Telcos race to transition from ‘dumb pipes’ to AI-enabled tech players

Barcelona – World telecommunications companies are talking about progress in key technologies such as artificial intelligence while they seek to move from perception like “stupid pipes” behind the Internet.

During the Conference on Mobile World Congress technology in Barcelona, ​​CEOs of several telecommunications companies described how they stack money in new technological innovations, including AI, new generation 5G and 6G networks, satellite Internet and even smart cities.

Makoto Takahashi, President and CEO of the Japanese telecommunications giant KddiDetailed plans to build an intelligent city nicknamed Takanawa Gateway City in Tokyo, as well as to deploy Internet Connectivity Direct Satellite in partnership with Elon Musk Starlink Venture.

Ralph Mupita, the CEO of the largest mobile network operator in Africa, MTN, also went on stage to share how the company has made significant progress to become a company that offers both wireless connectivity services and fintech services such as payments, electronic commerce, insurance, loans and discounts.

“The telecommunications sector has served us well. It has since it. But the future really concerns the future of platforms,” ​​said Mupita in his opening speech, adding that the company has invested in other fields such as media streaming and financial services.

A jargon that has gathered in the telecommunications industry in the past two years East The expression “techco” “a portmanteau of words” telco “and” tech “.

The term refers to the idea of ​​a telecommunications company that works more as a technological company – which invests in advanced technologies and offers digital services to consumers to help them earn money from important capital expenses they have allocated to upgrading their wireless networks.

For two decades, technology giants such as Meta,, Google,, Amazon,, Apple,, Microsoft And Netflix Prospered in a world where the content can be delivered directly to the devices of people, consumers can communicate transparently with each other, and the data can be stored or disseminated online without having to have bulky infrastructure – all thanks to innovations like the Internet, smartphones and cloud.

However, these innovations have disrupted the commercial models of telecommunications companies, to the point where they are now often perceived as inherited players who are only there to put cables and other network infrastructures that allow internet connectivity.

It is a dilemma that has won telecommunications brands the derogatory term “Dumb Pipes”.

“I remember at the start of the industry, even before the mobile internet when SMS was the Killer application,” said Hatem Dowidar, CEO of the public telecommunications company E & ,, in an opening speech at MWC. “We used to make messaging income. We used to make vocal income.”

“All this over the years has been disrupted by exaggerated players, to the point that today, many telecommunications operators in the world are reduced to being a package of packages that simply get data through the networks,” added Dowidar. “And competition does not remain motionless. They have the scale, they have the investment to disturb even more.”

Ryu Young-Sang, CEO of Telecom SKTelecommunications’ giant South Kharpal Telecommunications were reported to ARJun Kharpal of CNBC to help it to help it improve the efficiency of its wireless network – something that was constantly exposed to the stands of many telecommunications operators in MWC.

“For telecommunications, there are two aspects of AI. One is as a user, the other is a supplier,” said Young-Sang. “As a user, you are a telecommunications company, you can improve network efficiency, marketing and customer service using AI technology. You can improve your own operations.”

“The other aspect is that AI can be a growth engine, a new commercial opportunity for telecommunications,” he added. Data centers, installations that offer a computer capacity necessary to carry out generative AI applications such as Chatgpt, are another key area where telecommunications operators like SK Telecom can play a key role, said Young-Sang.

In the Western world, the race for the construction of data centers is that which was mainly dominated by the giants of Cloud Computing – or “hyperscalers” – like Amazon, Microsoft and Google. However, SK Telecom aggressively extends the data centers ready for AI of its own world, according to the CEO of the company.

For many analysts in the telecommunications industry, the chatter concerning telecommunications operators who seek to transform into technological players are not entirely new – industry companies have long known that their relevance in communications and the media are decreasing.

Kester Mann, director of consumer and the connectivity of the CCS Insight market research company, told CNBC that even if he was not a big fan of the term “Techco”, it is something on which the industry continues to concentrate and gathered a rhythm in the context of AI boom.

“The AI ​​can influence so many areas … And obviously, it plays this trend around Telco in Techco and operators positioning itself more than a simple supplier of connectivity,” said Mann.

The “autonomous networks” or the networks which can be managed and fixed with limited human surveillance, is an area which quickly gains ground in the industry, according to Nik Willetts, CEO of the TM forum of the association of the telecommunications industry.

“Autonomous networks are a movement that we see from theory to the reality incredibly quickly, thanks to the progress of the AI ​​combined at a new level of ambition and action on a scale of the industry,” said Willetts.

This technology “can unlock a change of steps according to the exploitation and efficiency of capital, improving the BAIIA and free cash flows, as well as to unlock new income opportunities and essential improvements in the customer experience”, he added.

Jeetu Patel, product manager of the IT networks giant Ciscosaid he sees telecommunications playing a vital role because AI increases the demand for network traffic and bandwidth.

“The reality is as follows: the appetite for bandwidth of the network will increase exponentially with AI,” Patel at CNBC told. “Today, 100% of our workforce is human. Tomorrow, you will have increased by AI agents, robots, humanoids, many on-board devices.”

“These agents will be more talkative and they will require more network traffic and bandwidth,” he added. “I think that service providers have an important role to play. In my mind, the opportunity has not left for them.”