Episode 20: The Business of AI: From Revenue Growth to the Race for Connectivity

Peter Jarich (00:00)
Hi everyone and welcome to Intelligence and Noise, the podcast from GSMA Intelligence, where we try to sift through what's going on in the telco and tech and mobile industries. Try and sift through the noise to give you a little bit of intelligence. Do so through the angle of the GSMA's CEO newsletter. Talk about what we saw that we thought was important, maybe dig into some of that, dig into what wasn't chosen.

maybe other things that we thought could have been there and try and tell you what it all means. So I am Peter Jarich, the head of GSMA Intelligence, and as is often the case, I have Tim Hatt with me. Hey Tim, how's it going?

Tim Hatt (00:40)
Good Peter, how are you?

Peter Jarich (00:41)
Good, good, good. Tim and I

are both back from IMC and the GSMA board meetings. If you haven't checked out last week's episode, please give it give it a give it a look. a lot of cool stuff came out of those group meetings preceding the GSMA board. We got a lot right about what we expected from IMC, and we can talk a bit about that, but give it a look. you can tell even if it's temperate or moderate here, when you and you spend a week in Delhi and you come back, it feels like it's just freezing. so I if it looks like I'm bundled up, it's just because my body has my body's act I mean, how is it coming back from Delhi, Tim? You didn't seem like you got sick. You managed to you managed to sort of skirt that?

Tim Hatt (01:28)
Well, as a Canadian I did feel like I was on the surface of the sun for a couple of days, but beyond that I'm I'm good to go and I'm back in normal climes now. But it was it was a great trip.

Peter Jarich (01:38)
Yeah, you made that I saw I saw you jump into Tim Hortons, which probably, you know, fueled the fueled the fu fueled the cells, helped you help you recover. It's like it's like getting in front of the sun for Superman a visit to t to Tim Hortons helps the Canadians just makes all right with the world.

Tim Hatt (01:57)
It just warms my heart. I cannot tell you how many random places in the world I've seen Tim Hortons and Delhi is the latest.

Peter Jarich (02:05)
I know the team always, always warns me against petting the street dogs, but I assume that's why I never get sick. They've they've raised my they've raised my immunity and they've they've helped me to be healthy. That's that's that's the story I'm telling myself. So as is my wont, I'm gonna kick off with a bit of a quick story, and this will hopefully lead into a little bit we're gonna talk about. But I think I've mentioned in the past, I think we've talked a bit about sort of the question of

Where are our AI value props going to come from, AI monetization? It was a big focus for what we talked about this last week in Delhi. And you know, we'd mentioned some of the consumer agents, whether that was the OpenClaw work most recently, the launch from Meta, follow-on by OpenAI with their dots. So we've got Muse, we've got dots, we've got other solutions out there. And

I think it's worth calling out, I think, from an anecdote side of things, and I could just say across the week. Right. Across the week I was I was playing with Muse and I found myself just telling my wife all the time about like it and she's kinda like, I this is just a new toy. What's what's keeping your you know, what's what's keeping you interested? Until I started like having it send her messages on my flight, flight status, flight updates, until I had it registered for CES.

do most of that work for me, check on hotels, tell me it found a cheaper rate. at which point she's like, that's that's that's kind of cool. Now she's she's an OpenAI girl, so she's probably got some dots going now. And I say this not just because not just because I think it's interesting or it's personally fun, but as I'm learning some of the new use cases, this really fits into the fact that as we think about what is the monetization opportunity for telcos for operators.

This question of is it going to come from consumer? Is it going to come from enterprise? We've got to be okay with not knowing until we see how this stuff takes off. Right. The idea of consumer agentic AI would have been silly until we have people starting to use this and you see how much they use it. You see where that traffic is, and you see how telcos can build it into their solutions. And so I think if you haven't gone out and played with this stuff, I encourage everyone to play with it, get ideas for their own business use cases, for their own personal use cases, but just to understand how this stuff's gonna roll out.

Because think in an abstract way, it becomes really difficult until you start engaging with it. so that's just my plea for all y'all. And with that, it's gonna lead us into the stories. So the two stories, if you are lucky enough to be getting the CEO newsletter and congrats to all of you, it means you're important. The two stories you would have seen coming out this last week. one around operators building new AI momentum, and one around

AI devices and privacy concerns. so I think on the privacy concerns, that was more about sort of the push towards sort of hardware innovation. We start to see a lot of agentic tools out there at the same time. We've got Norway putting a temporary ban on AI glasses in public places. I think we talked about AI devices a bit.

bit, so Tim, worthwhile digging into the operators and AI momentum piece?

Tim Hatt (05:27)
Yeah,

I think so. And there are a few kind of nested stories within this. so just for our listeners and viewers, let's recap what goes into the telco AI momentum. So we had Singtel, Singapore launching a new you know, token-as-a-service product on their sovereign cloud. we'll go into the details on these. Secondly, we had BT back in the UK introducing an AI assistant.

what they call AI Receptionist, for businesses and SMEs. And then also in Europe with Deutsche Telekom not talking about just one initiative, but rather it's sort of broader plans on what it sees as the sovereign AI play and giving some guidance on hard numbers as to what we ex what they expect, I should say, could generate in terms of revenue.

Peter Jarich (06:15)
And I think I think

when the when the newsletter when the newsletter gets things right, I think this is good example this week works out well. You sort of take three different two, three, four, whatever it is, sort of different stories and pull it together towards that trend. It's not just one thing. And I think three very different things, right? AI Receptionist, very sort of a narrow use case, not narrow, but a single product. Then you've got more of a of a service launch. The SingTel token is a service launch, a little bit broader.

and then you've got sort of real broad strategy piece, right? The DT side of things, but all of which showing this focus on telcos looking to monetize AI. which one grabbed your attention most, Tim? I know I we don't want to pick a favorite child, but

Tim Hatt (06:58)
Well, I think the I think they're all interesting, but I think the Singtel and the Deutsche Telekom are maybe most interesting for me. Why do I say that? I say that Peter, because it comes back to the sovereign story that we're seeing in both cases. And two, it allows us to sort of be a little bit more specific on what the revenue outlook is here. Now let's just put some numbers on this. So right now Singtel is operating as sovereign cloud. It's through its RE:AI cloud.

The new token-as-a-service opens up kind of a sandbox environment for businesses to be able to use hosted infrastructure, cloud, compute, all using a flexible kind of token model to pay for it. That is important because Singtel is, as with many telcos in Southeast Asia, quite a leader in B2B. and they're looking to drive this and really play the sovereign card where the data stays in Singapore. DT.

is interesting because they are a global behemoth, whichever way you cut it. and they've been one of the most vocal in terms of their AI plans. What they're guiding to here, Peter, is you know, the sovereign cloud outside the US, so just in Europe, looking towards eight hundred million euros by twenty per year in AI revenue, up about three X on what they're guiding for twenty six.

Peter Jarich (08:22)
Which is impressive. Which is which is which is

definitely impressive. And I think we can kind of split these two. And it's interesting. I think the SingTel side of things, token-as-a-service, I think is interesting, right? Because we've heard a lot of focus on token metering, selling tokens, and it's interesting because I think it also came up at the same time as a launch from SKT. SKT most recently talking about a Token Gateway. And what I think is interesting is this whole discussion.

of token-as-a-service or tokenomics or whatever you want to call it, is interesting because I think a lot of people think it's all about metering. But what we see, and we saw that in China, right? In the China cases that everyone talks about, it's one part token metering, but also giving people access to a whole bunch of models, which is also what you see from Singtel, giving people access, sort of helping them to control costs, giving them access to models. What you see from SKT in this Token Gateway is quote unquote, like a control center managing AI usage patterns. And so I think we're seeing a bit of a clarification there on this token-as-a-service, token metering, but it's less just about selling a big bucket of tokens, big bucket of big bucket of tokens, and more about how you manage that for folks. So I think that's a good like I think that's good because I we had in our analysis and we can link to it in the show notes a bunch of concerns about

Just selling, you know, if this is a new form of metering, how and long until you go unlimited on this as well. So it's good clarification. but I do think the DT story is particularly interesting. And let's let's double click a bit on the DT side of things. So this came from their AI investor day,

Tim Hatt (10:08)
Yeah.

Peter Jarich (10:09)
and you know, positions sort of as the next step in this transformation that they've rolled out at their capital markets days, right? Talking about, hey, we're gonna

Build our presence as a as a leading EU telco, we're gonna become a digital telco. Hey, we're gonna start leveraging AI to being a leading AI telco. We're gonna drive this nice, right? You've got this, you've got this whole view out there. But what I think is interesting is this idea of again, AI, and you see this, and this is I think the thing that we continue to and we'll talk a bit later.

It is this focus on AI for internal use versus AI for revenue because to be clear, they made a big focus on AI as a revenue generator, what they could do on the consumer side, what they could do with their sovereign cloud, digital services, how they could leverage connectivity, and give them tons of credit for going out and rolling out numbers. Again, it's part of a capital markets day type story. So they're trying to tell sort of what those numbers look like.

But what's what's interesting, right? And you called this out, right, is the potential financial impact and what that looks like, right? Because you know, when you look at what those revenues look like, and they call this out, right? It's going from 250 to 8, you know, two, you know, 250 to 800, that's still that's still on a revenue base outside of

the US, right? So not including the US of over forty billion.

Tim Hatt (11:52)
Yeah.

Peter Jarich (11:54)
So it puts it into perspective of although they expect to see those numbers rising. And if you look in their deck, right, they talked about 2030 examples, expecting maybe, you know, somewhere a billion, right? A billion in additional revenues from AI value pools by 2030. But that compares to like two and a half billion in savings, right? Gross savings from AI and automation. And so that's still two and a half times on.

the savings versus the revenue growth. So it's a it's it's it's a good story and it's great to see, but when you put it into context, it's not surprising why we see so much of the telco focus be on becoming more efficient versus the revenue side of things.

Tim Hatt (12:39)
Yep. And it's really important you call that out. And I just want to dive a little deeper on that too, because this matters. And it's you're right. Kudos to Deutsche Telekom for putting out numbers. It's brave. It's important. They're one of the first. for my money, Peter, I think I think they're intentionally being conservative on these numbers. Why do I say that? Nobody knows what AI is going to look like in five years' time. We can talk about it now. We can make, you know, intelligent statements about

How it's servicing revenue activities or cost saving activities. But six months ago, we wouldn't have been saying many of the things we're saying now in terms of how it's being deployed. And I think it's in their interest to be conservative on that projection and leave with the cost savings because that's the first anchor point that they can really drill into and establish a USP on. The revenues then grow up from there. But I come back to the point that, and we know this through conversations, a lot of this is anchored in the software.

USP. And particularly in Europe, that is going to be a major commercial driver, as much, if not more, than a regulatory compliance. And I think that's a sea change in how operators see the B2B world. Do you do you agree with that or do you see a difference?

Peter Jarich (13:51)
Yeah.

Yeah, no, I mean I mean I th I think th they're clearly playing to their sovereign role. So I think we will I think we will see that. I think from a from a conservative perspective, I think that's one part sort of how telco companies talk versus maybe tech companies talk, where you know you've got these huge numbers coming out of the big frontier model makers of how much they're gonna deploy, gigantic numbers.

I think telcos are generally more conservative. It might be US versus Europe. I had a great conversation with someone at Nova who was trying to raise money and was saying that they're struck with people telling them that well no, when you're raising money in the US, you've got to like go at the top level of your top most stretch case and tell people that's what you're gonna do versus when you're raising in Europe, where it's a much different way of sort of saying I she

that this person didn't say just be more honest, but here's what you actually expect. And so I do think I do think there is a question of being conservative there. I just want to end before we get to the next set of stories, call out, give them some credit where they talked a bit about in their positioning five postures for a fast changing AI landscape. And number one was data as a differentiator, which I think is interesting for a few reasons. One, because we've all said for a while telcos have enormous amounts of data that they can leverage.

Talked about this, I think, most recently. We saw this back at DTW, where you've got vendors talking about data platforms. We call this out every, every time about the importance of data. And I think we'll see us a bit later when we talk about some other news on the AI front. So those were the two stories that got chosen and what we thought was the most interesting of the two. Two stories that didn't get chosen. So the two stories that were positioned out there could have made it.

into the newsletter runners up if we will a bit of a focus on new pressures new scrutiny around data center builds and then a look at some of the new NTN models that we're that we're looking at data center build side of things i think i always find this interesting as a backdrop to every time we see like we talked last week about sort of some of the new ai

satellite type solutions, people just trying to figure out where to build these. So it's pushing lots of stuff. Your thoughts on the on I mean, I know I know the N T N side of things is probably more interesting, but how do you see those two playing together?

Tim Hatt (16:24)
Yeah, well and just for before we get to the satellite stuff, a quick word on the data center, you know, story you talked about. So just for our listeners here, this is the main part here is a Google data center investment in Finland that now is being put on temporary pause by the Finnish authorities while they investigate potential environmental concerns associated with that data center build out.

Not an isolated case. We're seeing a lot of concern and pushback from communities in the US, the UK, other parts of Europe. I think the key point here, Peter, is AI is continuing to move faster, and so are the infrastructure investments than any government can keep up with. But there are genuine concerns here around energy usage and land usage that are not fringe issues, but actually do need to be factored into how this plays out. Just to give you a number.

Peter Jarich (17:16)
People care. Yeah.

Yeah.

Tim Hatt (17:18)
Just to give you a quick number, we published a report earlier this year with our climate colleagues. You know, data center energy consumption alone is going to move from about 400 terawatt hours per year in last year, going over two and a half X by the end of the decade. and so you see how that plays out. This does have a community level effect.

Peter Jarich (17:40)
Let's go into NTN though. I think the NTN side of things, again, it's it's another good example, like I was saying, when the best of the CEO newsletters when it pulls together a bunch of different strands into a common story. And so I think the stories there were tell us working with AST on some initial integrations, but then the signature of the T Mobile US AT&T and Verizon J V that was announced earlier in the year, it was signed.

Obviously that signature shows that it's it's real, right? wasn't just sort of a discussion point, they're moving forward on it, which is good. how do you see this? I mean, I think from your perspective, I know you've been doing a lot of work with the team in terms of looking at different models. And I think you've put together recently something around sort of thinking about what those different engagement models are about. Because this is really ultimately it's just showing the different ways in which telcos are

partnering with or engaging the SNO ecosystem, right?

Tim Hatt (18:41)
That's exactly right. So when we think about the kind of telco operator play and satellite, putting aside the commercial rationale for that, which I think is fairly well established, you know, most of the activity we've seen has been to partner with SNOs, satellite network operators, on a wholesale basis, where the SNO provides connectivity to an operator who then buys it wholesale but maintains the customer relationship.

We are s now seeing in large part because of what Starlink is doing with a purported direct-to-consumer offer, you know, changes in how operators respond. And I think this sort of neutral host slash neutral access layer where you see collaboration between multiple operators, and that's what's happening in the US, is likely to be something we see more of, Peter, because it combines spectrum assets, it is a larger scale play, and

really reduces or mitigates the risk that one satellite company dominates rather than having healthy competition across the sector.

Peter Jarich (19:46)
I think and I think from my perspective, I don't think anyone really doubted it was it was gonna take place, but it's a reminder that it that it's ongoing. I think it's also, you know, highlights that there's still a lot of work to be done. Cause from my perspective, there's all sorts of like w we don't know the spectrum that's that's planning to be pulled. The specific activities are still pretty limited. At the same time, each of them have, you know, public work ongoing.

Right? Whether that's you know that 's T-Mobile with Starlink, that's AT&T and Verizon with AST. So it's it's it's not uncomplicated how you how you balance all of this, which makes it you know all the more ambitious, noteworthy, something worth you know, giving credit to because 'cause they're putting you know this isn't easy. It also I think gives guidance perhaps to other regions where

will want to see potentially or operating will want to see some partnering. So I think it's yeah, it 's it's it's it's good just to see examples there because everyone's looking to this. And I think most recently, right, by the time this comes out, the acquisition of additional spectrum by Starlink in the 800 megahertz band in the US, raises more questions of why this stuff isn't just a an interesting thing, right? That the competition

the head to head competition with the satellite providers is becoming more and more likely, or at least it seems that. And so it makes these partnerships and how telcos can work together in a in a pro competitive way to help you know to help drive good outcomes all the more important.

Tim Hatt (21:33)
Absolutely. And you bring up the Starlink point. Why does that matter? Well, one, to your point, it signals to the market they're they're dead serious about rolling out a nationwide network. two, it shows the need for urgency. And I think the fact we've talked about this before, but it now moving to being official shows how quickly the operators feel they need to move. We're likely to see similar initiatives in Europe. We've already

We've seen the Equatys joint venture between Viasat and Space42 in the Middle East. We're going to talking about that at our satellite summit in Doha, MWC Doha, at the start of next month. So this is not a one-off. This is very much something I think we're going to see as a bit of a trendsetter in large part to navigate this shifting landscape. And the last thing, Peter, I think is note, we talked about the AST TELES deal. Coincidentally, AST stands to be one of the biggest beneficiaries of this USJV. Why?

in trying to buffet the competition with Starlink, AST is the number two, and they

Peter Jarich (22:36)
Yep. Yep.

Tim Hatt (22:37)
really stand to stand to benefit.

Peter Jarich (22:40)
Yeah, no, a hundred a hundred percent. I mean, I would just say, and I think the markets if you look at the market view of what the Starlink acquisition of the hundred megahertz spectrum looks like, clearly the market expects that this means head on competition. I contend that Musk might just be investing. I mean, Spectrum is rarely a bad investment. so Tim Hatt (22:59)
Yep. Yep.

Peter Jarich (23:01)
he could just be he could just be investing in a spectrum, but he does like to build things. So,

Let's move on to the what I call the Willie Nelson section, the On the Road and On Our Minds. so things travel that we have upcoming we want to talk about, give some insights into, and other things on our mind. I'll kick off, and I know you have one, and then maybe I'll I'll end with something that's of interest to both of us. I'll just kick off with coming off of IMC. So again, I think I think if you haven't checked out last week's episode, please do

But we had a big contingent from the GSMA and GSMA Intelligence at IMC. That's India Mobile Congress (IMC). India Mobile Congress (IMC) was right after the GSMA board meeting scheduled together, which was great. So we had lot of folks there. and you know, just some quick thoughts there. Look for a blog and some messaging from us a little bit later on and sort of the highlights there. It's always an interesting show.

Because you have that tight collaboration between, let's say, the government and the operators. And I don't see me collaboration in terms of like you just in terms of the regulators really close to the market, they care. You had the Prime Minister Modi, he was there, he kicked it off. always interesting, talked about this last year. You've got this sort of make in i in India etho, so a real push of the of the local ecosystem. And of course, 6G sovereign AI as key messages, always great.

to connect with the telcos there. So right, connecting with Vodafone Idea, talking about, you know, their plans to catch up, how you know they're in a much better position, they're growing subs, a hope to leapfrog the others by building their network, but also interested to figure out how they shut down their 2G network. whereas I think from Airtel really pushing services. And it was really it was it was really great to see some of the stuff they're doing with anti fraud, with a performance boost, particularly for there the question of how do you

monetize that. great briefing with one of one of our analysts sort of going, wait, so you're doing this anti-fraud stuff, but you're not charging folks. No, no, no. We just think we just think it's important. so you're giving priority to your postpaid subscribers, but you're not you're not charging them. Well no, it's just it's just and it was just sort of well that's a way to get people on postpaid. So interesting just an example of how to monetize this.

And then Jio, I think, obviously, remarkable growth we've all seen, but really there, the interest on building homegrown network capabilities, building out the satellite, their own satellite network. they had a great mock-up of a satellite there. But it's it's it's not every day you go into an operator's booth and you see massive MIMO radios and baseband units and you know, their interest in leveraging some of the capabilities that they have, whether it was the Mavenir acquisition, whether it was the Radisys acquisition, how you pulled it all together. So it's yeah, always good. Look for more from us on that. Tim, what is your on your mind addition?

Tim Hatt (26:18)
Well, switching gears a little bit, I want to come back to the drones topic and in a different part of the world in Taiwan. I'm I'm flying us on a drone to Taiwan, Peter, if you can just virtually take us there with Chunghwa Telecom, who has launched a POC in collaboration with the Taipei Fire Department, an emergency services provider, to fly drones for blood deliveries to coastal and remote mountainous areas of the country.

and I say this because it's further evidence that operators are commercializing drones, two, that they're using cellular, and three, that as countries get more flexible on beyond visual line of sight, meaning the ability to fly drones farther and to more remote locations, we're probably going to see advancements here. And when we published our drone index last year, we saw the biggest countries moving up were those that had.

move to a more permissive environment on that. And so I think we're going to see more of developments like this, but it's an interesting way.

Peter Jarich (27:25)
Yeah, we talked about earlier the BT launch. we're seeing this. I think I think this is one of those sort of things that no pun intended sort of flies below the radar sometimes, but could be a significant could be yeah could be pretty good business for telcos. could be pretty useful for folks, particularly if you if you need blood and you're and you're out of the way. Much more useful and I think important. I do hear

We've got some of the team who'll be in Texas, I believe it's next week, that I hear Amazon is doing drone deliveries and you can deliver to a friend a potato. you can you can go as small as a potato and people are dropping potatoes for their friends. So I'm gonna see if our team can get one of those.

Tim Hatt (28:14)
Does that mean I can get my pizza

delivered for the game on Friday night with Amazon? Does that count as critical?

Peter Jarich (28:20)
I would stuck I would stick with a potato because if it you're not gonna hurt a potato, right? I mean the

Tim Hatt (28:23)
Cool.

Peter Jarich (28:25)
the p if the potato is cold probably still probably still fine also

Tim Hatt (28:28)
True, true, true.

Peter Jarich (28:31)
lower cost. last thing I wanted to call out, and again reminder, check out the stuff on IMC. tons of stuff we could talk about there. Check out also while you're checking out the IMC stuff.

if you are a GSMA Intelligence subscriber, we put out around the same time insights from our enterprise survey with a bit of an India snapshot to put some context to what's going on there. We'll put a link in the show notes, but check it out. I think it highlights so much of why it was an important show for us with India overindexing on enterprises, saying they're spending on digital transformation, really overindexing on the value of 5G connectivity.

and at the same time sort of where they see that in terms of things like the value of security which really fits with fits with what we've seen, right? And what we saw from the operators. So go check that out. It's a it's a really good important piece of work, including also to Tim's point in the discussion around DT, even question around the willingness of enterprises to spend on sovereign tech and sovereign AI.

trying to quantify that. And so we leverage that survey to do that. So go check that out. But wanna end with something I think both Tim and I saw and kind of fits with earlier things that we'd mentioned. Next week I'll be headed off to GTC Berlin, GTC being NVIDIA's big event, the big one being in the US, and then they do regional ones, which is smart. Smart because not everyone can make it to the US

Also, dynamics are different in every region. And so really, really, really smart. They did it last year in Paris. It was great, great use of my time. So I'll be there in Berlin. Probably not coincidental. maybe it is. they released their state of AI in telco report. and want to dig into that because I think it feeds a bit of these stories and it feeds a bit of, you know, I think what I'll be talking about and seeing next week.

a bit of a context here. A little over a thousand respondents, one thousand thirty-eight across the ecosystem, about quarter of those, 27% being from operators. seems like it's a set of different people from across these. So some management, some practitioners. I add this just because for us when we do surveys, these sort of details are important. There's two things there. One, full on credit to them for actually providing that detail. I can just say

If you are out there and you are putting together a survey and releasing details from a survey and you don't tell anyone who you talk to and how many people you talk to and where they were from, you might as well just throw that thing in the garbage. because it just could have been a bunch of randos and that's not useful. So good on you, NVIDIA for taking the time to do that. but also the fact that since it's only a quarter telcos management practitioners, we don't know who these folks are.

It still has to be directional, right? So take this take this as sort of a directional view. Tim, overall, I mean we can dig into we can dig into some of the thoughts here. What struck you most from what they've done? I've got I've got a whole bunch of stuff having spent some time with it this weekend, but what did you think?

Tim Hatt (31:55)
Well, coup couple things. I think I think you know, I see broad alignment in their numbers in general with what we're seeing. if I look at the deployment rates between these share of operators that have a live AI deployment versus something planned, we get to something about ninety -five percent, very similar. I think we see similar numbers in terms of the challenges that operators see. Number one coming out of NVIDIA.

It's the quality of the data. That's our number one barrier as well. Number two, skills and talent shortages. We see that exactly coming out. A little bit difference in terms of what NVIDIA, you know, has as their number three barrier, you know, ROI challenges. We see it more in the security domain and compliance there. ROI tends to be a bit of a non financial and financial combination. The other point I think Peter is just one difference I think I'd be interested to get your perspective on is just

The revenue contribution. You know, NVIDIA's numbers, when we kind of back out through them, you get to sort of telcos estimating that AI is going to drive about seven and a half percent of their revenue. we've got that more at about 2.5% as an expectation for this year. So a little lower. Partly survey bias, maybe partly the way the question's framed, but I think that's gonna be an interesting line to track, particularly as we come back to the DT stuff where

They're reporting about 0.5 to 1% now, so somewhere in the single digits, but maybe a little bit lower than what's being advertised there.

Peter Jarich (33:29)
Yeah, no, I think I think, you know, one, just before we move on, double clicking on the point of you know, great to see not I want to say great to see, but great to see alignment on the fact that data related issues, you know, aligns with again what you heard from DT saying that data is really important, aligns with what we heard. interesting to see that was a big bump up for them. Right. So they're talking about twenty five data went from, you know,

went from about twenty percent calling it a top three A challenge to fifty four percent calling a top three challenge. Right. At the same time, followed pretty closely by lack of AI experts and data scientists, aligns with a lot of what we're seeing in terms of skills gaps, in terms of having the right skills to roll this out. So I think that was it was good to see from an alignment perspective that we're all on the same page, whether or not it's it's whether or not it's good news.

But yeah, the part that really struck me was and appreciated the way that they put it. It's something that I think is a best practice might take away as we're doing some work in terms of just a back to back question of what do you expect to be AI's impact on decreasing costs versus increasing revenue. And you know, when you look at that, and it depends on the way, you know, you wanna, you know, wanna average it out.

Right, you definitely see that you've got more folks thinking it's going to increase their revenues or it's going to increase their revenues more than it's going to decrease their costs. And that's why I thought it was so important when I called out earlier the DT, you know, the DT numbers where it was two and a half times for decreasing costs and efficiencies versus increased revenues. And that increased revenue, even if we're talking about a billion off of a forty billion dollar revenue, is still, you know, marginal.

Right. Important. Right. You're not gonna no one's no one's gonna throw that away. It's not trump change, but still different than what you're seeing here. And I'm not really sure it could be the folks. It could be that there was a mix of operators and non operators in the NVIDIA work. It could just be these are folks that are by definition probably super excited about it. yeah, I don't know, but I think that's one thing that we're gonna have to be careful on because

I've said this time and again, saving money is making money. It's a way to monetize it. It's not as sexy. You can't

Tim Hatt (35:57)
Yep.

Peter Jarich (35:58)
save your way to growth, but we can't ignore it. And so I think if there is this bias towards revenue growth, it's it's potentially distorting how we actually look at the value.

Tim Hatt (36:08)
Yeah, I think that's right. And but coming back to your point on it being directional, you know, we're gonna be releasing our next telco AI quarterly output coming out later this week or early next. And one of the data points I can give people a sneak preview on is that to the point of it becoming more revenue focused, like fifty sixty percent I should say of the new AI deployments in Europe the last six months have had a revenue objective as the main point. You know, that's up double in the last twelve months.

So it gives you a sense of how quickly things are moving. I just think there we probably to the point of DT's conservatism, it might take a few years for that to really show up, but we are seeing that move towards that direction. So it's it's really both. It's not one or other cost savings or revenue. It's both. It's how you communicate that message.

Peter Jarich (36:56)
It's it's gotta be. It's gotta be. And that's it's a hundred percent. No, no argument there. So there is your recommended reading, your reading list for the week ahead. Go and check out the DT documents, they're all out there in terms of their AI investor day. Again, i it's it's Google it, we'll link to it. It's good stuff. Check out the NVIDIA work and then check out our Indian I know IMC is gone and passed, but India will remain an important market for the foreseeable future. So go check out the work that we've done in terms of our enterprise survey and enterprise demand there while you're all waiting for the latest stuff that Tim talked about from us on the AI side of things. And we will, of course, when that's out there, link to it so you can check that out as well. Any last thoughts, Tim, before we before we head out for the week?

Tim Hatt (37:53)
No, just a busy few weeks still to come. great to great to be back from India, but I know you're gonna be at GTC and we 've got another number of other events coming up through the next few weeks, so looking forward to relaying back on those.

Peter Jarich (38:07)
Yes, yes, definitely. If you're gonna be at GTC and you wanna catch up and you see this before, then reach out. Would love to connect with you in Berlin. and then after that, I've got a customer visit before I head off to the US, where amongst other things I'll be at the Brooklyn 6G Summit. And since it is a 20 minute

subway ride away, also at Future Net North America. So if you're gonna be in any of those, reach out. Would love to connect with you there. In the meantime, thank you, Tim. Great as always. Thank you

Tim Hatt (38:42)
Thank you.

Peter Jarich (38:43)
all for tuning in. Please leave a rating, leave a comment, tell us what works out well, tell us what doesn't work out so well. And in the meantime, remember that in your search for intelligence, you gotta embrace a little bit of noise. Thank you all.

Tim Hatt (38:59)
Cheers, guys.