TelcoForge holds monthly meetings mainly for C-level and VP-level professionals from as diverse an array of stakeholders as possible. These meetings take place under Chatham House Rules to enable senior professionals to speak frankly. However, we capture the anonymised ideas and outcomes for the wider industry to digest and act upon.
During the last few months the meetings have highlighted some of the dissatisfaction and structural problems prevalent in the telecoms market. Repeatedly, executives expressed scepticism about the ability of the telecoms ecosystem to innovate its way out of some of the problems it faces.
So in our most recent meetings we talked with them about why that is. What structural elements in the telecoms ecosystem prevent all the technology innovation we see in the news from translating into drastic changes in commercial outcome for large telcos?
The resulting discussion was wide-ranging, highlighting everything from investors to start-ups and graduates, AI, the Blue Army… and the fundamental need for radical change.
You can read the report from the meeting – along with others this year – on our Reports page. While it makes no pretense at digging into the full reality of a complex situation, it does share what senior and seasoned executives from around telecoms are thinking.
A few of the challenges they identified include:
- Conservative culture is baked in: Telecoms providers operate in an environment where service failures have massive reputational and financial consequences. This creates psychological disincentives to innovation. Meanwhile larger vendors are incentivised to iterate on their existing cash cows rather than pursue drastic innovation.
- Financial incentives are misaligned: The industry’s structure as a financial delivery mechanism for shareholders rewards cost reduction over breakthrough innovation. This short-term focus has led to the divestment of critical R&D capabilities and infrastructure assets.
- Talent pipeline crisis: Academic programmes in telecoms engineering face severe student shortages. The talent bottleneck threatens the industry’s innovation foundation and also leaves older senior staff, who made their reputation already, unchallenged by a new generation who want to do the same.
- Start-up ecosystem dysfunction: The industry systematically undermines external innovation through its treatment of start-ups.
Having said that, people are well aware that there are serious pressures on the ecosystem which may change some of this calculus – not least the possibility of traditional telecoms providers being replaced altogether by other kinds of player.
Some of my favourite (anonymous) quotes include:
“I’ve heard a CISO of a major telco telling me. “I’m not dealing with that quantum stuff because it all sounds like science fiction. And even if you’re right and this will be a danger for us, I will be retired at that time, so I don’t care.” Now this is a real quote, I tell you. And it’s incredible. I mean, it’s a completely reckless way of thinking.”
“One of my mentors gave me some excellent advice, which was hard to swallow but turned out to be absolutely correct. The advice is simple: Every political consideration outweighs any technical consideration. So a lot of us argue up and down about the value of 6G or fibre or whatever, but if it’s contrary to somebody’s political positioning or bias, it’s not going to happen.”
“There are no start-ups left by the time they get to the point where the technology is mature enough to deploy – they’ve burned through all their money. The operators have dragged it out for multiple years, and then the big players sweep in now that it’s all standardised and working and implemented.”
To read this report – “Structural Bottlenecks to Telco Innovation: Executive discussions on the gap between technical invention and commercial success in telecoms” – and the rest of the series, just visit our reports section and help yourself!
