Article

Transforming the Connectors: Takeaways from TM Forum

The Digital Transformation World Series, an event for network and digital service providers, grappled with the practical requirements for the industry’s next phase of growth.

By Steffen Roehn and Nik Willetts

Published on November 13, 2020
min read


Steffen Roehn is a Bain partner and chairman of the board of TM Forum. Nik Willetts is CEO of TM Forum. Nothing may be more emblematic of the network and communications industry’s critical role in keeping businesses running and blunting the still severe economic damage wrought by Covid-19 than the fact that one of its own industry conferences took place virtually. The Digital Transformation World Series, an annual gathering of network and communications service providers, technology suppliers, consultancies and systems integrators hosted by TM Forum, became a virtual digital series. When the series wrapped up on November 12 after six weeks, it had attracted more than 12,000 participants—more than four times the normal number—from 173 countries. In our article written at the forum’s halfway mark, we noted that this was not the only such shift: The pandemic has been a positive catalyst for change throughout the telecom industry, unlocking innovation and agility that we expect will continue long after the virus has gone. We also observed two trends that at first blush might seem contradictory: a new business focus on technology and a realization that people and culture have never been more important. Three steps to unlock growth The second half of the series focused on many of the practical requirements to unlock growth as the industry continues its transformation, including: the automation of business operations driven by data, leveraging machine learning and artificial intelligence (AI); the software revolution in network and IT that requires a single architecture and an autonomous and open approach with Open Digital Architecture (a blueprint for modular, cloud-based, open digital platforms created by TM Forum members); and more evidence that people and ways of working are crucial to the transformation—while also acknowledging that the industry has a long way to go when it comes to diversity and inclusion. “Enterprise 5G” is frequently tossed around as a catchphrase to describe the source of future growth in the industry, but the reality is more nuanced. Growth for telecom companies and network providers will likely come from three major sources and demand focused and thoughtful execution. The evolution of connectivity. Providers will need to offer connectivity that is simple, elastic and customer-centric. They can do so by offering it as a cloud service, much the same way the hyperscalers offer storage and computing today. Think network splicing, not slicing: bringing together a set of telecom capabilities to underpin the right outcomes for customers, regardless of size. Edge computing almost certainly will be delivered through partnership with hyperscale cloud providers. Forum participants expect this to rely on revenue-sharing models, though there are still many details—and questions about disintermediation—that need to be resolved. Being a platform for innovation. Telecom companies must find ways to provide the core telecom capabilities that third parties, developers, adjacent markets and even internal or acquired organizations need to innovate. Links with large, global developer audiences, such as those of hyperscale cloud providers, will be crucial, which reopens the debate over federation between service providers. Speaking at the event, Harmeen Mehta, GCIO at Bharti Airtel, also focused on adjacencies and untapped opportunities, such as providing “human ATM” services as a banking provider during the pandemic, or providing services to the billions of lower-income people in countries such as India. Becoming an ecosystem solution provider. Perhaps nothing demonstrates more clearly that the future of the industry goes far beyond delivering 5G connectivity than the need to partner with others to deliver end-to-end solutions to large enterprise customers. Providers will have to add multiple new capabilities to their existing offerings—and will often need to do so through partnerships. A software-first industry Another key takeaway was the conviction that a software-first telecom industry needs to be “plug and play,” not “plug and pay.” Legacy technology, processes and ways of working are some of the greatest threats to the future vision of the industry. In addition to seeking ways to reduce integration costs and technical debt, major operators are now looking at operating costs and seeking up to tenfold improvements in operating efficiency. Participants also agreed that, like IT, AI is a strategic asset. Use cases for AI are getting more ambitious, with a focus on automation of core operations and ensuring the right outcomes for customers, rather than automating the customer interface. But communications service providers are still unlikely to seize the full potential of AI on their own—or soon. Steve Jarrett, SVP for data and AI at Orange, noted that he believes it will take a decade to reach maturity. Tom Siebel, CEO and chairman of C3.ai (and founder of Siebel Systems), noted that AI should be at the top of every CEO’s agenda in what he called this “era of corporate mass extinction.” “Some will get it, some will not,” he observed. Alex Choi, SVP for research and technology at Deutsche Telekom, noted that the software revolution required companies to “break down the silos and the boundaries … and adopt a more agile software approach.” In practical terms, this means companies will have to adopt a modular, AI-ready, reusable, “open by design” standardized software architecture that leverages open APIs, such as TM Forum’s Open Digital Architecture, as well as open source efforts such as Open RAN. A troubling lack of diversity Beyond the technology discussions, the forum also focused on people—and on the industry’s troubling lack of diversity. The World Economic Forum found only 12% of the workforce in cloud-computing businesses is female, and only 26% in data and AI, and participants at the forum speculated that the pandemic may have made the situation worse. Even as the pandemic reinvigorated the industry with a newfound sense of purpose, a lack of diversity poses a serious challenge. It makes the industry less attractive to many employees, making it harder for communications service providers to recruit the types of top talent and diverse teams that are proven to be substantially more effective at delivering on innovation. Likewise, product sets and solutions—particularly in B2C markets—need inclusive design to be successful. A lack of diversity can even cause biases to be embedded in artificial intelligence, with far-reaching consequences. Inclusion also matters. A forum masterclass on the topic noted that many diversity initiatives stop short of making sure that the diverse talent that has been recruited is genuinely engaged and included in ways that help unlock the full value of that talent. Cecilie Heuch, chief people officer at Telenor, and Peter Leukert, CIO for Deutsche Telekom, both offered their thoughts on practical and systemic approaches to cultural change. Among participants, there was a consensus that these efforts can succeed only if the CEO is truly passionate enough about the topic to make it happen and that companies must find intuitive and easy-to-measure indicators in order to track the success of their diversity and inclusion efforts. Learn more about Bain at TM Forum.

Steffen Roehn is a Bain partner and chairman of the board of TM Forum. Nik Willetts is CEO of TM Forum.

Nothing may be more emblematic of the network and communications industry’s critical role in keeping businesses running and blunting the still severe economic damage wrought by Covid-19 than the fact that one of its own industry conferences took place virtually. The Digital Transformation World Series, an annual gathering of network and communications service providers, technology suppliers, consultancies and systems integrators hosted by TM Forum, became a virtual digital series.

When the series wrapped up on November 12 after six weeks, it had attracted more than 12,000 participants—more than four times the normal number—from 173 countries. In our article written at the forum’s halfway mark, we noted that this was not the only such shift: The pandemic has been a positive catalyst for change throughout the telecom industry, unlocking innovation and agility that we expect will continue long after the virus has gone. We also observed two trends that at first blush might seem contradictory: a new business focus on technology and a realization that people and culture have never been more important.

Three steps to unlock growth

The second half of the series focused on many of the practical requirements to unlock growth as the industry continues its transformation, including:

the automation of business operations driven by data, leveraging machine learning and artificial intelligence (AI);
the software revolution in network and IT that requires a single architecture and an autonomous and open approach with Open Digital Architecture (a blueprint for modular, cloud-based, open digital platforms created by TM Forum members); and
more evidence that people and ways of working are crucial to the transformation—while also acknowledging that the industry has a long way to go when it comes to diversity and inclusion.

“Enterprise 5G” is frequently tossed around as a catchphrase to describe the source of future growth in the industry, but the reality is more nuanced. Growth for telecom companies and network providers will likely come from three major sources and demand focused and thoughtful execution.

The evolution of connectivity. Providers will need to offer connectivity that is simple, elastic and customer-centric. They can do so by offering it as a cloud service, much the same way the hyperscalers offer storage and computing today. Think network splicing, not slicing: bringing together a set of telecom capabilities to underpin the right outcomes for customers, regardless of size. Edge computing almost certainly will be delivered through partnership with hyperscale cloud providers. Forum participants expect this to rely on revenue-sharing models, though there are still many details—and questions about disintermediation—that need to be resolved.

Being a platform for innovation. Telecom companies must find ways to provide the core telecom capabilities that third parties, developers, adjacent markets and even internal or acquired organizations need to innovate. Links with large, global developer audiences, such as those of hyperscale cloud providers, will be crucial, which reopens the debate over federation between service providers. Speaking at the event, Harmeen Mehta, GCIO at Bharti Airtel, also focused on adjacencies and untapped opportunities, such as providing “human ATM” services as a banking provider during the pandemic, or providing services to the billions of lower-income people in countries such as India.

Becoming an ecosystem solution provider. Perhaps nothing demonstrates more clearly that the future of the industry goes far beyond delivering 5G connectivity than the need to partner with others to deliver end-to-end solutions to large enterprise customers. Providers will have to add multiple new capabilities to their existing offerings—and will often need to do so through partnerships.

A software-first industry

Another key takeaway was the conviction that a software-first telecom industry needs to be “plug and play,” not “plug and pay.” Legacy technology, processes and ways of working are some of the greatest threats to the future vision of the industry. In addition to seeking ways to reduce integration costs and technical debt, major operators are now looking at operating costs and seeking up to tenfold improvements in operating efficiency.

Participants also agreed that, like IT, AI is a strategic asset. Use cases for AI are getting more ambitious, with a focus on automation of core operations and ensuring the right outcomes for customers, rather than automating the customer interface. But communications service providers are still unlikely to seize the full potential of AI on their own—or soon. Steve Jarrett, SVP for data and AI at Orange, noted that he believes it will take a decade to reach maturity. Tom Siebel, CEO and chairman of C3.ai (and founder of Siebel Systems), noted that AI should be at the top of every CEO’s agenda in what he called this “era of corporate mass extinction.” “Some will get it, some will not,” he observed.

Alex Choi, SVP for research and technology at Deutsche Telekom, noted that the software revolution required companies to “break down the silos and the boundaries … and adopt a more agile software approach.” In practical terms, this means companies will have to adopt a modular, AI-ready, reusable, “open by design” standardized software architecture that leverages open APIs, such as TM Forum’s Open Digital Architecture, as well as open source efforts such as Open RAN.

A troubling lack of diversity

Beyond the technology discussions, the forum also focused on people—and on the industry’s troubling lack of diversity. The World Economic Forum found only 12% of the workforce in cloud-computing businesses is female, and only 26% in data and AI, and participants at the forum speculated that the pandemic may have made the situation worse.

Even as the pandemic reinvigorated the industry with a newfound sense of purpose, a lack of diversity poses a serious challenge. It makes the industry less attractive to many employees, making it harder for communications service providers to recruit the types of top talent and diverse teams that are proven to be substantially more effective at delivering on innovation. Likewise, product sets and solutions—particularly in B2C markets—need inclusive design to be successful. A lack of diversity can even cause biases to be embedded in artificial intelligence, with far-reaching consequences.

Inclusion also matters. A forum masterclass on the topic noted that many diversity initiatives stop short of making sure that the diverse talent that has been recruited is genuinely engaged and included in ways that help unlock the full value of that talent. Cecilie Heuch, chief people officer at Telenor, and Peter Leukert, CIO for Deutsche Telekom, both offered their thoughts on practical and systemic approaches to cultural change. Among participants, there was a consensus that these efforts can succeed only if the CEO is truly passionate enough about the topic to make it happen and that companies must find intuitive and easy-to-measure indicators in order to track the success of their diversity and inclusion efforts.

Learn more about Bain at TM Forum.