THE TELCO CENTURY CLUB RETURNS:
WHY BRILLIANT TECH STILL FAILS
CHRIS LEWIS & ROB JONES

CRA: Rob Jones and Chris Lewis. Welcome back to the Tech Burst Talks podcast. Rob: Thanks Charles. Great to be here. Thank you for having us in this once again across time zones. Interesting discussion. Chris: Lovely to be back with you both. CRA: So we got a lot to talk about today, so let's kick it off. When we last did this telco Century podcast, and we call it the Telco Century Club because between us we have a hundred years [00:01:00] plus of experience in the telco industry. We weren't exactly bullish on where the telecoms industry future lied. We talk about a lot of the challenges. Chris was big on the supply and demand mismatch, where we've got a lot of demand for connectivity, but there's an oversupply so no one's really able to monetize it. Rob, you talked a lot about the build it and they will come mentality around 5G and I think we all agreed that the industry remains far too tech focused rather than being customer centric. Since then, in the last 18 months, we've seen a ton more layoffs, more disappointment around 5G monetisation and the usual parade of technologies that are gonna save the world and everything's gonna be great. So I want a quick answer on this one. Have things improved the past 18 months? Are they remaining stagnant or has the industry somehow gotten worse? Chris: I think the industry has come to realise it needs to change, but whether it's gone completely towards that customer experience, customer viewer is still questionable. At least it's realized it has to move [00:02:00] towards outcomes rather than technical inputs, which is where I think we were 18 months ago, where we were still focused on the inner workings of the network. So it's much more now shifting towards outcomes and what the network can do in the broader digital economy. We have improved, I'm not sure the financials have improved, but we, at least the attitudinal side has changed for many players, both the suppliers and the telcos in the industry. Rob: Look I think, has everything changed radically for the better? I would say no. But I do agree with Chris that things are starting to move in that direction. That there's a realisation that there needs to be a different focus. And things need to be more customer oriented. , Can the industry do it? It's still a big question. And I think there's also a big question as well with more and more external factors coming in, whether it's. Things like ai, and we can talk about AI in many different ways, shapes or forms, or whether it's things like satellite directed device. There's lots of people coming into the industry that haven't been there before, potentially [00:03:00] disrupting it. So I guess the question is, can telcos react to a, become, as Chris said, more customer centric like they want to be? I think there's an acknowledgement of that now, and B, can they react to the new things coming into the industry? Chris: But Charles, you hit the nail on the head also in that we're still seeing so many layoffs in the industry. So big, big numbers. Obviously the new head of Verizon is getting rid of big numbers. We see it still here at BT in the uk. We're seeing it across the world where just right sizing the telco for the job they've got to do and the revenue that comes in. You know that's the simple equation that. But the people within the telcos are trying to get right. then the supply and demand, as we touched upon before about making supplies, trying to sell stuff into those telcos. It's a tough gig. It's no doubt. It's a tough gig. And, and Rob, you're absolutely right. Those external factors, cloud AI and then the economy and those are three pretty big things on their own anyway. Rob: But the telcos CRA: do layoffs every year, I joined O2 in [00:04:00] 2002, so nearly 25 years ago, and we were talking to them about how we needed to transform the whole workforce because we were gonna go to this new era of data and we were launching the Blackberry and the XDA and we did layoffs. And like someone like that, Telstra, every year they have a new transformation program and there's more layoffs and nothing seems to change. So I think you guys are giving them the benefit of the doubt. I'm gonna hammer 'em on this one and just be like, you're just not learning. I've heard this before. It's been going on for so long like this, Chris: but it's cumulative, isn't it? So those layoffs that they've gradually been shaving and shaving and shaving off the big numbers that every telco employed and I think they, are they learning? Yeah, I think they are. But it's a big change, right? It's a fundamental transformation of what Telco is and how it builds its stuff, how it delivers it, and then how it interacts with those other parties in the ecosystem. CRA: I completely agree with that, but my view is they've had 25 years of inching towards this. They could have made a lot more progress by now. So hopefully they'll make a little bit of progress going forward, but. Rob: well THERE There's obviously a big efficiency [00:05:00] drive, which of course layoffs equals efficiency, right? But I don't think you're gonna change the world through efficiency. And I think, you're right, 25 years of embedded ways of doing this isn't going to change. From a bit of tweaking around the edges. And I think when you look at the big behemoths that these companies are, if you really want to change things, I think there has to be some bold moves about setting up a new division, setting up a new way to do things within a big company, testing, learning from that and trying new ways to go to market, new ways to reach customers. And so I haven't seen that. I've seen some attitudes about what. People need to do, is there a real radical approach about how they're gonna structure a new organization and new ways to market? I haven't seen that. I haven't seen that. Risk forward attitude, right. CRA: But if I'm a telco CEO right now, I'm gonna get fired if I'm not talking about transforming my business. So everybody has to talk about it. The question is, are you seeing any positive outcomes from these discussions or is it just more them [00:06:00] talking with no action? Chris: We're seeing some big changes certainly some of the Asian operators have shifted their emphasis. People like Axiata do see changing, and that's been they've had more of a CIO driven business than a. a CTO driven business. And to go back to your previous point, about 25 years, the problem which was outlined by a a group CIO at Telefonica, at the Great Telco debate, probably about 8 10 years ago, he said at that time they weren't hurting enough. Right? There was enough growth coming in from mobile and shift to new service revenues. I think we're probably now on the cusp where they are beginning to hurt enough. There is little growth in the in telco revenue therefore they're looking at the numbers going, do you know what? We've gotta change the way we do business. So I think there is a step change going on in the industry. at the moment CRA: Are they gonna be able to change the culture? Because it, it's not just about hiring a few different types of people. It's gotta create a different type of a culture within the organisation as well. So do you think they're gonna be able to do that because it's, it's not an easy thing. I mean, [00:07:00] they've been trying it for a long time and it's not just the telcos to be fair, IBM was trying to become a solutions company for God knows how long, and that just inch its way forward and never made too much progress. Rob, what do you think? Rob: Yeah I think, to build on what Chris was saying right there, if there's that realization there, that's great. And I do think the industry has got. Currently a lot more pain than they've had in a while as far as not realising the ROI for 5G has been a big thing. The threat from new entrants is another big thing. And the impact of ai, the efficiency piece, everything else. But the question I have right, is if people are saying. We need to change. That's great. What's missing for me is someone stepping up and saying, here's how we're going to change in a meaningful, and of course everyone needs to have that story and put it forward for their shareholders, but in a really meaningful, granular way about, here's some really different things that we're doing. And I'm still really not seeing that to go, wow, that's a really, [00:08:00] interesting action plan for how you're really gonna transform that business. Right. CRA: So what I wanna ask on this one is like there's this big talk of moving from being a telco to a TechCo where they start operating more like the technology vendors, which I find kind of. Ambitious to put it lightly. It is gonna be a challenge for them to do that. It begs the question, okay. They just, they're not gonna be able to compete with the hyperscalers. Should they just say, fine, actually some of us aren't gonna be able to do this. Let's just focus on being the utility product. being the bit pipe. Chris: I think in many ways that telco to TechCo argument has been and gone. I think the cultural thing you talk about, we should always keep coming back to that. But the problem I still have with the industry is I'm never quite sure what the product is we're selling to either to end customers, consumer, or business, or we're providing into the digital economy. So. Should you compete with hyperscalers? No. Don't. They've got a, they've got a part, a particular way of doing things, a way if you're going to market, should they personalise stuff? Yes, absolutely. There are enough changes going on, but it's not about being a [00:09:00] TechCo or a telco. It's what product are you selling? What channel are you selling it through? the fact of the matter is that connectivity today? Yeah, we do buy it in isolation, for our homes and for businesses to a certain extent. But more often than not, we're getting it as part of an application or part of a business process, into which connectivity has to be injected. And we've never really built the industry based around that, so that, well, I'm sure we'll come into APIs later on, but it's what, what do, what gets exposed from within the telco network. We spent all this time talking about how clever we are at building these networks was actually, the way that that manifests itself to the customer base is often invisible 'cause it's there as part of the solution. It's there alongside storage and compute and and security and all these things. So I do think. It's not about being a TechCo, it's about understanding the relative position within the ecosystem, the relative position in the channel to market and making sure you not playing nicely, it's under understanding [00:10:00] your product. CRA: This is gonna be the big challenge for them. And I'm glad you brought up the idea of APIs because we can now lead into that a bit. But I'll start off a little bit like talking about this whole sophistication paradox. And I love this term because it, it reminds me about what happened with Telstra when they launched their digital twin platform. They built something that was amazing. They couldn't explain it to anybody internally, so they couldn't actually get the headcount. It was a great thing for buildings. They're gonna run it on all five of their headquarter buildings across Sjo, then take it to market. It was genius, but nobody could explain it. But with 5G, we never knew how to explain the value of it. And now we've got network APIs and Chris, you and I talked about this at Mobile World Congress. Everybody's talking about it. Nobody can explain it simply and what it actually is and what the value is and what role they're gonna play. It's a great tech enabler, but who are you gonna partner with? What solutions are you going to create? What value you're gonna give to a customer to solve these pain points? Are we getting anywhere closer to being able to do that today with something like network APIs? Chris: Well, the fact you even call it [00:11:00] network APIs is sort of misleading anyway, isn't it? Because CRA: Yeah. Chris: APIs that, that an application developer, whether they're inside a business or an individual doing a, an individual application, what they need to do to deliver that properly, securely, reliably. Yes, there's some elements of the network in there. but they don't think of it as being network. The developers think of it, what do I need to have in place so I can deliver my Salesforce application properly or my accounting application properly, or a collaboration application properly? We are looking at this the wrong way as an industry again, 'cause we're looking at the capability we've got. Based on our network and network technology, not on what is needed to build an application, to deliver it, to deliver quality of service, to improve that customer experience. I think in some ways we're a bit arsed about, faced with this, that, we're focused on our tech and people don't care about our tech internally. They don't, the 5G comment you made is absolutely true. We've never managed to enunciate what 5G really delivers [00:12:00] apart from slicing, right? Which is the most ridiculous name in the world. That means absolutely nothing to anybody. And if you can't explain what your product is, people aren't gonna buy it. And if you don't make yourselves easy to do business with, people aren't gonna work with you. So that's why I think many telcos are seen at arm's length. But one, one thing which I think is worth mentioning, there are some organizations, and I'll use Von as an example. so Von. Have developed in the countries they operate, and it's a strange combination of countries I accept, but they're in the Ukraine, they're in Pakistan and north in some of the stand markets, but their, their position in those countries, they're helping those countries build a digital ecosystem, whereas if you look at the traditional telcos that we think of, the more mature Western telcos, they still just see themselves as a telco. They don't see themselves, or they've tried other things and failed. Whereas what Vion ISS doing with digital payments, with commerce, with business relationships is that because it doesn't exist as a mature set of [00:13:00] ecosystems, they're able to step in and do that. whereas in the mature markets, you've gotta work with the already existing banking systems or the channels to market or whatever. That's one of the key differences we see in what's so-called emerging markets versus the so-called mature markets. CRA: Rob, any thoughts on this one? Rob: Yeah, so, so look, just to touch on the network, API thing honestly, does anyone wake up in the morning go, oh, I gotta get me some network APIs. Like, man, my business would be great if only I had these network APIs. It's just not. It's not a market, right? I mean, and you want an example of a disaster. I mean, look at Ericsson buying Vonage and it's going, oh, this is gonna provide APIs into, VoIP. So what was it? They paid something like $6B and then very, very quickly had a $4B write down. I mean, it's just not a market. I mean, if I take a step back and forget about Telco, but just look at just businesses and stuff that gets sold and things that work in the tech sector, right? [00:14:00] much every business comes down to, and Chris, you touched on a few of these, right? It's bandwidth, it's compute, it's storage, and it's content and applications, right? And those four things is pretty much what every company in the tech sector sells now. I would argue that telcos are stuck in that bandwidth. It's the bandwidth and connectivity piece that they sell. Where they need to move to is the content and applications piece. And Chris, you talked about that content, the, the banking and all that kind of stuff. That's actually, like an application, right? So, so that's the, the four components of any tech sector business. And if they really want to be moving into a valuer, they need to go from bandwidth and need, they need to sell content and applications, Chris: I bet kind of, I disagree. They don't need to do that. They need to let the people who, if you get the space like Vion, I've got, then yes, move into that space and sell that. But where mature markets exist, financial services. Retail, [00:15:00] whatever, insurance, all those things where they exist. Then you've got to, you've got to work with those major companies. 'cause they're not gonna concede their market either. So I think it's that how do you work with organizations delivering services to different customers, whether it's B2B or B2C. , So you don't have to move into those markets. What's happened with most telcos over the last 20, 30 years is they've tried to move into those markets and they've failed because they've treated them the telco as being the center of the universe. And of course, I mean, of course it is in many, many ways, but the reality is, the way you buy. Disney or Netflix or whatever is that based on the network in itself? No, it's not. It is just, it's a pure conduit to get to that content and we emphasize the need for that cleverness of the network. But actually, many application developers and people like Netflix and Disney, you think, do you know what best effort's often find enough? We think high quality services is essential. Well, it hasn't been so far, is it in the years that Netflix and [00:16:00] Disney and Co have all been very successful, no, I don't think they need to be in those markets. Rob. I think they need to be conscious of how those markets work they can get into them. If the market is underpenetrated, like financial services in many African markets for example, then yeah, there's an opportunity. Where those markets are already well established, you're not gonna break in and break the relationship that you have with, whether it's Rabobank or Barclays or whatever your favorite Canadian bank happens to be. Rob: Yeah. No, you're exactly right, Chris. I mean, I'm not saying that they should be doing all of that piece, and it's like the app store sort of model, right? It's like, apple and Google are not writing all the apps on there, but they're providing that reach to customers. They're providing the ecosystem to do that. They're playing to their strengths, and then they're letting other third parties what they need to do to get to those customers. And I don't think that the telco sector has a good grasp on what they do well and how they can enable others to reach customers. Right. Chris: but Rob, do you know my theory on this is that, the telcos have [00:17:00] never had to really sell. 'Cause it was a monopoly. Obviously when mobile there was competition. But actually that's resulted in prices being pushed right down in many markets. So we've never really had to sell, we've never had to explain what it was. 'cause it was about making calls and providing data. You know, whereas if you're gonna be truly outcome based, you've gotta understand what the outcome is. And the outcome is watching Netflix, the outcome is delivering a Salesforce application. And as you mentioned earlier, not just the hyperscalers, but systems integrators, both local and global players. They're the ones working with businesses to deliver these things, to bring all those digital components together. Telcos, they've tried and they've, and they've failed. Rob: Charles, you said earlier, the pain level is increasing in the industry, but I still don't think it's where, not that I wish pain on the industry, but I don't think it's where it needs to be to really motivate some of that behaviour because as you say, Chris, it's a, it's still a lucrative business if you're a licensed operator and you have your significant market share as a licensed [00:18:00] operator. In a developed nation, it's still fairly much a license to print money, right? You've got your arpu Yeah, you're giving away more in your package, but it's remained fairly stable for a number of years. You've got a user base that you're managing and it ticks over, Chris: Yep. Rob: That comfort level that comes from not being a licensed operator with significant market share, I think in some ways has stifled innovation or the willingness to do new things. To reach new customers, generate new lines of revenue because they've got a pretty good machine that they're sitting on Chris: Yeah, it makes money. It doesn't, I think the thi, I think the thing is it doesn't make enough money from, the shareholders and the like, look at it and going, surely we should be making more off this. Of course the adjacencies are where the new money's being made o often not that much higher margin but obviously you've got global players com competing against local. So telcos will never have the scale to compete against even the people who their equipment. The vendors in the industry, they've got global scale, telcos have [00:19:00] local presence, local scale. CRA: I think what worries me about the industry right now is that I think they do recognise they need to change and transform their business, which means they're gonna need a different type of skillset in there. I think the problem they're gonna have is if I'm a really good technical guy or really good business guy, where in the priority list does a telco come in? Are they gonna be able to attract the best talent anymore? Because if you're good, you're gonna wanna go to a hyperscaler who's gonna probably pay more? Are you gonna be able to get the right types of people? And telcos have had some incredibly intelligent and innovative people in them. A lot of those people get burnt out with the bureaucracy and move on somewhere else. So my concern is, I mean, yes, they might recognize they need to do it, will they be able to attract the right type of people to do it? Chris: It's tough, right? It's tough. There's two different dynamics at play there. One is attracting the new talent. the other is repurposing the existing talent. All these cuts that we keep hearing about, the, obviously the people who can easily [00:20:00] find other jobs, go and find other jobs, right? Because they've got the right digital skills. So, so on the one hand, you're managing the decline of the workforce as a whole. The other side you're trying to build in new people. So it's a, a pretty complicated issue to, to change the culture and, the age profile. Obviously AI will help that because the jobs should become easier. Technically the jobs become easier productivity-wise become easier. yeah, I, I think it's a real challenge. CRA: Well, I'm glad you mentioned AI because I think we should now transition into AI because as with any podcast, we are contractually liable to discuss AI in depth on every podcast. Now I think it's like no matter what, you have to talk about it, even if you don't care about it. But AI reality versus hype, so when we talked about it 18 months ago. Chris, I, you had a great quote. You said you're bullish on the technology, but you're bearish on the timeframe for how AI will impact telcos. Rob, you are much more bullish on it where do you think we stand right now as a telco industry? Are we learning how to leverage ai, whether it's, for our networks or [00:21:00] for anything related to our customers? Rob, go to. Rob: Yeah, so look, I think we're seeing some green shoots of hope in some of the, the areas of AI and telco. So SK telecom, I think is a good example where they've grown some, of the revenue, about 14% on some of their AI strategy. They're using it for data centers. They're looking at it for chat bots and how they do customer service. I know Vodafone's using, what is it their, Toby. Chris: Yep. Rob: Toby Chris: Yep. Rob: and they're handling customer interactions using ai. But is that really like, I don't see the where I was a bit more hopeful that there'd be a bit more, rather than just like AI chatbots to deal with people and more funneling people off from talking to people in call centers. Which, let's face it, cost of service is a big thing and if it helps with cost to serve, it's. Maybe slightly better than getting stuck in an IVR menu. Hell of press three, press five, press nine. Where I think they haven't necessarily realized some real benefits is analysis of the network, [00:22:00] efficiency of the network management of resources, on a virtualized basis, which some of that's happening, but I also think that they've become too dependent on some of the cloud providers, right. And when you actually start putting stuff off to Azure or AWS that becomes a bit of a challenge. There's some flexibility in the resource, but I think people are also now waking up to how expensive that flexible resource is. So there's some marks, I think, on the customer service piece where yeah, starting to use ai, starting to, manage some of the customer interaction piece. On the infrastructure side, I don't think they've done enough themselves. There's too much that's gone out to the hyperscalers and the cloud providers. And I think there's a bit of a realization of going, well, that's nice to have flexible resources, but actually it's really expensive and it's good recurring revenue. Which of course the hyperscalers love that. And they're the big winner in some of this stuff, right? Chris: But, but CRA: Chris, your thoughts. Chris: good news is, I think certainly from the work I do with people at the TM forum, that they talk about different le levels of, of [00:23:00] automation, and so it's not really ai, it's really automation. obviously AI plays a role in that. In fact, I, I would generally, Charles the whole thing about a they talk about ai, native telco. I mean, what the hell's an AI native Telco, right? CRA: will come to that later. Chris: a telco that uses ai. Well, Frank, and it comes interestingly in the discussions about where they've got to with automation. The Chinese are doing quite well. Some of the Asia are doing quite well the issue is they're finding. Processes within the telco flow that they're automating, which is great. but, and that, that sort of raises the absolute question, which is, okay, so as an industry, the logistics the processes, the premises that we need to embrace Yeah, we can automate that. We can do more machine working on it rather than thinking about it being ai. So I, I think there's a lot of work. some small areas that have been successful. Order management, for example. But we need a massive amount, say around inventory, let alone around the data that we [00:24:00] gather in, in the way we run the telcos. And that's just the internal bit the AI bit around customer experience. Of course, we've got carried away with this idea of large language models or even small language models. That can do things that automate processes. my view of it is that it allows us to choose the channel of interaction that we prefer. So in my case, 'cause I can't see, then, I wanna be spoken to. If it's by a really good bot, I'll take that. I'd rather have a human. We are beginning to get to that. Stage where a AI is allowing us to, to hop between channels of interaction, but that's as long as they've got the right data in place that, do they understand me as a customer, or the business as a customer. The data generally within most telcos has been quite poorly managed and certainly siloed. 'cause the different lines of business have been protecting it from each other. 'cause they don't wanna concede ground. So I think we should move away from thinking that AI's gonna solve all of the problems that we have in the industry or perhaps even in humanity as a [00:25:00] whole. I'm much more about what processes can we improve? how can we use a AI in its many different flavours to improve the workflows. Because at the end of the day, we have to make sure that the logistical components are there, that all work together. And of course, I mean, thinking of our industry, we've got this issue between argument between fixed and mobile. And people keep telling me it's a mobile-first world and going, I don't care. It's a connected-first world. I don't care if I'm connected by mobile fixed or wifi when I'm in this environment, perhaps when I'm out about i, I care more. And perhaps satellite might play a role in that, but I think minimal from my personal point of view. a AI should not be seen as being the panacea it should be used appropriately to improve workflows, to improve procedures, to improve logistics, and make us a better industry. CRA: I agree with you completely on that, and I wanna point out something you said that you talked about how the telcos don't have the data in place to actually better service as customers, Chris: I CRA: and [00:26:00] it isn't just this. Chris: said data. Actually, Charles. CRA: It's, it, it's not just a telco problem. I had to do a retail event, and I did some analysis on this, and it works out about 16%. One 6% of global retailers have data in any way, shape or form ready to be leveraged to really start using AI properly. So it's not just a telco problem. Everybody's got this problem. So it's a wider industry problem than just the telco industry. But, and there's a lot of, I agree. Rob: data science stuff. It's a data science thing, right? If you are good at actually, structuring your data about customers and then leveraging that, this is actually a lot of pre AI stuff, and as you said, retail, things like retail, groceries, that kinda stuff they're fantastic at basically aggregating their data on customers. The frustration I think, in the telco sector is there is so much data there on customers. They are blessed with all this customer data that most industries don't have. But as Chris said. They've got it in different silos. They're not aggregating it [00:27:00] properly and they're not exposing it. So that things like everything from customer care to customer retention to whatever else, they're not able to leverage that data 'cause they haven't really done the pre AI data science piece that, other sectors are better at Chris: And, and Rob, they're scared to use it, right? They're scared of GDPR. They're scared of breaking the rules, whereas the other the hyperscalers and the device people like Samsung and Apple in many ways they've sort of create, shaped the rules and to use it and to using a sporting analogy, you, you play up into and beyond the rules until the ref tells you otherwise. I, I think, I don't think telcos have been aggressive enough in that respect. Rob: Well, that, that's actually a long history, Chris. It just sort of keeps, keeps manifesting itself where Telco is all about, well, we need to create the standards, we need to create the rules, and then we act by it. And this whole, not so new industry called the internet was like, it was just like, Hey, we just built [00:28:00] this thing and it works, and then it exploded. And then the world's like, well how do we put some rules around this thing? Right. Chris: Hmm. CRA: I have a friend who used to head up Southeast Asia of ML and AI group for AWS and he always said like, there's certain things we never tell customers. Number one, your business case is not properly defined because it isn't, but they're not gonna tell you that. And number two, your data is in nowhere near ready to do it. So they'll say, yes, we can do this. But by the way, it's gonna cost you a lot more than you think because we gotta clean up your mess first. So, but I wanna get off AI because if we just keep going on this path, we'll bang our heads against a wall and never solve anything. Chris: to summarize, AI is still as promising as ever. And we, CRA: I agree. Chris: moved on from the LLMs, right? So those big heavy lifting jobs have been done. The s SLMs, the rag, all the inference stuff, that's where the value's gonna be created. Now, my, CRA: Regs brilliant. Yeah. Chris: concern is that those big LLMs are not gonna make money either. So the open AI guys I think could potentially be in significant financial trouble. Google will carry on because it's got other things it [00:29:00] can drive, but you know, doesn't it worry you that Apple has been so poor on its AI delivery? CRA: Well. Rob: they're gonna be fine. 'cause now they're gonna use Gemini, all the Google Chris: Okay. Rob: for their AI Chris: Yeah. Problem solved. CRA: Let somebody else blow all the cash on that one. So, so the next thing I want to go into is I wanna look at these stats coming out of the uk and it came out in the FT earlier this year, and I was a bit shocked by this. So over the past two years, MVNOs in the UK are growing customers and subscribers significantly, and it's two years in a row now that the regular mobile operators are actually starting to lose customers. Now you guys look at the industry a lot closer than I do globally. Is that just a UK trend or are we seeing this shift to more and more MVNOs now? Chris: It differs in different parts of the world, but certainly to, to comment on the uk we've had a real, not even a, not even arrivals, but the beginnings of a change now. So quite a few of the financial institutions introducing MVNOs. So CRA: [00:30:00] Yep. Chris: which is, relatively young, and then the younger banks, they see it as a way of tying their customers in and giving them something which they, which helps. Grow their other business. So this is the, will it be a loss leader perhaps? If you think of it in those terms, they make money on it. 'cause the wholesale market is relatively mature but it's it's putting a cleaner front end on a product that, that I say that we've made too complicated and we fail to describe the way the benefits for people in the long run. So. H why not? It's a channel to market for the telcos, right? The telcos still get money for it. They just, they don't have the cost of servicing, which, and I think the wholesale market is something which we've ignored, for far too long. It's been a bit of a dark art, and actually that's exactly what we should be doing. If a, if an MVO wants to take it, if other businesses, banks wanna take it, then let 'em do it. CRA: But isn't that then pushing them back to being just a bit pipe pro provider and that's it. Chris: Nothing wrong with that. Rob: It's a good business. Right. And I think [00:31:00] the irony of the whole MVNO model, right, and we talk a lot about, telcos need to be better at segmenting and reaching and appealing to the customers, delivering to certain segments. MVNOs are all about segmentation, right? Because. For better or for worse, I've had the joy of, negotiating several MVO deals over the years. And it's all about going into a telco you want as your host network and talking about how you're going to specifically segment, target and reach, a customer base that they don't normally do. And then they look at that and go, okay, that's fine. We weren't really gonna do that customer base, or we don't really monetize that customer base. So you guys go ahead and we'll do our wholesale and MVO agreement. So, so by their very nature. Env os And there's, doesn't mean that all MVNOs are successful just because they're segmented, but I think they have a better chance of doing that because they are segmented. But the irony of all that is, by their nature they have to be targeted and segmented about a certain market piece and what they [00:32:00] do for that market. They also have to prove that model with their host operators. But you know, the host operators can say, well, we're not really reaching that segment, so great. Go ahead. But the irony of it is that the host operators are still very bad at, MVNOs are, by their nature, much, much better at targeting, reaching a specific market segment than the host operators are. So I think that's why we're seeing some success in that area. But you can still get that segmentation wrong. You can still get the proposition wrong, but to what Chris was saying is if you start pairing it up. With things like Revolut or other, financial services or other services that already have a user base and actually draw that, that linkage between their services, the services they want to upsell, they know how to reach that customer base. Then, yeah, I mean, MVNOs, by their nature do a lot of what we've been talking about the industry needs to do, which is target, segment, and reach those customers more effectively. CRA: I think like what excites me about this is that the platforms for these MVNOs make it a [00:33:00] lot easier to enter, and I like seeing brands come in doing this. I mean, I started out in banking and we used to do this with credit cards. You find somebody who has that affinity group and you're better at targeting 'em than the regular credit card company would've been. Same thing with an MVNO, and now these platforms are getting better. And Chris, what you referred to about this AI native stuff taking over, I do have an interesting insight on this that I'm really intrigued by, and I don't, I'm not an expert in this space. So there was a guy that I know who had an MVNE platform and he sold out, made his money to retire on, went back, went to Stanford to go to sit in some seminars. Now he's starting an AI native platform. He says he can do it basically for a fraction of what he already made his mint on already. So he can do it with, you can do it with a tiny fraction of the number of people have a better run, and it's gonna make it even easier for brands to come in and be an MVNO. And this is what I like because I think this is where they're really gonna start getting hurt when all the people, when a bigger brand can come in as an MVNO and take away market share, that maybe the telco does want [00:34:00] those more profitable customers, then they're gonna have to really transform their organizations. So that's what I'm hoping will happen. Chris: and that says a lot about what the potential of AI doesn't it, and mean, we've not used AgTech or any of those terms, but you know that what you essentially do in prompting and coding within a AI actually should allow you to draw those all the things together to make an MVO work. So, yeah, but by the way, it's also true that, businesses in theory should also be able to put their own coding prompting together to draw the services down for the business market, which is, and of course the connectivity is often not that different. So, so will we see? A challenge of the traditional private networking business. Within, we, we've seen that already with SD wan, keep breaking down many of the old private line NPLS markets because it's, it's a command from a router, so if you automate that and you bring a platform like you, you just described in. Yeah, as long as you trust it. I mean, the [00:35:00] problem we still have with all AI whenever we're using it is do we completely trust it? ' cause we know it, it does hallucinate however much we try. So do you really want your MVNO running on something which you can't absolutely trust? And I guess that's the irony of the telco is that we do trust them. Right? And they do have outages. 'cause there are problem problems for keeping these things running, if we CRA: Well, we may trust them, but we don't actually like them. That's the problem. Their MPS scores are pretty bad. Chris: about liking people? I think you trust your telco to deliver your service for the majority of the time. Right. And you might accept the odd outage. Do we have to like them? I don't think is business about liking people, Charles? CRA: You're making this into you're basically positioning them as they should just go to be a utility. It doesn't matter. I provide pipe and that's it. Chris: you listen to back to what I said previously, so people like Vion, and depending on the country you're in, then I think there are opportunities to be much more than that, but that's if you've got the right attitude, if you haven't got the right culture to deliver. The best connectivity [00:36:00] services based on the available technology and what your customers want, then how likely are you to break out into adjacent markets? Whereas if you've got the attitude to go and say, there's a lack of banked people in my market, I can use mobile to get people more banked, then yeah, that it's a much more entrepreneurial, aggressive attitude. I think that is lacking the risk. Risk averse nature many telcos. Partly 'cause they've had their fingers burned trying to break into these markets anyway, that's the problem. So I'm not saying you can't do it, I'm saying people do it when they see an opportunity. I think many of the Western telcos don't see the opportunity 'cause they're still stuck in what they were doing before. CRA: Okay, next over hype topic. Let's go onto satellite now. So last time Chris, I think your quote was, it's overblown and its importance and it's filling a niche gap. Chris: is up There somewhere. Yeah. But CRA: it's up. Chris: yeah, CRA: Well, it's up. Yeah, it's up. And Leo said, yeah, but but yeah, it's up. But is it gonna make any difference down [00:37:00] here or is it just gonna be more niche? And one of your friends, Dean Bubbly, has been very active talking about this. Every time somebody comes out and talks about how satellite's gonna make an impact on the mobile industry, he just points out it's crap for indoor coverage. You're not gonna go through walls. It's gonna compliment it. It's not gonna replace. Rob, let's go to you this time. Any thoughts on this? Rob: Yeah, look, I think there are some things that will be niche about satellite, but there there's a big shift in the industry that I think is making it. A lot more mainstream. So a lot of this stuff around, and there's a lot of, again, there's distilling hype versus reality around directed device. Everyone's got, oh, direct device. Everyone's got satellite services, and just like we talked about ai, everyone in the telco sector now has a bit of a directive, a board level go, oh, we need a story around satellite. So everyone's talking about directed device. What is it? O2 Virgin in the UK is like, oh, we've got this directed device service in Canada Here. Rogers is like, oh, we have this free directed satellite service right now. [00:38:00] Everyone can use it. Apple's doing a bunch of stuff in this space, so. lot of what's out there right now is very hype oriented and it really isn't delivering a massive amount to customers. However, if you look at how things are evolving between now and 20 30, 20 30 will have more mass market penetration and devices that are capable. And in some ways it's one of the first threats to the mobile operators. So we talk about the complacency. We talk about how mobile operators have their licensed customers, their licensed spectrum. Well for the first time you look at some of the things that Elon Musk is doing, you look at his, starlink mobile services piece that he's doing, the aggression that he's acquiring, spectrum and capability, and putting satellites up. I think there's a real threat here. That will come to pass in the next sort of five plus years that none of the operators are really ready for. Right. It's gonna be another pressure point that they have to get their heads around how they do it. CRA: Chris, your thoughts. Chris: you took, but you said it that in your comments, Rob, that you know it's [00:39:00] free. So obviously Canada, you've got a vast swats of country that aren't served by mobile signal. So yeah, great. When we're out and about in the wilderness. But the fact is that we have connectivity in. Many parts of and they, the mobile operator's targets are to give 95 plus 99% penetration as the universal service obligation. So just because we can skin that cat with a satellite, I don't believe it will deliver that much value. And of course, what we haven't worked out is whether connecting to satellite and direct satellite actually uses a more power on your phone. because of the signal you're working with, it's, it is an alternative and I'm delighted that it's available as an option now, I just don't see that it a, it will create a lot of extra revenue for the industry. might create a bit more, it might reduce churn if you've got it as your operator. So when you are outta signal, you get it. But yet again, I use it with the automotive analogy. Every year we have to put more and more into the product just to maintain the price. [00:40:00] Whether it's air conditioning or it's better stereo or screens in the car, that's what we seem to be falling into that trap of we're gonna keep pumping more and more in to keep our customers happy. But I don't think satellite moves the needle. It moves the needle that much. It certainly doesn't change the product. I mean, don't get me wrong, what Elon Musk has done and other people have done is brilliant for people where they can't get access to fiber or to high quality mobile signal. I don't think it's that much of a game changer. I think it's still a relatively small piece now. And, there are some people who believe that, Starlin will try and become a global telco. I don't think they've got the capacity to do that. I may be wrong. And I don't think the devices are there that will use it in a way that would generate enough revenue to justify investing in that much more satellite. In fact, in many ways, satellite is a bit like the fiber market has been over the last 10 years, almost got overbuild. can, and we've seen a lot of consolidation in the fiber market in different parts of the world now. 'cause we just don't need [00:41:00] competitive physical fiber in the ground. . CRA: I'm glad you brought up this whole moving the needle because this is one of your favorite questions is, does anything really change the needle in terms of revenue, relevance, and relationships? So we're gonna go to the quick round. Now we gotta start going through these relatively quick to get a lot of ideas outta you guys. Gimme one prediction for something that will happen in 2026. That's gonna go against our traditional over hype and under delivery, where we're actually gonna get something value that does move that needle in the next year. Chris, to you first. Chris: do you know what? I do think the next generation of AI generated chatbots will change the way we correspond with systems so that we are getting closer and closer to having that real-time voice interaction, obviously translations is there, I think the new Apple stuff is doing it. Some of the new smart glasses are doing it, so we are change. We, it does change. I think especially the smart glass market. I've become a big fan of the meta glasses which I obviously I use 'cause of my lack of eyesight. But actually I think that is changing the game in terms of how we interact with [00:42:00] devices and I think that ChatAble AI is getting really, really good. 26. We'll certainly see big improvements in that. CRA: Hey, Rob, over to you. Rob: In some ways there's a bit of overlap with what Chris says, but I think for me it's about customer engagement and actually the customer experience leveraging AI and where, if you look at some of the models and how things are evolving, particularly I think Google's in a fantastic place for this, right? Everything they're doing from, mobile devices to how they actually manage pictures on your device, how they, manage services chat bots, how they're doing that stuff with their in-home devices with navigation. AI penetration into that user experience, I think is gonna really explode. 'cause those, that usefulness has just hit that point where it really changes everything. And people like Google are very well suited to do that. I think Apple will leverage Google to do that. And some of the, next generation of series is gonna be Gemini. But I do think the biggest shift in the industry in the next [00:43:00] year is gonna be that change in user engagement, user experience and usefulness that AI will. Provide across applications, data, and that's just sort of day to day. How do you use your device? CRA: I am gonna go slightly different. What I'm actually hoping for is they will use AI for things like chatbot, but it's gonna move more for things like R and it's gonna allow them to do more things internally and improve the way they operate and manage their different assets across the business. That's what I'm hoping for. Chris: They will definitely use it to, to focus things down. So the assumption that probably last time we spoke was that the LLMs would do all that. Well, they Know, you've gotta have it more focused on your environment, you, your language, your services, your environment. So SLMs and Rag and Inference will do that. CRA: I remember, I'm a huge fan of rag. I just want to get the industry using it more. I'd be very happy with that. The other thing we talked about in the last podcast we went through a lot of different technologies that are in the graveyard now. That stuff that we hyped up over the years, whether it was wap, video calling, download a movie, and secs, all those great things. Name one current technology [00:44:00] that will join the graveyard of broken promises in the telco industry. Rob, you wanna jump first on this one? Rob: Well cur current technology. Look we maybe touched on some of this stuff at the beginning, like things like network slicing in 5G, right? Or you can even look at, some of the private 5G stuff, which does have its applications when it's. Done in a very specific enterprise environment, but the whole piece around open round 5G network slicing, it is just never lived up to the hype. And there are some efficiencies around that technology. It's not gonna go by the way of the graveyard, but it's just never gonna live up to the next piece, which, then begs the question around gonna be jumping and chomping at the bid around six G. Right. CRA: Okay, Chris. Chris: good to get your forward looking statement in. When you did the question was about what's gonna graveyard in there. Rob: It Chris: It is a forward looking there. There is a big black hole out there somewhere, isn't it? you know [00:45:00] what I think I've got a horrible feeling. APIs are gonna end up disappearing from our radar. And not just because of the way we pitched them, but just because it, we're gonna go back and call 'em features and functions rather than a APIs per se. Because I think it's just pitched wrong. Once again, we're pitching the tech we need to shift the language to more business-like language. I agree with the open ran side, by the way. I think we've wasted far too much time and airtime and media time and column inches on a, on o open ran and the like, we've just gotta make this stuff work and shifts in the ecosystem are gonna be significant. CRA: Okay, next one. Now you get to hammer me because I'm gonna give you one of my predictions. So I'm very bullish on watching the Middle East right now. And in particular like e and STC and I did an event recently and I said we should be using them as your telco of the future type benchmark instead of looking at a lot of the Western telcos. So I wonder [00:46:00] if you agree or disagree, but I wanna give you some more background. So I like the idea like ad Knock just launched a millimeter wave network. Problem is they have no idea what to put on it, but they have it. At least it's the start. Aramco's putting out a 450 megahertz network. Ian's got a stake in Vodafone. SD C's got a stake in Telefonica. Ian's got a platform play and the Middle East is committed to being the first to launch six G. So I'm bullish on the Middle Eastern telcos. Do you agree with me or do you think I'm full of shit? Chris: Charles, you're a financier in the past, to always follow the money, and there's plenty of money sloshing around in those markets they're building for the future. I'm not sure you can necessarily say follow their model because you can't suddenly crack a model and rebuild it in the likeness of a, of an SDC or anyand or whatever. So I think there is a challenge there. There is the good news is I think the middle or the Middle East could well become. A hub for many of the AI workloads in the future. They've got the energy, they've got the, they're building and investing for the future. And we know that many telcos can't afford to do that. [00:47:00] So it might be a weird geopolitical shift that actually says, do you know what, if you wanna have that sort of workload, that energy consumption, then we need to build relationships with them in the Middle East. CRA: Okay, Rob, final thoughts. Rob: I'm gonna a little be a little bit of a counterpoint on that, which is I think AB absolutely right. Follow the money. There's money there to do things. They're putting money in areas that other markets can't do that. So it's great. It's always great to have, markets with money and companies with money that are putting things into the future because that's helps to drive the industry. Now the problem is, as you just pointed out, all the things they're doing, it's like they're building technology, they're building technology. Going back to our kind of, if there's a common thread on some of these podcasts that we Chris: Nailed and they will come. Yeah. Rob: It's not the build and they will come thing. So they're doing the build and they will come. But you know, it's nice to see they're building things and, and that's great, but what is the revolutionary thing that people do with it? So. [00:48:00] Yeah, they'll gonna test new capability. And you look at, this is something they go through cycles of this Middle East as well, right? We look at the whole ne om thing. It was like, oh, this big shining light of what we're gonna build in the Chris: Mm-hmm. Rob: that kind of didn't really pan out CRA: But if Neem Rob: to. CRA: did 10% of what it promised, it would be more innovation than we've seen in the last 25 years. If they could do 10%, I don't think they did 2%. So, but I, again, if they hit 10, it would've been great. Chris: do, but, Rob: Yeah. Chris: but I think the point is, is it not that, you know what STC and Ian build in that region, given the right connectivity out across the region, then other people can use it. Because not everyone's gonna build. We've already seen it with the hyperscalers where their investment in the data centers for the future, they're beginning to finance it externally rather than take it all onto their own balance sheets. Now there's a reason for that, isn't there? That it's too cumbersome, it's too much of a hindrance on the ba, on the balance sheet. So although are those Middle East players doing that so they can then sell to other people outside of the, [00:49:00] outside of their country? I think that's where they're going. Rob: . If you look at it as a large CapEx infrastructure play for future technology that can be leveraged elsewhere where they don't have the ability to spend that CapEx, then they're absolutely in a leadership position. When you look at it revolutionizing what the sort of, end user content services applications are for end users, be they consumers or businesses. I don't think it's gonna move the needle. CRA: I think what they're gonna be able to do though is fast track to becoming as inefficient as the global telcos in a much shorter period of time than it took the global telcos. Okay, we have time for one last question here, and it's a simple one, but I'm gonna ask you to put your reputation where your mouth is. Look at telcos in 2026, and I want your prediction, are they gonna finally get their shit together and drive some transformation and move the industry forward? Are they gonna keep disappointing us as usual, or are they gonna screw things up even more than they have today? Chris: I, I think as long as they make that shift to deliver [00:50:00] outcomes, outcomes, rather than just build technology, then they will improve and they are improving. CRA: Yes. Chris: The way certainly the CEOs running the telcos these days, of course a lot of them are off, are accountants or beam counters. But actually I do think the attitude is changing within the telco world and we're seeing it more creative as say in Audi, in Asia, certainly in Vion and players like that. The bigger guys not so much 'cause they just don't seem to have the imagination to cope with it. CRA: Okay, Rob, over to you. Rob: Yeah, look, I think, if I have to put my hat in one of those categories, I'll put it in the keep disappointing as usual. One, there are some, some of the things are gonna continue. There's gonna be, efficiencies are gonna continue. Some of the layoffs will continue. I do think one of the things that we haven't talked about today that holds back some of the telco pieces is they are a little bit hollowed out when it comes to capability. And some of that means, some of the people like Ericsson or some of the integrators as well are [00:51:00] becoming so much of a part of the telco business 'cause they're going through the efficiency drives. The third parties come in to run their networks. Whether it's nps, whether it's, the Accentures or the consultants of the world. So that core capability is being hauled out within the telcos. And I think that's gonna prevent them from really driving new innovation because they're gonna be subject to what their third party masters and a lot of, people like Ericsson that are really running a lot of these networks. Right. Where I think we'll see some, of hope in there like Middle East is, you mentioned some of the state backed money in there, some of that piece that will drive some, investment that may drive some innovation. And I think there may be some bright spots that come out there. And then I think when we look at some of the segmentation around. MVNOs new services and things like that, can leverage platforms to do things with existing user bases onto telco stuff. I think that's where there's some for hope to see what financial services do, what other markets do on top of the [00:52:00] telco platform, I think was is more likely to innovate over the coming year. CRA: I think Chris hit it on the head there with the outcomes. For years I've been going off about how technology doesn't exist for technology's sake. It exists to deliver human outcomes. The sooner we understand that, the better off we'll be. The problem is I don't thi think we're getting anywhere close or maybe I'm just really crap when it comes to actually explaining that because I've done, I've spoken at, I don't even know how many events over the years pushing this down, everybody's throats and no one's transforming and starting to deliver outcomes yet. So maybe it just has to come out of Chris's mouth because he is much wiser than I am anyway, so. Rob: Well, and of course he's much wise than I am as well. So I think I, I agree with you on that point too. Charles is that most intelligent things will come from Chris's mouth. CRA: Well, I was actually gonna ask one last question real quick. Since you brought up Nokia Ericsson will the US take a stake in one of those two in the next year? Chris: Well, it's looking that way. Nokia is certainly, cozying up to the US market CRA: They both are, yeah. They both created federated businesses for the us. Chris: and even and especially since the new [00:53:00] CEO came in, it, and, and obviously that's the early signs, early shows. Let's see what happens at mwc if, Justin pushes his a, keeps pushing the US angle. I think it's a dangerous one to be honest. CRA: Agreed. Chris: Because the US is not very popular in the rest of the world at the moment. So I think it's a. CRA: That's the understatement of the day. Chris: I, well, I'm a Brit. I'm a Brit, right? So I'm allowed to understate. CRA: Trust me, I'm using my British passport now too. I hardly ever mention I'm American anymore, except my voice gives it away. Chris: I, but I think, cozying up to the US is not the right way to go. 'cause there's a hell of a lot of market, the US is a big market, no doubt. But those relationships are pretty well set. CRA: Yep. Chris: we saw the Ericsson with AT&T deal, Nokia are creeping back in in some ways, we do need multiple suppliers in there. There's a hell of a lot of markets around the world, if they do cozy up with the US market in some ways, that does expose 'em to more Chinese activity. 'cause not every market is pushing the Chinese out either. CRA: This is true. . listen, we've had a long talk today. I wanna thank you both for taking time out. Thanks you guys for [00:54:00] joining and let's do this again in 2027 and see if we were right or wrong with our predictions. Chris: Thanks a lot Charles. Rob: guys. CRA: Cheers.