Telco strategy: moving up the value chain, are we?

Two major announcements by dutch telco incumbent KPN underline the need for strategic change in telco land, as margins on traditional services are eroded.

In a deal with its supplier ATOS Origin, KPN takes over three data centers, and expands its workplace services to small and medium enterprises. In a more significant announcement, KPN states its intention to take over IT supplier Getronics. Getronics has a large presence in maintenance and similar commodity services.

It all reminds me of the time, years ago, when I worked at a big ISP and the strategic drive was to “move up the value chain”. Our questions then were (and still should be): “which value chain?” and “which way is up?”.

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