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From Brain Fades to Breakthrough Plays
58 Plays1 month ago
Why do telcos keep chasing the wrong opportunities—or is there really such a thing as a wrong opportunity?
In this episode, we unpack some of telecom’s most persistent “brain fades”: from telcos’ costly attempts to become media companies, to network vendors stretching into industrial markets, to the long-misunderstood promise of IoT.
But this isn’t just a post-mortem.
We flip the lens to what’s emerging now: how AI is reshaping the value stack, where real opportunities are forming, and why this time the winners may look very different from the past. If the last decade was defined by missed signals, the next one may be defined by who finally reads them right.
A sharp, honest look at strategy, hype cycles, and the gap between ambition and execution.
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Transcript
Introduction to Telco Drift Podcast: Brain Fades And new Opportunities
00:00:01
Pablo Tomasi
Welcome back to the Telco Drift, a podcast exploring tech, telecoms and other sci-fi stories. I am Pablo, your host, and in today's episode, we will discuss some brain fades from telcos and partners, from multi-billion acquisitions to industrial broken dreams, but we will also check some emerging opportunities on the horizon, so we'll try to understand where the market is going.
00:00:28
Pablo Tomasi
Now before we start actually discussing content, let me just very quickly self promote the launch of the TelcoDrift website. So if you haven't had the chance, just go www.telcodrift.com, have a look at a website, have a look at the different sections and let me know in the comments. So let know whether you like it or not. Let me know if I should add something else to the website or what is missing.
Strategic Errors by Telcos
00:00:52
Pablo Tomasi
let's keep try building this together actually and we'll see where the Telco of drift can be going on from here forward now let's start first of all with the discussing some of the blunders if you want that I've seen from from different telcos. Now, the reason why I want to focus, first of all, on some of the wrong strategic moves that have been made by telcos is because there's always sort of a silver lining, if you want. There's always a lesson that can be learned.
00:01:28
Pablo Tomasi
So what are some of the brain fails that I've seen happening in the industry? Now, o these sort of there is not single miss mistake that's been done in the industry. There have been like a lot of different decisions that have been questionable. so But one that for me kind of stands out is AT&T Media Madness so AT&T they actually acquired Warner for something like 85 billions and effectively they tried to push into the media business now the the idea of the company was pretty much I own the pipe I will have the content and I can cross-pollinate to customers
00:02:13
Pablo Tomasi
now we all know this was not a successful endeavor and think this is probably like one of the best examples of the challenges of moving away from your core business into additional opportunities now on paper you can see okay this actually makes a lot of sense but then the company hasn't really been able to to generate the type of synergy that it was expecting now if you want to look at this on a more positive outlook well if you're big enough you can make multi-billion dollar mistakes and and yet you can still survive then you can sort of pivot back to what you've been doing well which is sort of the connectivity piece so effectively there is a certain amount of risk that you can take while still kind of getting away with it
00:03:04
Pablo Tomasi
Now in a similar fashion Verizon Media and Advertising business hasn't been particularly successful. So Verizon acquired Yahoo for 4.5 billion and AOL for 4.4 and so they combined them into subsidiary called Oath which was then later branded at Verizon Media. Now this is another example of again trying to move away from core competencies into adjacent businesses. Now that that new business was then eventually sold so once again showing that it's not that easy to move away from what you're doing day in and day out.
00:03:37
Pablo Tomasi
In this case it was like a key focus on the advertising side of things and actually i do see telco and advertising potentially having a future together so I'm not really sure what didn't work In this case, maybe like the scale wasn't there, the size wasn't there, so today the tech behind the business was not where it was meant to be. But that's that's another example of trying to move past traditional telco and still finding very difficult to to become a different type of company, to change the way that you're doing things and to change the the customers that that you can serve.
Nokia's Struggles and Business Shift
00:04:15
Pablo Tomasi
Now moving on to something completely different and this may be a little bit more, you know, I we have a few people that say questioning this, but for me Nokia had some big industrial plans going on for the last few years. So they were trying in my own view to effectively become an industrial vendor.
00:04:35
Pablo Tomasi
and that can be, could be witnessed by the push that we're making in terms of creating new product and that's included there at campus size proposition, the ecosystem they were building, the marketplace, the MXIE strategy.
00:04:52
Pablo Tomasi
Now Nokia decided to kind of call it day on this. um And once again, this time we're not talking about a telco, we're talking about a vendor, but again, changing the DNA that you have is not that easy. And again, entering a new segment, and that is not exactly the same segment that you were playing before.
00:05:10
Pablo Tomasi
It's something that is quite difficult, even from a vendor perspective. It requires lot of patience. requires company that is willing to be extremely patient, particularly when you want to enter those vertical markets. So from my point of view, actually giving up on the dream is a little bit of a...
Challenges in Telcos' IoT and Techco Transitions
00:05:32
Pablo Tomasi
of the sort of brain fade but I know other people disagree strongly and the rationale from Nokia to push more on AI is clear we cannot deny that but anyways just another example of how difficult it actually is to change what your company does now another lesson i think is quite interesting to to discuss is effectively the IoT dream So particularly a few years back, when we were talking to Telecos, they all had this this idea of like, okay, the IoT market is expanding. We are going to be part of that. We're going to have billion of connections.
00:06:11
Pablo Tomasi
a The problem that i that I've seen, and I think if you ask most Telecos now what do they think about IoT, it's sort of a side project in a sense, is that the value in IoT went up a stack. It went to platform analytics solutions.
00:06:26
Pablo Tomasi
And sort of the Telco traditional fragmentation has been like a clear challenge in this market. And the connectivity piece, with you know connection worth like $1 or less a month, with strong price-based competition, effectively meant that the IoT business in most Telcos have never been able to to truly scale.
00:06:47
Pablo Tomasi
And Telcos haven't really been able to gain that vertical specialization. So I would say that the IoT dream has been dead dormant at least for ah for a few years. Maybe there's going to be sort of an awakening. It's going to be like a a new attempt from Telcos to enter the market. But the great expectation that we're there for some time.
00:07:07
Pablo Tomasi
I think they they have all disappeared. So the lessons here is is quite simple. Yes, connectivity is important, but sometimes the value somewhere else and you need to be able to capture that somewhere else at scale if you really want to be successful.
00:07:25
Pablo Tomasi
now another brain fade and again very controversial i would say so just comment if you if you disagree with me for me the the telco to techco nonsense it's it's absolutely i just simply don't get it so starting with the idea what is a techco i think you can ask 10 different people and you're gonna have 10 different answers so no one really knows what they mean How does techco make money?
00:07:53
Pablo Tomasi
Is it selling tech, is it selling solutions, it selling sort of to more tech savvy services? Again, lots of different differentiation. But for me, the the critical element is that when you're looking about um technology providers, I would say, well, again, you can define that in different ways.
00:08:15
Pablo Tomasi
but i would say it's critical for them to you know be r and d heavy companies so without going too far out from the telecom world if you're thinking about telecom infrastructure vendor r and d spend is roughly 20 percent revenues so you can say like between 15 and 25
00:08:35
Pablo Tomasi
and that's because you need to develop your solutions you need to create those and R&D is the only way to do that now if you look at what an average telco is spending on R&D way less than one percent so for me you cannot try to become a techco player unless you're like really stepping up your R&D which is easier said than than done so for me this was like a whole kind of rebranding thing, it was almost marketing and that's why I'm not big fan of marketing obviously because i think the whole idea was just to change the way that someone was perceiving a telco so telco telcos is a bit of an outdated concept in in a sense and I think just trying to position themselves tech-who
00:09:22
Pablo Tomasi
was ah was a way of changing people's perception and possibly getting better ratings. And from my point of view, it's like kind of changing your haircut. You you try to look differently, but and say at then at the end of the day, you are the same bloke, right? So you're doing exactly the same things, just trying to be perceived in ah in a different opportunity.
00:09:47
Pablo Tomasi
Now before we move on some of the opportunities, there are some initiatives in the tech world which depending on how you look at them may be considered a little bit of failures but potentially not necessarily failures, just sort of either opportunities or like strategies that were developed before their time or potentially just the strategies that require more time.
Skepticism on Network APIs and The Value Needed To Move The Needle
00:10:10
Pablo Tomasi
So if I think what Rakuten has been doing with Symphony unit, in effectively we're trying to become a global telecom software vendor. So they were trying to export their learning to create cloud-based ORAN a network to other operators and enterprises. Now for a few years it seemed there was like a lot of excitement around this this project.
00:10:33
Pablo Tomasi
I think a lot of that excitement has kind of, you know, has went quiet a little bit. That doesn't mean that was sort of the wrong approach. I think the some of the underlying assumptions that were correct, but probably the timelines that were tried to be pushed into the market were a little bit too optimistic. So I do think there there is some lag in there, but currently I don't think that hey this can really be categorized as a sort of revolutionary success but maybe we need to give it a little bit more time and the other strategy, solution technology, whatever are you want to call it that sits in between a failure and a new opportunity
00:11:16
Pablo Tomasi
is the whole network API conversation. And depending how you look at it, I'm a bit skeptical on network APIs in the sense that I've seen a lot of forecasts that are way, way off in my own view. Some some people talking about 100 billions. And then within those forecasts, you have people starting sort of...
00:11:40
Pablo Tomasi
bringing everything together. like It's going to be 100 billion, enabling new revenues in this and that, web verticals, whatever you want. But the reality is that from a pure telco perspective, you even assuming the numbers are correct, which you know we we can discuss, you're going to have like a tiny, tiny little piece of that puzzle.
00:11:59
Pablo Tomasi
And and that that brings you back into, okay, is is a few hundred million for a big telco moving the needle? Is that really something going to be investing in it if in three years time that's all to the money that I can expect? and We can make the same you know and debate about private networks.
00:12:19
Pablo Tomasi
And that's what I'm saying. i'm not sure if you're already there in sort of the that's alarming scenario or if we need to be a little bit more patient. a Network API will probably continue develop, but I think, again, it's much slower than than a lot of people wanted it to be.
00:12:38
Pablo Tomasi
Now, thinking about new opportunities, and I just had a quick look at some of the the recent announcements and I have to little bit about
NVIDIA's AI and Space Computing Initiatives
00:12:47
Pablo Tomasi
NVIDIA. Now, full disclosure, I don't really follow the the company that much, but the reason why I want to tie few to opportunities for the telecom world to what NVIDIA is doing, the main ah the main reason is quite simple.
00:13:01
Pablo Tomasi
NVIDIA money, has lots of cash to burn if you want and and therefore they they can really help creating or you know bringing the industry in a certain direction.
00:13:16
Pablo Tomasi
So a couple of the announcements that NVIDIA made recently. So they announced Open Physical AI Data Factory Blueprint to accelerate robotics, visionary agents and autonomous vehicle developments. Now there is a bunch of you know like high marketing sounding words and they are very, very hypey.
00:13:39
Pablo Tomasi
And the blueprint we know sort of ah is an open reference architecture. um And then like NVIDIA in the press release mentioned that unifies and automates how training data is generated, augmented evaluated and reducing the cost and complexity of training, physical AI system at scale.
00:13:58
Pablo Tomasi
So that's AI factories that have been quite quite trendy recently in the telco world and part of what NVIDIA is doing is trying to collaborate with telcos to bring sort of that AI into the the telco network, into the telco edge.
00:14:20
Pablo Tomasi
now one of the questions that i have and again without really following the company so if you follow NVIDIA let me know if i'm saying something that doesn't make any sense is NVIDIA focusing on telco edge because the company needs the edge for AI to succeed or because NVIDIA is already overwhelmed any other part of the sort of the data center world with this product and needs a new market to sell into.
00:14:49
Pablo Tomasi
um and I'm not sure. The idea of having a distributed sort of edge computing infrastructure for applications, IoT, AI, whatever, is nothing new but it seems that now for NVIDIA this is like the new big thing that really needs to happen and needs to work with telcos. I wonder what it's like really needed or just NVIDIA needing new markets to keep selling and keep growing as a company i guess what we'll see in and again comment if i'm talking nonsense now another interesting announcement from an NVIDIA so nvidia t-mobile and partners integrate physical application on AI RAN grid infrastructure
00:15:27
Pablo Tomasi
so they have some pilots and and again the the idea that that that we see is that sort of AI will play an increasingly important role in the RAN network whether it's like supporting RAN but also in its spare capacity potentially supporting some AI application or inferencing or you know a mix of everything and then again we see sort of how AI almost is in desperate need of the telco edge which is sort of what I couldn't really I cannot really understand or or share that that necessity for that um but we'll see how that develops clearly i mean T-Mobile has been doing a lot of innovative stuff and NVIDIA has been doing a lot innovative stuff so if there's certain folks on that
00:16:16
Pablo Tomasi
there is probably something at the end of that. So it's not just trying for the sake of it. Now, on a side note here, I'm trying to get the one of the greatest experts on RAN and AI RAN to join me on the podcast.
00:16:32
Pablo Tomasi
So he can probably comment much better than I can on whether sort of AI RAN has a future, what type of future, what are the challenges. The problem is that the guy is too busy. The guy is always, always busy. But you know bear with me. you know With a little bit of patience, we're going to get the AI RAN expert, hopefully, sometime within the next month or so, to join me and discuss everything about AI RAN
00:16:57
Pablo Tomasi
And the other thing, you know, side side, not closed. Yes, you can have AI at the edge of the network, of a telco network.
00:17:07
Pablo Tomasi
And it can do beautiful things, I imagine. I really don't know what AI is used for, but I'm sure it can do beautiful things. The problem though remains the same. The problem is that telco struggle to sell solutions. Telco struggle to sell to enterprises.
00:17:25
Pablo Tomasi
in new and innovative ways whether you're thinking about outcome-based solutions or whether you're thinking not to sell just connectivity and sim cards that is something that telcos have been trying to kind of learn and do for many years and yet i don't think they're there yet so you can have all the tech in the world but then if you don't know how to sell it it's not gonna be probably uh such a bright opportunity from the get-go
00:17:58
Pablo Tomasi
now the last news that i want to highlight highlight and this is tying back to to the NTN so tying back to really the sci-fi you know aspect of of this podcast and of tech in general so NVIDIA is launching space computing, rocketing AI into orbit And effectively, again, quoting from the press release, this is engineered for size, weight, and power constrained environments. It's the NVIDIA Space 1 Verubi module, and then, you know, a bunch of details that really don't really know what they are. But effectively, i think this is really important for me.
00:18:37
Pablo Tomasi
Because whenever you know we talk about data center in space or computing space, it's it's quite easy for people that are much more knowledgeable than myself to to to make comments and criticize, OK, because of the size, because there is not enough power, because of you know the the very extreme environment.
00:18:56
Pablo Tomasi
And those are valid points. But at the same time, you see how other people equally skillful in what they are doing. They are working to address those. all those concerns so they are reducing the size they're optimizing the power they are reducing the weight and so on and and so forth so sometimes i wonder whether like from an analysis world are we against this entering space because of a lack of imagination or because of actual fundamental limits that that will prevent this technology to happen. And again, just to be clear, I'm not saying that the whole data center infrastructure that we have on Earth is going to be replaced by stuff in space, but always I'm thinking about so that that integration, potentially the the the connection between terrestrial network, whether it's connectivity or computing and something that that is happening in space.
00:19:49
Pablo Tomasi
And so NVIDIA is partnering with very a few companies, Etherflux, Axiom Space, Capital Communication, Planet, Sofiaspace, and StarCloud. So we see that sort this is beginning. Again, we're not talking about the AI computing or the processing that we're using here on Earth.
Future of 6G and Importance of 5G Deployment
00:20:09
Pablo Tomasi
but we see that something is happening so obviously this is an area that we really need to keep an eye on and potentially from you know a hyperscale or tech perspective it would be interesting to see how much leg is into this idea and whether being early in the market could help change some of the dynamics that we are seeing down on earth now there's also bunch of announcements about 6G, I think, well 6G is still little bit further down the line but clearly this is big opportunity because the moment that 6G starts taking a little bit of the headlines then you're gonna have sort of the whole investment game getting back on and all the opportunity on the use case and everything kind of moving again into the market so we'll definitely keep an eye on that but so far i think we still have a few years where hopefully we're gonna first make well seen we i don't really do anything but we as an industry hopefully we're gonna have 5G to to be more successful and then can start thinking okay where 5G hasn't been successful maybe that's where we need 6G
00:21:21
Pablo Tomasi
but hopefully this has been like informative and again have have a look at the website leave a comment if you agree or disagree on anything and stay tuned gonna have quite a few outstanding guests joining me in the next episodes so that's all for the drift for today and see you next time