Telcos and satellite operators are already working well together, and this ‘co-ompetition’ is also developing into beneficial partnerships. In the first of a series, here are six partnerships between hyperscalers and telcos and why they happened – starting with the Asian market.
KDDI and AWS: Private 5G and generative AI
AWS has been working extensively with telos around the world for several years now. This culminated in the 2023 launch of the Telco Network Builder managed network automation service, which lets CSPs cloudify their operations without designing their own cloud-based networks.
This builds on a period of successful collaboration with Asian CSPs, particularly with Japanese telco KDDI. After migrating its backend services to AWS in 2021-2022, the two companies have taken their partnerships to new service offerings. One is private 5G, where KDDI is one of several operators to make use of AWS’s private LTE and 5G services to bolster enterprise offerings.
A second is generative AI. KDDI announced in September 2023 that it will use AWS cloud and AI infrastructure to implement AI-based digital transformation initiatives for Japanese companies and municipalities that need it. The partnership will focus on making use of the technology to solve Japan’s chronic issues with workforce shortages and operational inefficiencies.
Tencent and China Unicom: JV for AI
One of 2022’s biggest telco/hyperscaler tie-ups was the November announcement of a proposed joint venture, finalised in May 2023, between Tencent Holdings and China Unicom in a 42%/48% split. The rationale of the deal, according to China Unicom, was to meet its “strategic need to comprehensively foray into the digital economy”. In practical terms, this touches on a range of applications and technological developments, including content distribution, edge computing, digital governance and artificial intelligence, reported China Daily.
Telkomsel and Microsoft Azure: AI for machine learning and performance enhancement
Another Asian CSP looking to the hyperscaler world to improve customer experience is Telkomsel – this time on the marketing and business intelligence side. The Indonesian telco teamed up with Microsoft Azure in March 2023 to integrate Azure AI ML algorithms, with the aim of analysing customer data and usage patterns and eventually developing predictive algorithms for more proactive business decision making by the Telkomsel teams.
The potential of AI for enhancing business operations has been in the pipeline for telcos for quite some time. While generative AI and the demands it places on telco operations take much of the attention currently, integrating machine learning and closed-loop automation to telco operations means AI can be a help to CSPs as well as a challenge.
Microsoft Azure and NTT East: chatbots for business that actually work
Telco-hyperscaler partnerships don’t have to be all about the networks. There are plenty of ways the two industries can combine to deliver a surgical solution to a specific problem.
Microsoft Azure’s work with NTT East is a good example of this. NTT East works with a wide network of partners, who approach the company with regular queries and issues that require swift resolution. With internal teams struggling to clear out the enquiries in time, NTT East turned to chatbots, specifically the PKSHA AI Helpdesk, which runs on an AI dialogue engine that enhances its answers with greater use through machine learning principles.
Since the solution was brought in around 2020, chatbot query resolutions as a total share have risen from 10% to 35% - freeing up NTT East’s internal teams to service their customers more efficiently and focus on the service innovations that only humans can come up with.
AWS and SK Telecom: playing to each other’s strengths
Another use case of artificial intelligence that pre-dates the current focus on generative AI is computer vision - analysing large quantities of images in real time to help in applications like crop analysis, manufacturing troubleshooting and repair analysis, and other use cases.
Making this happen requires powerful, well-trained AI models and the storage and connectivity infrastructure to feed them. This is the rationale behind a partnership between AWS and South Korean telco SK Telecom. As part of the tie-in, announced in 2022 and currently underway, SK Telecom will power its AI models with AWS’s edge, IoT and storage solutions to deliver an improved solution for customers to process and analyse data, whether that be on-prem, in the cloud, or at the edge. This deal represents a further move along the hyperscale path for the Korean operator, who announced the construction of a hyperscale data centre and start-up cluster at the start of the decade.
This is an example of how telcos and hyperscalers can combine their respective strong points into one single offering – the customer relationships and data history of a telco, and the computing power and flexibility of a hyperscaler.
Microsoft Azure and NTT Docomo: making the ‘smartphone loan’ happen
Telcos are getting more creative when looking for new revenue streams. Japanese carrier NTT Docomo has even moved into banking – developing a ‘smartphone loan’ programme that allows quick and easy loan arrangement via mobile devices, with existing Docomo subscribers enjoying a better interest rate.
NTT Docomo had already been working on digital transformation. Armed with this experience, the carrier turned to Microsoft Azure to provide IaaS system infrastructure for the programme, thanks to its scalability and track record in the highly regulated world of finance infrastructure development. Built on a virtual WAN, the flexibility offered by this kind of virtualised infrastructure was ideal for the project, allowing the network to scale up as user numbers grew. With the telco to tech-co shift well underway, IaaS success stories like this are encouraging for telcos looking to expand their revenue streams in a scalable way.
The collaboration opportunities between telcos and hyperscalers is one of many topics that will get airtime at the upcoming Capacity Asia event in Singapore – look at the website to see who you can meet.
