Following two years buffeted by supply chain disruption, energy price surges and economic pressures, 2023 is likely to continue to be defined by change. While there’s no way to predict what will unfold, for telcos, there are a few trends we expect to see.

The rise of data mesh architecture.
Data-driven decisions can help telcos reduce operational costs, reinvent customer experiences and drive innovation. Companies such as T-Mobile and Telia are already leveraging data and artificial intelligence (AI) to elevate their customer experience and automate campaigns; however, the industry has a lot of untapped potential.

Although telcos have vast amount of data, much of it is scattered and siloed. A solution to this is the implementation of data mesh architecture data. This would enable each domain-driven data set to be treated as a product and owned by the teams that intimately know the data. Data is then shared to a centralised catalogue where it can be used for business transformation.

A data mesh also ensures that departments have the right tools for the job. For example, it enables non-data scientists to build, train, and deploy machine learning (ML) models, increasing ML adoption across the organisation, which can accelerate innovation.

Partnerships will grow the 5G ecosystem as networks mature.
This year will mark the beginning of a tipping point for monetising 5G networks. According to GSMA, 34 out of 50 European countries have deployed 5G, and devices are catching up as more smartphones come with 5G support.

The last hurdle is the 5G ecosystem. More cross-industry and cross-functional partnerships are needed to create new services and reduce barriers to build and manage the networks. In 2023, we expect more telcos to forge partnerships to increase adoption, like the way Verizon and Vodafone have partnered to accelerate edge computing.

Energy costs and sustainability drive business decision making.
According to GSMA Intelligence, energy consumption accounted for 15-40% of telcos operating expenditure in 2021. Reports from McKinsey and Ericsson estimate that 60-75% of energy consumption for mobile network operators is from radio access networks (RAN). Data-traffic loads are intermittent, meaning different parts of RAN can be put briefly into sleep mode. By using data and AI/ML applications, telcos can use intelligent services to monitor and automate this process.

Results show that companies in Europe can reduce their energy use by almost 80% by moving their compute workloads out of on-premises data centres to AWS. Companies could potentially further reduce carbon emissions from an average workload—by up to 96%—once AWS meets its goal to be powered by 100% renewable energy, a target the company is on a path to achieve by 2025.

The accelerated evolution of telcos to “tech-cos”.
The relationship telcos have with their customers and the ways in which they operate are also set to shift this year. This change is two-pronged.

First, telcos will have to move away from being connectivity providers to becoming digital service providers. An example is Swisscom, a company that is evolving its offerings by training technical and commercial employees to also advise their customers on their own cloud journey. Second, more telcos will experiment with running their network as a platform, providing a new way to monetise their network build-outs and spin up a new MVNO within a couple of days.

Successfully implementing these four trends won’t be easy. This will require upskilling and reskilling, and more importantly, internal buy-in and commitment from leadership. However, 2023 will be a year of massive change and these shifts will help unlock new growth and opportunity to innovate

This article was written and contributed by Adolfo Hernandez is Vice President, Global Telco Business Unit at Amazon Web Services (AWS)