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8 October 2019

Operators need both open platforms and digital strategies to change their image

In the age of digital platforms and webscalers, being a telco can be seem unglamorous and old-fashioned – something that is reflected in the lower stock market valuations operators generally achieve compared to digital providers. No wonder, then, that some operators are looking to shed the old image by highlighting their activities in more twenty-first century areas of interest like artificial intelligence (AI) or Internet of Things (IoT). Mobile operators hope 5G will boost their excitement factor among investors and consumers by enabling a far wider range of services and markets than 3G or 4G did.

So, Reliance Jio of India repeatedly insists it is not a telco, but a provider of digital services from smart home to content to connected car. Softbank has expanded its activities well beyond telecoms and media and some of the group’s digital investments are being leveraged to expand the services platform of its MNO.

Some may go as far as to consider changing their name altogether. Chey Tae-won, chair of SK Corporation of Korea, believes the group’s MNO, SK Telecom, should drop the word ‘Telecom’ from its name. “The term ‘Telecom’, which gives an impression that the company is a common carrier, should be excluded from the company name,” he told local journalists. “The name needs to be changed so that the company can be thought of as an AI-focused company.”

However, as digital services, AI, virtual reality and many other fashionable technologies become more mobile, and so more reliant on the MNO’s core connectivity offering, 5G may make telecoms sexy again. After all, digital player Rakuten is building a 4G/5G network, and others in the web world many follow.

Whatever the starting point, to become part of the new breed of operator, it will not be enough to acquire an AI company or change the name. Being modern and digital means adopting a whole new mindset, whether for internal processes (like DevOps), or customer interaction. And this needs to be underpinned by a new way to running networks, to they can be flexible, agile and open. If an open, cloud-oriented approach is not taken to support the new directions, brave digital strategies can end up in failure, as companies like Veon have discovered in the past. But if such an approach is adopted, the mobile network operator could yet become fashionable, and highly valued, again.