Chapter I

Reinventing Telefónica

Using artificial intelligence (AI) to transform a vast, over 90-year-old company

Sometimes it’s easy to spot a revolutionary thinker.

While other heavyweights at the 2017 Mobile World Congress talked tech in suits, Chema Alonso donned a worn “daredevil” T-shirt to announce a bold move.

During the mobile industry’s foremost conference, Alonso committed to completely transform the way Telefónica engages its customers. The over 90-year-old telecommunications company, one of the largest in the world, would harness the power of Microsoft AI technology to help reinvent itself.

“We wanted to create something without looking at our competitors,” says Alonso, Telefónica’s Chief Data Officer. “We wanted to build what makes sense for our business, for our customers.”

And Telefónica’s assessment of what customers want? Intuitive technology that allows people to access the content they love, simply by using their voice.

For decades, people have been forced to learn and adapt to new technologies that are continuously advancing and changing. Empowered by Microsoft, Telefónica believes that technology should instead adapt to the needs of people. Using AI they have successfully created a more natural way for their customers to engage their services.

“AI and cognitive intelligence are the most disruptive technology of all time,” says Alonso. “It can transform society as a whole and enrich people’s lives.”

Building Blocks


Telefónica is a crucial piece of Spain’s telecommunications history. Launched in 1924 as Compañía Telefónica Nacional de España (CTNE), the company was essential in expanding and modernizing the Spanish telephone network.

Today, Telefónica is a Madrid-based telecommunications giant, connecting over 350 million customers in 17 countries.

Operator of CTNE (Compañía Telefónica Nacional de España) with microplast..
1 / 7
Telefónica’s building on Gran Vía, Madrid, at its completion. (1929).
2 / 7
Underground telephone network (1926).
3 / 7
Installation of long-distance lines (1925).
4 / 7
Inauguration of telephone service with the United States. (1928).
5 / 7
Linesmen with façade cable (1926).
6 / 7
First “pre-paid” telephone (tokens). (1928).
7 / 7

“You’re talking about a company with almost 100 years of history,” says Alonso. “And we decided to change our vision from the physical world to the digital world. We needed something to control this data … so we could start to transform into a data-centric company.”

To start their transformation, Telefónica needed to store massive amounts of data, sort through the information and hone in on what was relevant to consumers.

“Telefónica analyzed these different data sources and defined the architecture for a consolidated data estate, setting the foundation for an intelligent platform,” says David Carmona, Microsoft’s General Manager for AI Marketing. “Relevant data is fundamental for relevant AI. We are excited to partner with Telefónica to bring the benefits of data and AI to their customers, and transform the telecommunications industry.”

Until recently, Telefónica was built on three distinct platforms. The first, the physical platform, includes its vast networks, data centers and other infrastructures spanning multiple countries.

The second platform includes the IT systems that manage and connect these physical assets, while the third platform encompasses a robust array of digital products and services for consumers, including TV, as well as cloud, security and other mobile services.

“The strategy was to transform Telefónica into a data-centric company,” says Alonso. “This would be our fourth platform.”

After evaluating available cloud, AI and cognitive technologies, Telefónica chose Microsoft AI as a technological partner to help develop its next platform, one that is infused with AI.

“Microsoft AI provided what we needed to go in that direction,” says Alonso. “Without the help of Microsoft, we wouldn’t have been able to incorporate artificial intelligence into Telefónica.”

Building Relationships


In addition to better understanding customers, Telefónica wanted to be a part of people’s digital lives.

“We have to make all new technology with our clients in mind,” says Alonso. “We have to ask ourselves, ‘How do they use our technology in their daily lives? That is where we need to focus our work.”

“Telefónica wanted to combine imagination and innovation. We worked closely with their teams to provide very involved support through every phase of the process,” says Pablo Benito, Global Business Director of Microsoft Iberica. “With Microsoft’s tools, they created easy, natural interactions with customers and highly personalized services.”

During development, Telefonica used Microsoft’s tools to generate and validate prototypes quickly. That helped the team solve problems, meet a series of demanding deadlines, and seize opportunities to reduce development cost and effort.

After defining Telefónica’s ambitious new vision with the help of Microsoft, Alonso returned to the Mobile World Congress in February 2018 to launch Aura, Telefónica’s service supported on their fourth platform.

An artificial intelligence-powered digital assistant, Aura has been launched in six countries — Argentina, Brazil, Chile, Germany, Spain and the UK — truly transforming the way customers interact with Telefónica.

Customers can turn on the TV, ask about their bill, and access other content and services, all by asking Aura in real-time through multiple channels, including a home device, mobile app, or a social channel such as Facebook Messenger.

Movistar Home reinvents communications in the home with Aura.

“We committed to changing our relations with our clients, and we have done what we said we would,” says Alonso. “Microsoft has been key to creating Aura, which is now the future of our business.”

Customers can turn on the TV, ask about their bill, and access other content and services, all by asking Aura in real-time…

With the launch of Aura, Telefónica became the first organization in the telecommunications industry to provide customers the possibility of managing their relationship with the company based on cognitive intelligence.

Now an industry leader in innovation, Telefónica wants to give consumers more than new technology, it wants to make their lives easier. If you want to engage with certain devices or accounts, all you have to do is ask Aura — and your data is completely secure.

Chapter II

Full Transparency

Meet the team and tech that built Aura