One of the best-kept secrets of the telco world is that telcos don’t tend to play well together.
But the telco business model is not as robust as it used to be, and these days telcos are learning to collaborate on a range of cost-saving activities that used to be managed unilaterally, from joint equipment procurement, government lobbying, and even network-sharing.
The latest evidence of this trend is the creation of the new Global Telco AI Alliance – a pact signed by four of the world’s most innovative operators, Deutsche Telekom, Etisalat by e&, Singtel, and SK Telecom, to explore AI pitfalls and opportunities ahead.
On paper, the alliance makes a whole lot of sense. AI is a complicated, risk-laden technology that is set to influence all areas of the telco business model, to product creation, network management, and customer support. The issues and risks are too significant to face alone.
The alliance’s success will depend on how the member companies deliver tangible results to customers while maintaining transparency and adhering to data privacy and security standards. Given the fact that the members span different countries and regions with uncoordinated regulatory environments, these are no small challenges.
The use of AI is already central to the digital transformation strategies of all four member operators, and the alliance indicates a mutual ambition to investigate, co-develop, and deploy different forms of AI for new revenue streams. Independently, the participating operators already offer some AI-based services to both consumer and enterprise customers.
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One of the more interesting considerations of this announcement, however, is the potential for member states to help their partners launch their own AI services internationally – or even on a white-labelled basis – at radically lower-cost and faster speed for a local market competitive advantage.
Telco AI alliance could reshape the competitive landscape
The scope for such international AI product and service international co-promotion is significant, and the role of such AI innovation alliance structures could help reshape the competitive landscape in the months and years ahead.
But one of the most interesting considerations is the vast pools of underlying anonymized data that the alliance might theoretically be able to leverage for a competitive edge in AI co-development. The telecom industry controls large databases of consumer information, and such data is the lifeblood of AI and generative AI model training.
The strength of those models helps attract others in the ecosystem. All this could well-produce a competitive edge in telco AI leverage for the telco member themselves, but it may also help the telcos gain a more even footing with the tech giants seeking to cement their dominance in the still-evolving AI digital product and services value chain.
It’s very early days for this alliance. There will be challenges to navigate with regards to data sharing and regulatory clearances across Asia, the Middle East, and Europe, as each market will be governed by different rules around the use of data and AI, with new legislation and regulation evolving rapidly.