications and managed services become new primary drivers for growth, each player in the market should be thinking about how they can use co-opetition to develop and deliver new services.

I think it is critical that co-opetition thrives and is considered viable as service providers move beyond basic voice and data.

Co-opetition goes beyond competition and cooperation to create shared value within a partnership. Even though two companies compete in some areas, they can also benefit from sharing subject matter skills, reach and technology.

The value they create in working together outstrips concerns about working with and supporting a rival. Each partner benefits from developing new revenue streams with new services, the ability to enter new markets or new geographic reach, and sometimes all three.

In the era of voice and data, co-opetition amongst service providers focused on extending geographic reach to new markets or hard-to-reach destinations. Today, expertise, skills and technology are driving new relationships where competitors rely on each other to achieve their goals in the cloud and to deliver new enterprise services.

To me, this is akin to the next evolution of the bilateral model in voice. Instead of partners swapping voice minutes it is about interoperability between multiple services and solutions.

The complexity of developing cloud, content and managed services offerings mean that it is often faster and more efficient to work with a competitor. The upfront cost of going it alone is prohibitive while monetising services without partners can be difficult. It is preferable to look at where you can work together in the long-term and see past competition in certain markets and segments.

There are a few things to consider when trying to use strategic co-opetition to your advantage without creating friction amongst industry players and long-term partners:

  • Strategic value – The value the relationship will create for each partner needs to be clearly understood with well-defined roles, responsibilities and operating parameters
  • Trust and transparency – Operating transparently with partners builds trust and removes the possibility of misunderstandings and stepping on toes
  • Understood expectations – Each partner will have different expected outcomes so these need to be set from the start
  • Divisions between business units – Business units need to have rigid divisions to ensure that competing and co-operating teams do not mix
  • Honest and regular communications – It sounds simple but communicating regularly and honestly will keep from friction emerging in the relationship
  • Mutual respect – For co-opetition to work at the most basic level there needs to be mutual respect between partners and a commitment to each other’s success

At Tata Communications, we value our partners and strive to have completely friction-free relationships across the ecosystem. We may compete with our partners in one market or service area but that does limit our opportunities to support each other’s businesses. When we have common goals we can work together and create shared value.

In today’s market, co-opetition is more than a necessary evil. It is an advantage when applied strategically and designed to support growth in the overall market as well as for individual companies. Winning big is about unearthing and capitalising on new value, new growth and new opportunities.

What are the main things a service provider should look for when choosing a partner? Conor explains in the video below