The crowds were back, the high energy was palpable, AI hype is hitting its peak, there was less whining (relatively speaking) about regulators, significant progress has been made in some critical areas while new ones are up for exploration. We attended the annual MWC show and met with senior leaders across the spectrum and from around the world. We also participated in several closed- and open-door conversations – Next 5 years (hosted by GSMA), AI and Sustainability (hosted by NTT and Dell), AI and 5G in Manufacturing (hosted by Microsoft), and Operational Transformation (hosted by Rakuten). This note summarizes our observations from the show.
telecomAI
Unsurprisingly, AI was the most talked about topic across the board. Every player had something to say about AI (and not just GenAI). Though we are in the early stages of understanding the implications, we are clearly on a roadmap. The topic is likely to dominate the conversations for years to come at multiple levels – from policy to strategy, from competition to engineering.
Having the hooks into the network data to better under the network flows, faults, and simmering issues is a great use case for applied AI. Getting to the root cause of a potential fault before it happens and keep the network running at all times is worth the investment. Each minute the network is down, the service provider and their customers stand to lose millions. A factory can’t afford to be down for an outage. A retailer can’t have its POS network down. An emerging security storm needs to be detected and contained before it wreaks havoc. Digital Twin of the network can provide the necessary capability in the hands of the network teams to manage the bits more effectively and expeditiously.
There are already examples of where AI has proven to be effective – customer service, network planning, employee Q&A, root cause analysis, RAN and energy management, software development and testing, security, and anomaly detection. These are not just in an experimental state, but many have graduated to providing millions in savings and a direct impact on the bottom line.
Deutsche Telekom CEO Tim Höttges had probably the best advice for Telecom CEOs on AI – “Command AI strategy from the top. Own the vision, shape the future. Don’t outsource your AI strategy to IT department.”
AWS had a series of case studies of how AI is being instituted at the mobile operators and seemed the most progressive amongst the hyperscalers. The big 3 infra players also had several examples of real-world AI in networks.
AI strategy needs to be rooted in upskilling employees as well. Models will become commoditized, so will the infrastructure but how you use it for specific purposes to improve enterprise cadence, how you hit the AI strides becomes central to an ongoing successful outcome.
If MWC whet your appetite on telecomAI, Nvidia’s GTC AI confab later this month will take the discussions to a new level. I am delighted to be collaborating with our friends at Nvidia on laying out the Telco Blueprint and how AI will shape it.
Amalgamation of Contortions, Contradictions and Confabulations
Is 5G dead or alive? Is OpenRAN a fad or bringing substantive change? Is GenAI delivering results or just GPUs? Is AI making a dent in Opex or increasing it? Is Metaverse going to increase network traffic, or did it die with the rise of AI? Will consolidation help the EU wireless market or make it worse? Will the new incarnation of Network APIs generate billions of dollars in new revenue, or it is a dead horse walking? 6G – are you kidding me, or is it 5G done right? China – Geopolitics or OMG?
In Sanskrit, there is an expression Kupamanduka which means “frog in a well” Frog in the well thinks the well is the world and doesn’t know the universe outside of it. Some players talk like this frog in the well. There are several questions hovering over the tech and wireless ecosystems and the answers are generally optimized for what someone’s sphere of influence looks like. This results in marketing messages that address all possible dimensions. However, the CEOs are tasked with navigating the choppy waters and quarterly earnings. When they are putting the money where the companies’ proverbial mouth is, they need a bit of certainty and confidence in going down the right path. If you absorb the wrong signals, you can lose time, and worse yet, go down a direction from which it is hard to retreat.
MWC conversations are an amalgamation of these contortions, contradictions, and confabulations. One needs to distill down the noise to understand the underlying currents and shape the strategy accordingly.
Connected Intelligence world is accelerating
A decade ago, when we published our first paper introducing the concept of “Connected Intelligence,” it was new and not well understood. It is heartening to see that almost all major brands have embraced Connected Intelligence to the point that it is on their branding materials and CEOs are proudly talking about their role in this ecosystem roadmap. In fact, there wasn’t a major company who is not talking about how they are powering the “Connected Intelligence” era.
(Un)healthy Industry
To have a healthy industry, participants in the industry must be healthy or market failure looms. Europe is especially in dire straits. Setting aside the inefficiencies of the operator business, the regulatory environment of the EU is very insular, devoid of any strategic thinking. European regulators aspire to regain the glorious past, but their policies have enabled a fragile ecosystem foundation.
There were a lot of discussions about AI and Sustainability. We need to talk about the sustainability of the industry itself.
Network APIs – Part Redux
You would be forgiven if you roll your eyes at network APIs rearing their head again. However, this time around, the efforts are more coordinated, hyperscalers are involved, and operators are working together to offer a common interface. The vast majority of the operators have signed up and there is clear momentum. Fraud detection and spam reduction seems to be one of the use cases getting traction. These initiatives only work if the top 3 operators can find a way to work together to offer a common interface and that seems to be happening. Hyperscalers have an advantage as they can combine access with compute and cloud to make things simpler for the developers. How these initiatives lead to monetization and how much – only time will tell but it has been good progress over the last 12 months.
0 Bit, 0 Watt
One area of significant progress in the last year is the area of energy management. Companies both large and small are using new tech, data, AI, and just common sense to make energy management a core part of the infrastructure and the savings can be significant. It is an intense area of interest and research that will carry on for this decade. Huawei had some impressive tech going to the root cause of the power consumption. Ericsson and Nokia had new sophisticated solutions to address the energy problem as well. Nokia was even showing how to use energy as a revenue generation tool. Startups like Opanga also have software solutions that take advantage of AI to reduce energy bills without hardware upgrades.
We wanted Flying Cars, and we are getting them
UAM segment is moving fast. It is technically quite a complicated and sophisticated. But entrepreneurs are making good progress. Alef Aeronautical got the prime keynote spot to talk about their vision of flying cars. Apple might have parked its car dreams; the ecosystem isn’t resting and continues to push the boundaries including players like Xiaomi and Huawei.
Raining LLMs
In the early phase of the market development, one would expect a lot of experimentation, arm-wrestling for position, sputtered starts and that’s what is happening in the LLM/SLM/VSLM space. Lot of partnerships, announcements, investments before we settle down on best practices and models for specific use cases. Kudos to companies who are putting their neck out there to figure things and land on a model that works.
ICT Convergence
It has been clear for some time that the compute infrastructure will run communications. We are hurling towards the dynamic where ICT infrastructure is converging whether it is RAN on Compute or networks of networks or enterprise Edge or AI in the Enterprise, the infrastructure is rearranging itself to address the demand and the opportunities. Huawei has the most comprehensive ICT infrastructure portfolio across the value chain.
OpenRAN and the path forward
The AT&T and Ericsson partnership announced late last year shook the OpenRAN ecosystem from its slumber. In some ways, it reset what it means to have OpenRAN. OpenRAN will become the defacto way of doing deployments in 6G. Between now and then, we will shake out the players, the mechanics, and the optimal path to scale.
AI RAN
AI and RAN are made for each other. Industry heavyweights launched the initiative to mine the opportunity.
Private Networks
For the players in the west, private networks have disappointed as they have struggled to scale the opportunity. From the discussions at the show, things are finally starting to break loose with POCs turning into deployments and meaningful revenues starting to flow. Verizon predicted that its deployments would grow by 5x in 2024.
GPU as a service
There is a gold rush to enable to the infrastructure for AI. Many companies are getting into the business of “GPU as a service.” Traditional data centers, hyperscalers, service providers, startups, and others are setting up the infrastructure that developers and enterprises can tap into.
Appless AI Phone
Back in 2005, I presented a concept user interface to a tier-1 operator. I proposed that interface should be task driven – what I want to do at any given moment rather than a myriad of WAP menu nested loops. The pitch fell flat.
Fast forward two decades, we are getting to a point where specific tasks become central to user interface. During the last two decades the WAP model graduated to an app-based interface. Microsoft did try to change the experience with a novel UX, but it failed because of other strategic missteps. AI is now giving us another shot at changing how we interact with information. Alexa, Humane, ChatGPT are steps in that direction. Building on that, appless AI interface that gives us a star trek like interface to machines can be quite transformative. Deutsche Telekom is first out of the gate with its AI Phone and looks promising. However, for such a vision to come to fruition, the network has to be much more reliable and resilient. More to come.
Slicing makes progress
I know we have been talking about slicing forever but this year there was good progress. The breakthrough seems to be the UX to consume slicing. The media demos wherein one can switch the slice at will in real-time conveyed the potential of how it can work across industries.
Sovereign AI
Talk of Sovereign Cloud is leading to the conversations around Sovereign AI and there are takers of the concept with Japan leading the way.
Automation is the killer feature of 5G
Those who inherently recognize the key 5G feature – automation, are benefiting from creating solutions that address the workflow opportunities. Most of the operators, however, are stuck in technology selling mode. The world is different. Selling SIMs gets you only so far. There are billions being generated for players who understand this key distinction.
If AI is the answer, what’s the question?
By some estimates, there were at least 400 booths claiming to be doing some groundbreaking work in AI. It would be amazing if it were true. The fact remains that while AI’s potential in reshaping the ecosystem is unquestioned, we should be skeptical of the claims. One needs a critical lens of specificity. Some rules-based engines or worse -spreadsheets are being passed off as AI engines. We should be very clear about what specific problem we are trying to address, what datasets are needed to get started, what models will work best, what’s the orchestration and compute infrastructure would look like, and how to benchmark progress and performance.
AI and Sustainability
While there were some discussions about sustainability, it was just the rehash of old ideas and concepts and overall, there was less substantive discussion. The only exception was the use of AI to reduce the energy budget given the European operators have seen their energy bills rise tremendously. Additionally, players like Assurant are making the real impact in helping recycle devices at scale.
AI/5G and Manufacturing
Manufacturing is one of the verticals where the synergy of highly reliable connectivity, extremely fast Edge compute, and AI orchestration really shine. However, places where it has succeeded is when engineers have focused on requirements and solutions rather than technology which is a means to an end.
Responsible AI
To quote the great philosopher, “Everyone has a plan until they get hit in the face.” Responsible AI seems to fall in that category. It gets thrown around a lot without any central governance, transparency, mitigation, recovery, and penalties framework. Regulators better get their acts together or we are walking into a mess bigger than what social media unleashed.
5G: What West can learn from East
It is widely accepted that 5G will be an enterprise driven cycle. There are plenty of actual deployments (not just POCs and trials) but one has to look. China’s enterprise 5G deployments dwarfs rest of the world combined. While geopolitics has its important role in world affairs, the west shouldn’t ignore what’s happening in China and learn/adapt to their ecosystem.
India is also rapidly expanding its 5G network and operating some of the most profitable networks in the world. In some areas, the center of gravity has firmly moved to the east and west should try to learn from their experiences and not live in their respective bubbles.
6G
6G work has started but there wasn’t a whole lot of noise about 6G at the show which was good. Maybe AI took away all the attention or we are just becoming more sanguine to keep industry’s attention on here and now. We have some serious concerns about the direction of 6G work.
5.5G or 5G Advanced did come up in conversations. China and Middle East are ramping up their plans for upgrading their network to the second phase of 5G.
Talk of mmWave has cooled down
Most of the focus was on the midband. mmWave continues to face a challenging landscape though enterprise use cases still persist.
Vanishing Metaverse
Despite the introduction of Apple Vision Pro, Metaverse or Spatial Computing was missing in action for the most part. There was a smattering of demos, but they were rarely central to any meaningful conversations. There are a lot of issues with Metaverse that need to be sorted out and it will take a few years before we are anywhere near scale.
Synchronous S-Curves
We have talked about the power of synchronous-S curves and how they influence each other to create the magic of disruption. After seeing some really cool tech, we remain convinced that the synchronous evolution of multiple exponential technologies will shape this decade.
Satellite
More discussions around integration of satellite with terrestrial networks for both niche use cases as well as broadband availability for urban/suburban/rural areas. The jury is still out as to what kind of a monetary impact the NTN integration will actually make. NTT DoCoMo also talked about high-altitude platform stations (HAPS), the unmanned aerial mobile base stations are intended to be deployed at a stratosphere altitude of 20 kilometers mainly for providing connectivity during disasters, or providing the connectivity to drones, vehicles over water, and remote locations.
New concepts
As usual, Lenovo had the gimmicky concepts for both smartphones and laptops. The transparent screen laptop and the rollable screen. While we are years away from commercial introduction, it is good to see vendors pushing the boundaries on devices.
Misc
Huawei again had the biggest booth followed by Ericsson and Nokia. Their spaces were filled with use cases, technology showcases, feature roadmaps, and eye candy for network nerds.
NTT and PwC were again the hosts of the most exclusive parties and dinners at MWC.
We will be covering many of the pertinent topics in more detail at our annual strategy summit for industry executives – Mobile Future Forward later this fall.
Until then,
Be well. Do good work.
Chetan Sharma