European operators have been dubbed as the losers in innovation compared to their counterparts in Asia and the United States by an analyst firm.
A new report by ABI research assessed patent portfolios, standards contributions, involvement in open source projects, takeovers, investment and expenditure in research and development.
The findings will make grim reading for European operators with Deutsche Telekom, Orange, Telefónica and Vodafone, despite a recent slew of 5G trials, dubbed “distant followers” of China Mobile, NTT Docomo, Softbank and KDDI, which it said was ramping up its efforts to innovate further.
[Read more: 5G business cases don’t exist, says BT Group CEO, in grim assessment of tech]
Dimitris Mavrakis, Research Director at ABI Research, said: “Although many telcos complain that they find it difficult to foster innovation internally, our Telco Innovation Benchmark Study indicates that they are actually spending a minimum effort compared to vendors and web-scale companies.
“At the same time, Asian telcos – namely NTT DoCoMo and China Mobile – have the highest scores across the board, indicating they are investing for the long-term and understand that 5G will require expertise outside their traditional connectivity domain.”
The report highlighted work by these two Asian telcos to develop and invest in traditional non-telco areas, dubbed by ABI as “UnTelco” areas, specifically in enterprise and shifting beyond traditional connectivity.
It said a fifth of NTT DoCoMo and 35 percent of China Mobile’s recent patent filings are in the non-connectivity domain. By comparison, it said European telcos were only devoting around 10 percent of their filings to this area.
Mavrakis added: “UnTelco expertise will become vital as 5G is deployed, and failure to become an innovation leader is equal to becoming, at best, a spectator of Asian and U.S. leaders and, at worst, prey to disruptors among web-scale companies and technology suppliers.
“European telcos should invest more efforts to build up expertise internally and become innovation hubs, rather than living under the shadow of their technology partners’ wings.
“UnTelco business models must be bulletproofed today, long before 5G is ubiquitous, and this will give a massive competitive boost to telcos who choose to act fast.”
In contrast to the ABI Research report, Orange was recently voted the world’s 19th most innovative company by Boston Consulting Group.