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When Telcos Become Best Friends...
32 Plays24 days ago
In this episode, we unpack why telcos sometimes decide to bury the hatchet and to collaborate rather than to compete to the death. The creation of JV or broader collaborative initiatives is not a trend yet, it could become a way for telcos to create a common front to tackle the next wave of connectivity and monetization.
Among others, we look at Aduna, the multi-operator network API venture designed to give developers easier access to telco capabilities at scale, and the newly announced AT&T, Verizon, and T-Mobile D2D joint venture, a rare collaboration between U.S. rivals aimed at facing off against a real or perceived threat from Starlink. The episode explores what’s driving these alliances, where they could create new revenue, and the strategic trade-offs around competition, governance, and execution.
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Transcript
Intro
Introduction to Telco Collaborations
00:00:08
Pablo Tomasi
Welcome back to Telco Drift, a podcast that exploring tech telecoms and other sci-fi stories. I am Pablo, your host, and in today's episode we will discuss why telcos become best friends, how that happens, what is the track record they have, and also what insights we could get from these type of developments.
The Verizon, AT&T, and T-Mobile Joint Venture Prompted This Episode
00:00:30
Pablo Tomasi
So this this episode was kind of prompted from the recently announced joint venture between Verizon and AT&T and TMo and that is about the D2D.
00:00:41
Pablo Tomasi
But I did little bit of digging and there are quite a few different joint ventures or like strength alliance, strong alliances, let's put it that way, that Telcos have developed over the years.
00:00:53
Pablo Tomasi
So of course, each one of them has different rationale. Now, the one that I just mentioned, the D2D one, is absolutely Starlink response.
Joint Ventures in Telecom
00:01:04
Pablo Tomasi
I know there's a lot of talk about coverage, digital, divide all that type of stuff like that. i Absolutely nothing with that. It's all about making sure you they try to keep Starlink in place. Now, another big joint venture.
00:01:17
Pablo Tomasi
quite recent, I think from from a couple of years ago, so it's Aduna and that is about network API. And that is between Ericsson and a bunch of telcos, and effectively it's about telcos trying to to change their business, trying to become that platform player.
00:01:33
Pablo Tomasi
There are a couple of less known joint ventures. One is EnStream and this is again about network APIs that's between the three big Canadian telcos and it's it's about offering mobile network based identity verification. So quite similar in a way to what Aduna has been doing so far.
00:01:56
Pablo Tomasi
There is then a European AdTech adventure called Utiq and that is ah between DT, Orange, Telefonica and Vodafone and it's sort of trying to play into the advertising you know identity for advertising market.
00:02:15
Pablo Tomasi
Another adventure that I came across is called the Bridge Alliance that's about simplifying marketable options variety that's across operators from Asia, Australia, Africa and Middle East and then an interesting one about it's called Telco AI Alliance and that's working on Telco multilingual large language models so it's about AI it's between different telcos I don't remember top of my head I have in the notes which telcos But as you can see, you know throughout the years, Telcos have tried to play well together.
00:02:49
Pablo Tomasi
So now let's see the results over the C.
Aduna: Network APIs To Turn The Network Into a Platform
00:02:51
Pablo Tomasi
So two let's hear my two cents on how has that been playing out for them. So first of all, let's deep dive on Aduna which is probably the biggest one of these joint ventures. And the first thing, of course, this is between Ericsson, so there is the involvement of a vendor.
00:03:13
Pablo Tomasi
If I remember correctly, he said sort of 50% owned this joint ventures by Ericsson. And then there are the funding funding fathers funding partners, which are like some really large techos. Verizon, Vodafone, Telefonica, Reliance Jio and others. And so there is like a financial commitment from these founding partners.
00:03:34
Pablo Tomasi
So what is it about? It's about Network API. So the idea is to turn the mobile network infrastructure into sort of a software platform that world developers can tap into.
Telcos Fragmentation Does Not Work Well With Developers
00:03:49
Pablo Tomasi
And one of the big challenges has always been the fact that telcos are fragmented and so I do not try to solve this fragmentation so if I'm a developer I don't want to integrate with every single telco I just want to be able to integrate once and then you know work effectively across the board with every telco and that's the idea beyond this initiative taking away that fragmentation
00:04:22
Pablo Tomasi
So if if I have ah an app, fintech or whatever, I want to use a single API to verify users and that needs to work across different countries and different tasks.
Transforming Industry Dynamics with Joint Ventures
00:04:34
Pablo Tomasi
I don't want to have to create, adapt and integrate for each different telco
00:04:40
Pablo Tomasi
It seems that the idea of identity for prevention, that type of stuff, is the sweet spot for what Aduna doing. By the way, I'm talking about digital management, but network API is a much broader topic, and of course, there's some stuff in there, but personally, I'm quite skeptical of it, but that that doesn't really matter right now.
00:05:01
Pablo Tomasi
So how does this fit into sort of the telcos and their transformation? Well, telcos are trying to monetize 5G, right? They tried to put more speed, to put more data, but effectively what telcos have done from a monetization perspective has been breaking the game. So telcos monetization in in the mobile space, it's a broken game.
00:05:26
Pablo Tomasi
You have been offering more than people need, and now you cannot go back. and it is like to make a simple example if you're giving me one million apples to eat in a month or 10 million apples it doesn't really matter it's way too much anyways of how much i actually need um i can either know 10 apples in a month maybe 20 you're offering like way too much and now that's what i'm expecting from you so if you're then trying to offer me less to eat i'm like well i can go to the other provider it just gives me everything that i want even if i don't need it
00:06:03
Pablo Tomasi
So I had a conversation the other day with a couple of ah you know my favorite analysts on the consumer side who were not happy about every time that I denigrate the consumer market. But once again, I'm sorry, the consumer market has failed.
00:06:21
Pablo Tomasi
And it's
Ericsson's Role and Developer Challenges
00:06:22
Pablo Tomasi
failed for telcos, but at the same all the value on top of connectivity, that has been captured by other players. ah You know, the OTT players, the hyperscalers, so on and so forth.
00:06:33
Pablo Tomasi
And going back now to John Venture's idea that the network can get back some of that value potentially. So again, trying to monetize beyond the standard connectivity piece and delivering those solutions that are needed by the enterprise. So again, the enterprise market.
00:06:56
Pablo Tomasi
That's the interesting one. So why Ericsson has been doing this? Well, partially Ericsson is this pushing this because they acquired company Vonage overpaid for it significantly. And Some really fucked that up when it came to you know, dealing with the price of that company.
00:07:17
Pablo Tomasi
But, you know, they have those assets and now they're trying to to make it work. And from their perspective as well, Ericsson really needs to try to diversify. one side they want to drive more tech investment on the network, on the other side they want to diversify their revenues.
00:07:33
Pablo Tomasi
So that's why they're so heavily involved in this. so So far, as so good.
Risks and Complexities of Collaboration
00:07:38
Pablo Tomasi
Yet, there are some challenges or risks. I don't really want to call them risks, they're just some challenges.
00:07:49
Pablo Tomasi
First of all, is that this is all about attracting developers. and telcos and developers they are not particularly well aligned so telcos are not particularly known as being as having that fast moving software culture or frictionless developer experience and that could be an issue um Then the other point which I think is also quite important is that my personal view is that the network API market is not even remotely as big as people want it to be.
00:08:29
Pablo Tomasi
So if at the end of the day you're playing in a market that is a few billions, how long before you lose your patience? Because this is simply not big enough. And I think that is the big challenge for Network APIs It's simply not the big enough market for the telco part. I don't care how much economic benefits it can can unlock, we can all play that game, but simply if I don't get enough money me as a telco, I don't see why there in the first place.
00:08:59
Pablo Tomasi
And the the last challenge that I see is maybe a little bit more subtle, a little bit more political, but you know there are some big telcos there and everyone, imagine there's gonna be like a lot of red tape, very difficult to get telcos to work together, different telcos have different interests based on their priorities, regions, so on and so forth. So I just imagine it to be quite quite a difficult thing to to get everyone to to agree and to work in the same direction.
00:09:27
Pablo Tomasi
So let's see you see what happened. Interesting in development. Realistically, I would imagine this to remain quite a niche undertaking, but I don't think it would change so sort that idea of becoming that sort of platform player. I don't
More APIs With EnStream And Some Advertisement Talk With Utiq
00:09:41
Pablo Tomasi
think that's going to happen. But let's say i can I can be wrong. I've been wrong many times in the past.
00:09:46
Pablo Tomasi
i Either way, I don't think we're going have the answer on whether I'm right or wrong anytime soon. So if we then look at another similar intervention, we have EnStream as I mentioned, that's the Canadian one. What's interesting is that this has been on since 2005.
00:10:05
Pablo Tomasi
So the Bell, Rogers and Telus are partnering to offer network-based identification for prevention services. ah So instead of having each telco building separate authentication APIs, they get all real-time mobile data together and they're kind of using that.
00:10:27
Pablo Tomasi
And that is targeting banks, fintechs, and governments, so allowing them to verify. Pros, you get some seamless authentication, you get nationwide scale.
00:10:41
Pablo Tomasi
And for me, the most interesting success this endeavor is the fact that it's been going on since 2005 five and that's that's a long time so clearly it's niche market and it's serving it and that's all or you can ask for this type of joint venture now I believe they recently then started teaming up with Aduna because before I don't think they were like using open standards APIs but now I think they're gonna be doing that going forward
00:11:15
Pablo Tomasi
Now moving on another joint venture quickly so Utiq aims to empower brands and publishers to address first party authentic audiences at scale.
00:11:30
Pablo Tomasi
and the interesting thing here it's about advertising so it's as weird as it is advertising is really the only thing that is moving the world like how much are we buying stuff that's what everything that we do is really boiling down at so big opportunity and when you look at the big hyperscalers that's how they make their to money honestly It's just on one side they sell the ad to the company, on the other they try to sell you subscriptions so that you don't get as many ads and that's also how they get rich.
00:12:02
Pablo Tomasi
For all the beautiful things they're doing, they're they're making money out to just sell you bunch of news.
00:12:09
Pablo Tomasi
I'm getting cynical again. But anyways, um so this is taken from their website. on The internet, funded by digital advertising, has given access to an amazing breadth of information, entertainment and services, but people face friction in their online experiences.
00:12:26
Pablo Tomasi
Opacity and complexity are constant to persons with the use of intrusive, repetitive advertising. For brands and publishers, that is becoming less accurate and abundant, putting the essence of the free-to-access internet at risk.
00:12:39
Pablo Tomasi
increasing their big tech dependencies for scale targeted for schedule targeted and traffic. Before the open web becomes as far as everyone, something has to change. So, you know, they want to kind of look get a piece of that under pie. And this is a joint venture with Deutsche Telekom Orange Vodafone
00:12:57
Pablo Tomasi
And the idea is creating that privacy focus advertising identities built on telco data rather than, you know, third party cookies and stuff.
00:13:08
Pablo Tomasi
I think this kind of plays into the broader European sovereignty and limiting hyperscalary influence as that worked. I'm not really sure, honestly I didn't know this existed, but interesting interesting see, I think more types should probably look into advertising I think quite a few of them have looked into data advertising.
00:13:29
Pablo Tomasi
It's probably not easy and it complies with a lot of regulations. And I remember when I was smart cities, there were some other rules about what you can and cannot do with advertising, which there was for the US, it was literally like a city was forbidding you, for instance, to to do some sort of advertising on certain type of infrastructure.
00:13:53
Pablo Tomasi
but I would say without having any knowledge of this that's a good opportunity Telcos.
AT&T, Verizon, and T-Mobile's Strategic Move
00:13:59
Pablo Tomasi
Now let's move on the AT&T Verizon and T-Mobile Joint Venture for D2D.
00:14:08
Pablo Tomasi
so This is like a big one. It's an interesting because it's kind of this big announcement, okay, we're gonna be doing this joint venture.
00:14:18
Pablo Tomasi
At the same time, you're not providing any details. is There's no satellite partner there or provider is named. so it's like, hey, this is what we want to do. We want to join together to drive D2D and kill the deck of our zone, bridge the issue of our abilities. It's not about that.
00:14:38
Pablo Tomasi
This is 100% a hundred percent way of reacting to the risk, whether it's real or perceived, or what Starling can do. So what do we do with this?
00:14:53
Pablo Tomasi
Now, first of all, is Starlink risk credible? um I'm telco to make my mind on it. I definitely don't think they want to become a Terakos, already talked about that before, but they will want to go after high value niches of the market, which I think that's probably where the two, the Terakos and the Starlink space experts sort of get, become less friendly, let's put it this way.
00:15:22
Pablo Tomasi
and that potentially sort of could create a precedent, like could change the way that things are happening in Telecos. I think that's the big fear. It's not necessarily that, you know, Starlink is going to go after Telecos on the run tour, but will change how things are.
00:15:38
Pablo Tomasi
And Telecos don't like change. Telecos like to live in their walled garden where they can do whatever they want to the consumers, which has been working decently for them. Now, the general venture effectively aims to have the three telcos controlling the core piece of this new integrated ecosystem, spectrum, billing, authentication, whatever, customer relationship.
00:16:01
Pablo Tomasi
So instead of having which telco do whatever they want, they're gonna push for common standards, share telco framework, and effectively, the idea is to force satellite operators to play the game that the telco wants in the way that the telco wants.
D2D Market and Independent Paths
00:16:19
Pablo Tomasi
so what what good can come from this yeah let's say it's gonna be coverage is gonna be improved dramatically so for all people that are always sending texts you can send texts from everywhere once you're the middle of nowhere you can send the text amazing But on more positive development, not more positive but the developments that actually have a weight, I think this could accelerate the development of that satellite mobile ecosystem, you know kind of making it easier for people to develop their solution and to to understand what's happening in the market.
00:16:59
Pablo Tomasi
And there could be So the more integration, the better satellite is integrated with terrestrial either There can be some benefits in bringing that coverage or reducing some infrastructure costs potentially.
00:17:12
Pablo Tomasi
Now the risk. According to AI, it's going to be antitrust scrutiny. and because the three titles are collaborating so I'm not sure I don't know regulation than that much but apparently that could be one of the issues what I actually think is going to be an issue is the fact that d to The D2D market is not as big as people want it to be again.
00:17:42
Pablo Tomasi
i think TMo recently pushed some numbers out in terms of uptake, in terms of how much has been used. So if this market doesn't explode as people want, then what was the point having this venture venture? People
Telco-Satellite Integration Impact
00:17:59
Pablo Tomasi
are going losing interest.
00:18:02
Pablo Tomasi
A challenge is understanding, okay, that's what the tackles want to do, is Starlink to play ball or not. And the other big issue that I see is that each tackle can still do whatever they want on their own with whatever satellite partners they choose.
00:18:19
Pablo Tomasi
uh and that i think that is always one of the issues that i see this type of event i think i'm doing the same issues if i can do whatever i want while i'm part of joint venture then i'm just gonna do whatever i want and if the joint venture doesn't move the direction that i want i can do other things so like it really reduces the relevance i think the strength of the joint venture
00:18:43
Pablo Tomasi
um then long-term impact we know terrestrial non terrestrial network and network are going become more and more integrated and i think there's going to big shape big shuffling probably that's the better word of vendors what they do how much they do how much money and also i think there's going be some drastic changes in the whole mobile ecosystem so i see that's my bold prediction for for the day Now onto the Bridge Alliance, I'm not gonna spend a lot of time here, but I thought about IoT and that's across, simplifying it across very different countries.
Telco AI Alliance and Language Models
00:19:21
Pablo Tomasi
Talking a little bit about AI because I Alliance to get that AI hashtag whenever I publish something. So the Telco AI Artlines Joint Venture that's between Deutsche Telecom, SK Telecom, Singtel E& former Etisalat Softbank that's from 2024 and idea is to build telco specific multilingual large language model.
00:19:46
Pablo Tomasi
so The idea is that, okay, normally models are not trained on telco data, so they may not understand the sector as well. So the idea is to create telco-specific large-joint-quatch model that is trained on telco data that is capable of better serving whatever the telco wants to serve.
00:20:08
Pablo Tomasi
Now, I hate chatbots, so I really don't understand how this could be useful, but I'm um'm very biased. I know that I am very biased. um Now, interesting thing, this is completely related, but I've always wondered, and tried to ask some people would get a good answer, is there language that better for AI?
00:20:27
Pablo Tomasi
the band Or is there language that is easier for AI to work with? um I don't know, it seems that a lot of it hits is language is different, right? The way that it's structured, constructed, I wonder whether AI is better suited to work in a certain language rather than in other.
00:20:48
Pablo Tomasi
Hopefully I'm gonna find that out sometimes. So the idea then is to create chatbots, you know, AIOps, concentric agents and so on. potentials I think to serve some services to to enterprises.
00:21:05
Pablo Tomasi
It's interesting, honestly haven't really followed this so I don't know how far are off they are with this endeavor but it seems like it makes rational sense to me.
00:21:17
Pablo Tomasi
One of the challenges always gonna be how are they working together, how they're splitting R&D. They're working in very different languages so don't know how that will will work um And then whats what's gonna be the actual new revenues and is the end product really gonna be so much better than in what you can get off the shelf.
00:21:39
Pablo Tomasi
I think we're gonna have to either, of course, there are gonna be some provider constraints that always happens no matter what. But that's it, I think that's that's an interesting
Conclusion and Audience Engagement
00:21:51
Pablo Tomasi
one. And finally, I managed to talk about AI.
00:21:56
Pablo Tomasi
um telcos trying to use ai to regain control over you know their own fortune their own customer experience their own network rather than having to be too dependent on other people so i think it's a very noble intention i'm not sure if will work but we will see.
00:22:17
Pablo Tomasi
So this was a quick rundown of different joint ventures. Let me know if for what I said didn't make sense. Are you more optimistic or are you more negative about joint ventures?
00:22:32
Pablo Tomasi
And do you think the future of telecoms is about them walking working well together or do you think this is just an illusion? Let me know in the comments and talk to you in couple of weeks times, maybe a little bit more, because I'm going on holiday and so I will forget everything about tech and telecoms for a few weeks. But great having you here.