TM Forum president and CEO Nik Willetts (pictured) opened Digital Transformation World 2023 with a stark message for the telecoms industry, claiming it is at a “crisis point” where it faces being left behind by the “very revolution we’ve created”.
Willetts blamed this on how connectivity providers are often “weighed down” by “decades of legacy technology, products and processes” that need to be updated to fit in the modern era.
He revealed the telecoms industry invested collectively over US$1 trillion in the past five years for a return of less than 1% which is “not sustainable” and urged players to find new paths for growth.
While the industry is facing its challenges, new players are finding it easier to enter the telecoms market, as barriers to competition are “evaporating in front of us” pushing the TM Forum to label this as a “code red” moment.
Despite the stark warning, Willetts highlighted how products the industry develops continue to grow in value, showcased in the proportion of GDP that shifts every year through digital channels, and this trend continues to rise. Examples of growth in the industry, Willetts pointed to are in IoT and cloud which are growing 10% to 20% per year, but this only “offsets the decline, in our traditional business”.
“We have to get fit for growth. We have to simplify, modernise and automate our businesses to be fit to play on what is a new playing field. As an industry, we spent 10 years trying to understand this new playing field as it evolved around us.
“We have to learn to interact with new players with new skills on that playing field to be able to monetize and create groups together. That means recognising we have new allies in that journey, and that we need to work with companies like hyperscalers, software vendors, innovators, start-up communities and our customers in a whole new way. They're allies in this journey, not competitors,” said Willetts.
Telecoms to technology company
Indosat Ooredoo Hutchison CEO Vikram Sinha took the stage to highlight how service providers have to switch from being a “telco to techco” by going back to basics and continuing to see growth.
The first thing the newly merged operator did was hire a chief data officer who reports directly back to Sinha. By gaining better leverage of its data the operator was able to launch an innovation centre in Jakarta six months ago, which Sinha boldly claimed will be “on par with Silicon Valley innovation hubs” with the purpose of finding new solutions that truly transform the lives of Indonesians.
Sinha detailed the operator has close to over 900 vendors on the books but 70 are partners and just 22 are strategic partners for its constant ambitions for growth.
“We want to make money with our partners, not from our partners. What we are trying to do is to go create and innovate with our strategic partners. The outcome will be to come up with products that can solve our customer's problems, which can help us play in this whole digital economy,” said Sinha.
Gen AI is not another metaverse
Far too often the industry looks to the latest on-trend technology and latches onto it as the silver bullet needed to kick-start the industry back to its heyday of growth, only to dump it almost exactly a year later.
The hot bit of technology infecting minds and board rooms currently is of course generative artificial intelligence (gen AI), but Sinha was ardent in that gen AI will truly live up to its hype for IOH. The executive admitted he saw gen AI as “another metaverse” a while ago but now sees it as an avenue for growth by simplifying and modernising IOH’s business.
Kiran Thomas, Jio’s CEO said there is a danger of companies diving too “deep into the hype of the technology”, but he also sees the potential of gen AI to be used across marketing, customer service and even coding. He put it plainly that anything that is “intelligent work” stands to greatly benefit from gen AI.
Read more of IOH and Jio’s stance on gen AI here.