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• October 13, 2026

Where value is created in telecom, where it stays and where it moves next

Srijan  Sanchar Foresight                                                                        Telecom Insight Series

The Moving Locus of Value

Part 1. Value Does Not Live in a Stage

Part 2. Why the Most Shared Asset Earns the Least

Part 3. Where Value Moves Next in Indian Telecom

October 2026

Executive summary

Telecom is an industry of paradoxes. Its networks carry almost every digital service, yet operators fear becoming "dumb pipes". Its towers are simple steel structures, yet they earn steady returns for decades. Its standards are written years before products exist, yet those who write them capture some of the industry's richest rewards. This series offers one way to make sense of these patterns and to anticipate where value will move next.

Part 1 begins with the smile curve, the familiar picture in which value is high in design and branding and low in manufacturing. We argue that the curve's shape is not fixed. When several products share a capability, whether design, manufacturing or a customer relationship, value collects at that shared point. Overlaying many products produces a composite smile curve with many possible shapes. The classic smile is only one of them.

Part 2 tests this against telecom and finds that shared capability is not enough. Value is created where a gradient is still open, where performance is not yet good enough and rivals have not caught up. It is scaled by shared capability. And it is kept only where someone holds control, through ownership, licences, patents, lock-in or regulation. Basic connectivity is the most shared asset of all, but its gradient has largely closed and operators have little control over what flows across it. That resolves the paradox.

Part 3 applies the model to Indian telecom in October 2026. It identifies 6G standards, satellite-to-phone, site power and coordination across sectors as live frontiers, and argues that power and energy at telecom sites is the most overlooked of them. We publish a dated forecast to be checked in October 2028: that new value from site energy will grow faster than new value from AI deployed inside Indian networks.

These ideas build on decades of strategy research, which we acknowledge throughout. Our contribution is a synthesis, a reading of telecom through it, and forecasts that can be checked.

Part 1. Value Does Not Live in a Stage

The curve everyone knows

Around 1992, Acer's founder Stan Shih drew a picture that has shaped industrial strategy ever since. Plot the value added at each stage of bringing a product to market, from research and design, through components and assembly, to branding, distribution and service, and the line forms a smile. Value is high at the two ends and low in the middle.

The lesson most people took was simple: move upstream towards knowledge and intellectual property, or downstream towards brands and customers, and escape the low-value middle of manufacturing. Governments built industrial policies on it. Companies outsourced factories and kept design and marketing.

What the evidence says

Economists have since measured the smile using international input-output data and firm-level records. Richard Baldwin and Tadashi Ito found that, for almost all exporting sectors and countries, the value added to manufactured exports has shifted decisively from manufacturing towards services. Armando Rungi and Davide Del Prete, studying more than two million European firms, found a U-shaped relationship between a firm's position in the supply chain and the value it generates.

Yet the same literature shows the curve can change shape. Jim Huangnan Shen, Kent Deng and Sarah Tang argued in 2021 that the smile can even invert when firms in developing economies achieve high productivity in midstream stages and face low entry barriers there. If the curve can invert, its shape is not a law. It reflects how an industry is organised at a given time.

From one product to many

The smile describes the chain of a single product. Real companies, groups and ecosystems make many products, and those products often share capabilities: a common design team, a common manufacturing platform, a common brand or a common relationship with the customer. Once products share a capability, their individual curves overlap and value begins to collect at the shared point.

•      Shared design. One insight, design language or material innovation spreads across many products. The design end of the curve rises because each improvement pays off many times.

•      Shared manufacturing. A platform rich in process knowledge, tooling, automation and supplier relationships serves many products. The valley fills, and the factory becomes an engine rather than a cost centre.

•      Shared brand or market access. One trusted relationship with customers carries across many categories. Value shifts right because the relationship, not the individual product, becomes the asset.

Nine configurations

Using only three stages, design, manufacturing and branding, at least nine value shapes are possible depending on which capabilities are shared. Nine configurations of value across design, manufacturing and branding (schematic)

Configuration	Shape	What drives it
1. Common design	Value shifts left	One insight serves many products
2. Common manufacturing	Centre rises	One platform enables many possibilities
3. Common brand or market access	Value shifts right	One relationship carries across categories
4. Design plus manufacturing	Strong left to centre	Product platforms
5. Manufacturing plus brand	Strong centre to right	Market-enabled scale
6. Design plus brand	Classic smile	Manufacturing outsourced to others
7. All three common	Plateau	Integrated capability platform
8. Portfolio of products	Emergent peaks	Different products sharing different nodes
9. Deliberate shift	Peak relocated	Architecture redesigned on purpose

 

The classic smile is configuration 6. It is one outcome of one architecture, in which design and brand are kept in-house and manufacturing is outsourced. It is not the general rule. We call the landscape produced by overlaying many products the composite smile curve.

Value addition and value propagation

Traditional value-chain analysis asks how much value each stage adds. In a system of many products, a more revealing question is how far an improvement at one point propagates. A capability that serves one product adds value. A capability that serves twenty propagates it.

Value tends to concentrate where a capability combines five qualities:

•      Commonality: many products depend on it.

•      Reusability: the same capability serves product after product.

•      Accumulated learning: experience builds up there and compounds.

•      Leverage: an improvement there spreads to many outcomes.

•      Difficulty of imitation: rivals cannot easily copy it.

On this view, the strategic unit of analysis moves from the product to the shared node.

Questions any organisation can ask

1.    Which capabilities do our products, businesses or partners already share?

2.    How many outcomes depend on each shared capability, and is that number growing?

3.    Where does learning accumulate fastest?

4.    Which shared capability would be hardest for a rival to replicate?

5.    Where could we deliberately create commonality so that value begins to accumulate?

Standing on earlier work

This idea builds on a long line of strategy research. David Teece showed in 1986 that who profits from an innovation depends on who controls the complementary assets around it. Adrian Slywotzky described how value migrates from outdated business designs to new ones. Carliss Baldwin and Kim Clark showed how product architecture and modularity shape where value collects. Clayton Christensen argued that attractive profits move to wherever performance is not yet good enough. C.K. Prahalad and Gary Hamel located competitive advantage in core competencies shared across businesses.

What we add is a visual and analytical device, the composite curve, for reading where value collects across many products at once, and a vocabulary of propagation for explaining why.

Key takeaways from Part 1 •      The smile curve is real but not fixed; its shape reflects architecture. •      When products share a capability, value collects at that shared node. •      Overlaying many products gives a composite curve with many possible shapes. •      Ask not where you sit in the chain, but where commonality could make value accumulate.

 

 

Term	Meaning in this series
Smile curve	A picture of value added along a product's chain: high in design and branding, low in manufacturing
Composite smile curve	The value landscape formed by overlaying many products that share capabilities
Shared node	A capability used by many products, businesses or partners
Value propagation	How far an improvement at one node spreads across many outcomes
Gradient	The gap between what a capability can do and what users need, while rivals have not yet caught up; open when there is still room to improve and differentiate
Amplifiers	Qualities such as commonality, reuse, learning and leverage that scale value from an open gradient
Control	Ownership, licences, patents, switching costs, network effects or regulation that keep value in place
Durable plateau	A node that keeps earning after its gradient closes because of control

 

References 

Are  for all parts of the series                                                           

•      Abernathy, W. and Utterback, J. (1978). Patterns of industrial innovation. Technology Review.

•      Baldwin, C. and Clark, K. (2000). Design Rules: The Power of Modularity. MIT Press.

•      Baldwin, R. and Ito, T. (2021). The smile curve: Evolving sources of value added in manufacturing.

•      Christensen, C. and Raynor, M. (2003). The Innovator's Solution. Harvard Business School Press.

•      Foster, R. (1986). Innovation: The Attacker's Advantage. Summit Books.

•      GSMA (2026). The Mobile Economy 2026.

•      Mathew, L. (2005). Value chain analysis of telecom equipment industry: a study of co-opetitive models. IIM Bangalore.

•      Prahalad, C.K. and Hamel, G. (1990). The core competence of the corporation. Harvard Business Review.

•      Rungi, A. and Del Prete, D. (2018). The smile curve at the firm level: Where value is added along supply chains. Economics Letters.

•      Shen, J.H., Deng, K. and Tang, S. (2021). Re-evaluating the 'smile curve' in relation to outsourcing industrialization. Emerging Markets Finance and Trade.

•      Slywotzky, A. (1996). Value Migration. Harvard Business School Press.

•      Teece, D. (1986). Profiting from technological innovation. Research Policy.

•      Department of Telecommunications tower data, reported by Business Standard (2026); tele.net, Greening towers (2026); 3GPP Release 21 timeline, IEEE ComSoc Technology Blog (June 2026).