Tony Poulos, TelecomTV (00:05):
Hi, Tony Poulos here today. The theme is going to be from Telco to TechCo scaling for the AI First future, and to help me with that, I'm surrounded by two leaders of the industry who are readily shaping the telecoms infrastructure and landscape at the moment. Firstly, Tatsuya Hamada, who's the CEO of KDDI Digital Life.

Tatsuya Hamada, KDDI Digital Life (00:27):
Hi, nice to meet you.

Tony Poulos, TelecomTV (00:27):
And also Sanjay Kaul, who is the Chief Revenue Officer at Circles Group and also the Chief Executive Officer of Circles Aspire bv. Gentlemen, great to have you here. Let me start with you, Hamada-san. Tell me about the mission behind KDDI Digital life.

Tatsuya Hamada, KDDI Digital Life (00:44):
Yeah. We're a Japanese telco operator KDDI is providing two major brands AU and UQ Mobile, and my company KDDI Digital Life is providing KDDI's second digital brand povo.

Tony Poulos, TelecomTV (01:00):
And also Sanjay. Tell us a little bit about Circles.

Sanjay Kaul, Circles (01:03):
See, Circles was born about 10 years back to disrupt the industry. Reason why we formed this company was really bringing "Uberization" into telco industry, and that's been our mission. And I think we are really, really growing fast because what we're changing is we're giving power back to the consumer. I think that's the real mission our company has.

Tony Poulos, TelecomTV (01:28):
Well, telco transformation is no longer optional. It's become a race. I know it has, but why is now the defining moment for digital transformation?

Tatsuya Hamada, KDDI Digital Life (01:39):
Oh yeah. Thanks to rapid digital technology sevelopment, society has been evolving so much faster than we expect. In order to catch up such new trend, new change, telco operators have to also change everything. However, telco business is really low versatile business. Right? That's why it's like a big ferry boat. In order to maneuver a big ferry boat. It takes really long time. That's why we need different ways with digital technology.

Tony Poulos, TelecomTV (02:13):
Do you agree with that, Sanjay?

Sanjay Kaul, Circles (02:14):
Absolutely, a hundred percent. And we have the nebulous of creating the speed boat!

Tony Poulos, TelecomTV (02:19):
Let's talk tech. What does it mean to evolve from infrastructure heavy to AI native?

Tatsuya Hamada, KDDI Digital Life (02:26):
Oh yeah, that's also really good question. In the first, when cloud system emerged in the world. Everybody talked about the differences: process and the use, right? It's the same. Telco operators have huge volume of fixed assets, how to move it? How to change? Its a really tough challenge always. However, use crowd or system is easier, right? It's saying telco stack enable has to change and move forward quicker, easier.

Tony Poulos, TelecomTV (02:59):
Yep. You agree with that as well, I presume?

Sanjay Kaul, Circles (03:01):
Absolutely. Look, it's fundamental. I've been in industry for 32 years, came from the traditional world, but today where I am, we are actually crafting what is called BSS and CRM and MarTech with the digital at its core. Because gone are the days when you start working with a traditional system and evolve it and transplant it, that's never going to serve. You have to craft it from core digital ethos, and I think that's truly what's enabling KDDI Digital Life because the platform is a hundred percent cloud native. It's composable and believe you me, code free. Any change I need to do in the market, I don't go to touch the source code. It's done at an orchestration layer through an AI enablement.

Tony Poulos, TelecomTV (03:54):
But what does a truly digital first customer journey look like today? Give us an example.

Tatsuya Hamada, KDDI Digital Life (04:02):
Of course. That's good question. Basically, telco business has a real touch point with the customer based on their customer shop, let's say telco shop, agent and a kiosk. And we are selling a telco service through at that direct channel to the customer. However, digital telco case, typically, no physical touchpoint at all. Everything will be conducted by an online channel. But it's a simple example. Of course. It's not only that.

Tony Poulos, TelecomTV (04:38):
Are they, the customers ready for that? Sanjay, do you think?

Sanjay Kaul, Circles (04:40):
Absolutely. You'll be astonished to see that. We call this category Gen D. We talked about Gen Zs and Gen Alpha, but I believe even an 80-year-old who is digitally savvy and people in your and my age group, we are Gen Ds because we think digital. So today, if you look at the consumer base, on average, between 70 to 75% is evolving to be a digital generation D. And if you are not taking care of that, you have an existential crisis as a telco.

Tony Poulos, TelecomTV (05:16):
I don't think we've got much choice. We have to become very digitally oriented. We are Gen D. Yeah, we're Gen D, but telcos aren't just competing with each other anymore they? How do you adopt a tech-first mindset in a telco?

Tatsuya Hamada, KDDI Digital Life (05:29):
Ah, yeah. As I touched on earlier, telco company had a lot of physical channels, meaning that directly touched on the customers, right? But it's always supported by human work, human resource. However, thanks to digital technology, we will be able to access to variety type of customers in variety type of market by smartphone, by pc, whatever it is. That's why in this sense, just human brain, work by technology, work is needed, right? That's why TechCo is needed.

Tony Poulos, TelecomTV (06:08):
Yes. And of course, we're dependent now on our handsets, for example. We're connecting constantly. And of course the TechCo concept is all about supporting that, presumably. But let's talk about monetization for a moment because we're always talking about the technology changes and the customer journey changing, but how are we going to make money? What's the future beyond connectivity?

Tatsuya Hamada, KDDI Digital Life (06:30):
Oh, that's really important question, right? Traditionally, we directly approach to the market B2C consumers, right? But nowadays, there are the huge keen competition in the market, and there is limit in order to increase the sales force in order to increase the sales agent, et cetera. But we decided, we are determined to work with our partners because there are so many type of partners, potentially SNS players, hyperscalers, video content players. They have a tremendous amount of customer bases. Then actually market eyeballs are looking at them, not looking at us. Why not work with them? So we established the SDK - software development kit. We implemented our software development kit into our partners system, indirectly approach to their customer, combining with our connectivity. That's a new challenge and a new possibility for us.

Tony Poulos, TelecomTV (07:37):
That's kind of sneaky, but a very clever way of doing it. It is. It's Sanjay. You're involved with that too.

Sanjay Kaul, Circles (07:42):
No, absolutely. I think our platform enables that. So typically my way of connectivity is table stakes. You have a network that functions, gives you quality of services, table stakes. So you get four more extensions we are giving to that, call it telco app or telco service, the second one we call e-commerce. It becomes like a super-app. You have a telco app where you can go and buy, do all your e-commerce activities. Third one, your entertainment. We have also embedded AI into our app. If you have to go to ChatGPT, you still stay with our app and you go to do whatever you have to do with AI. And then the last one where Hamada-san was talking about, creating embedded connectivity with the partner. Imagine if someone is using TikTok, for example. He's sitting on a train and using TikTok. TikTok should sense that you're running out of data and a popup will come up for povo, you hit povo, it gives you, you want to buy one gig, two gig, five gig. You click, you bought it. So now TikTok in this instance becomes a point of sales. And imagine your cost of acquisition is: zero.

Tony Poulos, TelecomTV (08:55):
But your portal becomes the core point.

Sanjay Kaul, Circles (08:58):
This becomes your super telco app.

Tony Poulos, TelecomTV (09:00):
Wow. This is interesting. Look, let's wrap up with something interesting here. I'm going to ask for a one sentence answer. What's one bold move that every telco must make this year?

Tatsuya Hamada, KDDI Digital Life (09:11):
AI-onization.

Tony Poulos, TelecomTV (09:13):
Good word. AI-onization.

Tatsuya Hamada, KDDI Digital Life (09:16):
AI-onization.

Tony Poulos, TelecomTV (09:16):
I think we'll quote that. I think you should take that and patent it, perhaps? AI-onization.

Tatsuya Hamada, KDDI Digital Life (09:22):
Everybody talking about AI. Even today.

Tony Poulos, TelecomTV (09:24):
Yes.

Tatsuya Hamada, KDDI Digital Life (09:24):
But there is no practical real cases a lot yet. Everybody watching it, right?

Tony Poulos, TelecomTV (09:30):
Everybody wants it.

Tatsuya Hamada, KDDI Digital Life (09:31):
We do. We do together with Circles.

Tony Poulos, TelecomTV (09:33):
Sanjay, what's your one word do you think?

Sanjay Kaul, Circles (09:35):
Kill, I guess. Yes. As quick as you can, because don't drag this dead horse too far. It's only going to cost you.

Tony Poulos, TelecomTV (09:42):
Oh dear. And one last one. What's the one word that defines the future of telco?

Tatsuya Hamada, KDDI Digital Life (09:48):
Telco transform to TechCo.

Tony Poulos, TelecomTV (09:50):
TechCo - that's it. It's got to be the case, right?

Tatsuya Hamada, KDDI Digital Life (09:55):
Yeah. And providing hyper-personalization to the customers in the market.

Tony Poulos, TelecomTV (10:01):
Wow. That's Nirvana we're talking about. Sanjay, yours.

Sanjay Kaul, Circles (10:06):
Exactly. I think use, embrace technology to create hyper-personalization. Every consumer is a segment. When you reach that state, you'll create engagement, you'll create motivation and higher data RPU, and that's what you need.

Tony Poulos, TelecomTV (10:20):
Well, as a Gen D I'm ready for hyper-personalization.

Sanjay Kaul, Circles (10:24):
Fantastic.

Tony Poulos, TelecomTV (10:24):
And AI-onization, or whatever that was. It was beautiful. Hamada-san, thank you for being with me and Sanjay, always a pleasure. Thank you very much.