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2017 Daily Highlights 3

Ghana Day

Wednesday marked Ghana Day at ITU Telecom World with a chance for people to visit the Ghana Pavilion and learn more about the work that is being done to reach across the digital divide. Ten years ago saw the launch of Ghana’s Universal Access Fund, designed to connect rural communities. Since then 194 community information centres have been established and 117 masts installed and activated.  Kofi Asante, CEO of The Ghana Investment Fund for Electronic Communications, was on hand to answer questions and introduce representatives from two of the agencies that are instrumental in the programme; GIFEC and NITA.

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2017 Daily Highlights 3

The transformation of telecom operators: reinventing telcos

Disruption in technology, networks, processes, and people, pressure from new, internet-based competitors and the need for new approaches to policy and regulation. Telcos are under existential pressure to adapt on all sides, to transform or reinvent themselves – even if it is unclear what the end goal of that transformation may be.

Telcos have been constantly evolving, from the remote sending of messages or voice communication by telephone to today’s focus on connecting computers to people via devices or the cloud, suggested moderator Dean Bubley, Founder and Director, Disruptive Analysis. What comes next?  What do telcos want to transform into, and what challenges do they face?

Transformation itself is not an objective, claimed Mohamed Madkour, VP of Global Wireless Networking Marketing, Huawei, but rather a journey of changes that need to happen, and to happen now. “Telcos have to transform for business sustainability as their old model is no longer suitable for our lifestyles,” he said, but face two major roadblocks: balancing long-term goals with short-term financial performance, and cultural resistance.

His recipe: “Get the most out of what you have, out of spectrum, infrastructure, network, human resources. Then get higher efficiency. Then be agile offering the right services at the right time and place to the right customers.” The most profitable new services, he suggested, will be IT enterprise technology, video and IoT, meaning telcos need to leverage video as a platform and then bring in vertical industries through cloud services.

And the advent of 5G, transformational by its very nature, will force investment – and force transformation, in telcos but also in regulatory and policy approaches throughout the industry.

For Saiful Hidavat, Director of Telkom Group Transformation Project for Telkom Indonesia, transformation is not about the technology but rather about how a telco does business and how it changes its culture to enable it to meet users’ technical needs.

In Telkom’s case, the answer has been to digitize internal processes and change operational efficiency to provide more customer experience, and to explore new digital business. This may be done internally, cherry-picking innovation, investing in customers in new types of businesses such as transport or financial services, through internal startup ventures or through integrating with others.

Startups are key to telco transformation, agreed Jean Michel Serre, CEO of Orange Labs Tokyo.

But for Hidavat,  “the most difficult change is cultural. We never talk about user-centric approaches or leveraging the data; the most difficult thing is dealing with KPIs in telcos, which is what investors look at.”

Rob van den Dam, Global Telecommunications Industry Leader for the IBM Institute for Business Value, echoed the importance of customer experience in a reinvented telco, “providing what customers want, what disrupters want, and working in ecosystems.”

One of telcos’ greatest fears, he continued, is of “Uber systems”, competitors coming unexpectedly from outside the industry and totally flattening revenue with a new business model – a fear that Bubley agreed was justified, citing the example of Whatsapp destroying SMS and with it a huge telco revenue source.

Robert Middlehurst, VP for International Regulatory Affairs at Etisalat, saw it less as a transformation than another step in an ongoing process of evolution. It is important to move forward as an industry, he said, not just as a telco, government, regulator or vendor, but all together to find a solution.

Where should telcos look for new models and revenue streams? Van den Dam found that telcos most favoured a future role as platform provider, with IoT as a future source of revenue – but there are no clear monetization models yet.

Pointing out some of the difficulties, Middlehurst said, “As a licenced operator, we have constraints that other players don’t have, so the problem is how to monetize certain areas of business.” These constraints include licencing, spectrum and tax regimes which leave telcos desperate to pass on costs to consumers, yet unable then to compete with new market players – and at a time when heavy investment in new networks is called for.

In addition, cloudification of services and network virtualization mean companies have software defined networks at international level with centralized management, but regulation is specific to each country, so that “economies of scale are restricted by limited or narrow-mined regulatory environments, and we can’t compete.”

Telcos have neglected for too long monetizing the IP transport, claimed Maikel Wilms, Director, Boston Consulting Group. Traffic volumes may be growing hugely, but revenue is declining or stagnant.

“Telcos are under pressure as the industry ecosystem, including government and regulators, has not succeeded in getting adequately compensated. The key question is to get a monetization scheme in place giving adequate ROI,” whether investment in future networks is in fibre for gigabyte of 5G.

“In Europe, over USD500 billion investment will be needed in the coming years. If you don’t change the economics, it will not work,” he continued.

Establishing the role of telcos in an internet ecosystem is another challenge, complicated by culture clashes and the difficulties in attracting the right talent. “Talent doesn’t go to telcos. If you want to play up, you have to think about attracting that kind of talent.”

Serre urged telcos to “ focus on helping companies to be actors in transformation, to change management, to be open in the way of coping with the world”, concluding that retraining the workforce in cloud, AI, data modelling analytics, is a major challenge.

For Huawei, connectivity is the key to telco success, and will play a much larger value role with 5G, providing higher efficiency and massive connectivity through the IoT. It will be a core asset but must be more efficient and deployed with cloud services.

Wilms argued that “connectivity and cloud are abstract terms, you have to dissect into assets or capability in order to monetize, identifying which unique assets you can monetize and how. You have to differentiate, to be clear where you invest.”

Customer relationships and access to customer data were two key telco assets, the panel agreed, although telcos may not be making the most of either at present. For Bubley, operators do not have a good enough connection with those customers, have not got into their mindset, and ultimately, “there are not enough designers in the telco industry.”

Service transformation through augmented and virtual reality, network slicing on software defined networks and the advent of AI will have huge impact on telcos in terms of infrastructure, services, monetization models and an urgent need to review regulation.

One way or another, transformation cannot be avoided; how telcos cope with changing culture, innovating services, focusing on customers and redefining their role in the ecosystem will be an interesting story.

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2017 Daily Highlights 3

The Economic Impact of AI

How can we define AI, measure its impact on societies and economies in different countries around the world, understand its potential, and plan for its implementation?

These were some of the framework questions opening the debate of the 3rd Economic and Industry Experts Roundtable at ITU Telecom World 2017, bringing together academics, consultants, economists and technology specialists to address the unstoppable advent of the age of AI and the concerns it raises.

Defining AI, it appears, may be neither possible nor relevant at this stage. Urging a focus on practicalities and facts, Danil Kerimi, Director of ICT Industries at WEF, gave the example of a UN initiative to find a global strategy on counter terrorism that wasted years in debating a definition rather than dealing with the problem. “Definitions are important to know what we are talking about, but its applications are more relevant right now.”

Panelists nevertheless took up the challenge to explain AI on their own terms, starting with moderator Catalin Marinescu, Head of Corporate Strategy Division at ITU: “We think of a blend of advanced analytical and machine learning applications which enable actions that would traditionally require human intelligence. AI is a tool for human development.”

We may have a very broad definition that separates AI from robotics or other technologies, but according to Maikel Wilms, Director, Boston Consulting Group “from a business perspective, it is irrelevant. We need to look at specific policy and use cases, the implications for medium and longer term are more important to enable businesses and policy-makers to prepare.” And technology advances so rapidly that any definition will have to be continually updated.

AI as a concept involves self-awareness and machines thinking on their own, according to Neil Sahota, IBM Master Inventor and World Wide Business Development Leader, IBM Watson Group, IBM. It is cognitive computing in the sense of mimicking the way humans work, human experience and knowledge, but can go no further: “AI can’t answer what we can’t answer.”

Where cognitive computing is indeed special, he continued, is in its ability to truly understand the natural language which we take for granted as human beings. If we say, for example, “I’m feeling blue”, other people know we are describing an emotion; a machine will think we have changed colour. AI, however, can draw on other language information to understand and create a conversation, rather than just key words.

For DukHee Lee, Professor, School of Business and Technology Management, Korea Advanced Institute of Science and Technology (KAIST), AI is a highly intelligent procedure that can substitute human beings for mental work, with different features from other machines, but missing certain aspects that make us human: emotions, morality, and “trust features of a human being which we cannot quantify”

“AI depends on human beings for wisdom,” he continued, so we need to focus on how to use AI, what its real function is for humans. We don’t want to reach a stage where humans depend heavily on AI, but to reach a compromise, “some optimal level of AI, some work substituted by AI but as a complementary to human beings.”

AI relies on data, Marcelo Motta, Digital Transformation and Big Data Market Management, VP of Marketing, reminded the panel, but the key question is who is providing that data?

There is a very real danger, pointed out Wilms, of unintentionally passing on human bias when designing AI or providing data: algorithms could reflect biased decision making in hiring at a company, for example, potentially preserving sexist or racist behaviours through correlation.

Beate Degen, Partner, EY, used the composition of the panel in the room to paint a very clear – and rather disturbing – picture: only a very limited number of people are responsible for giving input to AI from which to learn, meaning the vast majority of the world is excluded. And that elite band shaping AI and its untold potential impact on future societies is not likely to be composed of women from, say, Germany and Central Africa. AI is largely being designed by a less than diverse group white men between the ages of thirty and forty.

“I think we are embarking, just entering the digital age and revolution,” Kerimi said, and it is a human characteristic to be concerned about change, drawing a parallel with fishermen out at sea, first of all looking at the waves and stars, and then augmenting their abilities with a compass. “The compass gave us new abilities, but it didn’t replace humans.”

Many jobs will be lost – and those affected will be largely women and the underskilled engaged in low-pay, menial work.  But there is an upside, according to Thomas Suh, Co-Founder & President of Legalmation: we as humans are capable of many things, and will have more free time to be creative. If we are beaten at chess or GO by AI, we can use our spare time to learn another game; the AI can only carry on playing GO or chess.

“The uncertainty is scary,” he said, “and it’s a big job for the government to calm people down in the huge era of transformation that is going on.” That basic message on reacting to the advent of AI should be, in his words, “There’s no need to freak out.”

This fascinating discussion continued to address the expected impact of AI on the economy, attempts both quantitative and qualitative to measure that impact, developing the post-AI workforce of the future, how AI could solve the grand challenges of humanity, and its positive impact on each of the Sustainable Development Goals.

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2017 Daily Highlights 3

Founders panel: From Startup to Scaleup

What does it take to found a successful startup and take it to the next stage? And what are they key challenges that have to be overcome on the journey? Some great lessons for startups were shared today at the Founders panel: From Startup to Scaleup, with viewpoints from across the world, expertly moderated by Stephen Ibaraki, Founding Chair, Global Industry Council & Vice-chair, IP3 Board, International Federation for Information Processing, Canada.

Challenges

For Aibek Amandanov, Global Marketing Manager of Republic of Korea’s ulalaLAB- a finalist in the 2016 ITU Telecom World Awards, a key challenge- aside from finances- was convincing manufacturers to implement a new technology, but one that could optimize creativity. “Dealing with governments can pose a challenge to start-ups in a host of areas from navigating through licensing institutions to obtaining data. “The government doesn’t have any data on Indonesian SMEs,” explained Kiki Rizki, Co-Founder and Chief Operating Officer of Indonesia’s Nurbaya Initiative. Without this data they have no way to reach their potential target market of Indonesian SMEs- we practically have to go door to door to find them, she explained.

Advice for early stage founders

Be open to change when its required, said Reg Orton, Co-founder & CTO of Kenya’s BRCK, winner of 2016 ITU Telecom World Awards, cautioning that it can be too easy to change too much or too often. There is a fine line to be trod between switching direction every 6 months (too frequently) and sticking with the exact same direction throughout, he explained. Educate the market, be that on the importance of connectivity or the Internet and what it can offer them, said Rizki. Expecting SMEs to manage complex digital marketing or an online store takes more than 1 day.

Many ideas can fail without a good co-founder, as a co-founder can bring with them a complementary skillset and experience, ideally even experience from a different culture.  But make sure they have the same mindset, explained Tilman Süss, Managing Director, Berliner Strategen, Germany. Also, remember you can’t do everything- if there is a particular skill you lack, say, accounting there maybe people who are expert in this field and can do this better than you, so it can be a good idea to give some areas up.

Best support for startups

Startups need to be sure the public understand them. Often the public, or even large corporates, think they get startups but they don’t, as they just don’t have enough experience of them and the climate they operate in. Süss commended ITU for its work with startups, including through the ITU Telecom World Award – which will announce its winners on 28 September – to help integrate them into the ICT ecosystem.

Governments can provide key support to startups, helping establish a business friendly environment, establishing accelerator programmes, helping secure investment as well as helping startups manage risk, working with them in a way that enables them to scale up. Governments need to find a path for startups, not just go with the incumbents, according to Orton. The Indonesian government is giving a whole lot of exposure to its startups, according to Rizki- indeed, a number of them can be seen in the Indonesia Pavilion here at ITU Telecom World 2017.

Raising capital & getting ahead

The road to raising capital can sometimes be a difficult journey for startups. Start early, and be brave, said Amandanov. Meet with investors and make sure you research who you are meeting with. Be realistic, cautioned Rizki, don’t set yourself impossible numbers to hit.  Finding an investor within your niche can be tricky, Orton explained that it was easy to find either tech investors or investors interested in Africa but trickier to find one that covers both areas, as well as being an investor you can scale with.

Finding an extra pair of hands can help extend your reach explained Rizki, who worked in conjunction with the Indonesian postal service to get their message out and help get large numbers of underserved SMEs online in just one day.

Conclusions

The panel summed up with some key thoughts to ponder; be realistic but don’t sell yourself short. Don’t do something if you don’t love it – if it’s something you love, it will come across in pitches, said Süss. Take a risk, urged Amandanov. You only live once and when you take a risk the result will be more satisfying. Know where you are going, said Orton, but don’t be afraid to change how you get there. “If you want to succeed, keep pushing yourself beyond your capabilities, you can achieve amazing things.” Concluded Ibaraki.

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2017 Daily Highlights 3

New Pavilions join ITU Telecom World 2017 Exhibition

Welcome Benin, Brazil, Ethiopia, Indonesia, Mozambique, Philippines and Sierra Leone to ITU Telecom World 2017!  Joining the event for governments, corporates and SMEs for the first time, these countries shared their leading telcos, SME innovations, strategies, policies and opportunities on the showfloor and throughout the event.

Brazil and Benin showcased SME innovations including agricultural IoT devices, parcel delivery and a digital healthcare system based on a teleradiology platform. Ethiopia highlighted the work of leading telco, ethio telecom, as well as opportunities for investment and partnership in a number of areas.

Indonesia presented their successful experience in fostering the incubation and development of various Digital Economy business models, as well as focusing on their MSMEs working in areas as diverse as B2C and B2B payment systems, SME online market places, agricultural and aquaculture online platforms. Minister of Communication and Informatics, H.E Mr Rudiantara, hosted a press conference to highlight initiatives to cover the country’s wealth distribution disparity – a message echoed in his Opening Ceremony address.

Visitors to the Philippines pavilion were invited to join the “digital gateway to the future,” and enjoy a vibrant display exploring the work of the country’s two leading telcos, Globe Telecom and PLDT Global, providers of a full portfolio of telco, ICT and digital services in the Phillippines and beyond.

The Mozambique pavilion outlined the work of its regulator, the National Communications Institute of Mozambique (INCM), its mission, vision and current areas of work including the country’s digital migration. Sierra Leone highlighted the work of its Ministry of Information and Communications, in areas such as policy and strategy development, developing regulatory frameworks, promoting ICT literacy and ICT research and cybersecurity. Visitors could also read more on the ECOWAN fibre backbone project and the work of regulator NATCOM.