Andy Walker is Accenture’s Global Communications & Media Industry Lead. 6GWorld caught up with him recently and the conversation strayed across a variety of topics which are fundamental to how telcos set themselves up for the coming decade. Accenture has a variety of roles in the telecoms sector as an OSS/BSS provider, a systems integrator and a management consultancy and Andy gets to engage with it all. To better reflect the breadth of conversation, below is a transcript, with 6GWorld’s questions in italics.
Andy, you have a very broad view of where shifts in the telecoms environment are taking place. What’s been leaping out at you as the direction of travel?
I’ll share one of my takeaways from MWC. Every time I saw a panel up on stage, at some point the Telco speaker mentioned skills and reskilling and rethinking talent. It’s had me thinking for the last couple of months and it’s an area where we do a lot of work, but there’s clearly a need across telecoms.
If you go back to when I started 25 years ago it was like, “OK, we need guys to dig trenches and put copper or fibre in, or do the risers or map out and put radios up and repair them.”
It was pretty mechanical, a little bit like plumbing. Now you still need that layer, but just about every Telco we talk with is offering a full set of software services on top of it, or at least has the software platform to launch new services.
So it’s not just internet and phone and video, it’s also security, some Telcos are large medical records players, or support gaming or so on.
And in fact, some of this is public. Tim Fell at Telus, he’s got a whole group of software engineers; Reiner Deutschman at Telia was on stage and talking about the fact that he’s got a software development group in Lithuania.
So you see this shift, which is towards “We need the old group of folks to continue to maintain the network, but we also need this new group that are really engaged in digital, that can both transform us and develop our new products and services and build those platforms.”
And just outsourcing it all to Google or to some other partner doesn’t really work. Telcos need to actually know how this stuff works so they can continue to iterate and make it better.
And does that transfer through to the network itself then? Because obviously there is a drive to make that more software-based and I wonder whether, especially with legacy elements, that makes for a real difficulty in terms of combining that plumbing and physical engineering with the software?
It absolutely does, and in a couple of different ways.
Both design and planning require a lot more software skills, and then so does execution. The old kind of ‘force the network build and just make everyone work harder’ approach – that’s gone. It’s a lot of analytics and it’s software-based.
Then even in the design of the network, all our clients are experimenting with cloud switching or virtualised RAN or Open RAN, or they’re all experimenting with how to inject cloud into the network as well as AI.
So I would say the more advanced ones are building those skills internally; while the less advanced ones are hiring out for the skills, but then also looking at plans for how to build the skills internally. I think they all recognise that it’s not a one-time change like “Hey, I’m going to hire some firm to come in and help us figure out Open RAN or virtualised cloud and then they’re going to go away.” There’s going to be a continuous innovation cycle in this area.
So everyone’s hiring and everyone’s rethinking their talent strategy. In the network and the OSS/BSS software layer, in the product layer, it’s a pretty exciting time.
But again, back to Mobile World Congress, I think every Telco has talent and talent strategy in their top five priorities, probably in their top three.
Outsourcing and Differentiation
We saw in 3G and 4G that there was a big push amongst quite a lot of operators to outsource the management of their networks to the likes of Ericsson or Nokia or whoever had built them. They seem to be starting to move away from that now, but is there an opportunity for Accenture to kind of be that in a more software-based world?
When you look at companies that outsourced everything to Ericsson or Nokia Siemens, even Huawei was in the space, they lost some core capabilities that were pretty strategic. So I would say first there’s an overall question as to what you outsource and what you keep, right? What’s strategic and what’s not? For the life of me, I would never ever consider outsourcing design and planning of a network, as an example. I might outsource the guys in trucks driving around and doing testing and fixing stuff.
Is there an opportunity for Accenture? There is, and we’re taking on a fair bit of operations work, but I would say it’s not like the wave 15 years ago where it was just “Hey, we’re going to outsource everything to somebody and they’ll run it for 15% less.”
Now I think it’s much more thoughtful. That’s what we’re seeing and we advise our clients in that regard too.
Take a network operations centre, which is not the most strategic thing, then if an Accenture or somebody could run the network operations centre for six different carriers and could do it in a super-efficient way, that’s money that none of those carriers have to spend on their own. They can take advantage of a platform and now it’s effective.
So those sorts of things are happening. I think it’s just done more thoughtfully now than it was in the past.
Are you seeing any knock-on effects in the Sales teams, Operations, Service Management and that kind of thing when you’re talking to clients about their strategy and these next steps with their network?
I would say that there is, clearly. Every Telco that we talk with is trying to figure out how to differentiate, and almost all the management teams of these telcos have differentiated in the past on better network, better customer experience, and cheaper in some cases.
So the idea that you get rid of network differentiation is – well, it’s something that we agree with in some markets. There are some markets where there’s not a lot of differentiation any more.
I wouldn’t say that our clients are totally on board with that yet because it’s a scary idea, right? And when someone does their annual awards and one of our clients shows up with the ‘best network’ plaque, they’re very proud of it – it goes immediately into their marketing that they are the best network.
So I think any world where there’s not network differentiation starts to become a little bit terrifying for our clients.
That having been said, when you mention integrating satellite, and making things like roaming smoother, and integrating Wi-Fi or spectrum in different bands so that there’s a more holistic experience – that’s definitely the way the market is going.
I keep trying to think if there are good public examples, but a bunch of our clients who are doing this. Even MVNOs are building their own physical networks around where their customers live because most customers never travel more than 30 miles outside of where they live.
So there’s a lot of mixed network strategies that are occurring, which ultimately are dissolving the idea of network advantage or superiority. I don’t know that our clients have got their heads around that yet.
Well, that’s a very good point. Related to that, I wonder whether there is scope for Telcos to be something very different when they grow up? We saw at MWC the Open Gateways initiative – once more around the API process – and some are now going very aggressively in that direction. So I’m curious about whether you’re having many conversations to do with that? It feels as though it’s an idea whose time has come again, I just don’t know whether there’s an understanding of how to build an ecosystem around those APIs or how to put out a value proposition.
Well, you’re going right to the toughest part. If you start with open APIs – is there opportunity there? There’s a huge opportunity.
One of our clients, for instance, they see the data that Telco has is incredibly valuable to say a bank, for instance, because a Telco can validate that you are exactly who you say you are, just based on the network data. They know your IMEI of your phone, they know your location, they know it’s you; so opening up those APIs becomes really valuable to them or to trucking companies or all the rest.
As to your second question – going back to Mobile World Congress, after talent the second thing everyone mentioned was ‘ecosystem’. And when everyone was mentioning ecosystem, it occurred to me that what that meant was it’s both very important and no one’s yet figured it out.
I don’t think anyone’s figured out the right framework to engage partners, because the traditional position of Telcos in regard to partners is one of they’re running a really tight ship, they know what they need to do and they squeeze the heck out of all their vendors – maybe they call them partners, but they do squeeze the heck out of them. That’s been in the game for forever.
So how to change that position and integrate different companies into an ecosystem where you’re testing and you’re setting up JVs and all the rest? I would say it’s very, it’s very immature right now.
We see, we see lots of action in this regard. Every Telco is working with different partners trying to work things out, but their models are not set up for that.
The funny thing is they all understand that, right? If you talk to the Chief Strategy Officer at any Telco they would say, “Yeah, our model is not set up to work with companies and we’re working on it and we’re trying to fix it.”
I don’t know that anyone stands out as having solved that problem yet, but the whole industry recognizes it.
Is there an argument maybe for a third party to be organising that on their behalf and having the APIs exposed through their commercial relationships, something like that?
There’s an argument for that. There’s a number of different models.
There’s the model that the hyperscalers have, which is, “Hey, we’ll be your partner and we’re going to bring all these neat capabilities,” but there’s a little bit of a fox-in-the-henhouse kind of fear that the Telcos have.
There’s the model of Telcos individually engage either the hyperscaler, or the other strategy is having lots of smaller partners to develop things.
Then there’s all the integrators, where do the integrators fit into this? And, you know, in some cases, we are very much starting to fill that layer, but it’s on a case by case basis, as opposed to some sort of an industry group in the way TM Forum in particular fits into this, right?
Old Whine In New Bottleneck?
I’m quite glad to hear you mentioning the role that Accenture is taking there, because there have been a few people murmuring in slightly worried tones about the idea of open RAN and open ecosystems being brilliant at breaking up one oligopoly of vendors. The challenge is you need some kind of integrator, such as Accenture; but does this mean that you end up with an oligopoly of integrators rather than one of the network vendors?
That’s a very good question. We’re on our second Open RAN implementation right now and we’re concerned that the perception is all about “build-operate-transfer.” So we’ll set it up, we’ll coordinate all the vendors and then we can either run it or do a transfer, right? When our clients talk to us about this, we’re like “Which do you prefer?”
So I don’t think that there’s some master plan where we’re going to attempt to integrate and then be the one to run everything, though that’s an option.
In fact, one of my clients is a good friend; he and I have talked about the capabilities he needs and it’s almost always build-operate-transfer. He wants to own the capabilities, so I say “OK, no problem, let’s figure out how to set that up and make it happen.”
But that strategy differs. Some telcos want no part of it. They’ve got talent shortages and issues in their market so they say “I can hand this off to you and you can run it from some low cost place with talented people.”
But that kind of comes down to the strategy of the company.
It feels like we’re almost coming full circle here because one part of that idea of build-operate-transfer might include transferring the knowledge and the skills to do that. And so I wonder whether that opens you up to an opportunity to create some kind of academy or training for the Telcos?
Yeah, we’ve invested quite heavily in the past at TIP Academy, in and around Open RAN. The training part is something we’ve been really focused on.
But if you think that this is a movement, lots of Telcos are going in this direction, we’re not going to be able to train up that many people, but there’s a role dependent on what direction they want to go.
So we’re into training secondments, leading teams, all the way to backstop or maybe even be like the level three helpdesk. There’s all sorts of different models for the transfer depending on how comfortable the Telco is at riding the bike. Everything from, “hey, we’ll be here by your side” to “you’ve got this, we’re out.”
So with all of this, I’d be curious to get a sense of your priorities because it seems like there’s so much going on. Understanding the, the Telco’s priorities is one thing, I’m just wondering whether, in Accenture, you’ve got a longer-term view about the capabilities that you want to see put in place or how you think the market’s going to develop?
It’s very much outside-in when we develop our priorities. We talk with our ecosystem partners and all of our clients constantly to understand where they’re going and we triangulate from there.
We’ve our own strategists who have their points of view, but I would say our priorities are, firstly, the network.
Network is transforming. The kind of the cycle that’s occurred forever – which is getting new iterations of network technology; clients implement those; and we move on – I think that that’s broken. There’s new levels of technology now. We’ve got cloud and AI and big data infusing there, which has come from outside of telcom.
So there’s the deployment of networks, but then also the transformation of them I would say is our first priority, but the second is in and around customer experience.
We believe that Telcos are going to be differentiating on customer experience, and a very public example of that is Mint Mobile in the US, which is an app founded by Ryan Reynolds and an MVNO. They were they in business for 18 months before he sold it for a billion and a half dollars, right? It’s pretty impressive. We had a bunch of secret shoppers, and you can trans transfer your service from a carrier to Mint Mobile in under five minutes. It was about 4.5 minutes and the prices were something like $15 a month compared to $50.
So customer experience becomes a differentiator because you can’t just sit back and have stores and expect people to show up.
Then underpinning those two, I would say the digitisation of the Telco is huge. We’ve heard a lot about it but it’s going to accelerate I think. I mean, AI and especially Gen AI is really in the news but there’s an awful lot needed to make that work right. And digitising the core with Telco so that you have the capabilities that a Mint Mobile would have, so you can compete in that realm, I think is huge.
And then you have talent strategy underneath that. There’s an awful lot.
All this, by the way, plays into the cost base, but I don’t think you start with cost base. I think you start with assessing the capabilities you need to serve clients better or to differentiate, to run an advanced business and network; then as a result of that cost comes along for the ride.
It always terrifies me when I’m meeting with a CEO and his team and they say our subject is cost.
I respond “OK, I know our subject is cost, but we’re actually going to talk about something else. If you get to that something else, your cost is going to be lower.” Otherwise it’s very easy to cut the wrong things.
I mean, sure I can come in and cut 15% out of your network. Absolutely. But does that set you up at all for success? No. This is like a private equity game where you just cut a bunch and then your stock bounces, but that doesn’t set you up long term and another management team will be along in two years to clean up the mess.
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Alex Lawrence is Managing Editor at 6GWorld. His mission is to bring together stakeholders from across industries, countries and disciplines to make sure that, as technology evolves in the coming decade, it’s meeting the changing demands of society, government and business.
He has been involved as a professional nosy person in the telecoms sphere since 2004, with short detours through industrial O&M and marketing.
If you’d like to talk to Alex about your ideas or projects he’d love to hear from you. @animalawrence or firstname.lastname@example.org.