AI in the arms race, arrival of 5G, and future of digital identity: BICS 2019 predictions

Predictions 2019 | TelecomDrive.com

A lot can happen in a year, especially in a telecoms year. The industry has seen consolidation, disruption and innovation, all at a dizzying pace. 2018 saw the hype around technologies such as AI and blockchain reach fever pitch, and in 2019, we will see their promises fulfilled.

Other constants plaguing the industry, such as telecoms fraud, will continue to pervade, while the advancement of 5G will present both opportunities and challenges. Here, Daniel Kurgan, CEO, BICS, outlines how breakthrough technologies such as AI and machine learning can be harnessed to protect revenues, why 5G will create new MVNOs, and why mobile numbers will prove to be a revenue-generator.

AI will be wielded by operators in the fraud arms race

There’s been a lot of hype around machine learning (ML), and artificial intelligence (AI) in recent years, across a wide range of industries. In telecoms, the expectations from vendors around solutions and approaches that incorporate these technologies have been massively inflated. That doesn’t mean that AI and ML won’t deliver, though, only that all parties should tread carefully when investing in solutions.

How will they deliver? We think that in 2019, ML and AI will be used as tools to help fight telecoms fraud, which costs the international wholesale carrier industry $17 billion annually. There’s an ongoing arms race between fraudsters and operators, with operators improving their tools just as fast as criminals hone their tactics. The automation and problem-solving which ML and AI can bring, however, will help operators to stay ahead in this race, delivering above and beyond what’s been humanly possible in the past.

ML will be incorporated by a number of operators, allowing them to identify more fraudulent attacks on their network. Automating laborious manual processes, analysing traffic in near-real time, reducing false positives and their ability to ‘work’ evenings and weekends (when employees aren’t at work but fraudsters are), gives AI and ML-powered solutions an edge over their human counterparts.

This is reducing the time it takes for operators to address and resolve problems, and therefore pushing down the value of each attack to criminals – and the financial loss to the operator. We may well see the number of attacks rising in 2019, but we predict – and very much hope – that the value of these attacks will fall.

As well as looking ahead, we need to look back: to the hype around these next-generation technologies. While there’s a strong future for ML and AI in fraud reduction, adopting these technologies must be part of a wider, integrated strategy by industry players.

In 2019, businesses should evaluate their internal business structure and look at making changes to help reduce fraud. This might involve reorganising the skills and personnel within fraud management teams, their position alongside other sectors of a business, and their priorities. Finally, operators should streamline and improve their process of identifying and reporting attacks, meaning re-evaluating relationships with all of their customers and terminating the troublesome.

It’s here – in the disagreements between operators and other parties – that we could see another much-hyped technology employed to aid and hasten the dispute process: blockchain.

Adding transparency and accountability to operations, blockchain ensures data stored digitally is updated in close to real-time, and that each element of the resulting ledger is irreversible, time-stamped, and traceable. We’ll therefore start to see blockchain being adopted by operators to track and record data relating to network traffic, and reduce fraud. This data would be available to operators and others involved in creating this information chain, and would help verify and authenticate calls and caller identify, identify unusual traffic and automatically alert parties in the chain.

ML, AI and blockchain have huge potential for reducing instances of fraud in the future, but in 2019, many operators will have only just reached the cusp of the learning curve when it comes to implementing and wielding these new technologies. To support any investments made next year, the industry must remember: there’s strength in numbers! It’s crucial that parties from all across the industry work together; collaborating, sharing insights and resources, and contributing to dedicated initiatives, to building knowledge, hastening detection, and ultimately reducing telecoms fraud.

5G will make MVNOs out of businesses

5G has been on the horizon for some time. In 2018 it was at the industry’s door, with trials across the world and the first glimpse of a 5G handset, courtesy of Samsung. At the start of the year, we’d pinpointed early 2019 as marking the roll-out of the first commercial 5G network. Yet, ahead of the game as ever, South Korea pipped the rest of the world to the post, launching a commercial cellular 5G service based on 3GPP standards.

The joint initiative from SK Telecom (SKT), KT and LG Uplus, also marked the first 5G video call, between SKT’s CEO and its manager, using – you guessed it – Samsung handsets. Has 2018 stolen 2019’s 5G glory? Not quite. The South Korean network is currently only available to businesses in certain areas of country, with consumers able to take advantage of the lightening-fast speeds of the next-gen network in March.

Next year, there’ll be plenty of scope for other regions and operators to get in on the act, upgrading infrastructure and conducting further trials with the aim of rolling out 5G to consumers on a nationwide level in 2020. This, in turn, will unlock new business opportunities and use cases – enabling operations and processes which require the kind of ultra-reliable ultra-low latency wireless connectivity that only 5G can deliver.

Connectivity will also be embedded into an ever-expanding ecosystem of products, devices and sensors, which will be manufactured, assembled, shipped and tracked across the world. It’ll be boom time for business with technical telecoms knowledge, industry relationships, and required infrastructure. But to be a success, the IoT must also be accessible to those organisations without a traditional telecoms background.

Provisioning and managing SIMs for millions of devices means many organisations implementing a global IoT solution must at the same time act as MVNOs. However, many lack the means to establish essential roaming relationships different operators. In 2019, we’ll therefore see more organisations entering the IoT by outsourcing connectivity and taking advantage of eSIM technology, opening up new international market opportunities.

Mobile: a new revenue stream, identified

We all know that revenues from traditional voice services are being eroded by consumer (and increasingly, business) preference for OTT apps and VoIP. This picture will remain unchanged in 2019, yet that’s not to say that it’ll be a gloomy one. Instead, we’ll see the emergence of a new, highly valuable revenue stream for operators, which will help safeguard digital service providers (DSPs) and their properties, plus bolster security for end-users.

What’s this silver bullet? Mobile identity.

Most consumers have multiple digital accounts, for anything from banking and personal finance, to social media, ride hailing, shopping, and food ordering. In recent years we’ve all witnessed the fallibility of many of these accounts, with hacks and data breaches compromising consumer data and damaging the reputation of brands. It’s clear that the password/username combination is outdated and inefficient.

As such, using a mobile phone number – which is unique, portable, reliable, and durable – as a means of authenticating a user’s identity will increasingly be used as a means of reducing fraud and enhancing the customer experience.

Operators have long occupied a position envied by many DSPs, sitting on wealth of consumer data and with unrivalled insight into those who use their services. This can be converted into a valuable new revenue stream through establishing partnerships with DSPs, bridging a gap between the traditional telecoms and digital sectors. DSPs can, in turn, use this data for two-factor authentication services – i.e. to ensure that those using their services really are who they say they are.

The consumer benefits from a more secure online account, and, through operators’ augmenting their knowledge of customers, a reduction in instances of SIM swapping, call forwarding and porting fraud.

Amidst Christmas and holiday preparation, many in the industry will also be busy prepping for MWC19 Barcelona. The February event will be the stage upon which we’ll hear numerous announcements relating to AI, blockchain, 5G, mobile identity, and so many more. As with previous years, it’ll serve as the marker for just how far the telecoms industry has come in 12 months, and set the bar for where we’re going.

2018 laid the foundations for innovation and disruption in the years ahead, so we’re excited to see, both at MWC and beyond, how the industry evolves.