Ray Le Maistre, TelecomTV (00:04):
So we're at DT w Ignite 2024. We're in the sunny capital of Copenhagen in Denmark. I'm here with Vivek Chadha,, who is Global Head of Telco Cloud, at Rakuten Symphony. Vivek, good to see you again. Thanks for

Vivek Chadha, Rakuten Symphony (00:18):
Good to see you, Ray, for joining us. Thank you for having me.

Ray Le Maistre, TelecomTV (00:21):
So the trend of telco to TechCo is pretty well established in the industry. We know the why behind that transformation, but what about the how?

Vivek Chadha, Rakuten Symphony (00:35):
So if I take a step back and look at what happened with the evolution of the mobile network technology, let's say five or six years ago when the whole concept of OAN started becoming a thing to contend with. And the discussion is less about where OAN is today, but what it triggered off in terms of the thinking at the board level and what it did was it drove focus that for telcos to start becoming the digital equivalent of tecos as communication service providers, they would have to disaggregate at different levels and layers of their stack. And the reason for that was to create it a much greater degree of decoupling between integrated vertical stacks, allowing them not just economies of scale in terms of procurement, but agility to start doing things and innovation and change at a much faster pace without having to do the whole lot at one go.

(01:35):
And as an example, if you look at what's happened in the last two years and is now accelerating quite a bit, cloud transformation on-prem cloud transformation for telcos, especially in the core, is becoming a primary driver where a lot of mobile operators are saying regardless of their preference of which flavor of ran o or otherwise, they will go to, especially with the 5G SA change happening, it's a perfect intersection for them to say, this is one of the key things that I need to do in my network to set the stage for me to become more agile and nimble in order to do the other levels of disaggregation on top of the infrastructure platforms. So that's an example of how, which is visible today is underway and is only going to accelerate in the next two years. And that in turn will then get followed by other components of the network, whether they be the far edge, they be the ran, et cetera.

Ray Le Maistre, TelecomTV (02:33):
Now of course, this isn't just a technology exercise for the sake of it. This is all about helping to make the business stronger. What are the long-term revenue opportunities and business models that's enabled by bringing together cloud native architectures and ai? Because that's a lot of what people at this event are talking about as well.

Vivek Chadha, Rakuten Symphony (02:59):
So I'm probably going to be a little bit provocative on this long-term revenue opportunities for telco. I think there is a fair amount of discovery that needs to be done. I know there's quite a bit that is said in the media and the industry about various use cases and monetization will happen, et cetera. I think telcos are really good at what they do. They understand their business a lot better than most people assume they do. They understand the constraints, the physics, the economics of it. But what I think this will allow them to do, and this is just one of the levers in the long-term way, is truly understand what an elastic and a programmable network and allow them to do in terms of collaboration. I've said this in the past, all value in society is created at the interfaces. Right now most networks are closed or if they're open, they're open almost at a bilateral level with exchanging with a few select partners.

(03:53):
The advantage that some of the FANG companies or the OTTs or the hyperscalers have had is they've always built inherently webscale programmatic programmable infrastructure, which means it was easy enough for a billion dollar corporation to integrate with them, but also a small startup in let's say Hong Kong or India or Guatemala to say, I have something cool and I can use some of your services, but add on to that to create value. I think slowly and steadily, most operators are going to drift to that outcome. They'll all do it slightly differently. They each bring a very different flavor to their core markets. But the long-term revenue opportunities will inherently get enabled by elastic programmable network, which then allows a much higher degree of interaction and integration with third parties than is possible today. And that's where additional value is going to come.

Ray Le Maistre, TelecomTV (04:41):
So in what way can they capitalize on this sort of new cloud native approach and couple those new processes and ways of thinking in with what AI Edge IOT 5G SA can deliver and what can that do for their businesses in the next decade?

Vivek Chadha, Rakuten Symphony (05:01):
You sure you haven't forgotten an acronym in that? That's a mouthful. Okay. But I do get the gist of the question. So I think if you look at cloud native, I think which was the first one that you referred to, it's not just a collection of tools and technologies, it's also a paradigm. It's how you think about doing things in a much more industrialized but agile manner, which has always been difficult in the past for telcos. So what that drives is a very different way of thinking. So it's an operating mindset. It's also skills, but it's also processes. And I think the combination of some of these process cultural changes along with skillset, but also getting augmented with things like ai, and I've said this recently as well, AI to me is two things. It's first augmented intelligence, which means you start doing what you're used to doing in a much more automated fashion and you create headroom in the business by saving on opex, and then you lead to autonomous behavior where you do new things, which today either are not visible to you as a business or are very difficult to achieve. But AI is now breaking down those barriers and saying there's a lot more innovation you can do either at the edge or in driving revenue streams or product innovation, et cetera. So a combination of culture change processes and behavior, which allows the organization to be a little bit more dynamic and flexible in how they respond to the market enabled by cutting edge technology such as AI and edge, I think they're going to intersect to create new possibilities. How those possibilities mature, where they intersect with market demand, I think still needs to be seen.

Ray Le Maistre, TelecomTV (06:35):
Now of course, another aspect here is open source. Once you combine open source or open source with ai, what does that mean for a more cloud native telco?

Vivek Chadha, Rakuten Symphony (06:51):
I think that's an interesting one. So if you do do a dipstick analysis at the event today, I would argue close to 98, 90 9% of the audience who are operators will confess to using a significant bit of open source either through vendors or partners or directly in their environment. So open source is not something new for the telecoms community either on the vendor side or on the operator side. But I think what is different now is with AI becoming mainstream and large language models, and I've recently heard about small language models or personalized language models, what will be interesting to see is how much commonality is embraced by the industry, which is your upstream open source contributions versus how much of that is considered secret sauce where a particular operator in Europe might choose to say, well, this bit is specific to what we do and I think we're better off honing our skills on this bit while also enjoying and contributing to the larger open source community.

(07:50):
I don't think there's a single answer that'll address the variety and the topology of operators. We see the dynamics and the economic and technology pressures that exist in the western world are slightly different from Asia Pacific, are slightly different from the Middle East. So I think they will also have a bearing on how fast, how deep and how far some of these operators go in embracing some of these technologies. I have a feeling the Middle East and Africa region is probably going to lead on some of this because they seem to be investing very heavily on some of these AI centric technologies.

Ray Le Maistre, TelecomTV (08:27):
Now we talked about what these changes can bring in terms of business opportunities, but the other thing we need to consider of course, is the customer. What can this shift towards cloud native processes and the associated technologies and AI do to help service providers meet customer expectations because those expectations are changing up and becoming greater all the time?

Vivek Chadha, Rakuten Symphony (08:58):
That's a great question. Lemme take a step back before I address the potential new age of enhanced changing futuristic requirements of operators. I'm going to take an example of the conversation you and I were having a few minutes before. You and a few other colleagues have had roaming glitches while in Copenhagen, an ideal use case, a very simplistic one, but this enables customer experience, perhaps not revenue directly. Indirectly, yes, would've been if there is enough intelligence and power on your device to figure out you've got a roaming glitch and do something to sell, feel and auto correct from that. There's some stuff that already can be done, but it's not to the level where you will no longer have a conversation with me, hopefully next year saying, well, I didn't even know there was an issue, but I got a notification from a provider saying there was a glitch, we fixed it.

(09:45):
You're up and running, you now. Those are simple, low touch things, which actually do a lot to change customer satisfaction. I'm sure you'd agree with that. Absolutely. And these things have a way of having both positive and negative dissonance in your ecosystem. If you're having a great customer experience where things which you've gotten used to in the past are no longer even a factor in a conversation that is a plus for you, and it's a plus for the operator. So this is an example of very simplistic existing everyday problems that perhaps can do a little bit that we could do a little bit better, both as the vendor community and as operators. From a futuristic point of view, I think the ability to consume what you want, when you want in the format that you want, which placed again to the inherent strength of the operators because they are fundamentally the fabric that connects our society without worrying about the G, without worrying about whether it's an open brand based solution or not, because consumers don't care about any of that and neither should they.

(10:46):
I think in a very simplistic, crude manner. I think anything that elevates the ability for consumers to say, I can consume what I want when I want as much as I want, and have it be seamless as an experience for me, I think that is an endeavor from the consumer point of view for B2B and enterprises, I think once we see mainstream adoption of 5G, my last reckoning is it's still in the lower two digits globally active subscriber base. By the time it gets to 50% plus, I think we probably will start seeing real world applications on the enterprise side of actually slicing. And I know slicing can be done in 4G, but there's a few things you can do in 5G, which is a little bit more secure, economical, agile from an operator's point of view, where enterprises today, some of the large enterprises have a reasonable headcount deployed of managing their network infrastructure.

(11:43):
They probably are not the best equipped to do that. That's a connectivity problem that they are responding to because they find it easier to do it. And I think operators are best suited to deliver that because that is their core business. And I think once we hit mainstream adoption of 5G, some of these things will start becoming commoditized and convenient enough that it'll be easier for enterprises to consume them. Right now, I can't name the CTO, actually the CEO of a large European operator. They said we have private 5G currently as projects. We'd like to move it to a product phase where it's industrialized at scale, and this is one of the largest operators in Europe. So if they have this feedback from the market, don't get me wrong, they're making money, they're getting more and more orders, but they're having to deal with the majority of them at a bespoke basis for a variety of technical and operational reasons. Once this gets to commodity, I think that's where you'll see unlocking of the enterprise value.

Ray Le Maistre, TelecomTV (12:39):
And of course the other aspect, apart from business technology, the customers is security, which goes across everything that we all do. How can a cloud native telco ensure that they're providing robust security and compliance becoming more important in an AI world for these customers? I guess particularly for enterprise customers and governments and those kind of organizations. Does cloud, does your shift to cloud native make this not easier, but kind of better to manage in the medium and long-term, do you think?

Vivek Chadha, Rakuten Symphony (13:22):
Another great question. So I think 5G inherently is a little bit more secure than 4G was, but then coming down to the rest of the stack, if you look at something like cloud native, because it's microservices based, because it's completely decomposed, it actually allows a much more fine grain control of what's happening in the environment. Is it out of the box? No, it's a very opinionated architecture if you go to Kubernetes, but there's enough literature, regulatory environment available, compliance benchmarks available, whether it's nist, et cetera, that you can, if you're doing the right thing, and as Rakuten simply believe, we are doing the right thing. If you comply to those, you are inherently a lot more secure than you were in the previous generation. But that's just on the software stack. We cannot ignore the fact that the attack surface increases. As you disaggregate, you're opening up your network, you're allowing a lot more interaction, which I think is a good thing.

(14:20):
So those vectors need to be addressed as well. The cybersecurity community is obviously actively interested in this because for them, that's the next yardstick to conquer. And there's already a lot of good work done by some of the biggest players in the industry, and I make this an analogous to the central banks versus the ATM change when it happened, which is a similar shift that's happening when you go to disaggregated networks. ATMs are commonplace now and they're no less secure than a bank. So same thing is happening with edge compute and 5G and disaggregated. Is it a hundred percent addressed? No. Is it a problem that has significant unanswered questions? No. In fact, there's something happening in the industry that is actually going to seriously raise the bar for cyber threats. Post quantum cryptography is becoming mainstream. There's some stuff folks are involved in across the industry, including ourselves, and I think within the next two years, we'll see real world scaled implementation of this. Once that happens, I think the bar of entry, at least for some time, is going to be quite hard for malevolent actors to try and create issues. So I think it is something to watch out for, but I also think it's been acknowledged quite early on and enough input is being provided across the ecosystem, not just from the cybersecurity experts that this is a manageable problem in the long term.

Ray Le Maistre, TelecomTV (15:48):
Vivek, we covered an awful lot of ground there in a short space of time, but great insights on how things are changing in the telecom sector and for operators. So thanks very much for joining us today.

Vivek Chadha, Rakuten Symphony (16:00):
Always a pleasure. Thank you.