Telco AI Transformation – Building the New Hyperscalers [Part 1: The big picture]

Who would have imagined – at literally the flick of a switch the way we work and live will be changed forever – thanks to the pandemic.

Amidst all this, the folks from the telecom industry have been the unsung heroes playing a critical role in the dramatic shift. A big thank you to the telco warriors – without your tenacity, resilience and grit this could not have been possible.

Yet, as has been the case in the last several years most of the wealth making opportunities have continued to elude the telcos. It is a curious paradox that on one hand telcos have become the backbone of our new world order, and on the other, the pressure on revenues, margins, and that of customer expectations has only grown.

While one might find multiple reasons for this – in my opinion, there are some things telcos can do to address this situation.

  • Embrace AI: Shift gears from scattered and sporadic AI experimentations for decision analytics to a strategic view of transforming all decision analytics in the organization by leveraging AI. This has to be a top-down CXO-driven imperative. It is clear across the telco value chain AI driven decision analytics has the ability add a few percentage points in terms of revenue uplift and cost reduction
  • Re-think tech stack: Cloud for elasticity and Open Source for agility is absolutely necessary. Ensure best practices from hyperscalers such as Google, Uber, GoJek are adopted.
  • Derive value from data: Ensure data and features are well cataloged and searchable. And Ensure AI infra and services from Image to Speech to Forecasting to Deep Learning are easily and readily available. That’s the only way to attract and retain Data Science talent.

Learn from the hyperscaler enterprises that are built around data and AI-driven decision analytics. Just think about it – if you were to let go of the entire data science teams in telcos there be very minimal impact. Now compare it with the impact of the same activity on the likes of Google, Uber or GoJek. The repercussions will be catastrophic, to say the least!

No – it’s not to say that telcos do not understand the value of AI-driven decision making. The truth is that across the telco value chain there are several opportunities to leverage AI-driven decision analytics with the possibility of boosting revenues and profits. But most efforts thus far have been sporadic and scattered set of experiments.

It’s not all gloom though. And I would like to use the example of a telco who are clearly thinking at a planetary-scale. I had the opportunity to listen in to Rakuten’s CTO Tareq Amin during a webinar session and I was absolutely floored by his vision, clarity of thought, and conviction to think planetary scale. He calls it Rakuten Un-limit. Rakuten sees itself as a platform company and is combining the power to Open Source for agility, Cloud for scale and elasticity and a co-create/ collaborate model to redefine how telcos can compete against the best and win. Telcos like Rakuten, Jio and Telefonica to name a few have a tremendous focus on leveraging data, and AI-driven decision platform as a must have layer in their entire stack.

In my mind, I am absolutely convinced. Intense digitalization, the impending launch of 5G services combined with AI in decision analytics has the power to propel telcos into the league of hyperscalers. It is time telcos recognize this and start organizing themselves around data – a precious commodity they are already awash with!

Note: This blogpost is part of a multi-part series on AI transformation for telcos. Look forward to the subsequent parts that will be published under the title.

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