WINDSOR, UK — The world is embracing artificial intelligence (AI) and telcos don’t want to be left behind.
This is one of the key takeaways from this week’s DSP Leaders World Forum. There, hundreds of leaders from telecommunications and technology providers tackled the various challenges and options facing the telecommunications industry, including the need to modernize their businesses and adopt the latest technologies, such as: Such as the cloud and artificial intelligence (AI).
Telecommunications companies (known here in Europe as telecoms companies) are experiencing massive layoffs, financial stagnation and chronic inferiority when compared to more rapidly changing technology-driven companies such as cloud hyperscalers. I’m suffering from feeling As telcos look to develop AI-driven technology strategies in the face of tight budgets and a slowing economy, the AI tsunami is clearly causing new fears.
“As an industry, we have to be honest, we’re not doing very well,” said Jeff Hollingworth, chief marketing officer of Rakuten, a supplier of cloud-based telecoms technology. “There is something about AI that changes the game. What we as an industry are trying to figure out is how to go faster and cheaper.”
The self-flagellation didn’t stop there. A Silicon Valley-based executive admitted it’s not cool to tell someone in the Bay Area that he works for a telecom company. “If you tell them you work for a telecommunications company, they will think you need a hug,” said Sebastiano Tevaratto, customer service champion at telecommunications software provider Optiva, during a panel discussion here.
An opportunity to turn the industry around?
The buzz around AI has accelerated, and the urgency has only increased as the stocks of cloud and AI companies skyrocketed, as highlighted by NVIDIA’s 25% share explosion this week. The AI tsunami has come at an interesting time, as the telecommunications industry has recently made unfortunate headlines for mass layoffs and the world fears AI will take their jobs.
Unions may rise, but the telecommunications industry will have no choice. Telecommunications companies are among the most indebted companies on the planet, and many suffer from poor profitability. They are currently owed significant investments in 5G spectrum and networks, but have yet to pay off, so automation and efficiency will likely be the only solution.
Of course, there are opportunities as well as threats. The explosion of AI will increase the need for data and networks fed by large communication networks. If you introduce the right products and services, you will find new growth. More importantly, AI can be a key tool in reducing operational costs and building better networks.
“Moving to the cloud is a business decision,” says Tevarat. “Embrace or die, you choose.”
Adopting the AI cloud
Several of the panels here focused on the steps telcos need to take to better automate their networks. One of the major challenges is that organizations that have been regulated for decades are burdened with aging infrastructure that needs to be updated at an alarming rate.
For years, the telecommunications industry tech community has embarked on a “cloudification” journey, adopting cloud-based technologies such as standardized servers and switches, open-source software, and cloud-based APIs to drive automation. But it was a slow process and it didn’t go as fast as anyone would have liked. For example, the transition to 5G Standalone (5G SA), the industry’s first fully cloud-based standard for deploying 5G services, is just beginning in earnest.
At the DSP Leaders World Forum, dubbed the “Davos Conference of the Telecommunications Industry,” panel participants regularly criticized the industry’s slow progress and lack of innovation.
“We We need to modernize our technology – the latest cloud technology and APIs.” “We need to invest in open source. We need to hire engineering talent. The path from telco to techno is a cultural shift that applies across organizations.
Another powerful call for popular reform came from Neil McRae, a leader in the communications technology community with decades of experience. McRae left British telecoms giant BT in 2022 and recently signed on as chief network strategist at Juniper Networks. One of his goals is to explore what AI can do for the industry.
McRae told the audience that he recently took an AI coding class at the University of California, Berkeley, and developed his own “AI server.” This is a rectangular parallelepiped server equipped with NVIDIA GPUs, which is said to be played by placing it next to the desk.
“The future is one where AI will be embedded in everything we do. There will be thousands of use cases,” McRae told the audience at an AI panel. “Are you ready for it? Are you building AI at scale? I don’t think so.”
McRae’s concern is that the telecommunications industry will use AI to make incremental improvements to the industry, rather than figuring out how to completely reinvent things.
“Our mental model of how telcos work is the biggest barrier to success,” says McRae. “If you think about AI that way, you’re missing out on an opportunity. AI requires, perhaps more than any other technology, the introduction of unbrained talent into telcos.”
In fact, as someone who has followed the telecommunications industry for decades, I can tell you that mental models are a big risk. Telecom executives are not typically known to be innovative visionaries. They often make terrible decisions to make huge investments in industries they don’t even understand. Plagued by high debt levels and a painfully overwhelming rollout of 5G services, the time has certainly come for more radical change.
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