Are Telecoms back? Or is this a completely new sector?.

Written by – Fabio Moioli  – Head Consulting & Services at Microsoft. 

A few years ago, the future of telecom operators seemed doomed. That was the era of smartphones and apps, with the like of Whatsapps killing SMS, and the free Internet services attacking traditional voice-calls.

To get the idea, telcos already lost more than $100 billion in SMS revenues, prices of voice calls sharply decreased, and Telcos profitability painfully declined. Even worse, telcos have sustained huge network investments for data growth. Yet, while they sustained these costs, the money went in advertising to the “Facebooks” and the “Googles”, and in consumer money to the “Apples” and the “Samsungs”. 

The total cost structure of a global Whatsapp ended-up being only 2% of a typical local telecom operator, and the “dump pipe” was the word abused to describe the unfortunate future of operators.

Now the world has changed. One more time.

With artificial intelligence and cloud, traditional smartphones and apps are no longer at the center of the universe. Indeed, we will soon have conversation with systems of cloud intelligences, in diversified devices and (internet of) things. The mobility of devices will be replaced by the mobility of our experience.

In this new world, Telecoms have the unique opportunity to be back at the leading seat. But they must act quickly. Each of them will either incredibly flourish, or miserably perish.

By partnering with companies like Microsoft, Telco can take a leading role in the democratization of Artificial Intelligence. Ambient computing will allow us to interact with cognitive services via a multitude of interfaces, including holographic computers and a new generation of wearables. And Telcos can be the new neural system, connecting and orchestrating all of this, strongly leveraging their control of internet access, wide presence on the territory, deep traffic data ownership, and end-user identification capabilities.

There is now the opportunity for Telecoms to provide their customers with an experience of artificial intelligence that is intuitive, personalized, and always accessible. Telefonica CEO José María Álvarez-Pallete showed at the recent Mobile World Congress an anticipation of this digital journey.

By strongly partnering with an artificial intelligence leader like Microsoft, Telefonica is putting their customers in control of the new artificial intelligence, which will connect their mobile experiences. Again, I’m here referring to the mobility of their experience, contextual, not to the mobility of any smartphone they may have.

We are witnessing a paradigm shift.

By leveraging artificial intelligence, Telcos’ new mission can be almost limitless. Looking forward, they can become the neural system of our new “phygital” world, once they embark in this cognitive services journey.

To begin with, they need however to partner with an AI leader (like Telefonica has done with Microsoft) and they must profoundly transform their selves, including their typical organization and their legacy IT.

How do you see the future for Telecom Operators? Will they either incredibly flourish, or miserably perish?

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