If the past couple of years were any indication, the immediate future will likely have headwinds and change as well. While there’s no way to know what will unfold, for telcos, there are a few developments we expect to take root.
Greater emphasis on data
Telcos such as Singapore’s Starhub, M1 and the Philippines’ Globe Telecom are already leveraging data and AI to elevate their customer experience and automate campaigns. Yet there’s a lot more untapped potential for the industry. With the deprecation of third-party cookies, the sources of first-party data will become even more valuable, as long as they are governed with the customers’ best interests at heart.
Telcos have oceans of data, but much of it is scattered and siloed. For example, operational data is stored across multiple legacy technologies, like 3G or 4G, and platforms, including operational support systems and business support systems. Further, many of the ISVs across the telco value chain maintain their own data within walled gardens. This makes it hard to consolidate, govern, and share data across the organisation.
A data mesh architecture can help liberate telco data. The data mesh enables each domain-driven data set to be treated as a product and owned by the teams that intimately know the data. Data is then shared to a centralised catalogue where it can be harnessed to deliver transformational business outcomes.
A data mesh also ensures that lines of business have the right tools for the job. For example, it enables non-data scientists to build, train, and deploy ML models, increasing ML adoption across the organisation, which can accelerate innovation and enrich the customer experience.
Energy costs move to the top of the agenda
With energy costs rising, reducing use and increasing sustainability will move to the top of agendas, and a data-driven approach can aid efforts.
The global telecommunications industry produced 2.6% of the total world carbon dioxide (CO₂) emissions in 2020 — more than the airline industry, according to a European Telecommunications Network Operators Association report.
According to GSMA Intelligence, energy consumption accounted for 15-40% of telcos operating expenditure in 2021, and that figure is expected to rise. For mobile network operators, the bulk of this energy consumption (60-75%) is from radio access networks (RAN).
Data-traffic loads are intermittent, meaning different parts of RAN can be put briefly into sleep mode, even during periods of peak traffic, to reduce energy consumption. By using data and AI/ML applications, telcos can use intelligent services to monitor and automate this process.
Moving to the cloud provides further energy savings. Multiple studies conducted by international analyst firm 451 Research, part of S&P Global Intelligence, found that migrating on-premises workloads can lower the workload carbon footprint by nearly 80%.
We’re already seeing telcos in Southeast Asia embrace the cloud, like Circles Life, TPG Telecom, Singtel, and Starhub. Also, innovation in processors in the 5G core can reduce energy use. For example, in Japan, NTT DOCOMO and NEC reduced energy consumption by an average of 72% against incumbent x86 processors.
More partnerships will grow the 5G ecosystem as networks mature
For the past few years, we’ve heard the promise of added revenue from 5G – but we’ve yet to see the windfall. However, there is a growing sense that a tipping point is on the horizon.
Many major Singapore carriers have nationwide 5G deployments. In Southeast Asia, all countries have deployed 5G, along with 14 across Asia Pacific, according to GSMA. Devices are also catching up — the top smartphones of the past few years all come with 5G support.
The last barrier for realising 5G’s potential is the ecosystem: the cross-industry and cross-functional partnerships needed to create 5G services and reduce barriers to build and manage 5G networks.
Private wireless offers huge promise for 5G industry use cases. IDC estimates the TAM for private LTE/5G wireless will reach US$8.3 billion by 2026. But the adoption has been slower than expected, partly because of the high cost and complexity to plan, build, deploy, and manage a private network. Moving forward, we expect more telcos to forge partnerships to increase adoption, like how Starhub and M1 partnered to accelerate Singapore’s 5G network coverage.
Transformation of telcos
Another area of change is the accelerated evolution of telcos to “tech-cos,” transforming the relationship telcos have with their customers and how they operate to unlock new revenue.
There are two pieces of this shift.
First, telcos will need to shift from operating as connectivity providers to become digital service providers, leveraging their networks to enrich their relationship with customers. For example, Starhub’s DARE+ initiative includes the development of its Giga! digital platform to enable full self-serve digital engagement for its customers. Meanwhile, Singtel is deploying a 5G conversational AI virtual retail assistant to offer customers a personalised experience.
Second, telcos will need to shift operations to use their network as a platform. This approach will provide a new way to monetise their network build-outs and spin up a new MVNO within a couple of days, which could also operate profitably with as few as 10,000 subscribers.
Embracing these advancements won’t be easy, as they require upskilling and training for staff. More importantly, they will need commitment from leadership. But telcos that make the shift will be better positioned to unlock new growth and adapt to new innovations.