At the end of October, UKTIN invited a select group of investors to a VIP lunch. The aim? To facilitate a frank conversation about the future of connectivity, the perceptions of telecoms among the investor community and the opportunities available in our sector.
It was a fascinating and at times robust discussion which covered everything from how we define telecoms to the impact of geopolitics. Our key highlights are below:
What do we mean by telecoms?
Perhaps one of the most contentious topics of the lunch was how we can actually define our sector and how that has fluctuated over the years. There was no clear consensus agreed but a broad agreement that the telco domain - and therefore investment opportunities - can now be seen as falling into two distinct areas:
NetCo - operating infrastructure such as cable, fibre, core and access layers
SerCo - the service infrastructure that sits on top of the NetCo.
The more exciting side of this is likely to be the SerCo space but it’s clear that none of the innovation potential here can be realised without solid infrastructure, hence that area also requires investment.
Investing in telecoms can be challenging…
Telecoms is undoubtedly a complex market with main vendors dominant and this raises some well-trodden concerns for investors. The hardware side of the market is expensive and has extremely long sales cycles.
Interestingly however, a number of challenges were raised beyond the market dynamics of our sector. A number of attendees raised the fact that telco start-ups are often guilty of producing “solutions looking for problems”, a sentiment we also heard echoed in our recent commercialisation event.
It was also observed that with a lot of the R&D and start-ups coming from universities, there is often a lack of commercial and sales skills. UKTIN’s Transforming through Telecoms programme directly addresses some of this feedback, supporting start-ups to better understand the market, how their proposition fits within this and equipping them with the commercial nous to succeed.
…Yet there are undeniably opportunities
These days, telecoms is a broad church of different disciplines and specialisms that might not have traditionally been viewed as telecoms. An exciting blend of digital and deep tech, telecoms - or perhaps more accurately, future connectivity - encompasses photonics, AI, non-terrestrial and quantum.
As such, telecoms still presents a significant opportunity and on the SerCo side particularly, there is significant scope for innovation and therefore investment.
It was felt that the UK has much to offer but needs to sell itself more, recognising that telecoms is a global business. Amongst a broader discussion around suggestions for government support and intervention, there was significant enthusiasm for the investor community, innovators and possibly government to convene at regular intervals and much earlier in the innovation lifecycle. Fortunately, an innovation network like UKTIN can - and does - facilitate just such closer working.
