Rebooting telecom innovation

Last summer several individuals, including representatives from Telefonica and Deutsche Telekom, published a White Paper on the need to boost innovation in the telecom industry.

Don Clarke

Six months and many conversations later, the group published its second paper, this time focussing on the communications service providers (CSPs), vendors and the investor community.

The paper, entitled Developing a Code of Conduct Framework for the Telecom Ecosystem, highlights four areas to spur innovation: Funding, Innovation Processes, Competition and Procurement.

The code-of-conduct paper offers guidelines as to how CSPs can work with vendors, especially small and medium-sized ones that lack the resources of the larger established vendors.

Innovation

The group’s White Paper argues that, in an era of accelerating and disruptive change, the CSPs are proving to be an impediment.

The CSPs’ networking infrastructure has its own inertia; networks are complex, vast, and have long-investment cycles, measured in years. Operators also need a solid business case before undertaking expensive network upgrades.

Meanwhile, the return on investment for vendors bringing new products to market is lengthy, making it harder to justify product development and limiting the risk vendors are willing to take.

Accordingly, diminished innovation is costly, not just for the CSPs but for the industries dependent on their connectivity services. Practices must change if the CSPs are to boost innovation.

This is what the group’s latest paper tackles: it pinpoints areas that must be improved if CSPs are to attract smaller players and startup that can inject much-needed innovation.

“We have initiated a conversation in the industry that hasn’t been had before,” says Don Clarke, formerly of BT and CableLabs and co-author of the two papers.

The conversation Clarke refers to is how to solve the issues of deploying technology that has nothing to do with the technology itself.

These barriers are caused by issues of organisations and processes, what Clarke calls ‘the telco culture’.

Issues addressed

The Code of Conduct paper lists practical steps for each of the four categories. “Each one on its own isn’t going to solve the problem,” says Clarke.

Under Funding, the paper considers how the telecom industry can become more appealing for investors and how capital can be injected to help smaller vendors and start-ups.

“If venture capitalists are not willing to invest in start-ups in our industry because it takes too long before their stuff gets into the network, or telcos don’t want to buy from them because they are too small, what do we do about the funding problem?” says Clarke.

He also highlights telecom’s lack of high-profile entrepreneurs, the equivalent of an Elon Musk or a Jeff Bezos. “There is no supernova that is pulling people into our industry; the industry is moribund,” says Clarke.

One idea the paper promotes is for the CSPs to set up a fund to help start-ups. Another refers to actions to attract investors to the telecom industry.

Governments can also play a role in aiding Competition, the second issue addressed.

“Governments might give tax breaks to smaller companies,” says Clarke. The group is in discussion with the UK Government’s Steering Committee on Telecoms.

One issue for Innovation Processes, says Clarke, is that the operations departments of the CSPs have so much to deal with daily that they have little time for anything new: “How does innovation get consumed by telecom companies when operations is so reluctant to take on new things?”

Suggestions include highlighting innovative new technology requirements in Request For Information (RFI) and Request for Proposal (RFP) documents and limiting the time it takes for new technology to get to the lab (6 months) and field trials (18 months).

Procurement, the fourth and final category, must be streamlined since the demands exclude smaller companies from getting a foothold. For example, CSPs could pay software licences up-front and not when the code is finally used.

“We are talking about procurement processes that are too onerous; it doesn’t matter what the technology is, the procurement process is broken,” says Clarke.

Next steps

The group aims to expand its influence by adding individuals that will help drive these threads in parallel. One person that has joined the group and that contributed to the second paper is Andrew Coward, the CEO of Lumina Networks, a software-defined networking start-up that folded in August 2020 yet was working with AT&T and Verizon.

The group will also meet strategic staff at CSPs. “We already know they are aware of our work,” he says.

What gives the group confidence its initiative will spur innovation?

Telecoms must retain control of its destiny, says Clarke eventually; it is so fundamentally important, to countries and the world.

“Telecoms must continue to evolve; it can’t afford to decay with a stagnant infrastructure,” he says. However, such evolution is threatened because of diminished innovation.

“This initiative is about figuring out how to reboot innovation in the industry,” says Clarke. “I don’t know which of these areas is the most important; maybe all have a role to play as all influence the culture.”

The output of innovation in the telecoms industry is a Request For Proposal (RFP), he says, an order for a capability or something being bought from the industry.

If CSPs buy only from large vendors, they become less motivated to innovate. Equally, the vendors depend on the CSPs moving fast enough. “If there is no buying, there is no investment,” he says.

Telecoms is also experiencing disruption. The global pandemic has if anything made telecom even more important. There are also geopolitical issues such as Brexit, and the trade war between the US and China.

“What we are experiencing and the distruption will force the changes that need to be done,” says Clarke.

A successful outcome of the group’s work will be if two or three of the initiatives highlighted in the Code of Conduct document are embraced by several CSPs, says Clarke.

Further Information:

The Telecom Ecosystem Group, click here