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“They have become ageing monocultures; disruptive innovators have left the industry and innovation is outsourced,” says the report.

The TEG has held three colloquiums and numerous discussion groups soliciting views from experienced individuals across the industry during the two years.

The latest paper names eight authors but many more contributed to the document and its recommendations.

Network transformation

Don Clarke, formerly of BT and CableLabs, is one of the authors of the latest paper. He also co-authored ETSI’s Network Functions Virtualisation (NFV) paper that kickstarted the telcos’ network transformation strategies of the last decade.

Many of the changes sought in the original NFV paper have come to pass.

Networking functions now run as software and no longer require custom platforms. To do that, the operators have embraced open interfaces that allow disaggregated designs to tackle vendor lock-in. The telcos have also adopted open-source software practices and spurred the development of white boxes to expand equipment choice.

Yet the TEG paper laments the industry’s continued reliance on large vendors while smaller telecom vendors – seen as vital to generate much-needed competition and innovation – struggle to get a look-in.

The telecom ecosystem

The TEG segments the telecommunications ecosystem into three domains (see diagram).

The large-scale data centre players are the digital services providers (top layer). In this domain, innovation and competition are greatest.

The digital network provider domain (middle layer) is served by a variety of players, notably the cloud providers, while it is the telcos that dominate the physical infrastructure provider domain.

At this bottom layer, competition is low and overall investment in infrastructure is inadequate. A third of the world’s population still has no access to the internet, notes the report.

The telcos should also be exploiting the synergies between the domains, says the TEG, yet struggle to do so. But more than that, the telcos can be a barrier.

Clarke cites the emerging metaverse that will support immersive virtual worlds as an example.

Metaverse

The “Metaverse”  is a concept being promoted by the likes of Meta and Microsoft and has been picked up by the telcos, as evident at this week’s MWC Barcelona 22 show.

Meta’s Mark Zuckerberg recently encouraged his staff to focus on long-term thinking as the company transitions to become a metaverse player. “We should take on the challenges that will be the most impactful, even if the full results won’t be seen for years,” he said.

Telcos should be thinking about how to create a network that enables the metaverse, given the data for rendering metaverse environments will come through the telecom network, says Clarke.

“The real innovation will come when you try and understand the needs of the metaverse in terms of networking, and then you get into the telco game,” he says.

Any concentration of metaverse users will generate a data demand likely to exhaust the network capacity available.

“Telcos will say, ‘We aren’t upgrading capacity because we are not getting a return,’ and then metaverse innovation will be slowed down,” says Clarke.

He says much of the innovation needed for the metaverse will be in the network and telcos need to understand the opportunities for them.  “The key is what role will the telcos have, not in dollars but network capability, then you start to see where the innovation needs to be done.”

The challenge is that the telcos can’t see beyond their immediate operational challenges, says Clarke: “Anything new creates more operational challenges and therefore needs to be rejected because they don’t have the resources to do anything meaningful.”

He stresses he is full of admiration for telcos’ operations staff: “They know their game.” But in an environment where operational challenges are avoided, innovation is less important.

TEG’s action plan

TEG’s report lists direct actions telcos can take regarding innovation. These cover funding, innovation processes, procurement and increasing competition.

Many of the proposals are designed to help smaller vendors overcome the challenges they face in telecoms. TEG views small vendors and start-ups as vital for the industry to increase competition and innovation.

Under the funding category, TEG wants telcos to allocate a least 5 per cent of procurement to start-ups and small vendors. The group also calls for investment funds to be set up that back infrastructure and middleware vendors, not just over-the-top start-ups.

For innovation, it wants greater disaggregation so as to steer away from monolithic solutions. The group also wants commitments to fast lab-to-field trials (a year) and shorter deployment cycles (two years maximum) of new technologies.

Competition will require a rethink regarding small vendors. At present, all the advantages are with the large vendors. It lists six measures how telcos can help small vendors win business, one being to stop forcing them to partner with large vendors. The TEG wants telcos to ensure enough personnel that small vendors get all the “airtime” they need with the telcos.

Lastly, concerning procurement, telcos can do much more.

One suggestion is to stop sending small vendors large, complex request for proposals (RFPs) that they must respond to in short timescales; small vendors can’t compete with the large RFP teams available to the large vendors.

Also, telcos should stop their harsh negotiating terms such as a 30 per cent additional discount. Such demands can hobble a small vendor.

Innovation

“Innovation comes from left field and if you try to direct it with a telco mindset, you miss it,” says Clarke. “Telcos think they know what ‘good’ looks like when it comes to innovation, but they don’t because they come at it from a monoculture mindset.”

He said that in the TEG discussions, the idea of incubators for start-ups was mentioned. “We have all done incubators,” he says. But success has been limited for the reasons cited above.

He also laments the lack of visionaries in the telecom industry.

A monoculture organisation rejects such individuals. “Telcos don’t like visionaries because culturally they are annoying and they make their life harder,” he says. “Disruptors have left the industry.”

Prospects

The authors are realistic.

Even if their report is taken seriously, they note any change will take time. They also do not expect the industry to be able to effect change without help. The TEG wants government and regulator involvement if the long-term prospects of a crucial industry are to be ensured.

The key is to create an environment that nurtures innovation and here telcos could work collectively to make that happen.

“No telco has it all, but individual ones have strengths,” says Clarke. “If you could somehow combine the strengths of the particular telcos and create such an environment, things will emerge.”

The trick is diversity – get people from different domains together to make judgements as to what promising innovation looks like.

“Bring together the best people and marvelous things happen when you give them a few beers and tell them to solve a problem impacting all of them,” says Clarke. “How can we make that happen?”