MWC, formerly Mobile World Congress, used to be a show about the telco industry. As demonstrated by the presentations and hallway conversations at this week’s gathering in Barcelona, MWC is now about how the major cloud providers and telco companies will work more closely together, a key theme that stood out strongly for one analyst attending the show.

“They are dating each other right now,” said Sarbjeet Johal (pictured), founder and chief executive officer of Stackpane. “They are assessing each other. Can we get together? I think they have to because of the nature of the beast. [Telcos] can try to innovate on their own, but because they are all segregated. They cannot innovate at the pace that Big Tech can.”

Johal spoke with theCUBE Research analysts John Furrier and Dave Vellante at MWC Barcelona, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed how telco collaboration with cloud providers will shape the industry’s future. (* Disclosure below.)

Cloud companies at MWC pitch digitization of the telco stack

The presence of major cloud players at the event, such as Amazon Web Services Inc., underscores the interest among telcos in leveraging the cloud to manage operational workloads and business support systems. Initiatives such as the Global System for Mobile Communications Association’s Open Gateway project demonstrate how AWS and others are working with telcos to bring cloud services to the edge.

“I see cloud as the industrialization of backend computing,” Johal said. “The big pitch is [cloud companies] are helping telcos digitize their stack, go to the next level. Monetization is key for telcos. They are helping them build business support systems.”

Collaboration between telcos and cloud players has been driven by a mutual interest in opening telecom’s platforms to cloud developers and interested third-party communities. An example of this can be seen in the recent spin-off by Vodafone Group PLC of its IoT unit in a joint deal with Microsoft Corp.

“Telcos are highly regulated … their hands are tied in many ways,” Johal said. “They can’t keep the data of the user in the way that the Googles and Facebooks of the world can. In order to innovate, I think spin-offs are the best strategy and many telcos are doing that.”

The conversations at this week’s MWC illustrate both the opportunities and challenges facing telcos in the pursuit of more innovative business models. TheCUBE Research analysts have noted that the cloud operating model is poised to dominate the telco industry and collaboration will be a key part of any future success.

“It’s all great to dream about big things, but remember this one thing: The telco is a utility, just like electricity,” Johal said. “They have to serve the population of their countries. I think the key is collaboration. Anybody who’s collaborating with the likes of Amazon, the likes of VMware, the likes of Microsoft, I think those telcos are doing good and they will do better going forward.”

Here’s the complete video discussion, part of SiliconANGLE’s and theCUBE Research’s coverage of MWC Barcelona:

(* Disclosure: TheCUBE is a paid media partner for the MWC Barcelona event. No sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE