Telco Innovation Is as Easy as Three As

Can 5G still be a disruptive force for telecoms? Achieving success with 5G will require more than improving operational efficiencies in the core and radio access layers. Telcos recognize there is far greater potential for 5G — in fact, GSA cites that over 20% of the operators with 5G are currently investing in 5G Standalone (SA) trials or deployments — but the lack of new services emerging belies a larger problem: a failure to innovate.

Like many legacy businesses, telcos find themselves in the situation outlined by Clayton Christensen in his book The Innovator’s Dilemma. So far, 5G is offering small improvements to one-size-fits-all networks and services that already exist. Much more is possible, however, which is why the industry has spent the past few years reframing future network possibilities. The key areas of focus include managing how wildly different devices connect to ubiquitous networks, delivering differentiated and innovatively priced services for both the enterprise and consumers, and finally, creating uniquely tailored services.

There’s just one problem. Risk-averse telcos tend to refuse to take the lead in 5G innovation, instead looking to each other and waiting for someone else to make the first move. This comes with a more existential risk of its own: the risk of failing to realize profitable growth and eventually falling off the metaphorical cliff.

Now more than ever before, it’s time for telcos to experiment, take risks, and yes, even fail as many times as it takes to disrupt the market and move into the new era of innovation and connectivity that 5G is capable of delivering. To do that successfully, they’ll need to leverage three A tools: analytics, AI and automation, as I recently shared in Forbes.

Analytics

Currently, analytics are used much in the same way 5G is, with a lot of telco data being captured, stored and analyzed for the sake of marginal improvements to already-extant systems. Right now, this data mostly tells businesses where they’ve been, not where they’re going or where they should go. In short, analytic insights need to look for different, more pertinent questions to answer and then find the data that can produce the answer. There is plenty of telco data out there — it’s just a matter of asking the right questions. Think along the lines of where did this unexpected spike in revenue come from and what factors are needed to replicate it? The second and third As are also critical in responding to what your analytics tell you.

Artificial Intelligence

Artificial intelligence may be hailed as a game-changer in nearly every industry, but for telcos, it could actually live up to the hype. 5G allows telcos to go beyond giving the customers what they ask for; operators can find the kinds of services customers don’t even know they want yet. With its ability to learn, adapt and optimize choices, AI can play an integral role in discovering these new services and customer segments, then quickly test the different discoveries to identify what’s working and what isn’t. It’s an established recipe for market disruption faster than ever before with AI.

Automation

Finally, automation complements AI to speed up the entire cycle of developing, testing and evaluating new services and products. Automated systems reduce costs, react more quickly and don’t require as much human intervention. Most critically, however, automation solves the problem of decision paralysis. It looks for innovations with the best empirical outcomes and, thus, the highest potential for positive revenue generation, all based on what AI models have learned from their deployments.

The future of telecommunications services and their revenue models, by necessity, will look very different from what we have today, thanks to 5G SA and the myriad of devices in development. Consequently, telcos focused only on optimizing cost efficiencies in the present will find themselves left behind.

In this new era, being a successful telco will require proactive advancement of new possibilities and programmatic adaptation to optimize for the constantly changing landscape. In particular, telcos will want to focus on the following two areas:

1. Defining a competitive, profitable product offering set for each market served
2. Ensuring optimal uptake and maximum spend within each relevant customer segment

Analytics, AI/ML and automation offer telcos the opportunity to discover the best path forward in a choice-heavy market. A new era of telecommunications is nearly here and while it may seem contradictory for market leaders to disrupt themselves with the help of the Three As, it’s now essential to achieving future success — before someone else gets there first.