Inward application of tech explains dumb pipe rhetoric

Every telco fears the ‘dump pipe’ label and the push towards commoditisation, but perhaps this trend is being compounded by an inward looking attitude in the application of potentially revolutionary technologies.

This is the conundrum; telcos are missing out on the cash bonanza which is fuelling companies like Facebook and Google, but to keep investors happy, executives are focusing more on improving profitability than replacing lost revenues, such as the voice and SMS cash cows of yesteryear. This might seem like quite a broad sweeping statement, and will not be applicable to every telco, or every department within the telcos, but statement could be proven true at Total Telecom Congress this week.

One panel session caught our attention in particular. Featuring Turk Telecom, Elisa and Swisscom, the topic was the implementation of AI and the ability to capitalize on the potential of the technology. The focus here is on automation, predictive failure detection and improving internal processes such as legal and HR. These are all useful applications of the technology, but will only improve what is already in place.

The final panellist was Google, and this is where the difference could be seen. Google is of course focusing on improving internal processes, but the main focus on artificial intelligence applications is to enhance products and create new services. Spam filters in Gmail is an excellent example, though there are countless others as the Deepmind team spread their influence throughout the organization.

The difference between the two is an inward and outward application of the technology. Telcos are seemingly searching for efficiency, while Google is looking to create more value and products. One will improve profitability of what already exists, the second will capture new revenues and open the business up to new customers. One is safe, the other is adventurous. One will lead a company down a path towards utilitisation, the other will emphasise innovation and expand the business into new markets.

Of course, there are examples of telcos using artificial intelligence to enhance offerings and create new value, but it does appear there is more emphasis on making internal processes more efficient and improving profitability.

This is not to say companies should not look at processes and business models to make a more successful business, but too much of an inward focus will only lead to irrelevance. We’ve mentioned this before, but the telcos seem to be the masters of their own downfall, either through sluggishness or a fear of embracing the unknown, searching for new answers.

The panel session demonstrated the notable difference between the two business segments. The internet players are searching for new value, while telcos seem more interested in protecting themselves. Fortune favours the brave is an old saying, but it is very applicable here.

Elisa claims world’s first commercial 5G launch

Finnish operator Elisa says it has become the first operator in the world to begin commercial use of a 5G network and starts selling 5G subscriptions.

Not only that, the network was kicked off by an international video call – from Finland to Estonia. In Tampere, Anne Berner, Finnish Minister of Transport and Communications called Kadri Simson, Estonian Minister of Economic Affairs and Infrastructure, in Tallinn.

“We aim to make Finland the leading nation as a developer of 5G mobile services,” said Berner. “The Ministry of Communications is ready to allocate the first 5G licences to the 3,400–3,800 megahertz frequency band in autumn, which will make Finland among the first countries in the world to start building 5G networks.”

“Elisa actively enables Finland to continue leadership in mobile data usage by opening commercial 5G network first in the world,” said Elisa’s CEO Veli-Matti Mattila. “With the help of 5G services, consumers as well as corporate and institutional customers will get lots of new value when modern applications can be used more efficiently and it becomes possible to develop new applications. For example, it will be possible in the future for all viewers to watch the same football match as a high-quality live broadcast without delay using any terminal device.”

Elisa was keen to remind everyone it made the first GSM call too and it’s good to see Europe is still capable of leading the way in telecoms. The bigger picture still seems to be that Europe will lag the US and the Far East in 5G, but this sort of thing indicates that if the EU and regulators can get their act together we might be able to close the gap a bit.

Elisa is proud of its efficient SON

Finnish operator Elisa is so happy with its self-organising network tech, developed with Red Hat, that it wants the whole world to know about it.

Elisa is quite big on uncapped data tariffs and as a consequence experiences disproportionately high volumes of traffic over its network. This has led it to make a special effort to make its network more efficient, which is where SON comes in. Developed on Red Hat’s OpenShift Container Platform, Elisa SON claims to double the user data throughput on the existing network.

“Our automated network optimization solution offers operators both operating and capital expenditure savings,” said Elisa CTO Kalle Lehtinen. “For example, in Elisa’s own network in Finland, the software actively monitors and tests the network, making more than two million tests and 2,000 changes on daily basis. Less resource-intensive manual work is required and the existing investments can be fully utilized.”

“With Elisa’s approach offering unlimited data plans to subscribers, its networks carry a high volume of mobile data, meaning it has focused on optimising network performance and getting maximum value out of its existing equipment,” said Santiago Madruga, head of Telco and ICT EMEA at Red Hat. “Thanks to this drive, it has developed innovative SON capabilities. We are proud to collaborate closely with Elisa to deliver SON on Red Hat OpenShift Container Platform.”

This is obviously a PR coup for Red Hat too, especially since, in its briefing documents, Elisa speaks about having tried various off-the-shelf vendor SON solutions but couldn’t find anything that did the job well enough. This is also yet another example of operators growing frustrated with the vendor community and taking more ownership of overcoming their technological challenges themselves, and now Elisa has a product it can sell on to other operators too.