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Vodafone partners with Google to develop a cloud-based data platform to help telecom operators find new opportunities and improve customer relationships.

Numerous studies have shown that telecommunications operators are finding it increasingly difficult to find new sources of revenue, despite massive investments in 4G and 5G networks.

The partnership is the latest trend showing convergence between the telecoms market and Silicon Valley.

But there are concerns about where in the world customer data is processed.

The deal is expected to last six years and will involve collaboration of up to 1,000 employees of mobile operator Vodafone and tech giant Google, located in the United States, Spain and the United Kingdom.

The idea is to help Vodafone simultaneously create and deploy new digital services in multiple countries for consumers and businesses, as well as gain new insights from customer data to improve relationships and build customer loyalty. clients.

If the platform is successful, it would be another boost for the public cloud computing market, which is expected to grow 23.1% to $ 332.3 billion (£ 239.3 billion) in 2021. , according to research firm Gartner.

“Telecom operators are investing an insane amount of money in network equipment and spectrum licenses for 4G and 5G, but they are struggling to get a return on their investments because the investments are extremely high”, Leif-Olof Wallin, vice-president president of research at Gartner told the BBC.

“They need to operate more efficiently to reduce costs, which is why they use public cloud services.”

Automate customer service

Gartner research shows customers are much happier when they can switch to a new phone, change contracts, or add services to existing agreements instantly, without having to wait on hold and speak to customer service staff in the office. call centers.

Trying to acquire new mobile subscribers is much more expensive, Wallin says, than it is to keep existing customers happy and fine-tune their services over time.

He says Vodafone has long had ambition to eventually be able to automate at least 50% of all changes or upgrades to existing contracts and agreements.

As part of these efforts, the mobile operator launched in 2017 an artificial intelligence-based digital assistant chatbot application called TOBi.

Consumers download the app and ask TOBi questions. The application, powered by artificial intelligence (AI) from IBM Watson, is able to instantly access information on common topics such as international roaming or access to 5G, and it can also extract customer records to help users resolve a problem.

The mobile operator has also entered into an agreement with Amazon Web Services (AWS), to bring business applications and computing power closer to where the data resides, using the cloud and 5G mobile internet – a concept called “Edge computing”.

The Google deal aims to develop this concept of customer service automation, as well as accelerate the global delivery of services to consumers and businesses.

Vodafone says it has identified 700 use cases so far where it believes a data platform would be useful. He says the benefits would include reducing costs by simplifying and centralizing its operations.

“This is an important announcement that highlights the level of technological transformation underway in telecommunications, which is perhaps more dramatic than in any other industry right now,” said Nick McQuire, chief research officer at CCS Insight consulting firm.

“With the changes brought by the pandemic, as well as the industry-wide shift to 5G and the cloud, operators are increasingly turning to data analytics and machine learning to help them improve operations and, above all, improve the customer experience. “

But where does the data go?

However, there are concerns about how customer data will be transmitted from Vodafone to Google and any other partners.

In March, the Spanish data protection authority AEPD fined Vodafone € 8.15 million for violating several GDPR data protection laws, including Article 44, which prohibits the transfer personal data to countries that are not part of the European Economic Area, or to countries whose legislation is not in force. in accordance with the GDPR.

And in July, the Court of Justice of the European Union (CJEU) ruled that it was illegal to share personal data with US cloud providers, due to concerns about “invasive US surveillance programs.”

“This is clearly a big deal for Vodafone and Google. However, it seems to be ignoring the GDPR-based Schrems 2 ruling, which governs data transfers between the EU and the US,” the analyst said. independent telecommunications Ian Grant at the BBC.

“Companies active in the EU, such as Vodafone, cannot use cloud services provided by US-based companies because US law allows US government agencies, such as the NSA, to request and obtain data about any person whose data is processed in the United States. had clouds all over the world. “

Google says Grant’s opinion that it is “illegal” to share data with US cloud providers is incorrect.

However, others agree, such as Anja Hoffmann, a lawyer and policy analyst for the German think tank Center for European Policy (CEP), who told the German newspaper Handelsblatt that “corporate data transfers from the ‘EU to US cloud services such as Microsoft, Amazon, Google or Dropbox are illegal if the data recipients are subject to US surveillance laws and have access to the data content in plain text. “

The sharing of personal data between the EU, Switzerland and the United States was previously governed by a framework called the Privacy Shield, designed by the European Commission.

Other countries can only transmit personal data with the EU if they have data protection laws in place that the European Commission deems adequate.

But the Schrems 2 decision of July invalidates the framework of the Privacy Shield. However, the framework itself is not mandatory and companies must decide whether they wish to join.

Regardless, no new legislation or GDPR waivers have yet been approved by the UK.

So while there is no law in place governing how personal data is currently transmitted between US cloud providers and the UK – even though the data center is in Europe – Mr Grant says it could be “unquestionably risky”.

Vodafone told the BBC in response: “We have put in place strict intra-company contractual arrangements which ensure the legality of data flows between the EU and the UK.

“In addition, every data feed linked to the Google Cloud platform is cataloged on Vodafone’s specialized platform, with particular emphasis on the management of sensitive metadata and compliance with all policies.”

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