With MWC Barcelona set to take place at the Fira Gran Via next week, Ariana Lynn, Principal Analyst at The Fast Mode spoke to Boris Maurer, Senior Managing Director and Communications and Media industry lead for Accenture in EMEA on the company's participation at the event.
Ariana: What are some of the key themes of this year's MWC?
Boris: Communications industry leaders are already thinking about the conversations they need to have once MWC kicks off and the business decisions that will follow. This year’s theme is Future First. The show will demonstrate the power of connection and why CSPs are so important in today’s world.
Thanks to the technology available today, CSPs have a very real opportunity to make the massive changes the industry has been desperate for. They are at a point where the transformation to fiber and 5G means they can become cloud first, fully automated and have the ability to expose their capabilities and services to cloud enabled business models for consumers and connected industries. But let’s not forget the challenges facing the CSPs are enormous. They are worried about the fact most do not return the cost of their capital because of the investments they must undertake, and cost pressures have never been greater as a result of rising interest rates, inflation and high energy costs.
But now is the time for change. The ball is very much in the court of the CSPs to overcome these challenges and find a way forward. There are three areas where they must take action and will be the basis of most conversations throughout the Fira:
- Trend One: Innovate to provide an enriched customer experience
- Trend Two: Accelerate with a modern digital core
- Trend Three: Transform the network
Across all of these areas, is the topic of talent, so is likely to be discussed many times during the show too:
- Trend Four: Generative AI elevates the importance of talent
Trend One: Innovate to provide an enriched customer experience
Connectivity is becoming a necessity that grows exponentially, but CSPs are failing to increase revenues. They can’t increase prices as customers are already looking for lower priced plans and churn rates are high. Moreover, to keep relevant they must address a significant shift in customers’ constantly changing expectations and behaviors. Today, the reality is that CSPs are finding it more difficult to generate loyalty with their customers in an increasingly competitive market. The days of "one size fits all" are over. People are individual and want their specific needs satisfied. This applies not only to the services and experiences provided, but also to customer care.
Having good internet connectivity at home and while on the go has increasingly become a commodity for people. Therefore, CSPs must think beyond simple connectivity and instead advise customers on services, gains, products that help them profit from their connected services. CSPs are in a privileged position to advise consumers on how to make the best use of telecom services. They can perform tasks for the clients, help them optimize their data usage and save, detect, and prevent anomalies on their bills. They can also provide security guidance (for example, for parents) and secured connected devices.
Going beyond traditional telecom products and services, CSPs can gain space in people's lives by offering added-value services – for example in entertainment or security.
The introduction of generative AI can be a game changer for CSPs too in terms of the service they can provide customers. Gone will be the days of chatbots that cause frustration and instead they will be replaced by technology that can be truly conversational in style and will be able to understand a customer’s intent and formulate accurate answers of a high quality meaning they could truly offer these additional services and provide the seamless experience customers today are looking for.
Generative AI can also help with sales and marketing across all these services from offering basic connectivity to entertainment, security and more as it finally allows for true hyper personalized communications on a 1:1 level and customers will be engaged how they want, when they want 24x7.
Those CSPs that embrace technology and broaden their services and ecosystem offerings quickly will be the ones that get closest to their customers and start seeing the growth the industry is longing for.
Trend Two: Accelerate with a modern digital core
Conversations have been taking place for several years about a need for digital transformation in the communications industry. But changing market conditions, ageing technology, climate change, regulation, high energy prices, inflationary pressures, geopolitical tensions, supply chain disruptions, talent shortages and the economic downturn has changed everything. Now, CSPs need constant reinvention underpinned by an integrated digital core if they are going to survive and thrive. Reinvention is a holistic process that involves people, culture, and purpose, with technology at its heart.
The industry is at a point where operators have shut down many of the older 3G and copper networks and moved to fiber and 5G. As such, the industry is at a pivotal point where networks can be managed centrally in the cloud and for the first time.
The telco of the future will have a digital core; businesses that have are organized around artificial intelligence, cloud, security, and platforms – all of which interoperate together. They will be open, putting APIs first. That means it will be easier to engage with customers and the partner ecosystem, enabling the creation of new services in a standardized and interoperable way, allowing for constant reinvention. Taking a standardized approach is hugely beneficial for the industry as services can be scaled within and across telcos, creating new monetization opportunities.
A strong digital core will help CSPs respond to change and shifting dynamics within their industry. Placing the cloud at the network’s center allows for end-to-end flexible, scalable network delivery. It enables a boost of innovation for the network itself and the products and services that run on it. And by providing next-generation networks CSPs can both reinvent their own businesses but also help others reinvent theirs too. How they build out their networks defines how—and which—industries will use their services, directly impacting their bottom lines.
Trend Three: Transform the network
During the last 15 years, digitalization—as measured by the adoption of digital technologies and growth in data, devices, storage, cloud, compute and connected endpoints—has increased a staggering 162 times. Meanwhile, network capacity has grown only 43 times and innovation spend on network has grown just two-fold. Digitalization is clearly outpacing network capacity and modernization spend. Yet enterprise networks are expected to be ready to rapidly adopt to rapidly evolving new technologies. So, for example, with generative AI creating new data to enhance digital twins, to truly support mobile asset tracking and management, or even computer vision that helps with quality assurance or worker safety.
With every new technology evolution, there should be a network evolution to meet increasing demands being placed on them. But, while businesses are spending increasing amounts on their networks, a large amount of that investment is going on maintaining legacy networks as opposed to network modernization.
The sluggish progress in network modernization frequently results in a detrimental cycle of accumulating technology debt, restricted innovation, rising costs, and heightened security vulnerabilities. As network teams make incremental adjustments to a system without eliminating outdated functions or rearchitecting, the system progressively becomes more intricate, less predictable, challenging to maintain and upgrade, and resistant to quick scalability. While introducing complexity might be tactically justified in certain instances, it is often strategically misguided.
Networks must be modernized if they are going to be an enabler of future of technologies and innovation. A modern network seamlessly connects and enables various layers of the digital core, comprising cloud, data and AI, applications and platforms and incorporating other innovative technologies.
The good news is if budgets are refocused, they will provide greater resiliency and improve cost structure, which in turn, will create a ripple effect on innovation. Three practices are the key to progressing on network maturity and business resiliency:
- Flip the budget in favour of new, modern networks instead of repairing legacy ones.
- Stabilize the current network, then modernize with advanced technologies and capabilities and accelerate innovation.
- Make focused progress on advanced network practices to achieve higher business resilience.
Enterprises must embrace continuous reinvention to thrive in a world shaped by a volatile macro environment and accelerated innovation driven by next-gen technologies like cloud computing, edge computing, 5G, data analytics, and artificial intelligence. While change is imperative, establishing robust networks to support these transformations is a fundamental and logical necessity.
Trend Four: Generative AI elevates the importance of talent
The landscape of the communications industry has gone through phenomenal change in recent years as CSPs have migrated to the cloud and moved to fiber and 5G networks. This new environment requires a different set of skills – software engineering, cloud, Open RAN, data and AI, virtualization, Edge, and more. It’s also a more competitive marketplace, revenues are under pressure and there is an increasing need to move regulatory, social and sustainability topics to board level.
All these trends have a material impact on skills, so expect conversations at MWC about talent to be high on the agenda. It’s becoming an increasingly tough market to get the right skills and people within the workforce so if they haven’t already got one, telcos need to put a talent strategy in place to ensure they can access, create, and unlock talent potential.
Focusing on critical, skills-driven talent actions will enable telcos to respond to the need for reinvention. They must dynamically plan for shifting business needs through informed talent decisions for all enterprise workforces taking a data-driven approach. They must continuously develop the future workforce required to achieve the business strategy, while accelerating learning and clarifying career pathways. The telcos must also consider new ways of working and accelerate adoption focused on agility, innovation, growth, collaboration, and data-driven decision making. They must also develop a strong talent pool for emerging roles and skills and match core talent within and across borders, based on skills, experience and the individuals’ aspirations.
While not the single silver bullet to that constant reinvention telcos need, being skills-driven does act as an enabler for that to happen as they will be in a better position to know where to invest and with greater precision.
Right now, it’s important that telcos reinvent work, reshape the workforce, and prepare workers for a generative AI world. That includes adopting innovative technology to stay ahead of the curve. And it’s vital that when determining future work and workforce, that telcos must understand the impact generative AI will have on their business. Individual work will change, organizations and their processes are likely to change, and the skills needed will change.
Every telco must consider where they need to start from and what talent they need to enable their strategic changes. They are all different so will have different requirements. What is the same, is that talent must be a strategic priority for all telcos in 2024.
Ariana: What are some of the events that Accenture has lined up? Any showcases?
Boris: Accenture will have a strong presence at MWC 2024, providing speaker slots and experiential demos. At our booth (Hall 4, 4B30) we will showcase how we can help the world's connectivity service providers take advantage of growth enablers like generative AI and explain how ecosystems can operate with efficiency, accelerate innovation, and scale effectively while meeting the demands of the connected world.
We’re excited to announce that for the third year, we will be featured as the GSMA’s exclusive Connected Industries Knowledge Partner. The Connected Industries space in Hall 4 offers a distinctive platform for CSPs and businesses to collaborate and accelerate the next wave of innovation as industries converge.
Our demos this year showcase how CSPs can innovate and grow using cutting-edge technology and will center around three main themes:
Connect to new markets and customers with an enriched experience plan:
- Next AI/Gen AI Powered Customer Care
- Digital Life Platform
Reinvent to innovate faster with a modern digital core:
- Gen AI hyper-personalized customer experience
- Gen AI assisted Telco Platform Accelerator
Maximize your network’s value with a future network strategy:
- Network Plan & Deployment
- Intelligent Network Operations & Automation
- Private Wireless Networks
We will have a number of leaders taking part in the speaking program, including:
- Julie Sweet, CEO will moderate the ‘digital vision for telcos’ keynote on the opening day of the show
- Can telcos afford not to be part of the AI race – Kathleen O’Reilly
- Harnessing Gen AI at telco scale – Lan Guan
- Reality check for XR – John Walsh
- What does your smart factory look like – Andy Tay
- The customer experience revolution in the AI era – Laura Peterson
- Cloud and intelligent edge: Shaping the future of 4IR – Jefferson Wang
- Is AI bias easier to eliminate than human bias? – Juhi Munjal
- Daily opening keynotes from leaders across Accenture at Connected Industries Hall 4
In addition, Francesco Venturini, global Communications & Media industry lead, will be taking part in a Connected Industries wrap up session on 29th February at 14:00 CET.
Ariana: What's the outlook for telecoms, specifically the mobile industry in the next 12 months?
Boris: Today’s market conditions are creating challenging times for the telco value chain. Margins are being squeezed because of the massive fiber and 5G infrastructure investments. Business models are also challenged: telcos have tried for some time to break out of the core connectivity play and move into higher value-added services for years with mixed results. The competitive landscape is evolving even faster with pressures coming from all angles – traditional and non-traditional players from adjacent sectors like Technology - and disrupting traditional market dynamics. Customer expectations have changed and benchmarks have been set by digital natives from other industries.
Geo-political instability poses risks to the interconnected global economy & operations. A looming recession and regulatory pressures especially around GDPR have created even more constraints. Ultimately the value equation is constantly being challenged with deteriorating pressure on return on investment in the face of increased capital expenditure linked to both 5G and fiber deployment. As the acceleration of the above disruptions continue, mobile operators have been unable to achieve the financial rewards to match their investments.
Still, we are coming to the end of the telco investment cycle. Similar to how we do not ask about the number of megapixels in our smartphone cameras anymore, we may be at the end of network generations and enter a software defined, cloud enabled generation-less network. So if telco’s are at the end of the investment cycle, this frees up capital to invest in the execution of the telco reinvention formula. If telcos act with determination around simplification and automation powered by GenAI especially across experience, modernizing their digital core and networks, there will be brighter times ahead. And the time to act is now.
