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Asian Telcos are Leading Global Innovation Investment

While most telecom service providers across the globe continue to invest in software-defined networking and open source software, a few are now investing in the new wave of technologies. In particular, technology leadership is a key component in China's strategic plan to stimulate new economic growth.

In its latest benchmarking study to identify the leaders and laggards in telecom service provider innovation, ABI Research has concluded that Asian telcos are the recognized technology trailblazers, followed by U.S. tier-one service providers, AT&T and Verizon.

5G Wireless Market Development

However, European telcos are perceived as laggards in the realm of telco innovation, with DT, Orange, Telefonica and Vodafone distant followers of China Mobile, NTT Docomo, Softbank and KDDI -- which are collectively ramping up their efforts to foster technology-empowered innovation.

ABI Research has assessed patent portfolios, standards contributions, open source involvement, acquisitions, investments and R&D spend to accurately benchmark technology innovation efforts for a list of top-20 telecom network operators worldwide.

"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 webscale companies," said Dimitris Mavrakis, research director at ABI Research.

At the same time, Asian telcos -- NTT Docomo and China Mobile, as an example -- 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.

Furthermore, the two leading Asian telcos are ramping up their efforts to develop, acquire and invest in UnTelco areas. ABI Research refers to 'UnTelco' as business opportunities beyond connectivity -- where telcos aim to address enterprise verticals and become much more than simple communication providers.

For example, 20 percent of NTT Docomo's recent patent holdings are in the non-connectivity domain, and China Mobile is ramping up its efforts to acquire UnTelco patents: more than 35 percent of its recent patent acquisitions are in the non-connectivity domain. In contrast, European telcos meander around 10 percent.

Outlook for New UnTelco and 5G Investments

According to the ABI assessment, 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.

ABI analysts believe that European telcos should invest more efforts to build up expertise internally and become innovation hubs, rather than living under the shadow of their traditional telecom technology vendor wings.

UnTelco business models must be bulletproofed today, long before 5G is ubiquitous, and this will give a massive competitive boost to those telecom service providers who choose to act fast.

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