Insights from the "Telco to TechCo in the Era of AI" Roundtable from Indonesia attended by Sarwoto Atmosutarno, Merza Fachys, Kok Leong Yap, Bayu Hanantasena, Desmond Cheung, I Gede Darmayusa, Chirag Sukhadia, Muhammad Buldansyah, Yessie Yosetya, Gidion Suranta Barus, Seno Soemadji, Arik Kurniawan, Raditio Ghifiardi, Ronald Limoa, Teguh Prasetya

A TechCo is a telco capable of creating tech and software-driven platforms that enhance internal efficiency, create new services and can be marketed to customers. This transition is crucial for telcos aiming to stay relevant and competitive especially as the world transition from the connectivity era to the AI era. The Roundtable had the best telco minds in Indonesia and here are the seven points that they felt strongly about.  

1. AI while overhyped is a game changer for telcos

All participants believed AI was a game-changer for telcos despite its hype. While Telcos have leveraged AI long to enhance various aspects of their business, before its current popularity, the challenge they face is around detailing out the business model amidst the hype.  

2. Overcoming the "Telco Trap Mindset" is critical to be a TechCo

The biggest challenge in becoming an AI-driven TechCo is overcoming the traditional "telco trap mindset" and its conservative business case approval processes. The traditional approach requires extensive validation and incremental improvements, which can stifle the rapid experimentation and deployment necessary for AI initiatives. The telco trap is real and inhibits agility. To escape the telco trap , telcos need to have the 4 As – Ambition, Ability, Agility or Acquire ( Ability and Agility).  

3. Indonesia has the ability to leapfrog via AI

The ability of gen AI to rapidly to scale the talent pool and revolutionize both processes and industries was well acknowledged. In fact the roundtable felt the ambition can be very high given the governments push on AI and becoming a strong digital economy []. While there are current challenges, the AI foundation has been laid with players like Indosat partnering with Nvidia and development of localized LLMs.  

4. Localizing AI Efforts – Collaborative ecosystem crucial

Pak Sarwoto from Mastel emphasized the importance of finding localized AI best practices.  Just like Indonesia has 100 flavours of localized coffee (Kopi), AI in Indonesia should be used to drive local use cases be it in  smart manufacturing, smart retail or enabling the 45 mn MSME.  The foundation for AI is set, presenting vast opportunities across industries. Developing shared AI infrastructure and treating data as a national asset to power use cases across industries, along with an Indonesia-specific LLM, would be a strong driven.  

5. Start small and scale- Small LMs for Business

Telcos are developing mini-LLMs or small-LMs to drive business, which can be tailored for different verticals. Telcos have the advantage of scale and trusted security making them more reliable than startups, positioning telcos as leaders in AI-driven services. Many enterprises in Indonesia look up to telcos as an early mover in AI and want to learn from them.  

6. Global Tech Firms see Indonesia differently today paving way for partnerships

Global tech firms are now using Indonesia for new use cases and pilots and willing to customize their approach, marking a significant shift from their previous "take it or leave it" stance . This has allowed many telcos to form fruitful partnerships that move the needle and accelerate the acquisition of capabilities.  

7. Metrics for AI and TechCo Investment – the business case question

While most telcos seek a two-year payback on AI investments, investing in AI is not just about the revenues or costs. Many progressive telcos in Indonesia are considering additional metrics like impact on customer experience, impact on productivity and agility to stay ahead in the market. Balancing immediate returns with long-term strategic benefits is key. One suggestion to think about the business case was not to compare with current connectivity revenue at all. The only way techcos can be created is if they show the impact on non-connectivity revenue as the base and how fast the products can be rolled out to test them in the market.  

8. Operationalizing AI needs ‘soft hands’ rather than hard sell

Operationalizing AI in Indonesian organizations requires a 'soft hands' approach rather than a hard sell. There's a tendency to rely on current methods, such as deploying more staff, which is often cheaper than implementing AI-driven technology in areas like network management. Successful AI adoption demands careful change management and demonstrating that AI is not just a cost-saving measure but a tool for improving productivity and quality. For instance, AI in cars can prevent accidents, highlighting its role in reducing human error and associated costs.  

Conclusion

The roundtable provided invaluable insights into the AI transformation journey for telcos. By focusing on localizing AI efforts, leveraging mini-LLMs, and aligning AI investments with strategic metrics, telcos can successfully transition to TechCos and drive substantial growth and innovation.

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