Erlend Prestgard, CEO and co-founder at Working Group Two.
You can read more about the background and questions asked below the video in this weblog. Overall, this interview provides a nice introduction to WG2’s proposition, differentiation, and go-to-market.
A related presentation to this interview is The challenges of creating a multi sided marketplace platform for telecom enabled products by Marius Waldum, Head of Product at Working Group Two. Where Marius explains more details on the proposition to telcos and developers of WG2.
Another related presentation is Programmable Telecoms inside a Telco, Jesus Cruz Manjavacas, VAS Development Expert at PLAY. This shows a nice existence proof of SMB focused services, which could migrate into the WG2 ecosystem.
It’s still early days with WG2’s ecosystem. IdeaMart in Sri Lanka and Bangladesh show such ecosystems do work. We’ve reviewed their success at TADSummit over the years, including TADSummit Asia in 2019 and 2020.
I think the timing of WG2 is interesting. Most of the traditional telco vendors have walked away from service innovation. Its simplified core is a no-brainer for most MVNOs, private network integrators, and IoT service providers. And as an adjunct core to larger telcos who want to iterate faster and at much lower cost.
A focus on a few verticals, e.g. dentist practice communications and security (IoT) services, could create the broader existence proof western markets need. Or it could be a focus on emerging markets in Asia, with an SMB package for local market needs. I think there’s a role where the TADS community can help accelerate this experimentation phase. I’m just not quite sure how.
Where to focus the services is not clear, that’s the opportunity. And the timing is interesting as the global cloud providers move into the telco core, and telcos like Rakuten and Jio show they can take control of their core networks. The conditions are favorable for a leap from legacy ways of business. WG2 is one to watch.
Finally getting there? The journey of bringing web-scale inspired programmability, economics and delivery models to traditional mobile telco.
Working Group Two has been part of the TADS community since before its founding. WG2 offers a mobile core network built the Internet way, they give mobile operators an innovation capability, while reducing operational cost and complexity.
WG2 investors include Telenor, Digital Alpha (an investment firm with a strategic collaboration agreement with Cisco Systems), and WG2’s employees/board members.
WG2’s strategy is to make the mobile core network programmable and accessible for third parties. At the heart of their effort is building a mobile core network, delivered in a software-as-a-service model. They expose core network functionality through APIs to third parties. We have been here before, almost 2 decades ago with BT Genie / Ribbit, then Telefonica BlueVia, and wrapping up with WAC (who ‘joined forces’ with the GSMA/Apigee). So we look forward to exploring what is different this time.
Erlend brings a wealth of experience across finance, strategy, media and international telecoms. We’re going to have fun giving him a grilling ?
If you have questions for Erlend please let us know. Here are some we plan to ask:
- What made you join Werner and found Working Group Two?
- What is WG2’s core offer to telcos, and how is it architected?
- How does the WG2 business model work for third parties developers?
- The cynic in me doesn’t believe any telco-standards compliant core network when supplied by Ericsson, or Nokia, or Huawei will cost less. The sales person’s target revenue remains the same else they are out of a job. So how are you going to build a wedge into the cosy core network relationships that have held telcos back for nearly two decades? With the exceptions of SMS being uniquely mobile, and mobile internet access being a copy of the fixed telcos.
- Telcos’ culture more than anything else has blocked service innovation, how do you reduce its impact on your business?
- What’s your view on NFV, and the current fashion of containerization / cloud native in the core? I’ll throw Kubernetes into the mix as well, for anyone playing buzzword bingo.
- Looking beyond telcos. How does your offer work for alternate access providers, mobile virtual network operators, and enterprise networks running their own mobile networks (in some cases global networks)?
- What is WG2’s delivery model, direct, through channels like system integrators (e.g. Cap Gemini), through traditional suppliers?
- What’s the exit plan? Amazon, Google, Microsoft, Ericsson, Nokia, AT&T, Verizon, Accenture, IPO?
Thank you for your time Erlend, it was a fun interview. Sorry for rambling on a little. I have a question:
AQ1) You bring up an important point on the local (national) role a telco plays. Successes in telco service innovation have often created a local innovation ecosystem, e.g. Play in Poland (see yesterday’s presentation https://blog.tadsummit.com/2020/11/08/programmable-telecoms-inside-a-telco-by-jesus-cruz-manjavacas/), and IdeaMart in Sri Lanka. Do you see WG2 facilitating the creation of such local ecosystems for its telco customers?
Absolutely – I think this is at the heart of what we are doing. That said, I think traditional local ecosystem have always been limited by exactly that they are local. Part of our job is to facilitate the local ecosystem, but help accelerate them by making them more global. To make these ecosystems really vibrant you need to make both demand and supply sides as big as possible.
Thanks for a fun discussion!
Why are Working Group Two pursuing the multisided platform strategy? How are WG2 enabling the different sides of the platforms? What can be built, and how is it taken to market? What is going well, and what is proving hard?
Great question!
We have observed a couple of things:
– Subscriptions have become a commodity, and people have a limited range of user friendly and valuable products they can get from their operator.
– Operators struggle to innovate, and when they do the products don’t scale because they are built on top of a unique core network.
– People are diverse and want different things. We don’t see it as feasible for any one player to address all these opportunities and problems alone.
We believe that the act of adding a product to enhance the value of a subscription will become as natural as the act of adding apps to a smartphone.
To solve for the observations listed above we are facilitating for 3rd party developers to build valuable and user friendly products through our Developer Portal (http://developer.wgtwo.com/). We think that there are a lot of smart and creative people out there who can build a lot of interesting products if we give them the tools.
The operators on our platform get a separate interface for managing and supporting products, and a way to distribute them to their subscribers.
Kicking off a multisided marketplace platform is hard. The first problem is the classic “chicken and egg”. Matching a developer and product up with an operator may sound easy in theory, but there are multiple things to figure out, such as:
– How are products branded?
– Who provides support for products?
– Who is liable when a product doesn’t work?
– How is revenue shared?
– What is the price level and model?
– How to deal with refunds?
– How to deal with changes to a product
The first product exclusively built on our public APIs can be tested now if you have a SIM that runs on our core network. Check out http://voicebox.cc/.
3rd party developers are enabled to access events occurring in the network, send text and media message to- and from anyone, fetch audio files from recorded messages, user tokens, etc. When combining this with machine learning, voice recognition, AI and IoT you can build some cool products. Some examples are:
– Instant translation for voice and text
– Automatic time tracking of time spent on the phone with clients.
– Spam protection
– Smart home functionality
– And much more