Through our ongoing conversations with telecoms operators and the wider industry about their strategies and progress in implementing automation and AI, we see telcos pursuing a range of different partnerships, depending on their goals and level of ambition (i.e. size of budget) to transform their businesses.
On one end of the spectrum, telcos are mainly users of automation and AI technology, either integrating pre-existing tools into their solutions or buying specific solutions to address well-defined needs. Often this can be a fairly tactical approach within a business unit rather than driven by a top-down strategy.
On the other end, telcos that have senior-level buy-in and support for more ambitious AI and automation strategies are building in-house expertise as technology creators, and in some cases relying on partnerships with other telcos or telco analytics vendors to accelerate their progress.
Every telco sees AI and automation as technologies with a dual purpose of greater cost efficiency and accuracy (reducing human error), and driving growth through improved customer experience, agility and innovation. Those that are more focused on the immediate cost benefits of implementing automation are more likely to buy specific solutions or take a managed service approach, since it is less dependent on slow, painful and costly efforts to change working practices and acquire and develop new skillsets.
If a telco knows exactly what it wants and can articulate that clearly to a vendor with matching capabilities, then it makes sense to opt for an existing solution within a more traditional telco-vendor relationship, even with the newly emerging class of vendors. But in most cases the industry is not yet mature enough for off-the-shelf automation and AI products to easily meet telcos’ goals, while also integrating with their operational practices and structure, particularly in the highly complex network domain.
This is driving telcos to build in-house teams that combine a good understanding of the telco’s needs and software and data science expertise. However, building internal skills takes time, so some telcos have sought partnerships either with vendors or one another geared towards accelerating development of in-house skills.
One way of developing internal skills more economically is through Cross-telco partnerships, which can enable the industry to pool resources and share best-practices on how to evolve their operations.
Those with a strong top-down mandate to innovate and push the traditional boundaries of the services telecoms operators can offer are more likely to pursue Collaborative Development partnerships. Nearly every time we ask telecoms operators what their biggest challenge is in implementing automation and AI, their answer has to do with people – how to effectively change working habits, develop new skills. Even though most telcos have hired at least small teams with software development and data science skills, the lack of an enabling infrastructure and culture around them often hampers their progress. Collaborating with one of the growing number of telecoms-focused analytics firms can help operators overcome these barriers more quickly, by leveraging their experience of what has and hasn’t worked with other telcos, and creating co-development teams that can more effectively drive process changes.
As the shift to cloud-based infrastructure and deployment of 5G networks continue, access to these new skillsets and working practices will become essential to telcos’ core operations. Therefore, those that are not prioritising investment in developing in-house automation and analytics skills will struggle to compete over the long term.
However, even those that are investing heavily in developing these skills cannot expect to be technology creators in every field across their operations. All telcos will have to make choices on where to focus their efforts. Meanwhile, as the adoption of automation and AI grows, so will the availability of productised solutions to meet a wider range of needs. So we expect to see telcos rely more on specific solutions or managed services for common use cases, such as energy management or network planning, and increasing specialisation among telcos on where they develop in-house skills, for instance in line with the enterprise verticals they’re seeking to grow their business in.