Telecom evolution is evident as the industry constantly transforms to meet the ever-changing demands of customers, both enterprises and consumers. What was previously an expensive and rationed communication means has now progressed to operate more efficiently, provide more value and offer new services.
Shaping how we use telecoms today, various telecom industry players accelerated their transformation to digital by adopting modern, scalable systems and more agile ways of working.
For operators, digitization is a key driver of profitable growth along with solid strategies for 5G, fiber rollout and sustainability. Now, customers want better bandwidth, durability, range and speed. This can be fulfilled through modernization and continuous innovation.
The importance of telecom evolution is undeniably highlighted since the pandemic, as connectivity continues to underpin the extensive efforts of realizing a digital economy. Remote or hybrid environments, virtual interaction and online transactions are also on the rise, driving the need for a solid connection.
To meet these requirements, telcos are placing digital innovation at the core of their strategies. According to McKinsey, digital transformation can yield over a 30% increase in gross profit for telecom operators.
Without a doubt, telecom has been a massive force for connecting people and economies – from the telegraph in the 1840s to the current 5G revolution – and is now a major innovator in its own right.
Even if telecom companies must remain competitive to survive in the market, the industry at large is based on interconnected networks and technological collaboration. The underlying investments done by telcos, particularly during the pandemic, made their operations resilient and responsive in the best way possible.
Internet service providers (ISPs), mobile virtual network operators (MVNOs) and software providers have been expanding their niche in the market, joined by independent tower companies (towercos), fibercos, and other technology giants.
The telecom evolution made the industry landscape bigger and more integrated. Nevertheless, telecom operators continued to lead other companies in the industry in terms of the absolute value they created between 2016-2021. As per BCG’s study, T-Mobile US emerged on top, generating $97 billion in additional market value within the five-year period.
Software and Automation
The physical aspects of the network still exist but the softwarization trend is increasingly on the rise. With cloud adoption being considered by the majority of telecom players, the software makes more flexible, dependable and modern network solutions.
From being an expensive, restrictive and monopolized sector, telecom has become a commodity that can be built into applications. Value-added services on super apps or easy-to-use APIs enable low-cost telecom services.
Another form of telecom evolution nowadays is adopting AI to improve network planning and operations. Using AI and extensive network probes ensures that operators deploy networks in the best way possible, and helps prevent and handle outages.
Whether it’s AI running contact centers or voice and SMS cloud communication APIs, innovation in telecom brings a lot of benefits. One of which is driving capital efficiency through analytics. Using automated and advanced analytics, operators can run simulations to prioritize capital spending across a portfolio of projects, allowing greater transparency and quicker decision-making. Applying these principles to a 5G rollout or RAN optimization will reduce time-to-market (TTM) and expenses.
The demand for private networks – where digitalization and automation are unleashed by the growth of 5G – also forces telecom networks to become more distributed. New and dynamic edge data centers power critical functionality and allow data access points and transfer seamlessly by being closer to the end customer. This also results in reduced latency and a surge in IoT applications and use cases.
The need to support this software and automation growth for telecom evolution will change the demand patterns and motivate telcos to upgrade their models. Convergence between telecom and computing is intensifying and it won’t slow down as years go by.
From CSPs to DSPs
The goal of CSPs lately is to become digital service providers (DSP). By exposing their network into on-demand consumable services, they strive to offer flexible, quick provisions, along with tailored quality of service and service level agreements that can cope with the promise of enhanced mobile broadband and low latency.
In this context, automation is mandatory, as it is needed to dynamically manage and orchestrate all the services at such a volume and complexity whilst at the same time coordinating a multitude of data and technical domains.
By 2025, 80% of MNOs are expected to automate at least 40% of their network operations. Companies will transform internally to share responsibilities between IT and networks teams and implement organization-wide automation use cases.
In the telecom evolution journey from CSP to DSP, many network operators today have orchestrated network and IT domains, but few have the capability to orchestrate end-to-end (E2E) services given the fact that physical network functions still coexist with both non- and cloud-native virtual machines. On top of this mixed ecosystem, 5G NSA is believed to be the norm for the next couple of years, with network slicing and tailor-fit connectivity still yet to improve.
5G will support the migration of a business model from CSP to DSP, where the latter intends to expose their assets via API to provision and monetize innovative services. In parallel, automation is the foundational pillar to tackle the challenge of increased complexity of changing into self-operating business models and investment constraints.
In fact, tier 3-5 CSP clients in automation and orchestration have experienced roughly 400% ROI over the past five years.
The existing market for communications APIs – such as video, voice and SMS – is currently growing at 30% annually and projected to reach $22 billion by 2025. For Ericsson, global APIs provide a new material growth opportunity will allow developer communities to create applications for any 5G-connected device. Its acquisition of Vonage will enable accessing network capabilities in an open, intuitive, and programmable ways via global APIs.
Seeing great progress with frontrunner CSPs, Ericsson aims to launch the first 5G network APIs in the coming year.
On the other hand, telcos cited accelerated service delivery and time to revenue, as well as improved customer experience and loyalty as the benefits of implementing MEF-standardized APIs for the automation of B2B interactions between service providers.
Companies like AT&T, Verizon, China Unicom Global Limited, Colt Technology Services, HGC Global Communications, Lumen, Orange, PCCW Global, Sparkle, and TELUS have already implemented MEF Lifecycle Service Orchestration (LSO) APIs.
“The leading global service providers are collaborating to build an emerging business ecosystem of automated networks that supports the rapid delivery of digital services across multiple providers and reduce friction in connecting enterprise users to cloud applications,” said Nan Chen, President, MEF.
DISH Network is also deploying the first standalone, cloud-native and autonomous 5G network via AWS, leveraging its global infrastructure footprint, native services and on-demand scalable resources. This can impact telecom evolution from the disaggregated nature of a cloud-native 5G Core and RAN network functions.
Adding Cisco’s 5000 Series Enterprise Network Compute System (ENCS) to its virtual network services (VNS) portfolio for enterprise customers, Verizon enables customers to replace traditional network devices and functions, such as routers, firewalls, and switches. The Cisco ENCS compute platform is optimized to provide virtual network functions (VNFs) that can be managed and orchestrated from a central location.
In the wholesale arena, DE-CIX explained that network automation offers the answer to simplifying the art of connecting within and between networks. The automation of interconnection ensures easy, flexible, secure and cost-efficient access to enterprise resources.
By using the DE-CIX API – based on the IX-API which DE-CIX developed in collaboration with other interconnection industry giants – services can be provisioned and consumed across different networks, flexibly and on demand.
NTT also announced partnerships with ServiceNow to simplify and accelerate the adoption of private 5G through an AI-enabled end-to-end workflow automation platform, and Swimlane to scale its security operations via a low-code automation platform.