As the world came to a screeching halt due to the worldwide COVID-19 pandemic, the tech world adopted a full steam ahead approach
This has rapidly pushed technological advancements to the forefront.
Everything from augmented reality (AR), Internet of Things (IoT), artificial intelligence (AI), 5G, and the like were propelled forward and began integration within our lives.
While the pandemic heavily impacted service providers’ spending plans, technology never stopped, and several key areas of telecom IT will demand attention in 2021.
Overall, telecom IT vendor revenue is expected to grow by 2.3 percent in 2021, a welcome improvement on this year’s anticipated 0.6 percent decline although still below 4 percent CAGR for the period 2025, according to a study by Omdia.
While telcos took notes of the on-going tech developments and participated some, they found themselves keen on the prospect of adding AI within their systems to better optimize the way they deliver their services.
In parallel, the broader AI industry is witnessing a migration of AI to the edge. For example, the edge AI training and inference market for chipset sales is expected to grow from $2.6 billion in 2020 to $10.7 billion in 2025, at a CAGR of 35 percent.
Omdia’s research indicates that 80 percent of service providers see the use of AI and analytics, when it comes to the automation of network activities, as an “important” or “very important” IT project for 2021. Nearly 60 percent of them are planning to increase investment in AI tools.
AI presents telcos with the ability to shed human-intensive networks in favor of an intelligence-driven ecosystem, in order to go along with the ongoing quest to drive new growth, the report added.
Latecomers, telecoms are actively expanding the utilization of AI/Machine Learning (ML) beyond merely digitizing internal and external interactions. “Many Communication Service Providers (CSPs) are already on a journey to become augmented service providers where AI augments human decision making for prediction, analysis, and new revenues,” Don Alusha, Senior Analyst at ABI Research, said in the report.
An example of this could be seen by the changes made by Japan’s Rakuten, who renamed its Network Operations Centers (NOCs) to Service Experience Centers (SECs) as it implements extreme automation for self-aware networks.
In addition, Spanish telecom giant Telefónica established a new wing called Telefónica Tech Ventures which plans to incubate new growth based on AI/ML, cloud, and IoT/Big Data, as well as cybersecurity.
“AI/ML capabilities enable the industry to leverage IT-oriented nimbleness and scale as they seek to manage the complexities of today’s networks and establish new commercial models,” Alusha added.
The integration of AI/ML within these industries will aid existing asset-intensive environments where cost of goods sold, inventory turns, managing factories, and supply chain are the area of focus and success.
In parallel, the Omdia report suggested that service providers should make “targeted use of AI to better orchestrate customer journeys, as well as invest in well integrated central data repositories and robust data management capabilities.”
In the new world of cloud, AI/ML, and software, tech providers do not manufacture a product and sell it, the report highlighted.
“They sell a capability. They sell knowledge. They create it at the same time they deliver it. The business model is different and so are the economics. DriveNets, Enea Openwave, Ericsson, HPE, and Nokia are some vendors among many others that are building software-centric ways of marketing and selling solutions. The point is that AI/ML-based platforms are re-shaping existing commercial models. The winners will be those who act decisively and thoughtfully,” Alusha explained.
According to ABI Research, the consistent and continuous maturity and development of AI/ML will pave the way to enable new value creation in CSPs’ journey in becoming digital service providers.
“Technology is a key pillar of that journey, but there are other key dimensions, that if not considered part of the overall digitalization journey, may limit CSPs’ ability to capture the full value at stake,” the report added.
Under that pretense, change management is considered vital to the alteration, since it represents the bulk of the effort to push for new ways of working and conducting business.
ABI Research found that CSPs who are investing in AI/ML-based platforms must take into consideration the root of efficiency will be derived from knowledge sharing and embracing open platforms where APIs and data can be easily accessed.
Alusha stressed that AI/ML, big data and open APIs offer agility and the ability to drive innovation and enable faster and better decision making.
Consequently, CSPs must realize that the new world in cellular must start with a foundation on software and API-led connectivity.
“The ability to harness the power of software platforms and AI/ML is bound to be a defining feature of CSPs of the future. This may well mean that, in addition to bolting on software and intelligent capabilities, CSPs need to learn how to build them as cloud-edges, Open RAN, and 5G core proliferate in the ecosystem,” Alusha concludes.