DTW 2022: Sparkle CEO points to ‘a brutal truth’ for CSPs

Elisabetta Romano, CEO of Telecom Italia’s Sparkle, didn’t mince words during her keynote at Digital Transformation World in Copenhagen Tuesday when she spoke about “a brutal truth” all communications service providers (CSPs) need to face and what they should do about it.

Romano pointed to the drastic discrepancy in revenue growth and market capitalization between telcos and over-the-top providers like Facebook, Amazon and Netflix and Google (also known as FANG).

“From a revenue perspective in the last five years, OTT is plus 500% revenues; telcos in the US, flat, and in Europe, minus 7%,” she told the crowd. “If we look at market capitalization in the last five years, OTT [is] plus 385%; telcos in Europe, minus 40%. So, this is a brutal truth. And on top of this, there is a lot of investment (that telcos must make).”

That leaves little money for innovation or attracting the new talent that CSPs desperately need, she added.

Romano clearly was citing figures from a report commissioned by the European Telecommunications Network Operators’ Association (ETNO), that has become a favorite talking about among telecoms’ C suite. The graphic below, recreated with permission for TM Forum’s Digital Transformation Tracker 6 report, illustrates the problem clearly.

To address this reality, Romano urged operators to get “back to basics” and focus on automation in order to complete all the transformation they’ve been promising for the last decade.

“It’s really time to deliver something now,” she said. “We’re here at DTW now, and it’s really a call for action.”

The first area where automation is required is between telcos and their partners and customers, according to Romano. Customers want to be able to order bandwidth on demand, for example, and CSPs should be able to provision and monitor it end to end across partners’ boundaries. This will happen through API and network exposure, she added, “but it’s not there yet.”

Romano pointed to some progress, such as collaboration between TM Forum and MEF to extend the Forum’s Open APIs to support automated lifecycle management of broadband services like SD-WAN. (Read this report to learn more about the relationship between TM Forum and MEF.) But she said more needs to be done to simplify interoperability between service providers – in particular, she pushed for more collaboration on “east-west” interfaces between telcos so that customers can order services that are truly global.

Romano stressed the need for a simple API framework to eliminate the need for complex system integration, and she got a hearty chuckle from the crowd when she quickly added, “To all of the systems integrators who are here in the audience, we love you, we want to keep you doing business, but please, APIs…we need it to be simple.”

Automation for telcos’ internal processes is also critical, Romano said, pointing to the need for innovation in network inventory and assurance systems.

“Yes, cloud native; yes, AI; yes, machine learning; yes, microservices,” she said. “But we need to go back to the basics.”