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Sunday, May 09, 2021

Telcos: Stop Thinking You're Always the Leading Actor

Hubris: "an extreme and unreasonable feeling of pride and confidence in yourself"

I've followed developments in the telecoms industry for over 25 years. I've seen positives (eg broadband, SMS, LTE) and negatives (UMA, RCS) as well as a shifting landscape of regulation, the rise of the Internet, and multiple generations of network technology and services infrastructure.

Undoubtedly, both fixed and mobile networks have added massively to economies, society and our current way of life. It's understandable that network operators - and their vendors and governments - feel proud of their legacy and want to perpetuate it.

Yet it's possible to take this too far. Even beyond obviously-silly pronouncements such as "5G is as important as electricity", there remains a constant thread among the telecoms industry that it is absolutely central to all future developments, and that the network's finely-engineered QoS mechanisms are the wellspring of technology-derived value, as well as pivotal to future GDP and world happiness.

But while self-belief and aspiration is helpful, arrogance and self-delusion is not.


Starring role, or supporting cast?

There is an assumption that the (public, traditional) network is always the leading actor in any movie about Industry 4.0, IoT, smart homes, AI, pandemic recovery & the "new normal", combating climate change, or creating new modes of communications and entertainment like AR/VR.

And yet in reality, the telecom network - especially public 5G - is often going to be a supporting actor. Or perhaps just have a walk-on role, or be relegated to an extra who gets dubbed in a different language.

You can almost imagine a C-list celebrity arriving at a busy party and shouting: "Guys, guys! Listen up! You can get rid of all your old stuff, all your Internet apps, all your legacy Industry 3.0 gear... just use our new [Technology X] instead, and we'll offer it all with a nice monthly per-GB subscription. You can even buy a slice!"

Heads swivel. Eyes roll. People refill their glasses & continue their conversations.

A bit more realism and humility is required. Telecoms isn't always the star of the show, and neither does it write the screenplay for the rest of the infrastructure or solution.

That doesn't mean it lacks value, or has a limited opportunity - but that it has to play nicely alongside others... and accept that the director and producer have other priorities to focus on - and a wide choice of alternatives to cast in the same roles.

Leaving the acting analogy aside, it's also important to understand that the nature of the word "telco" is itself changing. Looking out to 2030, the "telco of the future" isn't like todays - there won't just be 3-4 national MNOs and a handful of converged/fibre/fixed-line operators. There will be a vast diversity of service provider types and private/community networks. I've written before about the "new telcos" and this is a critical aspect for traditional ("legacy"?) operators to understand and even embrace.

This isn't just 5G-related

It's tempting to just see this as a problem with how 5G is being positioned and hyped. But while I discuss that below, it's far from being unique. This attitude has been around for years, and pervades the entire industry. Some examples of this mindset include:

  • Telcos consistently assume that "voice" means the same as "telephony", since they only do the latter. Telephony is just one voice application of hundreds - and a 140yr-old clunky and poorly-optimised one at that. This is why telcos don't have a foothold in voice assistants, critical comms, gaming voice, podcasts and so on - and get out-competed by cloud players for UCaaS and cPaaS. (For more: see my upcoming workshop series on the future of Realtime Comms, Voice & Video, starting May 19th)
  • 20 years ago, 3G networks were pitched as platforms for telco-created and telco-delivered videoconferencing, games, "value-added services" (ringtones, basically) and much more inside "walled gardens". The killer app was, in fact, plain vanilla Internet access - despite early dataplans trying to restrict the use of VoIP and IM.
  • Some 1980s & '90s telcos saw themselves as central to enterprises' telephony systems and pitched "Centrex" services - basically a precursor to today's cloud-based UCaaS. Most businesses decided that running their own PBXs was a better option - it fit with their internal organisation and operations much better.
  • Telcos' MEC edge-compute was supposed to take centre-stage against hyperscale cloud providers. Instead, MEC's main use is to host internal NFV or vRAN functions that run the network itself. Or enable some hyperscalers' own edge platforms on a wholesale basis, where they don't have other options. Meanwhile, edge-compute evolves in many other (non-telco) domains much faster, including on-device / gateway, or linked to non-3GPP technologies such as Wi-Fi and fibre.
  • RCS was initially supposed to replace all Internet-based messaging apps. Then its believers pivoted to pitch it as a universal B2C tool for mobile customer interactions. In reality, it's (at best) just another slow-moving messaging app with few users and no loyalty, or special features. It turns out to be channel #17 for consumers dealing with companies that don't merit downloading a proper app or which have a lousy website. RBM's best hope is for things like tickets from that 3rd-tier airline you're forced to use to get to an obscure airport, or ordering a new recycling bin from the local council's chatbot. It's competing with the browser, not apps or Internet messaging.
  • MNOs' public 5G with network-slicing was supposed to replace all the cumbersome enterprise network gear such as ethernet and Wi-Fi. There are still visions within obscure 3GPP work-groups about "5G LANs" and I still read and hear nonsense from the cellular industry about it replacing Wi-Fi at scale....
  • ... or alternatively, the new story is that the 5G core is going to be the centrepiece of all telecoms and networking - it'll control Wi-Fi, fixed broadband, satellite connectivity etc. on operators' terms and policies, of course. (See the Broadband Forum's rather Machiavellian efforts here - led unsurprisingly by behemoths like Verizon & Deutsche Telekom that want the core network as a "control point" all the way to end-devices in the home). Yes, maybe Wi-Fi can easily just slot into 5G's shiny new cloud-native core - but in reality, 99% of Wi-Fi has nothing to do with cellular networks, offload, or non-trusted / non-3GPP access
  • As I mentioned recently, the telecom industry tries to take 100% of the (carbon) credit for new technologies reducing energy consumption or emissions.

The ridiculous and judgmental term "OTT" exemplifies this - creating a them-and-us fallacy of "web" companies using "our" pipes. Never mind the fact those technology companies build their own infrastructure, and invest billions in R&D for everything from AI to chip design. Or that all telcos themselves deploy "OTT" apps, websites and Internet-delivered functions.

To use a more sociological phrasing, many network operators still have a "sense of entitlement". They feel that they should be running everything from voice and video communications to networked entertainment, smart homes, or B2B commerce and industrial automation.

This attitude extends into public policy, and discussions on topics like spectrum, where there is a sense of exerting "license privilege". There is often an attempt to exert control before earning it. This is different to (say) Apple's control of its AppStore.

(*Sidenote [And apologies to my clients if this stings!]:if you work in telecoms & talk casually about "OTTs" for anything other than TV streaming, you should be fired, and so should your boss. It's not only wrong, it's flat-out ignorant and damaging. It indicates gross incompetence. It's not quite a "hate crime" but it is a them-and-us divisive term for a distinction that simply does not exist).

Actions have consequences

There are several reasons why this problem is more than just "attitude" or normal marketing-related hyperbole. It directly translates to business successes and failures.

  • Many telco technologies don't just benefit from n-squared network effects, but depend on them. They degrade "non-gracefully" if they're not ubiquitous - which means they need to be adopted by other telcos at the same time. Messaging is a good example - at 50% uptake, across 50% of operators that implement a new standard, there's a high % chance that two people on different networks won't be able to communicate, especially internationally. There's no focus on saturating small niches, or communities of interest, then expanding over time.
  • Telcos spend so much time envisioning themselves as "platforms" that they fail to realise that pretty much every tech platform evolves from a great (and widely-used/loved) product. Google indexed the web & created a great seach function, before it started selling ads. Apple sold the iPhone for a while before launching the AppStore. It also had a loyal base of iPod users who wanted a music-phone, too. Amazon sold books before it launched AWS. All of them had platforms in mind earlier... but had to create a product before tuning the way the platform needed to behave for customers / developers.
  • The telecom industry always assumes that it will be a "net exporter" (or even pure exporter) of capabilities and APIs. It expects it will sell more "exposed functions" than it buys. It assumes a role at the top of the value chain, rather than the middle. This is starting to change now with the recognition of the role of buying public cloud services for virtualisation, but prior to that it just relied on Google Maps for "find the closest store", or credit-checking agencies for new subscriptions. Almost all successful tech businesses these days are more like trading hubs, importing AND exporting functions, APIs and data. The assumption that telcos will always be the OrchestratORS rather than OrchestratED is leading to an unrealistic world-view and poor decisions.
  • Conversations with regulators and governments try to amplify the supposed "special" status and reinforce the spurious divide with new telcos or Internet/tech firms. "We don't want to be dumb pipes, so please tax & regulate the clever people, because we can't compete". This might seem smart - and perhaps gets better access to new funds for rural coverage or pandemic recovery - but it also hampers and limits future options, for instance around international mergers and expansion. Domestic champions find it hard to live dual lives as global heroes.

What needs to change?

There needs to be a frank, honest discussion about "Telcos' place in the world", which works out how to transition from a world of a few licensed network operators per country, to one in which the landscape is much more complex and nuanced.

  • Position the term "telco" as a broader church & consider the needs/roles of the wider group. MNOs and fixed telcos are important, but not alone here. TowerCo's are telcos. Neutral Hosts are telcos. WISPs are telcos. MVNOs are telcos. Governments can act as telcos. Community networks are telcos. Consider them peers. Insist that GSMA, CTIA, ETNO and others treat all telcos equally and offer membership (and governance) on reasonable terms.
  • Don't push back against governments trying to enable new forms of competition and new entrants. Instead, exploit them. Offer reference designs for Open RAN internationally (see Rakuten). Launch Private 5G services in new countries with local spectrum (Verizon is doing this). Run MVNOs in other countries (Turkcell, China Mobile etc).
  • Internet, IT and industrial automation (OT) companies need to be seen as equal and equivalent peers too. Amazon, Microsoft, Google, Siemens, Honeywell, IBM, HPE, Tech Mahindra, NTT Data & many others will often own the customer relationship. Sometimes telecoms fits into their frameworks, and sometimes theirs' fits into telcos. Maybe there are roles for gatekeepers, but only where there is enough competition.
  • Telecom standards need to become much more "loosely coupled". The traditional insistence that a 5G radio needs a 5G core and IMS/VONR telephony needs to stop. 3GPP standards and interfaces should be mix-and-match. Rather than trying to push complex core networks into fixed broadband architectures, the industry should instead make core-optional lightweight variants of 5G RANs, or expose interfaces that make them controllable by enterprise IT, or a Wi-Fi platform.
  • Offer both complete solutions and sub-component services. Don't assume primacy - sell what customers want. Maybe enterprises want their own Private 5G, but would happily use telcos to do the installation and maintenance, or to enable roaming or as a provider of eSIM-aaS
  • Use 3rd-party infrastructure and connectivity where it makes sense - for instance on neutral host networks. Attempt to automate onboarding, and remove friction wherever possible. Accept national roaming if it means your customers get better access in remote places, or indoors.
  • Work out better metrics to measure the business & communicate these to investors and regulators. See this article on what metrics are especially poor.
  • Understand software and app developers' mindsets. They don't want to pay for "premium QoS" on a thousand networks. They want warning of congestion, and how to adjust their apps' demands - when/how to use on-device compute vs. cloud, which codecs and compression, and so on.
  • Stop thinking that phone calls (and worse, video calls) are perfect manifestations of communications, with just an upgrade every 10 years from circuit to VoLTE to VoNR. Why doesn't the dialler app get updated once a month with new features, or give the user more controls?
  • Look at alternatives to subscription business models. Why not an insurance-style annual premium? Or "dark spectrum" just like "dark fibre"? Or 100 others?
  • Invent more stuff. Spend money on R&D rather than sports TV rights. Much of the current angst comes from competing against tech firms that actually create products and services that people want to buy/use.
  • Have a much clearer policy and stance on buying/selling technology and services. Make using platforms effectively seem as important as creating platforms. This is starting to happen with cloud and Open RAN, but it's very slow.

It has been interesting to see that the most interesting - and lauded - new telcos have come from different backgrounds, and have different attitudes. Rakuten is a cloud/eCommerce company first and foremost. Dish started as a satellite TV provider. Jio's parent Reliance Industries is a broad conglomerate. Although not a new company, South Korea's SKT is part of the SK Group, which also has a broad set of non-telco assets.

To be fair, one area where telcos are taking a more hybrid position is around physical assets. Some are operators/co-owners of shared networks, some spin-out tower businesses, some sell dark fibre and some buy - or both in different places. Some use public colocation and data-centres, while others are looking at local offices as possible edge compute sites.


This undoubtedly comes across as a bit of a rant (and not for the first time...) but it's coming from a position of frustration. I've seen the same issues play out for years - and at the core is this attitude of entitlement that I mention above.

It's totally counterproductive, even if the inertia - and sense of history - is understandable.

Everyone wants to be the star, especially if they've been the lead actor for decades. But sometimes, the role just involves a couple of scenes. And often, it's just the cameo roles - if played well - that get the headlines after all.

[A quick plug again: my upcoming Future of Video & RTC workshop series is here]

Cross-Posted from my LinkedIn Newsletter Article (here). Please see comments there & Subscriber.

#telecom #5G #telco #cloud #technology #regulation #voice #edgecomputing

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