Pakistans Missed FDI Opportunity, Telco + E-com Dreams…

What do Facebook, Silver Lake Partners, Vista Equity Partners, General Atlantic, KKR and Mubadala have in common? They are all partners with Jio in India. This means a total of $12.96 billion has now been promised from seven investors in exchange for a stake of just over 21 per cent. While Jio is building its e-commerce engine and monetising its telecom asset from strength the strength, we cant even get our basic Spectrum licensing items sorted out in Pakistan. Besides that we have no real #DigitalFirst leadership, we have digital thaikaydars like flavour of the government kind. More on that here.

Whilst every one is in lock down the natural outlook should be one that promotes government + regulator + Telcos to use access to internet and tele-density as positive levers and promote marketplace enablement. Save for Ali-Baba Daraz tie up which is also experimental in the way that traction is visible and the brand issues that plague Daraz, no Telco has taken the lead to follow Jio like path.

There are many paths to monetisation, let’s look at the India JioMart model.
They can initiate an order by texting to a Whatsapp number(Same Whatsapp that is owned by Facebook and that has 400M customers in India), which prompts a link that opens a mini store on the browser, allowing them to pick a range of grocery products including toothpaste, snacks, tea and coffee, rice, and cooking oil. This was pre-Jio/FB deal, the integration may grow and likely will.

Once an order has been placed, which currently does not include a way to pay digitally, JioMart automatically assigns a neighbourhood store to them and sends an invoice through WhatsApp. More than 1,200 neighbourhood stores are engaging in the pilot program. Do you see the potential, converting all local retail to be partners and fulfilling orders B2B2C.

Whilst the news of Tajir and Bazaar and other startups who want to disrupt the Kiryana store space(by trying to help them do their own b2b procurement, their pre seed is pittance at 3.1M Dollars compared to the Bn$ plays possible), it takes one strategic alliance with the likes of a Whatsapp/FB Store front to up-end every one else given the captive user base.Not to take away from the domestic raises, they build continued confidence and will lead to more plays in logistics and fulfilment, thereby creating on ground jobs.

Think dark stores operated via local operators and a unified order taking system via Telcos. One may not have to follow the same path in every locality but the captive user base is an advantage that Telcos + WhatsApp both have, how people our companies end up using them is their call.

So what are our Telcos thinking? Likely nothing. I think they continue to be happy with making money on data and voice. No serious value added items are visible. If you count micro finance and peer to peer payments then yes. But imagine if you are a Telco and you can enable 100s of thousands of business in the current scenario, what else would you rather be doing? But I doubt any commercial activities are happening in that space. From what I can see on MOUs and PR notes abound, is oneupmanship of counting product/feature updates.

Let me save you some time. Most are patting them selves on the back to have launched WFH Data Bundles, they are also selling Golden Numbers, Some have agri weather and rural lifestyle services, in using for a week, see a missed opportunity given how cumbersome the services are. Last but not least, one is fixated on how super its card recharge is and continues to market the shi* out of that one idea. Ones busy TikTokking till you drop, or selling bundles to use its most popular bandwidth consumption tool. You can guess which one. Visit all 4 sites and you will see this data/Telco first strategy.

With all whats going on by just visiting their site, the maturity of thought is evident and as it the thought process. Jazz had a DFS Play and a separate CEO, but that didn’t last too long as there was a leadership change at the top. Telenor thinks like a Telco and now more so than ever the Bank and Telco seem like to 2 different strategic plays. U Bank seems to be opening location after location. I think, there the divide and use of data between Telco and Bank is perhaps the deepest. Zong doesn’t compete with Chinese companies as a matter of China first policy so it seems there is nothing new coming from that front just yet. Whilst Alibaba is aligned with Telenor this is a strange mix.

The core issue, that no one will talk about is one of personalities, these Telcos are led by Telco first, forward thinking executives, who have life time tenure(till they don’t), theres nothing bad about it, but they are the Steve Jobs to their own employees, sadly. Hero worship at an all time high and no one challenges the status quo, the amount of money Ive seen wasted since 2014 on CEO Led ideas that teams said, its a brilliant idea sir = equal to Millions of $ that if they had invested in local startups would have given better outcomes. Thus all this FX potential, market place innovation, last mile data , multi party integrations just don’t make sense. I feel, because the lense is wrong. It likely wont, given they even treat the micro finance arms as license vehicles vs fully inter operable command centers that one can use to catapult the payments play + e-commerce play. They are still doing better than traditional Banks, but that tells you how badly the Banking items are lacking.

The employees at Telcos, like the FMCG folks are ‘brand’ people, most of these folks have one or 2 products these 3-4 former Telcos launched, every ones resting on their former laurels. The smart ones left and joined Banks and are trying to make peeer to peer payments sound like gods work.

No net new innovation is happening and every ones out to dick-swing their own peers by being territorial. Most telco and Telco Digital Bank convos start with “yeh hamaray baray puranay xyz sahab/sahiba hain” I am not suggesting we replace the old, I’m merely suggesting what no one else will say due to either fear of retaliation from the companies or their executives. The Owners/Principal share holders of these telcos need to ask, ” is it time for change/infusion of top talent?” When you continue to rely on incumbent leadership, do you think they will ever let any one else flourish, its a human instinct, for all the talk about leadership at all these companies, there is no real number 2, there is no real commercial leadership. Titles and roles yes, depth of talent, likely not.

It is largely due to human nature and not due to personal insecurities. But it is evident across organisations in Pakistan at the Top. Vacuum, even for family owned businesses if the Patron lucked out and has smart kids then it works out, else the hired help is always just that, hired help taking direction from dimwit second/third generation. Sadly our telcos/micro finance Banks and even traditional Banks are operating like saith shops, contrary to India, where at JIO the owner is where the buck stops, there is clarity of vision and massive enabled leadership teams who are duly qualified to lead the charge, they aren’t afraid of which sahib from which Telco can replace them. They are bending the boundaries vs our guys who a building fences to retain what they have.

Its also cultural, the Telenor Principals based on their own pedigree (Nordic) reward loyalty and serious level of non-confrontational personalities. Zong, is all about China first so what ever is prescribed from Mothership comes across is what happens. Ufone is getting more and more inconsequential till it gets prioritised and packaged and sold to one of the three or may be a new entrant. Jazz is interesting , with a mix plate of ownership roots and talent and a CIS + Regional focus beyond PK + Bangla they have made seriously bold bets that have failed. So likely in retreat mode especially during market contraction times by focusing on Telco that has worked for them always.

For starters we should encourage the Japanese example that I read about a few days ago at these companies.“Most people want to become wealthy so they can consume social status. Japanese employers believe this is inefficient, and simply award social status directly.” The best employees aren’t compensated with large option grants or eye popping bonuses — they’re simply anointed as “princes”, given their pick of projects to work on, receive plum assignments, and get their status acknowledged (in ways great and small) by the other employees.” If we did this, we would unlock so much more value than we already have.

It does help to understand whats going around us to then try and diagnose how to solve for it. Jio has an other weapon that I have written about in the past, a feature phone KaiOS Enabled with a voice first strategy. Once they conquer the 400M addressable population size of Indian WhatsApp users/ala Facebook, they will bring on a blended voice based experience to the rest of India through voice. We have 89M non smart phone users that if these Telco start thinking about can offer a host of life altering and revenue generating possibilities for both parties. We barely have the smart phone market addressed let alone the feature-phone migration ready one.

It’s not very hard, given their scale, the Telcos can bring in global partners to do what seems so obvious in India, which btw is also freaking out Amazon, Walmart and all the others who paid Billions in premium to get into the online commerce space. The Telcos in Pakistan have a rare opportunity to be the largest consumption, demand and distribution channel all in one. The only question they should ask them selves is, how long are they happy to only be the data pipe provider to Youtube(highest consumption of data in the country by some measures) or TikTok without owning others pieces of the pie. Sadly in terms of economic impact, all the data they sell, enables content consumption, which enables monetisation, which results in indirect-fx losses via advertising channels to Google and TikTok and even FB. In the absence of locally compelling propositions or deeper tie-ins with international vendors they continue to enable the successes of every one besides their own true potential. The Telcos perfectly manicured PR releases makes one think that they are dreaming big. But it seems like every ones just day dreaming.

“One man’s daydreaming is another man’s day.” – Terri Guillemets

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