AI Will Take Decades to Produce Clear Productivity Results

General purpose technologies (GPT) tend to be important for economic growth as they tend to transform consumer and businesses do things. The issue is whether artificial intelligence is going to be a GPT.  

The steam engine, electricity, the internal combustion engine, and computers are each examples of important general purpose technologies. Each increased productivity directly, but also lead to important complementary innovations.

The steam engine initially was developed to pump water from coal mines. But steam power also revolutionized sailing ship propulsion, enabled railroads and increased the power of factory machinery.

Those applications then lead to innovations in supply chains and mass marketing and the creation of standard time, which was needed to manage railroad schedules.

Some argue AI is a GPT, which means there will be significant and multiple layers of impact.

Machine learning and applied artificial intelligence already can show operational improvements in all sorts of ways…

Can AI Help Move Beyond "Something Happened" to "Something Happened and the Network Fixed Itself"?

To say artificial intelligence is trendy is an understatement, experienced routinely by a growing number of consumers in the form of their smartphones and voice-activated assistants, invisibly in their consumption of content.

Investments in artificial intelligence have been highest, to date, in banking, retail, healthcare and manufacturing, IDC estimates. In the communications business, AI use cases arguably have been most pronounced in smartphones, customer service automation and possibly billing.

But it is logical to ask whether AI should not logically come to play a role in network operations and marketing, among other basic functions of communications networks.

Can AI be used by networks to make decisions based on customer activities or location? And does that create incremental value and revenue opportunities?

Can AI help network supervisors move beyond “I know what happened” to “I know what will happen” to “something happened and the network fixed itself?” That is not a terribly…

How Much Can a Telco Afford to Invest in Faster Internet Access?

How much should any tier-one service provider invest in its internet access capabilities?
Much depends on the market dynamics: whether that firm’s role is wholesale-only; wholesale and retail; or retail only or mostly.
But in every case, the fundamentally-sound position is to invest only to the point that an adequate return on capital can be made. The level of return might be dictated wholly, or in part, by a government entity that caps the rate of return. In other markets the rate of return is limited by the amount of competition and risk of stranded assets.
In the U.S. market, some are not optimistic. Jonathan Chaplin, New Street Research equity analyst, believes cable companies could have 72 percent market share in 2020, with as much as 78 percent share of the internet access market.
Some might argue, given such trends, that telcos should simply harvest their internet access customer base. Of course, such forecasts likely include an assumption that telcos must either upgrade to fib…

"Insight" is the Outcome AI Delivers

All of us have heard the phrases “data-driven business” and “digital transformation” as hallmarks of the way firms will have to evolve

Add insights-driven to that list. Though we are in the early days, that phrase is supposed to refer to the way firms mine the data they own to develop insights about customer behavior that can, in turn, be used to drive sales, retention and profit margins.

“Insight” is another way of saying “knowledge” or “understanding” about actual patterns in customer and prospect behavior, with the ability to apply such understanding to actual product features, processes and delivery, in a predictive way.

And without belaboring the point, such insights, the result of data mining using artificial intelligence or machine learning, already have been deployed in some business processes such as customized content, search, customer service operations and e-commerce.

Some firms have ad advantage, though. Etsy, the e-commerce site, created a “dedicated research department t…

One Interesting Factoid from Verizon's 3Q 2017 Report

Just one interesting observation from Verizon’s third quarter earnings report, which probably was better than most had expected. Note just one indicator, voice connections, which shrank seven percent. At that rate, Verizon loses half its voice revenue in a decade.
That is one illustration of the argument that tier-one service providers must replace half their current revenue every decade.

Despite the shift to unlimited plans and heightened competition in the mobile services market, Verizon managed to add a net 603,000 mobile connections, 486,000 of those being the highly-regarded postpaid accounts.
Operating revenues also were up, year over year. Even Verizon’s wireless segment posted higher revenue, year over year.

source: Verizon

Massive MIMO Deployments are Inevitable

It is not hard to predict that use of massive multiple input-multiple output radio technologies is going to grow, as advanced 4G and 5G networks are built. Massive MIMO is required to make use of vast new spectrum resources to be released in the millimeter wave region to support 5G.
In fact, massive MIMO is intrinsically related to use of small cells, ultra-dense cell networks and millimeter wave frequencies.
Massive MIMO trials or limited deployments in 2017 were undertaken by Sprint, Deutsche Telekom, China Mobile, China Telecom, China Unicom, Singtel, T-Mobile Netherlands, Vodafone Australia, Optus, and Telefónica. Massive MIMO also is being developed by Telecom Infra, the open source telecom infrastructure effort.
The spectrum bands at which many of these trials have taken place include 2.5 GHz, 2.6 GHz, 3.5 GHz, 1.8 GHz, and 2.3 GHz. Except for 3.5 GHz, the remaining frequencies are also allocated for LTE in many countries. Telecom Infra is testing much-higher frequencies (60 GHz…

Why a Massive New Gigabit Upgrade, Instead of DirecTV Acquisition, Made No Sense

Two years ago, when DirecTV was acquired by AT&T, it would have been easy to find detractors arguing that AT&T should have spent that money investing in fiber to home infrastructure. With linear video cord cutting possibly accelerating, the new version of that story is being heard again.

So what should AT&T have done with $67 billion, assuming a 4.6 percent cost of capital? Cost of capital is the annualized return a borrower or equity issuer (paying a dividend) incurs simply to cover the cost of borrowing.

In AT&T’s case, the breakeven rate is 4.6 percent, which is the cost of borrowing itself. To earn an actual return, AT&T has to generate new revenue above 4.6 percent.

First of all, AT&T would not have borrowed $67 billion if it needed to add about three million new fiber to home locations per year. Assume that was all incremental capital, above and beyond what AT&T normally spends for new and rehab access facilities.

Assume that for logistical reasons, A…