Total Telecom Congress last week opened with keynote speeches focussing on digital transformation from the operator perspective. With long-term perspectives from senior leaders in European telecoms companies, what can we glean about telco priorities and how does this relate to the prospect of ultimately moving past 5G?

There were three critical themes arising from the discussions, two of which won’t surprise most tech folks. Most telcos are going through what Azfar Aslam, Nokia’s VP & CTO Europe, described as a “two-sided transformation” – unsurprisingly, defending existing revenues while cutting cost bases; and finding ways to create new growth.

So far, so unremarkable – those priorities might have appeared in any annual report for decades. The way telcos are thinking about this is fundamental and structural, however. Yannick Decaux, SVP Wholesale & Interconnection at Orange, gave a good example of this when he observed, “I see three directions for us in evolution,” which boiled down to:

• Telco to infraco. Based on sharing and cost optimisation of infrastructure.
• Telco to servco. Dedicated to service delivery and customer satisfaction.
• Telco to techco. “You leverage technology to gain a competitive advantage.”

Saving Money

Infracos can certainly improve asset utilisation rates and drive more value from building them. It also hands over a major cost – that of electricity – to the infraco to manage. With pressures on the industry to reduce the climate impact of telecoms provision, there are some transformations infracos will have to implement themselves too.

While that might not, in itself, have anything directly to do with 6G, the separation of hardware and software opens up some interesting options for established operators. Decaux has been thinking about how to do this.

“I deal a lot with MVNOs,” he noted. “We could learn a lot from them.” In particular he highlighted their tendency to be very asset-light and cloud-based.

Deutsche Telekom, too, is thinking along these lines. Senior Innovation Manager Alicja Pitthan observed that she and her team have been exploring whether the evolution towards 6G could entail a simplification of their assets by a reduction or removal of legacy network elements. She is a keen supporter of the NGMN’s vision of a graceful evolution from 5G, as much as possible by software. Pitthan pointed to the example of 4G, which enabled the switch-off of 3G networks.

Such a simplification of the underlying network architecture could create significant savings for operators, if it can be realised. This kind of simplification is something which has had several false dawns in the past; at present, though, there is an opportunity for the operators to push for this in a coordinated way through organisations like the NGMN, GSMA, ECTA and other bodies.

Making Money

Looking at the growth opportunities for the telecoms environment, the areas of focus in business conversations were unsurprising.

The enterprise and industry 4.0 opportunity remains firmly on the radar, of course – depending on who you spoke to this week, growth in the consumer area seems hard to come by or non-existent.

While Aslam conceded that so far for 5G “consumability of these services was very low for our industrial customers”, he sees a new kind of customer emerging for the telcos: “The developers; because they own our industry’s access into the industry 4.0 environment.”

How can the operators monetise that relationship with developers? Decaux argued that standardised, open APIs using Camara – an open-source tool – are the way forward.

“To access the next generation of 5G services and 5G standalone, it will be done via APIs,” he commented. “An enterprise will not want to deal with different APIs in France, in Brazil, in Guatemala.”

This is still a project in relatively early phases. However, next year, he suggested, “we’ll start seeing what those new APIs will look like.”

Lasha Tabidze, Group Chief Digital Operations Officer at Veon, is also keen on APIs, noting that the data telcos hold “when we share it and connect to other services, there is a huge opportunity.”

In the meanwhile, Orange has been finding success in selling services such as cybersecurity to enterprise customers in Europe and Africa – a service which netted the group nearly 1 billion Euros in 2022.

Alongside this, they are also selling financial services and electricity in some African markets. Oddly, supplying power is also a service for some providers in Europe who are selling electricity for charging vehicles. To some, this might sound like an unwelcome variation outside of the traditional telco heartland of connectivity. It reflects both a growing need to try new things… and a growing capability to do so, which should be welcomed.

In all these cases, it could be argued that opening up network capabilities for tracking location, billing, or identity verification could prove to be a useful value-add – telcos demonstrating the value of their capabilities as they build a marketplace.

However, Tabidze has a much more ambitious platform play in mind: software agents which can take services, such as in education or fintech, and deliver them in the local language regardless of where that is. Tabidze views this as a platform not only to translate but also to bring services together.

“Still, all this is done through separate applications,” he pointed out. “There will be one place where you find all this information and make it more useful for you in your daily life.”

Don’t Focus On The Money

Curiously, services and applications were far from Keri Gilder’s mind. The CEO of COLT Telecom has just completed the acquisition of Lumen to make a significant international player.

However, she pointed out that the majority of acquisitions and the majority of business transformations fail to deliver good results.

“Assets are absolutely meaningless if we don’t have the right culture,” she noted. “Unhealthy cultures do not respond well to change.”

This is more than an abstract to Gilder, but a source of competitive advantage in an environment where competition is easier.

“Copycats are becoming more common. This means that culture, as one of the only ways to stand out, becomes even more important,” she said.

However, Gilder was keen to steer the conversation away from soft measures, vision statements and so on, using the analogy of starlings flocking together. Murmurations of starlings don’t share team goals or measure their work against a scorecard; instead, they’re very receptive to a few small signals in the birds around them, such as distance from each other, changes of direction and so on.

Gilder stated, “Culture is about these small signals – how things get done, how decisions get made, how rewards and recognition are handled.”

She set out three principles that can send signals through an organisation, when implemented consistently from the top down. Her recipe? “Tell a story, share vulnerability and build safety.”

Lotta Gunnarsson, CIO at Odido, has also been focussing hard on internal human factors to build the foundations for either growth or cost savings. For her, the challenge has been to enable her department to work in an agile fashion at scale as a way to both respond to external pressures and deliver new initiatives at a pace that can create market impact.

“Normally, about 5-10 agile teams is cool,” she noted. “Beyond that…we add managers, we add reporting… and at that point, we stop being agile.”

This is, arguably, why we see start-ups that can deliver outsized impact on a market. How does Gunnarsson, a veteran from the digital sector coming from Booking.com, expect to go about delivering start-up agility across a large organisation?

“It comes down to people. If you have the right people, you can scale; if you don’t have the right people, you feel the need to manage.”

The mindset shift is significant. While any company is subject to externalities affecting its plans and operations, Gunnarsson is ceding even the comforting illusion of control that many management processes provide. Governance – yes, absolutely, to make sure that work is going in the desired directions and making course corrections as you go. Management? No.  

“You cannot control what your colleagues are doing, you have to trust them… if you can’t, you’re working with the wrong people.”

Implications for 6G evolution

What can we take away from this? A few points.

It’s pretty clear that most telcos are struggling with their existing business models and the shortage of growth that they’re finding. Some are looking beyond core telco services to cybersecurity or energy, while others are looking at platform plays and/or restructuring the fundamentals of the business. Nobody is doubling down on their network investments as a source of competitive advantage; instead, software that can hopefully leverage or monetise existing capabilities better were the subject of discussion.

That should put researchers and vendors on notice that 5G-Advanced and 6G might be of interest to telecoms providers, but they are facing problems right now that need them to do things differently in future. Next-generation solutions and systems that support a resource-constrained industry in saving costs or creating new business opportunities will likely be popular, but it makes little sense to go through the standardisation process if it’s technology-driven rather than responding to the demands of operators or their customers.

We saw in 5G that there were use cases outlined for various technical capabilities, but a use case is very far from a business case. We should be excited about the possible use of 6G to eliminate the systemic telecoms albatross of legacy systems – but will this be a subject for the SNS-JU or other groups? Time will tell.

The other thing that shouts from these conversations is a desire to reduce hardware infrastructure and adapt software-oriented structures, processes and services. Again, this seems to run contrary to some of the conversations in 6G, for example surrounding the use of high frequencies to develop services based on Integrated Sensing & Communications [ISAC]. This may have useful applications for private networks and indoor environments, but we are moving away from nationwide deployments and the traditional national-scale operators as customers.

In the same way, collaborations with satellite players may provide means to deliver properly national-scale coverage for services which augments existing infrastructure. However, the use cases will be quite specific for the foreseeable future.

The conclusion for the vendors and bodies developing 6G is that the next generation isn’t going to be a unitary ‘thing’, but a collection of technologies that increase telecoms capabilities in specific areas. However, the value chains and potential customers are going to be quite different in each environment. In itself this is likely to create new opportunities for the national-scale telcos as the orchestrators enabling all these different elements to work together, based on a flexible and software-based network architecture.

Again, though, it means that the vendors will need to take account of who their customers are likely to be when designing and implementing capabilities. If the users for ISAC are enterprises or systems integrators, the devices will need to be simple to instal and manage in a way which 5G hasn’t yet been, and that may have ramifications for the overall design of the services.