The Trillion-Dollar Paradox
Today’s telecommunications networks are engineering marvels. They achieve near-total population coverage with cloud-like uptime. With 5G, capacity bottlenecks that once plagued users are a thing of the past. These networks are the invisible foundation of modern life - powering our conversations, entertainment, work, cars, payments, and every digital service we rely on. They are quintessential national infrastructure.
Over the last decade, carriers globally have invested over $3 trillion in CAPEX to upgrade physical infrastructure. But while the pipes have evolved, the software has not. In a world that is predominantly run on software and increasingly AI-enabled infrastructure, carriers missed the OS upgrade required to digitize distribution and automate operations.
And here’s the paradox: while telecoms built the infrastructure powering a multi-trillion-dollar digital economy, they’ve become its largest rent payers. Carriers spend billions acquiring customers via Google, Meta, and other ad platforms - channels that contribute nothing to service delivery. They maintain expensive retail footprints in a world where banking, shopping, and entertainment have all gone fully digital. They resolve customer issues over 30-minute phone calls for tasks that can be two taps on a screen.
The Digitalization Gap
Over the past three decades, the world has been rewired by an invisible layer of code. Like a silk scarf stretched across the planet, a thin digital fabric now connects every industry - music, entertainment, commerce, transportation, finance, work, communication. Entire sectors that once operated purely in the physical realm have migrated to the cloud and into the palm of our hands.
The entire consumer lifecycle - activation, consumption, management, and customer support - now lives on mobile devices. And yet, telecom hasn’t crossed the same bridge.
Networks carry every byte of the digital economy, turning our phones into remote controls for the world around us - yet they haven’t built the software that brings them into this future. While other industries have evolved into seamless, self-serve, on-demand experiences, telecom remains tethered to analog processes and human-heavy operations that no longer live up to consumer expectations.
For years, rapid subscriber growth masked the problem, fueling a trillion-dollar industry. But the game has changed. In an increasingly commoditized market, algorithms now intermediate access to customers, auctioning discovery and driving customer acquisition costs into the thousands per subscriber. At the same time, the absence of automation and digital UX leaves carriers saddled with rising operational expenses and the lowest Net Promoter Scores of any major global industry.
This is the double squeeze: CAC spiraling upward, OPEX surging, margins collapsing. The legacy distribution model is breaking. And yet the solution is hiding in plain sight: the very platforms that networks already power. By embedding natively into the digital layer riding atop their infrastructure, carriers can recapture the value chain.
The OS Upgrade Networks Need
Telecom needs an operating system upgrade - a digital infrastructure layer that embeds networks directly into the platforms they power, while automating distribution, subscriber management, and AI-powered customer support.
Instead of paying rent to acquire customers, they can become native components of the apps consumers use every day. Instead of forcing consumers through antiquated service channels, they can deliver network features with the same seamless experience as ordering an Uber or sending a Venmo payment.
This isn’t about carriers building better apps. It’s about becoming part of the apps consumers already live inside so networks can finally power differentiated digital experiences while capturing their fair share of value.
The New Value Chain: Only Contributors Allowed
The traditional telecom value chain is bloated with intermediaries extracting value without creating it. The new model is radically simple. Only three parties deserve a seat at the table:
Network Carrier - Provides national infrastructure: coverage, spectrum, core operations and a trusted brand.
Operating System - Runs the software layer that makes networks embeddable, programmable and fully automated.
Tech Platforms - Own customer acquisition and create differentiated experiences.
This model is already taking shape:
Enterprises provisioning work phones instantly via IT tools
Fintechs bundling mobile service with banking
Gig platforms offering riders low-cost, optimized data plans
Each example demonstrates a future where connectivity is contextual and embedded - unlocking new distribution models while improving user experiences.
The Stripe-Visa Moment for Telecom
Other industries have already proven this playbook. Intel transformed from a commodity chip supplier into a premium, co-branded partner by embedding “Intel Inside” into PCs. Payment networks went from background infrastructure to valued brands through co-branded cards. Most recently, Stripe and Visa showed how programmable infrastructure can create entirely new economies. While both were able to create a lot of value from the partnership, Visa became one of the world’s most valuable companies by leaning into digital distribution, increasing its value by more than 10x in the process.
For Visa, the Stripe partnership was transformative:
Innovation & Distribution: Stripe became the fastest-growing processor for internet businesses. By supporting Stripe early, Visa ensured its rails remained the default for the fastest-scaling companies. Visa gained a software-led partner that expanded its distribution, accelerated product innovation, and helped it become more product-driven.
Transaction Volume: Stripe’s rapid growth drove billions in new payment volume over Visa’s rails, strengthening Visa’s dominance against Mastercard, AmEx, and others.
Access to Developers & Startups: Visa had little brand recognition among developers. Through Stripe, Visa became part of the “default stack” for internet payments, embedding itself in the startup and developer ecosystem.
Just as Stripe made sure card networks benefitted disproportionately from payments moving online, telecom networks can do the same by partnering with technology platforms. Instead of pushing one generic brand with hundreds of plans, carriers can enable hundreds of specialized, context-driven services through digital partners. Each partnership brings built-in distribution, loyalty, and near-zero CAC. Platforms gain new revenue streams. Carriers monetize infrastructure more efficiently. Consumers get seamless experiences. Wholesale doesn’t need to be just a side business - it can become telecom’s new growth and distribution engine.
When AWS made hosting programmable and pay-as-you-go, it sparked a Cambrian explosion of digital services. Stripe’s programmable rails fueled the gig economy, creator economy, and on-demand commerce. Now it’s telecom’s turn.
Making infrastructure programmable and lowering the barriers to access has always increased demand. Telecom will be no different.
The Time Is Now
The networks are ready. The technology exists. The platforms are eager for deeper integration. The new value chain has already been built. It’s time to bring it to scale.
For carriers clinging to traditional models, consider this: you’re already paying the tax. Every dollar spent on Google or Meta ads, every subscriber churned by outdated service and slow response to market developments, every missed opportunity to monetize infrastructure - these are penalties of the legacy system. The new model doesn’t just eliminate those costs; it turns them into a new distribution model.
The Connectivity Renaissance
We stand at the precipice of a connectivity renaissance. The same networks that once felt like slow-moving utilities are about to become the dynamic foundation of tomorrow’s digital economy.
Carriers that embrace this transformation won’t just survive - they’ll reclaim their position at the center of innovation. This is the great realignment:
From rent payers → value creators
From faceless utilities → platforms
From the periphery → the interface layer of the internet economy
The future of telecom isn’t about building better networks - it’s about making networks merge into the experiences they power. In an increasingly agentic world, that convergence matters more than ever before. When that happens, carriers will finally capture the value they’ve been creating all along.
Hermann Frank,
Co-founder & CEO
San Francisco 12/16/25
