Ryu Young-Sang, CEO of South Korean Telecom giant SK Telecom, told CNBC that AI is helping telecom companies improve network efficiency.
Manaure Quintero | AFP | Getty Images
Barcelona – Global telecom companies are talking about the advancements in key technological advances like artificial intelligence as they aim to stay away from being perceived as the “silly pipe” behind the internet.
At the Mobile World Congress Technology Conference in Barcelona, CEOs of several telecommunications companies explained how they are loading money into new innovations, including AI, next-generation 5G and 6G networks, satellite internet, and even smart cities.
Takahashi Castle, president and CEO of a major Japanese telecom company kddiA detailed plan to build a smart city called Takano Genkaku in Tokyo, and a partnership with Elon Musk’s Starlink venture will deploy satellite internet connections directly to the cell.
Ralph Mupita, CEO of MTN, Africa’s largest mobile network operator, also took the stage by sharing that he is on a major step towards becoming a company that offers both wireless connectivity and fintech services, including wireless connectivity, e-commerce, insurance, lending and remittances.
“The telephone company business has been helpful to us, and it’s been repeated ever since. But the future is about the future of the platform,” Mpita said in his keynote address, adding that the company has actively invested in other areas such as media streaming and financial services.
From “Dam Pipe” to “Techcos”
Several experts who have collected steam in the telephone company industry over the past few years teeth Portmanto is the phrase “Techco,” and the words “Telco” and “Tech.”
The term refers to the idea of a telephone company that operates like a high-tech company. It helps you invest in cutting-edge technology, provide digital services to consumers, and make money from the critical capital expenditures you allocate to upgrade your wireless network.
For 20 years, such a high-tech giant Meta, Google, Amazon, apple, Microsoft and Netflix Bloosters in a world where content can be delivered directly to people’s devices, allowing consumers to communicate seamlessly with each other and store or stream data online. Thanks to innovations such as the Internet, smartphones, and the cloud.
However, these innovations have disrupted the business model of telecom companies and are now often recognized as legacy players only for the installation of cables and other network infrastructures that allow for internet connectivity.
It is the dilemma that won the Telco brand, and the light-journal term “Dumb Pipes.”
“Even in front of the mobile internet, where SMS was a former killer app, I remember early in the industry,” Hatem Dowidar, CEO of UAE telecom company E&, said in a keynote address at MWC. “We were getting messages. We used to make audio revenue.”
“This has been disrupted by excessive players over the years. Today, many carriers around the world are being scaled down to become a pipe of packets that capture data across the network,” Dowidar added. “And the competition is still not here. They have scale. They have investments to go even further and disrupt further.”
Telcos accepts AI
Ryu Young-Sang, CEO SK TelecomHe told CNBC’s Arjun Kharpal that the Korean telecom giant turned its eye on AI technology and helped improve the efficiency of its wireless networks.
“There are two aspects of AI for carriers: one as a user and the other as a supplier,” says Young-Sang. “As a user, you are a telephone company business. You can use AI technology to improve network efficiency, marketing and customer service. You can improve your own operations.”
“Another aspect is that AI can become a growth engine, a new business opportunity for the telecoms,” he added. According to Young-Sang, another important area where carriers like SK Telecom can play a key role is data centers, which is the ability to provide the computing capacity needed to run generated AI applications such as ChatGPT.
In the Western world, the competition to build data centers is dominated primarily by cloud computing giants like Amazon, Microsoft, Google, or “hyperschools.” However, SK Telecom is actively expanding its Ai-Ready data center globally, according to its CEO.
Can Telcos catch up with Tech?
For many telecom analysts, chatter about carriers looking to transform into technology players is nothing new. Companies in the industry have long recognized that their association in communication and media is declining.
Kester Mann, director of consumer and connectivity at market research firm CCS Insight, told CNBC that he is not a huge fan of the term “Techco” but that the industry continues to focus and is gathering pace in the context of the AI boom.
“AI can affect so many areas… and obviously, it’s the trend around Telco that places itself above Techco and operators more than just connectivity providers,” Mann says.
According to Nik Willetts, CEO of the Telco Industry Association TM Forum, so-called “autonomous networks,” or networks that can be managed and modified due to limited human surveillance, are areas of rapid traction in the industry.
“Auto-Local Networks are a very quick move from theory to reality thanks to advances in AI, new levels of ambition and industry-wide action,” Willett said.
The technology “can unlock step changes in operating and capital efficiency, improved EBITDA and free cash flow, and much needed improvements in new revenue opportunities and customer experience,” he added.
Jeetu Patel, Chief Product Officer of IT Networking Ciscosaid they see communication play a key role as AI increases network traffic and bandwidth demand.
“The reality is this: network bandwidth appetite will increase exponentially with AI,” Patel told CNBC. “Today, 100% of our workforce is human. Tomorrow you will be augmented by AI agents, robots, humanoids, and many edge devices.”
“These agents will be more chatty and will need more network traffic and bandwidth,” he added. “I think service providers play an important role. In my mind, their opportunities will not go away.”
