Building a Future-Ready Telco Stack: Lessons from the Nordics and Baltics

The telecommunications landscape is evolving at an unprecedented pace, with data consumption growing exponentially and connectivity becoming as essential as utilities like water and electricity. This article explores key insights from Tele2's journey toward becoming a leading telco in the Nordics and Baltics, focusing on their innovative approach to technology stack modernization, AI integration, and sustainability. As European telcos face increasing pressure to modernize while managing legacy systems, Tele2's strategy offers valuable lessons for operators seeking to enhance customer experience while driving operational efficiency.

The Changing Telecommunications Landscape

From Legacy to Digital Transformation

The telecommunications industry faces a critical challenge: addressing legacy technologies while simultaneously building future-ready networks. As data speeds increase and terabyte consumption grows year over year, connectivity providers must ensure seamless service delivery across fixed, mobile, and FMC (Fixed-Mobile Convergence) networks.

Tele2, operating across the Nordics and Baltics with its Tele2 and Comviq brands, has positioned itself to meet these challenges by reimagining its telco stack from the ground up. Their approach demonstrates how European operators can transition from fragmented legacy systems to consolidated, AI-enhanced platforms.

Connectivity as an Essential Service

COVID-19 highlighted that homes have become central hubs requiring constant connectivity. This shift has elevated gigabyte availability to the status of an essential service, necessitating uninterrupted connectivity flow across all network types. For telco professionals, this means designing networks and services that prioritize reliability and seamless integration through APIs.

The Four Pillars of a Leading Telco

Tele2's ambition to become the leading telecommunications provider in the Nordics and Baltics rests on four fundamental pillars:

1. Superior Customer Experience - Measured through NPS scores, product relation metrics, and digital touchpoint effectiveness

2. High Employee Engagement - Recognizing that exceptional customer service requires motivated staff

3. Best-in-Industry Shareholder Returns - Ensuring financial sustainability

4. Sustainability Leadership - Prioritizing environmental and social responsibility

These pillars are supported by three core values: reliability, insight-driven decision-making, and collaboration within the broader ecosystem.

Modernizing the Telco Stack

From Fragmentation to Consolidation

Tele2's journey over the past 3.5 years illustrates the transformation from a fragmented, multi-colored legacy stack to a streamlined, consolidated architecture. This evolution included:

• Consolidating three backbone networks into one
• Creating a single stack for consumer services (including small business customers with 0-5 SIM cards)
• Developing a separate enterprise stack for larger business customers
• Embedding automation at every layer using current AI capabilities while preparing for future advancements

The Critical Role of Decoupling

A key aspect of Tele2's modernization strategy involves decoupling front-end and back-end systems (the "north and south" of the architecture). This approach facilitates API development across three crucial layers:

1. CSP-level APIs that open connectivity services
2. Orchestration and adaptation layer ensuring regulatory compliance
3. Industry-wide standardization enabling cross-operator functionality

This decoupling strategy allows for greater agility and efficiency while preparing the organization for broader ecosystem participation.

AI Integration: Three Key Trends

Embedded AI

The integration of artificial intelligence directly into products and services is accelerating. From ERP software to product catalogs, embedded AI is making systems more robust, automated, and accessible. Tele2 has embraced this trend, with more than half of their code now written with automated assistance, allowing developers to focus on integration and higher-value tasks.

Seamless Observability

The historically fragmented space of system observability is being transformed by AI. Rather than storing logs for reactive problem-solving, AI-enhanced observability enables action-oriented decisions based on real-time insights. This capability is becoming increasingly critical as networks grow more complex.

Cloud Strategy Dilemmas

Telecommunications providers face ongoing decisions regarding on-premises, private cloud, public cloud, country cloud, or sovereign cloud deployments. With increasing regulation around data processing and sovereignty, these decisions have significant implications for how telcos structure their technology stacks.

Focus Areas for AI Implementation

Tele2's AI strategy centers on three priority areas:

1. Productivity Enhancement - Providing modern tools to increase developer productivity and code quality

2. Core Business Improvements - Applying AI to product and service development

3. Foundational Enablers - Ensuring proper data structure and knowledge base organization to maximize retrieval-augmented generation (RAG) capabilities

Sustainability as a Competitive Advantage

Tele2's recognition by Time magazine and Statista as Sweden's most sustainable company (and 37th globally) demonstrates how environmental responsibility can align with technological advancement. For European telcos, sustainability isn't just about compliance—it's becoming a core business differentiator.

Future-Proofing the Telco Organization

Hyper-Personalization with Data Sovereignty

The path forward for telecommunications providers involves achieving hyper-personalized services while maintaining strict data sovereignty. This balance requires significant upskilling and reskilling of engineering teams—a priority as operators phase out legacy technologies like 2G and 3G.

Cloud-Native Expertise

Understanding containerized workloads and cloud-native architectures is essential for modern telcos. Without proper containerization, workloads cannot be easily moved between environments, creating long-term dependencies on specific platforms.

Security and Privacy by Design

Rather than treating security as an operational afterthought, forward-thinking telcos are embedding security, sustainability, and data governance directly into their design processes. This approach ensures that products and services are built with privacy and security as foundational elements.

Conclusion

The transformation of the European telecommunications landscape requires operators to balance legacy management with future-focused innovation. Tele2's journey demonstrates how a clear vision, consolidated architecture, AI integration, and sustainability focus can position a telco for leadership.

This article is based on insights from a presentation by Yogesh Malik, CTIO at Tele2 Group, delivered at Network X 2024.

Human Insight, Summarised with AI.