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How to secure a mobile operator partnership for your startup

A new report co-authored by the GSMA Ecosystem Accelerator programme and Match-Maker Ventures walks startups through the process of securing a partnership with a mobile operator and answers the questions that will arise along the way.

In the report, the authors said emerging market mobile operators and local startups can complement each other, as operators have reached the scale that startups lack, while startups are developing the kind of local innovation operators need.

With collaboration between startups and mobile operators on the rise in various markets, the report aims to help startups negotiate process of securing a partnership with a mobile operator. It says engaging with a mobile operator and building a partnership is a journey, and has identified four main stages of this journey.

Understanding the industry

“Understanding the current state of the mobile industry is critical when seeking a partnership with mobile operators, as it will enable you to address their specific needs and challenges,” the report says.

It highlights a handful of trends currently facing the mobile industry in emerging markets, which startups should be aware of in terms of their potential significance for their business in the context of a potential collaboration.

These trends include the rise in mobile data and smartphones, the high investment pressures on operators to maintain quality, the high cost of acquiring users, and the falling revenues from voice and SMS. Startups need to work out how their solution can address any of these issues.

Understanding your market to find the best match

Once you are familiar with the mobile industry and its jargon, the report says, the next step is understanding the mobile market in your country of operation.

“Knowing the value your business can bring to a mobile operator is critical. A robust offering will give you stronger bargaining power when a mobile operator agrees to discuss a potential collaboration. Therefore, you should understand what your business can bring to the table, as well as what you want from the partnership,” it says.

Startups should research the market, and also research individual operators.

“In your country of operation, ask your customers which operator they prefer, not only in terms of pricing, but also coverage and quality. This could help you determine which mobile operators you should engage with,” the report says. “Alternatively, conduct a quick survey of local airtime and SIM card street resellers. Reach out to people who have worked in the telecom industry and are willing to share their experience about what mobile operators have and need.”

By the end of this phase, startups should be able to identify the mobile operators that best align with their objectives. This is when it becomes time to contact key individuals in the organisation.

“A CEO is rarely the most suitable individual to contact, and while some mobile operators have appointed “internal champions” to interact with startups, most are still in the process of setting up a structured engagement mechanism,” the report says.

“Securing the introductory meeting will therefore require connecting with the point of contact who deals with the type of partnership you are seeking. The end goal is to engage with the team or individual whose KPIs would be positively affected by a collaboration with your startup. This might mean interacting with different people in the organisation.”

From this stage onward, it says building strong one-on-one relationships is vital.

“We therefore advise you to approach the engagement using a typical business development or sales model where persistence is essential,” the report says, advising startups to perform desk-based research, create buy-in through mobile operator partners, probe their networks, and attend select events to identify the right individuals.

Pitching

If you reach the pitching stage stage, it means you have secured a first meeting, which is a great achievement.

“You will now have to build trust in your solution and your team. You will need to convince the mobile operator (1) that your solution can create value for them, and (2) that you can deliver on your promise while (3) quickly identifying who the decision makers are and understanding the underlying decision-making process on the operator side,” the report says.

This is a tough ask, and the authors note that the implementation challenge is often overlooked and considered too late in the process.

“Implementation of your solution at a mobile operator will likely be fundamentally different than what you have experienced before. Mobile operators think in millions, which is also what makes them attractive partners. The more progress you make in your discussions, the more important it is to be clear on how you will deliver,” the report states.

“To be successful, you should have documents ready to share upon request. Mobile operators tend to be a lot more risk averse than startups and in general mobile operators associate startups with higher risk. You will need to change their perception that working with startups is risky and you need to establish trust in your delivery capabilities.”

The report advises that startups plan to be in it for the long run, be aware it will be a balancing act, and that “winning is all about preparation”.

“Ending this phase with a verbal commitment is good, but you should strive to have a signed commitment. This does not necessarily mean you should not move ahead without a signed agreement, but you should make a very conscious decision about your next step,” it says.

“Weigh the strength of your position. You need to ensure the mobile operator’s involvement in the collaboration is real and that resources are being allocated to the project.”

Making the collaboration work

Match-Maker Ventures’ research shows that partnering with startups was key for 45 per cent of mobile operators interviewed in emerging markets, while 58 per cent consider innovation a priority. Unfortunately, the report notes this has not yet always translated into specific processes and responsibilities for collaborations with startups.

“To ensure a successful collaboration, you should follow three basic steps: (1) set up the collaboration structure, (2) keep the lines of communication open, and (3) remain close to your stakeholders,” it says.

“You will not be able to “control” a mobile operator, but you can put the collaboration on the right track by setting up (1) joint KPIs to track progress and escalating issues when required, and (2) a steering committee of all key stakeholders that meets regularly.”

It also says having a steering committee that meets regularly is critical, especially in the first year or so.

“Communication with your partner is key. You will need to become the central point of knowledge for the collaboration and continuously expand your network. As mobile operators are huge organisations, misalignment can happen easily,” the report says.

“Teams sometimes do not communicate on a regular basis and might not all be on the same page about the collaboration. You will want all key stakeholders to agree on the objectives of the collaboration and what needs to be done to fulfil the value proposition.”

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