I spent Day 2 in the “Digital Youth” session, chaired by the effervescent Tomi Ahonen, the most enthusiastic mobilist on the planet. Tomi is almost as ubiquitous as a mobile phone and this time he had no need to glorify Habbo Hotel. Their UK manager was there in the flesh.

Yesterday I mentioned how James Enck suggested that telcos don’t have the DNA to become Telco 2.0. This premise was very much tested in today’s session in every way possible. If there’s one segment of the market that poses the greatest challenge in terms of innovation, it is the youth segment. There was some initial concern that most of us in the room were too old to talk insightfully about youth services. Certainly, the average age of a Web 2.0 CEO is supposedly 24, whilst the average age of the first panel looked to be about 44 (sorry to my associates for pointing this out).

I did ask what’ the youngest age was of anyone in their “youth services departments”, but it went unanswered. I think it was too confusing (”what’s a youth services department?”) However, during the second panel, I did note that the unabashed critique of the telco world by Moblog’s relatively youthful Alfie Dennen was considered patronising by several of the audience. I could hear their inner demons - “What’s this young geek know about our business?”

The first speaker was Norman Lewis, Orange’s Director of Technology Research. He had some very interesting comments about how children interact with technology generally. However, I could sense in his presentation a tension between his own innovative outlook about the market and the relatively conservative nature of his board. I can imagine their reactions - “Why did we hire this guy again?” Perhaps I’m being too cynical, but I did notice a large number of attendees with the word “innovation” in their job title, something new and not found in Web 2.0 companies where it’s intrinsic in the job description of most employees. I suggested to the “Head of Innovation” from T-Mobile that he was brave to take such a job title. He didn’t disagree. It is perhaps easy to mistake talking about innovation with actually being innovative and I can imagine that people with such titles, who probably are innovators, go largely ignored in operators. I hope that I’m wrong.

It is a fact that most mobile operators have not been investing much, if anything, in R&D and are, by their very nature, not innovators. Some operators don’t even bother reporting an R&D line item in their annual reports. This reminds me of a previous encounter with a “Service Creation Mastermind” in one operator who told me he was too busy to look at new services. Uh?

I don’t think there is any reason to be shy about the lack of innovation in the operator world. It is simply a historical fact, but one that needs addressing if they want to move into new growth areas. Currently, perhaps due to the framing of the whole conference as “2.0″, there is a largely unchallenged premise that operators need to adopt technological and commercial paradigms prevalent in the dot.com world. The dot.com world is actually vast, but reference is constantly made to MySpace, Google and the usual web success stories. This causes a lot of issues because these companies have such vastly different business, operational and technological models to operators that it is almost impossible to think about how to harness such models.

I will short circuit the rest of the panel discussions by saying that they mostly presented innovative web-centric ideas with mobile capabilities, none of which fall into the traditional operating model of the operators, so the issue of “business case” remained a key anxiety. Moreover, the massive elephant in the room, which did eventually get discussed in the closing brainstorm, was the huge task of cultural shift that operators would have to undertake in order to embrace dot.com methods. Oh yes, the other massive elephant was the ongoing question of whether or not current mobile devices could support the rich user experiences encountered in the Web 2.0 world.

It is too much to ask an operator to jump from where they are today to the Web 2.0 world in the ways being discussed at the conference. There probably shouldn’t be an “O2 MySpace”. However, operators do need to understand the gravity of the Web 2.0 world and the fact that the digital generation are increasingly tied to it. And where there’s a need for an umbilical cord to digital services, there is always a role for the mobile. Therefore, step one in the operator consideration of Web 2.0 is to ensure that all future services are Web 2.0 compatible or friendly (e.g. via mash-ups). This is a basic requirement to retain customers and probably to generate some revenue, but not necessarily a strategy for growth. However, the very process of ensuring Web 2.0 friendliness will ensure greater chances of hitting upon a gold streak if and when that day comes.

I do believe that there are some real opportunities for growth by getting involved in the Web 2.0 world and I will blog about these in my next post. Meanwhile, before we get totally carried away with the “death of voice and texting” nonsense, I believe that there is a lot that can still be done to make more interesting and compelling voice and messaging services. It is in this area that operators do need to adopt a more innovative approach in order to move away from the usually very long term product deployments for voice and messaging services, which includes about one year of just thinking about it and perhaps another to do a trial. These deployment cycles have to change drastically.

New voice and messaging services are going to be more risky and require a greater willingness to try things out. Some of the newer platform technologies, like SLEE and IMS, can potentially support very different development and deployment cycles. IP technologies can be utilised without jumping entirely into the unfamiliar world of Web 2.0. However, some of the Web 2.0 ideas, like launching “beta” products might need to be accommodated. Operators need to find a way to do this and I think it can be done with some serious investment and thought. It has to be done. If operators assume that a new future can be secured without taking risk, they are mistaken. No doubt, some operators will take the lead and the rest will follow, which is what they do best.