Government to give Ofcom new stick swinging targets

The UK Government has unveiled a new consultation which will explore how it can encourage Ofcom to snap the whip, making sure telcos get their gears churning to meet connectivity targets.

Over the next decade, if the government manages to create a suitable amount of urgency across the telco industry, there will certainly be some progress made. The objectives currently set out are nationwide full fibre broadband coverage by 2033, while also increasing geographic mobile coverage to 95% of the UK by 2022.

Although this sounds very official, this consultation is more of a temperature check from the government. It’s asking the industry to give it feedback on its Statement of Strategic Priorities to reinforce its position and create a framework for Ofcom to work towards, ensuring the aims and objectives of the government and the regulator are on the same page.

In this consultation, the government is presenting its Statement of Strategic Priorities for a legally required 40-day consultation, which will validate and justify the aims, therefore providing a more stable foundation to bring Ofcom’s work in-line with government ambitions. This is a process which is required in other utility verticals and brings the telco industry more in-line with the stricter regulatory scrutiny which is placed on segments such as water and energy.

Aside from meeting the connectivity and coverage ambitions, the consultation will also look at how ‘loyalty penalties’, the price-creep which is placed on contract renewals, can be tackled. The telco industry is one which is geared towards customer acquisition, though many would like to see loyalty rewarded, instead of picking up the slack created by offers to lure customers away from competitors.

“As the UK’s telecoms regulator, Ofcom has a critical role in realising our shared connectivity aspirations for the UK,” said Secretary of State, Jeremy Wright. “As well as ensuring the necessary improvements to broadband and mobile services, consumers must also be protected. I urge Ofcom to tackle harmful business practices and remove barriers to switching.”

The ‘loyalty penalty’ is a highly emotive mission from bureaucrats and consumer champions to stop an age-old practise of the telcos, which is perhaps underhanded. It is effectively taking advantage of those who are not savvy-enough to search for a new deal, or those who might innocently and naively presume loyalty would be rewarded. Unfortunately, this is not the case in the telco space, an industry which has a woeful track record and outlook on customer experience and services.

In terms of improving mobile coverage, the up-coming Ofcom 700 MHz auction has caught the attention of the government. The auction will aim to sell off 80 MHz in the 700 MHz band, spectrum which is well suited for providing mobile coverage over wide areas and indoors. Ofcom is currently clearing this band of transmissions for Digital Terrestrial Television (DTT) and by wireless microphones used in the entertainment industry, though the plans are to have the spectrum free for mobile use by summer 2020.

Elsewhere in the consultation, rural roaming will be covered. Again, this ties back to empowering the consumer with greater connectivity and coverage, tackling the not-spots across the UK. Despite each of the telcos claiming progress in improving coverage, there are still plenty of not-spots across the UK where consumers only have the choice of one operator. Future proposals would aim to improve roaming agreements, to offer greater choice of providers to the consumer.

Finally, the consultation will ask for opinions on the current regulatory landscape. Central to this aspect of the investigation will be the suitability of rules and regulations to ensure the UK attracts investment.

While this might seem like bureaucracy for the sake of bureaucracy, it is a democratic nation ensuring all the boxes are ticked. The government has ambitions and objectives, though it is seeking validation from the community, before presenting a mandate to Ofcom to ensure it is regulating the industry in the way the government feels is most beneficial for society on the whole.

Three UK’s guerrilla marketing strategy backfires

Challenger brands need to try harder to get noticed, but this approach can sometimes backfire, as Three UK found out this week.

Three is hoping to build on its #PhonesAreGood campaign, launched in October last year, that took a tongue-in-cheek look at all the negative press around smartphone addiction by imagining some historical scenarios that would have been changed for the better with the involvement of a smartphone.

One of those scenarios concerned King Henry the Eighth, who notoriously got through six wives by the time he called it a day. The joke is that if he’d had some kind of dating app at the time he might have been able to make up his mind about them prior to marriage and thus a couple of them could have been spared the chop.

In the build up to Valentine’s Day some bright spark in Three UK’s marketing department thought it might be a laugh to promote this part of the campaign with a tweet entitled ‘Shag, marry or behead’. This was presumably a nod to the ‘kiss, marry, kill’ game and maybe even the phrase used by history students to remember what happened to Henry’s wives: ‘Divorced, beheaded, died; Divorced beheaded survived’.

Now you don’t have to be the most committed social justice warrior to know that Twitter is not the place for nuance or humour and anything that can be taken offence to will be. While the tweet was clearly a joke, there was always the possibility that it could be perceived as some kind of trivialising or even endorsement of domestic violence by someone.

That someone was apparently mumsnet member Jeanhatchet, who flagged up the tweet on the site’s forum. “The 3 mobile network are laughing at domestic homicide in this tweet, Jeanhatchet wrote. “In many of the women killed as a result of intimate partner violence blunt force trauma to or being stabbed in the head is a feature.

“The most worrying thing is …. how did this marketing meeting go? What views were expressed about killing women? How that was funny and would sell more contracts and phones? Imagine those men who sanctioned this and how common their views are that it never registered as a marketing disaster? https://twitter.com/threeuk/status/1095740892919541761?s=21” Three seems to have taken down the offending tweet by here’s a screenshot of it courtesy of Jeanhatchet. Google is also still acknowledging the original tweet.

3 UK deleted tweet

 

3 UK deleted tweet Google

That was enough for the Manchester Evening News to get involved, which committed not one but two dogged hacks to the job of writing up this mumsnet post and the rest of the claimed ‘flurry of complaints’ around Three’s tweet. Even their combined efforts weren’t enough to ensure the faithful representation of the discussion thread they were copying-and-pasting, however, with one of Jeanhatchet’s early comments wrongly attributed to  Lolkittens5, to whom she was responding.

Hot on their heels was Labour MP James Frith, who apparently spent most of yesterday working himself up in to an impressive froth of righteous indignation. “This is a disgraceful ad,” he opened. “Misogynistic and violent towards women. The disgrace of it. I hope you’re fined big time for this with proceeds sent to women’s refuges. Utterly shameful @ThreeUK”

Three, of course, tried the standard ‘we are sorry for any offence caused’ defence but, as is nearly always the case, it was too little too late. Apparently emboldened by the 30 likes and four retweets his initial Twitter salvo received Frith doubled down, including the textbook move of calling for an apology and then rejecting it when it was made. He concluded by vowing to grass Three up to the ASA before wrapping up his busy day by retweeting a story about how great his constituency is.

Unperturbed Three announced a new marketing initiative today around London Fashion Week. It’s claiming to have launched the world’s first 5G mixed reality catwalk, It ‘uses innovative start up Rewind and its Magic Leap mixed reality technology alongside Three’s 5G network, which will see the designer’s inspirations come to life on the catwalk,’ according to the press release.

Somehow this involves the son of singer Liam Gallagher and actress Patsy Kensit, who is apparently a world-renowned model and, as you can see below, has inherited his father’s petulant resting face. Perhaps this is intended to distract from Three’s rather weak 5G claims, with vague talk of IoT and AR the only substantiation offered.

3 UK Lennon Gallagher

“Today we are turning up the volume on 5G and bringing it to life for the first time in the UK, right here in the heart of the fashion world,” said Shadi Halliwell, chief marketing officer at Three. “By giving students access to the next generation of mobile technology, they will be able to push the boundaries of learning, innovation and sustainability to create in a way that’s never been possible.”

Halliwell, who presumably signed-off on the problematic tweet, will be hoping this new initiative will be free from controversy, or maybe not. It’s possible that the tweet was made in the hope of a bit of viral exposure, but that seems unlikely when you consider how quickly it was deleted. One thing, at least, Three will have gained from the experience is the knowledge that guerrilla marketing is a very high-risk strategy these days.

UK and US smartphone markets in steep decline

The latest numbers from industry trackers Strategy Analytics reveal UK smartphone shipments fell 14% in Q4 2018.

The main culprit seems to be UK smartphone market leader Apple, which seems to be having a bit of a nightmare all over the world right now. Apple shipped 700,000 fewer iPhones in Q4 2018 than it did in the year ago quarter, which is a drop of 19%. Second placed Samsung suffered a similar decline, dropping 400k shipments. This placed Huawei actually managed to increase its shipments by 200k, which meant it stole a big chunk of market share from the big two.

“Despite fear of trade wars and Brexit, Huawei has cracked the UK smartphone market,” SA’s Neil Mawston told Telecoms.com. “If current growth trends continue, Huawei will overtake Samsung as the number two UK smartphone player later this year. Samsung’s UK smartphone marketshare has halved in the past five years, and it must take urgent steps to arrest the decline, before it is too late, but he ‘big 3′ brands still made up three in four of all smartphones sold in the UK last year.”

“UK smartphone shipments declined 14 percent annually from 8.5 million units in Q4 2017 to 7.3 million in Q4 2018,” said Rajeev Nair of SA. “United Kingdom is the largest smartphone market in Western Europe and it is suffering from weak sales, due to longer replacement rates, a lack of wow designs, and Brexit uncertainty causing consumers to hold off on some new purchases.”

“Samsung clung on to second place with 19 percent smartphone marketshare in the UK during Q4 2018, down from 21 percent a year ago,” said Woody Oh of SA. “Samsung is facing intense competitive pressure from Huawei, who is targeting Samsung’s core segments in the midrange and premium-tier with popular models such as the P20. Huawei’s UK smartphone marketshare has leapt from 8 percent in Q4 2017 to 12 percent in Q4 2018. Huawei is growing fast in the UK, due to heavy co-marketing of its models with major carriers like EE.”

 

UK Smartphone Shipments (Millions of Units) Q4 ’17 Q4 ’18 Growth YoY (%)
Apple 3.7 3.0 -19%
Samsung 1.8 1.4 -22%
Huawei 0.7 0.9 36%
Others 2.3 2.0 -15%
Total 8.5 7.3 -14%
UK Smartphone Vendor Marketshare (%) Q4 ’17 Q4 ’18
Apple 43.5% 41.1%
Samsung 21.2% 19.2%
Huawei 7.8% 12.3%
Others 27.5% 27.4%
Total 100.0% 100.0%
Source: Strategy Analytics

SA has also been looking at the US market recently and while the shipment decline is even worse on the other side of the pond, seems that Google’s Pixel brand is starting to get some serious traction over there.

“Google’s Pixel 3 range benefited from weakness at Apple, Samsung, ZTE and others,” blogged Mawston. “Apple saw longer replacement rates, due to its battery-replacement program encouraging owners to hold on to existing iPhones for longer. Samsung struggled, due to soft sales of the flagship Galaxy S9 model. ZTE was shunned by authorities and carriers and demand for its smartphones collapsed. Google Pixel 3 is starting to resonate with US consumers who are searching for something new, such as eSIM connectivity or AI.

SA Q4 2018 US smartphone chart

UK growth is slowing, but so is Europe’s

The numbers for 2018 GDP growth are in and, while they’re not great, they’re a lot better than some doom-mongers have expected.

UK annual GDP growth slowed to 1.4% in 2018, the lowest since 2012. Having said that growth was below 2% for the previous two years and historically we seem to have paid the price for few recessions by having smaller peaks too. This ONS chart shows around 2.5% is the long-term historical norm so we’re below par but not by a lot.

Further context can be provided by looking at the rest of Europe. A recently published European Commission report says German GDP grew by 1.5% last year, with the French managing exactly the same. In both cases, however, this was down from 2.2% last year and the UK is actually forecast to slightly out-perform Germany this year, with growth of 1.3%. The whole of the EU27 is only forecast to grow by 1.5% this year.

“GDP slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining,” said Rob Kent-Smith, Head of GDP at the ONS. “However, services continued to grow with the health sector, management consultants and IT all doing well.

“Declines were seen across the economy in December, but single month data can be volatile meaning quarterly figures often give a better indication of the health of the economy. The UK’s trade deficit widened slightly in the last three months of the year, while business investment again declined, now for the fourth quarter in a row.”

The EC report defaulted to tried and tested ‘uncertainty’ to explain the slowdown. The main thing flagged up was the current aggro between the US and China, but also “…social tensions and fiscal policy uncertainty in some Member States,” which seems to be a reference to France and Italy, respectively. The uncertainty around Brexit was briefly mentioned at the end of the commentary.

That hasn’t stopped opponents of Brexit jumping on these figures as the next piece of news to support their apocalyptic narrative, with loads of supposed experts jumping on the bandwagon and claiming special insight into the minds of the country’s business people. Many such experts also predicted a recession in the event of a leave vote that never materialised, so we should probably take their latest blurts with a pinch of salt.

 

Huawei answers UK parliament’s security questions

In its latest bid to get US allies to chill out Huawei wrote to the UK parliament to address a bunch of concerns it had expressed about security.

On 15 January Norman Lamb, the Chair of parliament’s Science and Technology Committee, sent Ryan Ding, President of Huawei’s carrier business group, a letter entitled ‘Security of the UK’s communications infrastructure’. In it he noted the oversight board of the Huawei Cyber Security Evaluation Centre (HCSEC) had said in its latest report that it could only provide limited reassurance about the risk Huawei posed to the UK’s critical networks.

Ding was given two weeks to respond and used all of it, pinging over his response on 29 January. That response has only just been published and you can read it in full here, but in case you’ve got too much other stuff on your plate, we’ve condensed it into words of one syllable for you.

It starts by praising the UK for its openness and notes Huawei has operated here for 18 years without any aggro. In that time it has invested loads of cash in the UK and would be happy to keep doing so, given half the chance. The main part of the letter addresses four questions posed by Lamb in his earlier correspondence, so here they are, accompanied by a summary of each response.

What reassurances can you give to demonstrate that your products and services pose no threat to UK national security?

  1. We’ve been around for ages and nothing’s gone wrong so far.
  2. We do loads of work on cyber security.
  3. The HCSEC Oversight Board still reckons that’s the best way to keep an eye on us.

How do you respond to actions being taken over foreign involvement in communications networks by other nations, such as the UK’s Five Eyes allies?

Coverage of this stuff has been overblown; Canada hasn’t taken any action, New Zealand has only turned down one 5G proposal, only 5G is a problem for Huawei in Australia and even in the US legal restrictions only apply to federal funds. Furthermore banning us just creates a false sense of security because the supply chain is global.

How do you intend to respond to the HCSEC Oversight Board’s latest annual report?

More references to points two and three of the answer to the first question followed by vows to double down on things like security and transparency. Ding infered it would help if policy makers would try to be a bit less uptight and give Huawei the benefit of the doubt every now and then.

To what extent could Huawei be compelled to assist Chinese national intelligence work using its UK-based hardware or software, or information gathered in the UK?

  1. Huawei has never and will never do that stuff and if it did someone would notice and then it would be in serious trouble.
  2. China’s National Intelligence Law doesn’t oblige companies to install security backdoors and Huawei has never been asked to do anything like that anyway. But even if that did happen, it would not be against Chinese law to refuse.

In closing the UK is really important to Huawei and we still plan to spend £3 billion there from 2018-2023 if you let us. Feel free to get in touch any time and even visit us in Shenzhen if you fancy it.

So, what to make of this exchange? It’s good that our parliament is engaging with Huawei rather than just unilaterally acting against it and Huawei’s response seems like a genuine attempt to reciprocate that gesture with an attempt to answer the questions in a constructive and comprehensive manner. Having said that the attempts to downplay the restrictions already imposed on it, especially in Australia and the US, were a reach.

There’s nothing especially new in the response, however, as it’s largely a restatement of the defence Huawei has been using for years. Huawei is essentially a proxy for deep, visceral distrust towards the Chinese state at this stage, which means there’s a limited amount it can do to conclusively prove its innocence. Its fate in western markets probably hinges on a significant thawing of diplomatic relations between the US and China and there’s little sign of that happening anytime soon.

What’s the point of Virgin Media’s latest broadband speed claim?

Virgin Media has claimed it can now deliver 8 Gbps broadband, but you have to ask whether there is any point aside from satisfying executive’s egos as the ‘faster than you’ mentality undermines the industry.

To be clear, Virgin Media is not the only telco that destabilises customer confidence and makes claims which are often twisted and contorted by their spin doctors, resulting in the miseducation trends of recent years, but they are the ones doing it today.

In Cambridgeshire, one of the UK’s technology hubs, Virgin Media is trialling what it describes as the ‘UK’s fastest home broadband’ service, with speeds exceeding 8 Gbps. This might sound fantastic and serves as an excellent means to distract onlookers from shortcomings elsewhere in the Virgin Media business, but why?

Why do customers need an 8 Gbps broadband connection? What services and applications could possibly be satisfied by such lightening speeds? In the future there might well be demand for such services, but right now there are arguably other things Virgin Media should be concentrating on.

This is the current issue with the telco industry on the whole, and why the telcos will struggle over the next couple of years; the obsession with ‘bigger, meaner, faster’ is unhealthy and is limiting the ambitions of the telcos themselves.

All of this comes back to the relationship with the customer. Every telco is obsessed with being the fastest around, as it is commonly believed this is what the customer wants, and therefore all messaging is geared around this ambition. Advertisements are flooded with imagery and claims which are unrealistic and more often than not, un-needed.

Instead of focusing on a single test which claims PR plaudits for hitting 8 Gbps in a very specific area of the UK, why not concentrate on delivering a more satisfactory service across the board? You correspondent used to be a Virgin Media customer and can assure you promised speeds were never met. The telco industry’s obsession with wowing the world with headline figures is compounding the misery of mistrust.

If Virgin Media wants to succeed in the broadband world and be more than a quirky challenger with a famous brand ambassador, it should aim to create a wonderful experience for all customers, not chase shallow headlines. This is of course a wonderful example of what is possible in the world of tomorrow, but customers are getting screwed today.

Customers don’t care what the maximum speed of a service is, as long as it is more than what is required for a good experience. If a household requires 50 Mbps to make everything work, does it really matter whether the top speed is 55 Mbps or 5 Gbps. All this obsession does is lure the majority of customers into a false promise of performance and create problems for the future.

Looking at the bigger picture, the telcos with a mobile offering are going to have to move away from this obsession with speed before too long. As it stands, customers who have a stable 4G connection can pretty much do anything they want. There are very few (if any) consumer applications which exceed the capabilities of 4G. And if there are, we suspect there are other factors involved.

This leads us onto one of the biggest questions telcos will face at Mobile World Congress in a couple of weeks’ time; how will they sell 5G to the consumer?

There are of course plenty of reasons to be excited by 5G, but as a consumer why would I be bothered? The applications which will require 100 Mbps or more are not widely available on smartphones, while few connect laptops to the internet outside of wifi. We strongly suspect telcos will market 5G on the grounds of ‘faster is better’, but most will look at the premium and likely decide they have fast enough.

Virgin Media’s 8 Gbps broadband trial is perfectly representative of the industry we work in today. While there is always a need for progress, there are more cogs spinning in the machine than just the speed one.

The unhealthy obsession with ‘bigger, meaner, faster’ is falsely reinforcing the belief that telcos are going a good job, both across the mobile and broadband segments. At some point, someone is going to have to sit down and realise there is more to the world of telecommunications than speed.

BT publishes report that concludes it’s great

A new report commissioned by BT has concluded that it’s really important for the UK economy. Imagine BT’s surprise.

One out of every 75 quid (1.3%) produced in the UK is down to BT group, we’re told. The report, entitled The Economic Impact of BT Group plc in the UK, was compiled by Hatch Regeneris, which describes itself as follows: “We create economic and social insight to help our clients make a positive impact on people, places and economies.”

This piece of insight concluded that BT is making a positive impact on the UK economy. It says BT group contributed £22.8 billion to the UK economy when you measure Gross Value Added, which takes into account additional value generated through BT’s suppliers, which accounts for 40% of the total.

“Our analysis underlines how vast BT Group’s contribution is to the UK economy, particularly across the nations and regions,” said Tim Fanning, Director at Hatch Regeneris. “BT Group is almost unique in contributing to the economies of virtually every community across the UK, supporting significant levels of GVA spend and employment opportunities per region.”

“We’re proud to be one of the UK’s largest private sector employers and investors,” Jane Wood, BT Group UK Nations and Regions Director. “Our investments, including the latest 5G mobile technology through our mobile network EE, will ensure the UK continues to be one of the world’s best-connected economies.

“With more than 82,500 directly employed people spending their salaries in local businesses, from Shetland to the Scilly Isles, as well as regularly volunteering on activities such as our Barefoot tech literacy programme in schools, our people are at the heart of nearly every community.”

As you can see by how much BT is labouring the point, this is a fairly transparent corporate marketing exercise. As a former state monopoly and the UK’s most significant operator group, BT is under constant public scrutiny. It presumably figures commissioning benign reports such as this every now and then will help its image but they need to be a bit more subtle if it hopes to win over all but the most suggestible of people.

Vodafone’s UK fixed line efforts off to a shaky start

Ofcom has started including Vodafone’s broadband and landline services among its complaints data and they top both categories.

The good news for Vodafone is that, while its nascent fixed line efforts are the most complained about (to Ofcom, at least) the lead isn’t that great. TalkTalk isn’t far behind in each case and there isn’t much of a gap to the chasing pack. Ofcom didn’t have anything to say about Vodafone specifically, contenting itself with the standard, generic fare.

“With so much competition in telecoms and TV services, companies that are falling short need to make service quality and complaints handling their priority,” said Jane Rumble, Ofcom’s Director of Consumer Policy. “Customers who aren’t happy with their provider can shop around and vote with their feet.”

Ernest Doku of uSwitch.com had a bit more to say. “Vodafone will especially be feeling the heat here as, for the first time, the provider has topped the table for receiving the highest number of complaints for its broadband and landline services,” he said. “However, this is the first time the provider has had enough customers – proportionally – to justify its inclusion in these figures.”

It’s not too surprising that a relatively new set of services should have some teething problems and therefore an elevated level of complaints, so we shouldn’t read too much into Vodafone’s performance for now. But if that level remains high for the next few quarters then that could indicate some more profound issues with Vodafone’s UK diversification.

Here are the tables.

Broadband

Ofcom Q3 2018 complaints broadband

Landline

Ofcom Q3 2018 complaints landline

Mobile

Ofcom Q3 2018 complaints mobile

Pay TV

Ofcom Q3 2018 complaints TV

Openreach creates 1.6k new roles to fuel fibre rollout

A sparkling new training centre in Peterborough and 3,000 fresh-faced trainee engineers, 1,600 of which are newly created roles, gives weight to the long-overdue fibre rollout ambitions of Openreach.

Peterborough is the second of twelve new or upgraded training centres across the UK as Openreach continues to scale with plans to hire an 6,500 engineers across the next twelve months. The full-fibre plans are starting to meet acceptable expectations, and it’s about time. Currently, Openreach employs 24,282 field engineers and last year hired 3,500 new engineers.

“Openreach’s publication of clear plans for where, when and how they will be investing in new fibre networks is an important step,” said UK Minister for Digital Margot James. “Long term commitments from the industry like this are very important for local communities who need this kind of guarantee on when they will be able to take advantage of the benefits that fibre can bring.”

“In the last year, we’ve learnt to build at high quality, and at a competitive cost,” said Openreach CEO Clive Selley. “This year, we’ll prove that we can build the network on a vast scale and connect customers seamlessly.”

For the digital economy to run at full pace, fibre connectivity is a must. Openreach are clearly reacting to this idea, though this is hardly novel. Selley and his slumbering cronies should have been aware of this years ago, unless the Spanish, French, Portuguese and Norwegians had access to a secret stash of research it wasn’t sharing with Openreach.

As it currently stands, only 6% of homes and business across the UK have access to full-fibre connectivity. However, this number has more than doubled between 2017 and 2018, according to Ofcom’s Connected Nations 2018 report. This might be progress though the UK should not consider calling itself a leader in the connected economy.

Looking at the full-fibre assault, Openreach is now (or will be in the near future) building in 25 towns, cities and boroughs across the UK as it drives towards its ambition of fibering-up three million homes and businesses by 2020. The team also plan to release figures every three months to increase transparency through the full-fibre rollout.

As part of the government’s Future Telecoms Infrastructure Review, the industry has been set a target to connect 15 million premises to full fibre broadband by 2025 and provide full fibre broadband coverage across all of the UK by 2033. Alongside the increased need to satisfy the connectivity appetite of the ever-demanding consumer, fibre infrastructure will be key to realising the 5G dream.

“Access to fibre broadband is particularly key for UK businesses in the run up-to Brexit, as companies come under even more under pressure to deliver on a global scale,” said Phil Sorsky, VP International Sales at CommScope. “With that in mind, it is critical that everyone across the country has the same access to the opportunities enabled by connectivity.”

Progress is being made, albeit at a slow pace, but at least the UK is staggering towards the finish line.

Gartner claims people are warming to AI

The power of artificial intelligence is unquestionable, but what remains unknown is how long it will take for the technologies to be considered mainstream. Are people afraid of the power of AI?

With every technological breakthrough it takes a considerable amount of time for mainstream adoption. There are of course early adopters who will reap the benefits of AI, but bell curves exist for a reason; the vast majority will be slow to react, scared of the unknown, resistant to any form of change or dismissive of the benefits. Despite this pretty much being an inevitability, Gartner is confident adoption is going pretty well.

“Four years ago, AI implementation was rare, only 10% of survey respondents reported that their enterprises had deployed AI or would do so shortly,” said Chris Howard of Gartner. “For 2019, that number has leapt to 37% – a 270% increase in four years. “If you are a CIO and your organization doesn’t use AI, chances are high that your competitors do, and this should be a concern.

“We still remain far from general AI that can wholly take over complex tasks, but we have now entered the realm of AI-augmented work and decision science – what we call ‘augmented intelligence’.”

This is where some of the biggest benefits can be realised according to Gartner. With a continued shortage of IT skills (and also in some niche/highly qualified professions) throughout the world, AI can be introduced to ensure the chasm of ability does not negatively impact revenues. How this idea has been implemented across the ecosystem does seem to vary quite considerably.

The research indicates 52% of telcos have deployed chatbots to assist with customer service operations, while 38% of healthcare providers rely on computer-assisted diagnostics. Fraud detection and IT security are other areas which have seen AI implementation, while the breadth of services will only increase across 2019. With the smart home, and smart speakers in particular, becoming increasingly normalized in the eyes of the consumer, this looks like a blossoming space.

Interestingly enough, today also marks the day the UK Office of National Statistics unveiled employment numbers for the year. The number of people now employed in the UK has reached an all-time high of 32.54 million, while the number of job vacancies rose by 10,000 to a record 853,000. Although the early adopters, those with extraordinary technology ambitions, will focus on the added value benefits of AI there will of course be those who use such a breakthrough to reduce headcount.

This is the reality of AI which we will have to meet head on. Jobs will be replaced by automation and software, people’s livelihoods will be made redundant, unless retraining is offered. But, for retraining to be a realistic ambition first there has to be an acceptance of the negative consequences of AI.

The Fourth Industrial Revolution will be incredibly painful for some, but industry and politicians don’t seem to want to admit this, instead just focusing on the benefits. Every Industrial Revolution has been painful for those who have not adapted for the future, but somehow the rhetoric seems to be this one will be different. Putting PR spin on the issue will not help in the long-run, we need to be realistic.