For many end-users of today’s communications technology, the cloud is a somewhat mystical concept, a digital equivalent of aether. Most think of it as a formless abstraction “up there” when, in fact, the cloud is rooted in the ground. Or the seabed.

Despite rapid advances in satellite connection, almost all intercontinental data transfer that takes place every second of the day occurs via hundreds of thousands of miles of underwater cables. Reading a map of these submarine cables is like viewing a tapestry of international telecommunication.

It is perhaps strange to think that the email you just sent to your colleague in Africa traveled below the Atlantic Ocean. It’s an oddly analogue image in an online world. Yet, the digital capability that those cables unleash is increasingly the stuff of science fiction.

Submarine cables have historically been laid by telecoms companies, mostly in the form of consortiums that share out the extreme costs, often running into the hundreds of millions of dollars. Perhaps frustratingly for these investors, the cables are famously attractive to sharks who, for reasons not entirely clear to scientists, can’t resist having a nibble.

Large fish, however, are not the only things eating into telcos’ profits. Over the past few years, many undersea cables have been laid by internet giants like Amazon, Google, Facebook and Microsoft, businesses that, in 2018, owned or leased more than half of the submarine cable bandwidth.

This expanding aquatic infrastructure grants these firms growing independence from telecommunications companies, allowing them to launch, even more aggressively, offerings that directly compete with telco products and services.

There is nothing new about this scenario.

A worrying habit

In stories that almost read like case studies for Kodak or Blackberry, telcos lost their core revenue streams to OTT providers in the early to mid-2010s, seemingly from nowhere. Between 2010 and 2014, telecom businesses saw revenue decline from 4.5 percent to 4 percent, EBITDA margins drop from 25 percent to 17 percent, and cash-flow margins decrease from 15.6 percent to 8 percent.

Then, when it became clear that cloud computing and networking was going to be the future of digital operations, telecoms companies again lost the advantage. On paper, telcos seemed like a solid bet to compete with the likes of Amazon, Google and Microsoft: network experts against booksellers, online advertising engines and packaged software suppliers.

But that hasn’t been the case. AWS, Microsoft, and Google have dominated the rapid evolution of cloud computing, leaving telcos to play catch up. Though their network infrastructure capabilities keep them relevant, it is possibly these very networks that account for telecoms companies’ sluggish response to accelerating change.

Some argue that “thinking digital” is deeply embedded in telcos’ business model because, in addition to offering their own digital products and services, they provide the infrastructure and connectivity that allow other players and sectors to operate in the digital economy.

However, it is not just technical capacity that counts. Thriving in the digital economy requires a different mindset. It’s the type of mindset that might have helped telcos see earlier on that the future of cloud wasn’t going to just be in networks, but rather the software and services that rested on those networks.

GSMA predicts that over the next five years telcos will spend USD$1.1 trillion on their networks, 80 percent of which will go on 5G. As we stand on the threshold of global 5G and perhaps the greatest leap into communicative novelty the world has seen, telcos are faced with another opportunity to take charge in the form of edge computing. How will they react this time? Will they capture the opportunity that relies on software, services and the security for the smart-everything world? Or will the cloud incumbents again capture larger returns on top of telecom infrastructure?

IoT in a post-COVID world

As we have learned, and continue to learn, through the COVID-19 pandemic, the world as we know it is fundamentally reliant on digital connection. The recent crisis has also made it abundantly clear that the nature of work is likely to evolve much faster than anyone previously expected.

After witnessing almost instantaneous shifts to remote working and the accelerated digitization of organizational operations, it is easy to see how the adoption of mass automation and AI-driven cyber-physical systems (CPS) might be sooner than many first thought.

Add to this the value that has been proved by utilizing national surveillance and monitoring systems to curb the spread of the coronavirus, and the case for a massive civil and industrial internet of things (IoT) becomes more visible and more compelling than ever before.

Such networks would incorporate billions of devices, sensors and machines in factories, cities and commercial environments managed by businesses and different tiers of government. The future prospects for consumer-facing IoT products and services are tremendous. In fact, the opportunities in all areas of IoT growth are abundant, but it is in the facilitation of enterprise and civic development that telcos could play a major role. The opportunities in developing the IoT ecosystem remain extensive. The question is, can they capture the possibilities?

McKinsey estimates that IoT’s potential economic impact on factories will rise to as much as $3.7 trillion a year by 2025. Though these figures were pre-COVID and don’t account for the huge downturn in the manufacturing sector, it is precisely this financial pressure that may force manufacturers to disinvest in human labor and prioritize the implementation of IIoT systems managed by AI.

However, with less capital available than before the coronavirus outbreak, companies – industrial and commercial – pursuing digital transformation are likely to be more risk-averse in their investments. Reliability and security will become more crucial than ever when choosing service providers, which should be to telcos’ advantage.

Finding the winning edge

The much-anticipated emergence of the massive internet of things (mIoT) is unlikely to be restrained by the economic impacts of the current pandemic. No-one knows for sure, of course, but more urgent development of new use cases in markets like healthcare, transportation, logistics, resource management or public surveillance will possibly stimulate the growth of the mIoT, not hamper it.

This expansion will continue to provide complex challenges in privacy, security, and even safety, an important concern when enterprises begin to incorporate more CPSs into their operations. With their vast experience in network management, telecom operators who are able to move beyond the mindset of selling connectivity or data have a number of advantages that can be leveraged to succeed in IoT.

The mIoT will be built on 5G, which is not just a physical network infrastructure. However, telcos pivoting into the development and management of virtual networks and multiple cloud-based applications should capitalize on their ownership of 5G network hardware to build an IoT ecosystem that delivers greater returns overall.

Security will be an important component of telcos’ proposition, not just as a market differentiator, but as a revenue stream. COVID-19 has highlighted the value of a humanity-serving IoT, but it has also laid bare the risks of sliding into a Big Brother society. Consumers and enterprises will demand greater IoT security, and telcos have a strong track record in keeping networks secure.

But success for operators will depend on their ability to capture a significant share of edge computing. This technology will facilitate most of the real-time cyber-physical use cases that often are used as adverts for 5G-founded IoT: autonomous vehicles and factories, remote surgery, massive drone networks, and so on.

These operations are extremely time-sensitive. There’s no tolerance for network lag when a driverless car traveling at 90 miles an hour suddenly needs to avoid a pedestrian. There’s no room for data delays at a critical stage of brain surgery.

5G’s near-zero latency is critical to the realization of these levels of operation, but even with 5G, we may not be able to rely exclusively on centralized cloud networking to deliver these use cases. IoT devices are also, by design and necessity, too small and too weak to take charge of the required data processing.

Edge computing, also known as fog computing, is a decentralized architectural pattern that moves computing resources and application services away from the cloud server, which is often hundreds of miles away, and closer to the point of data generation and action.

This improves speed as well as security and compliance. Edge computing removes the need for large packets of data to be transferred over great distances, and bypasses the potentially complex regulatory questions of data being generated in one jurisdiction but analyzed in another.

Telecom operators have a natural advantage in edge computing. Their physical networks with multiple data processing nodes mirror the distributed approach of fog processing. For edge computing to work, smaller data centers need to be located near the end device – telcos already have a lot of this hardware in place. This should give them the upper hand over AWS, Azure, and GCP.

These major cloud providers have largely relied on enormous data centers to deliver their services and will need to build out the components of an edge solution. Telcos, however, can reassign their existing assets in the service of computing at the edge.

Through their scale, infrastructure and networking experience, telecom companies should be able to leverage the move to the edge and reclaim a leading role in large scale and enterprise IT expansion.

The challenge, however, is not just technical, it is also mental. Can telecommunications companies make the mindset shift that will be required to re-imagine themselves as collaborative and forward-thinking players in a smart future?

Cloud 2.0

In politics, the principle of subsidiarity dictates that a central authority should only perform those functions that cannot be performed at a local level. This is a useful analogy for the future of cloud computing because, though almost all processes are currently run through centralized network hubs, what has been called “Cloud 2.0” will see more and more functions decentralized and moved to the edge.

Cisco predicts that the number of devices connected to IP networks will be more than three times the global population by 2023. Edge or fog computing will be critical to meeting the increased load of these devices, many of which will be built to run on the super low latency that we expect from 5G.

5G will also see network virtualization, which will allow telecom operators to redistribute the core network to be closer to the user or device. At the same time, Cloud RAN, which improves agility and flexibility by virtualizing non-realtime functions, effectively allows the edge to be brought closer to the core. These forms of optimized architecture will radically improve the user experience and are a major opportunity for telcos to take the lead in distributed cloud services.

The first obstacle telecoms firms face is a legacy of slow-moving, risk-averse operations. In a heavily-regulated industry, often with unnaturally low market competition, telcos never needed to be agile and responsive.

Of course, the landscape has changed quickly, but reputations and memory have not faded as fast. Numerous surveys show that telcos are less trusted than other types of technology providers in supporting enterprises with their digital transformation.

Businesses know that, in order to be as effective as the cloud giants, telcos need to alter their DNA. They need to shift from being a utility and a dumb pipe provider to acting as a business advisor and systems integrator. This is a major mindset and an organizational change that would affect every function within a telco. Not many have made that shift.

The inertia is understandable; there are some steep hills to climb. For one, telcos are geographically segmented and territorial. Yet, they are competing with worldwide cloud providers who are able to offer developers and software providers almost globally-consistent UI and capabilities.

Building the uniformity and reliability that enterprise clients need will require standardization and time. Time to build trust, and common standards to establish unity between telecoms operators. Such a collaborative approach may be difficult for telcos to implement but will be necessary if they are to claim the edge.

Another major obstacle is software itself. Virtualization and edge computing rely on software capabilities that telcos don’t traditionally have. By comparison, these skills are the lifeblood of cloud companies. Telecoms operators need to rethink their workforce and processes if they are to achieve the software efficiency and refinement that cloud competitors display.

One way telcos are dealing with this challenge is by working with cloud providers in potentially symbiotic arrangements. Recent announcements by Amazon Web Services and Microsoft see these behemoths using the networks and infrastructure of large telco carriers to deliver their cloud services to the edge. For many, this is a classic win-win, even if the telecoms operators do not get the ownership of the edge that they may have hoped for. Perhaps afraid of losing once again to cloud providers, telcos are willing to strike a deal that sees them capture at least some of the pie.

Were this the case, it would be another example of risk-averse thinking that will end with telecoms operators losing their play for the edge. Though cloud providers may be relying on carriers for now, they have already signaled their intention for the future.

Only last month, Microsoft acquired Affirmed Networks, specialists in fully virtualized, cloud-native networking solutions for telecom operators. This will release Microsoft from reliance on telecoms’ data centers as they build edge computing capability. In Microsoft’s recent quarterly conference call with analysts Microsoft’s CEO was boasting “We are the only cloud that extends to the edge, with consistency across operating models, development environments and infrastructure stack,” revealing more about Microsoft’s edge computing strategy.

Google Cloud has revealed similar aspirations with the launch of Anthos and Global Mobile Edge Cloud (GMEC). More than that, Alphabet also has Google Fi, a mobile virtual network operator (MVNO), as well as fiber and cloud offerings. Taken together, this represents a disruptive portfolio in telecommunications.

Similarly, Facebook is launching its Terragraph network in San Jose using 60Ghz spectrum, which could compete with 5G. Despite current agreements and collaborations, telcos’ competitors are making bold moves towards taking away more of telecoms’ business.

Conclusion

We have known for some time now that telecommunications firms are in need of new business models and approaches to market development. It is not novel to observe that telcos were too slow to react in the past, and as a result were beaten by OTT.

But reactive strategies, no matter how fast, are now altogether insufficient. Only proactive movement will do if telcos are to avoid losing the battle for edge computing. Cloud providers are already closing the gaps in their own capabilities, and telecom companies need to do the same, but faster.

This will require a new way of doing business, but also a new way of thinking about telecom business. It won’t be easy, but that doesn’t matter – right now, there’s no time to think about pain.

There are many adjectives that could be used to describe the global outbreak of COVID-19, but perhaps the simplest might be: fast.

The disease has spread quicker than most people can mentally digest. By nature, humans process linearly. This pandemic has been a lesson in exponential thinking for the common man. Those who don’t spend their time contemplating Moore’s Law or compound interest have felt overwhelmed by infection or mortality rates that double daily.

In response, governments, businesses, monetary institutions, education systems and the many other players in corporate and civil life have acted at high speed. It is easy to argue that, in numerous cases, reactions should have been faster, but as a whole, shifts in policy and social management have been rapid.

A pace of change of this magnitude and on this scale is unprecedented. Seemingly overnight, entire societies have been atomized, people cloistered in separate homes with external face-to-face contact deemed illegal.

Predictions of a future in which people communicate primarily online have been rendered inaccurate by decades. In one giant leap, we have landed in a virtual reality facilitated almost exclusively by digital applications like Zoom, Houseparty, Skype, WhatsApp and Slack.

Older generations have received a crash course in teleconferencing. Millions are having their first experience of working from home. And many of those homes are shared with others in a type of ceaseless proximity that tests even the healthiest relationships.

All of this change has happened, and continues to happen, incredibly fast. That has made people feel uneasy. While everyone likes to speak of the “current situation”, there is a lot about this that will last far beyond the end of the coronavirus crisis. As Yuval Noah Harari writes in the Financial Times:

“Many short-term emergency measures will become a fixture of life. That is the nature of emergencies. They fast-forward historical processes. Decisions that in normal times could take years of deliberation are passed in a matter of hours. Immature and even dangerous technologies are pressed into service, because the risks of doing nothing are bigger.”

A few months ago, before public debate was dominated by COVID-19 concerns, “immature” and “dangerous” were words regularly used by opponents of 5G. But, what do the extreme and rapid changes to social and economic structures mean for 5G, the technological poster child for ‘fast’?

Will growing fears related to privacy, cybersecurity and curtailed civil liberties affect the public perceptions of 5G, or will this technology’s benefits be crucial to a new world in which dispersed humans rely more and more on connectivity for communication and services?

The answer, of course, is both. 5G is about to become more critical than ever, but so will requirements for its responsible implementation and management.

Taking WTH? out of WFH

Covid-19 started as a health emergency but soon evolved into a social and economic one. Many parts of the world economy have ground to a halt. Despite record sums in fiscal stimulus and monetary interventions aimed at keeping companies open and citizens employed, the damage has been sharp and extreme.

In the United States alone, more than 22 million jobs have been lost since the middle of March. However, many jobs have been saved in companies who have been able to restructure themselves around remote working.

According to the World Economic Forum (WEF), until recently working from home was a luxury for the relatively affluent.

Only around 7% of U.S. workers had the option to regularly work from home (WFH), most of them “knowledge workers” such as executives, IT managers, financial analysts and accountants. The UK Office for National Statistics estimated the WFH contingent in the United Kingdom in 2019 was approximately 5%.

Though no authoritative figures have been compiled yet, the number of people currently teleworking around the world has multiplied dramatically. Whole organizations have moved online and connect via video conferencing.

In March, Zoom was downloaded 2.13m times around the world in one day, up from 56,000 times a day two months earlier. The company’s share price has doubled since 1 January 2020.

In many countries, schools have been closed, with children continuing their education at home. Families are in lockdown together, with the result that working parents are online almost fulltime, and at the same time as their kids who are streaming, surfing or gaming.

That amount of domestic traffic, most of it in the form of high-data video, is unheard of. In a recent press release, Verizon stated that demands on bandwidth had increased 75% over the course of one week.

Home broadband typically has a lower capacity than business networks and telecoms providers are being tested as they aim to meet the surge in demand. More challenging, though, is the fact that this ‘surge’ may be more of a new normal.

Yes, the current conditions could be expected to last for a few months, which will place established networks under strain, but questions are already being asked of how COVID-19 will change the work landscape after social distancing and limitations to freedom of movement are ended.

It is very likely that WFH will become a more pervasive and accepted mode of working for those whose jobs permit this type of engagement. Network operators will need to be prepared for that. More importantly, though, they need to be ready for the next major economic disruption, pandemic or otherwise.

The most obvious possible solution to these challenges is 5G, which has the large network capacity, high speed and low latency required to keep millions of connections stable in real-time without lag or loss of quality.

Not only are we likely to see an acceleration of 5G adoption over the short to medium term, we may also see this technology being prioritized further above other infrastructural focus areas. 5G could become the most critical of critical infrastructures, and its strategic importance has already been emphasized in geopolitical conflicts like the trade war between China and the US.

Below this public zeal for 5G capability, though, numerous questions exist about unequal access to basic internet services. Even in the US, households in rural areas are 12% less likely to have broadband than their urban or suburban counterparts.

Critics say the fanfare about 5G is obscuring, possibly even exacerbating, these inequalities. Existing socio-economic divides will need to be addressed if countries hope to move their working population online.

The COVID-19 crisis may justify an even faster 5G rollout. This is not simply because more people will rely on this technology to stay connected from home, it is because COVID-19 will have profound effects on our social systems, and only 5G will be able to support this evolution.

Smartification of a post-COVID world

On the 9th of January 2020, the World Health Organization (WHO) announced an outbreak of a flu-like disease in Wuhan, China. For most of the world, this was the first news of the coronavirus that would grow into today’s pandemic.

If, however, you were a client of BlueDot, a Canadian health-monitoring platform, you would have known about COVID-19 more than a week earlier, on 31st December, when the company sent out a notice to its customers.

BlueDot’s advance warning system is founded on an AI algorithm that scours news reports and airline ticketing data to predict the spread of diseases like coronavirus. This AI epidemiologist beat many top scientists to the diagnostic punch, but it was only the first example of AI and smart technology being used in the fight against COVID-19.

From autonomous machines used to disinfect hospitals to patrol robots deployed to monitor mask-wearing and body temperatures in public places, 5G-powered devices have been at the frontline of the battle against coronavirus from the outset. These use case examples come from China where 5G capability is more advanced than the rest of the world, but the lessons are clear: 5G can be a key ally in counteracting the spread of a dangerous disease.

However, the full value of 5G in response to COVID-19 will only be felt over the coming months, and it will be felt by everyone, not only those in critical healthcare services. The greatest impact will be seen in cities, where the virus has hit hardest, but where the concentrated benefits of 5G access can be leveraged en masse.

5G can support up to a million devices per square kilometre. In cities, that means the possibility of coordinating multiple public and private messaging systems to notify citizens of important health and safety announcements.

As cities become smarter, 5G also means that diseases like coronavirus can be tracked, mapped and neutralized much faster. Cameras in public spaces, licence plate readers, and mobile device data can be commandeered to trace the people’s movement and, therefore, the spread of the virus.

As we will see shortly, implementing this type of approach raises important questions about privacy and civil liberty, but the fact remains that 5G permits a new level of surveillance that can, if used responsibly, serve society in life-preserving ways.

As we become increasingly accustomed to the reality of social distancing and individual isolation in our own homes, it’s easy to observe how 5G-enabled machines will influence how we receive simple services like deliveries. It is fair to assume that delivery bots, like those being trialled on college campuses, will become ubiquitous in cities and suburban areas, delivering courier parcels, takeouts, groceries or medicines to self-isolating individuals or dispersed communities. Drone delivery technology is also reaching maturity, ensuring greater reach for healthcare systems and more support for the critically ill.

Though these developments have strong positive potential, there is also a possibility of high social costs. In economies already stripped of jobs, greater automation of supply chains through autonomous vehicles, drones and bots will further reduce the need for a human workforce.

Perhaps even more worrying, though, is the price we may be asked to pay with our own freedom. It doesn’t take a dystopian fantasy writer to imagine the many dangers of 24/7 surveillance systems that recognize our faces, know where we live, and monitor our every movement. When the disease is gone, this could form the new battlefront of civic concern, and 5G could be a primary target.

War is peace

In the first chapter of George Orwell’s novel, 1984, the reader is introduced to The Party’s three slogans: War is peace; Freedom is slavery; Ignorance is strength. 1984 was written shortly after World War II, when the author and all those around him had experienced a first-hand vision of what life may be like under totalitarian control.

These three tenets powerfully express the domination that Orwell saw as all too possible when the masses are manipulated by fear, propaganda, and misinformation, and leaders have absolute power. But the book’s most enduring statement is the ubiquitous warning from Oceania’s commander: “Big Brother is watching you.”

This caution has become the mantra of those who fear the creation of a surveillance state in which ruling powers are able to monitor all citizens and direct their behaviour. Such concerns have been around for a long time, since before Orwell, but we now live in an era in which technology undeniably makes the possibility of Big Brother a reality.

The coronavirus crisis has made this point all too clear. We already have the technology to track individuals by their mobile devices, their physical identity, their financial activity, their online behavior.

Under COVID-19 we have seen this technology employed by countries like China and South Korea to excellent effect in aiding quick responses to outbreaks of the disease. Some argue that this is because the populations of these countries are already accustomed to surveillance.

For the Chinese, especially, these conditions are already an accepted part of daily life. Eight of the top 10 most surveilled cities in the world are in China, with the most surveilled watched over by 2.58 million cameras–that’s one camera for every 5.9 citizens. Without the same democratic controls championed by nations in the west, the Chinese government is able to use the data it collects with relative freedom. This gives the ruling party the ability to mobilize new policies effectively, helping to get outbreaks like coronavirus under control relatively rapidly.

In the west, democratic safeguards are enacted to protect citizens from governments and corporations using their data against them. But as emergency laws are passed with little time for resistance or careful consideration, fears are mounting that privacy and security could be under threat.

Edward Snowden argues that legislative responses to Covid-19 could give governments invasive new “temporary” data-collection powers that could last long after the pandemic. As Yuval Noah Harari points out in his FT article, “temporary measures have a nasty habit of outlasting emergencies, especially as there is always a new emergency lurking on the horizon.”

It would be very easy to justify the maintenance of emergency surveillance powers by highlighting the possibility of a second wave of coronavirus, and then a dangerous outbreak of Ebola, and so on.

Effectively, we could forever be “at war” with some contagion, and that war could keep the populace lulled into a sense of safety that is provided by, and therefore justifies, levels of surveillance that would currently seem terrifying. War is peace. And that war could be neverending.

Believers in the strength of democracy do not see this scenario materializing, but vigilance and reason should not be abandoned. Only 5G would be able to deliver such an Orwellian nightmare. With its high speed, low latency and unprecedented device capacity, 5G networks would be critical to the construction of a surveillance state.

If 5G’s implementation was controversial before, COVID-19 will probably make it a matter of far wider debate. That is appropriate and necessary, provided that the powerful benefits of this technology are not forgotten. Like all the tools humans have created through history, 5G is agnostic. It can be used to do good or harm, the choice is ours.