The evolution of connectivity providers is upon us, and they are entering into new ecosystems that include a larger network of vendors, hyperscale cloud providers and even satellite communication enablers.

Connectivity has expanded its capacity exponentially, empowering capabilities and technologies that underpin a whole set of services and use cases for multiple industries in different ways.

Having said that, telecommunications has become the cornerstone for businesses, governments, individuals and communities to easily connect and share information. In this digital era, the connectivity provider’s role in society becomes inevitable and indispensable. Demand is ramping up quickly, with hyperscalers progressively innovating and looking into addressing the needs of the future. Along with this, satcom stakeholders are also boosting growth and contributing to the seamless and reliable service offerings needed by B2B and B2C customers alike.

It is a must to understand who are the players that will influence how the connectivity provider of the future will look like, as they will be at the heart of the digital revolution that’s been ongoing, and will remain unstoppable in the long run.

Build and Partner With Hyperscalers

Consisting of internet exchange points (IXPs), data centers and cloud computing, middle-mile infrastructure is essential for connectivity. Hyperscalers like Amazon Web Services (AWS), Microsoft Azure and Google Cloud are reshaping traditional telco value chains by offering not only data storage but on-demand infrastructure, competitive cost, maintenance and advanced big data technologies.

For CSPs, the growing influence of hyperscalers can represent significant market opportunities once they strategically align with them. 

According to Gartner, the three leading hyperscalers have announced nearly 50 strategic deals with Tier 1 CSPs worldwide, offering their readily available worldwide infrastructure footprint and developer ecosystem. With this in mind, by 2025, the majority of enterprise IT investments are expected to be directed toward the public cloud.

The 5G infrastructure landscape is also bound to increase tenfold in the next three years. In line with this, hyperscalers are starting to supply their own 5G solution platforms—l private 5G and packet core— however, their go-to-market strategy is still primarily partner-led with telecom vendors fulfilling their part in the overall telco stack.

To ensure both near-term and long-term telco cloud success, CSPs will need to evolve their existing relationships with hyperscalers to employ a build-and-partner strategy. Without a doubt, hyperscalers are expected to become more involved in the telecom industry as operators migrate their networks to the cloud.

An example of this is Verizon revealing an Edge Discovery & Quality of Service (QoS) API proof of concept with AWS that delivers the ability for customers to deploy low latency, high-bandwidth applications across a variety of emerging Industry 4.0 use cases.

AT&T's decision to outsource its 5G core network to Microsoft Azure is also a landmark decision and provides an example of how hyperscalers will position itself to support telecom networks.

Maximizing the cooperation between telcos and hyperscalers, according to an analysis, when telcos develop their cloud business, they can employ multi-cloud, cloud and network convergence as well as PaaS/SaaS strategies to unlock the full potential. Moreover, hyperscalers already own and operate the largest networks in the world, and the next build-out phase is the mobile core, far edge and access domains.

With a huge room for competition and collaboration, telcos and hyperscalers working together would spawn growth across the global digital market. Telcos should provide orchestration capabilities while offering the flexibility of choice to customers that can be accentuated with hyperscalers’ competence in enterprise data ingestion, security, business analytics and AI.

LEO for Inclusive, Extended Coverage

Low-Earth orbit (LEO) satellites blanketing the Earth deliver affordable service to handheld devices and are being promoted as a solution for remote areas. In context, an LEO satellite can operate between 200 and 2,000 km from Earth’s surface, and being smaller in size than traditional ones, these machines are very compact and are suitable for various industrial applications. These include Earth observation, logistics, scientific missions, remote industrial business, defense customers and emergency response, among others.

LEOs are providing important backhaul transmission services and have proven to be a useful backup when terrestrial systems are damaged or disasters disrupt the Internet network.

Companies such as SpaceX, OneWeb, Amazon, and Telesat, are pioneering to launch of large constellations of LEO satellites.

As the LEO-based industry matures over the next few years, factors such as advances in satellite and Internet technologies, miniaturization, and rapidly decreasing launch costs, coupled with government funding or subsidies, are driving this market’s growth.

One of the known use cases of LEO satellites nowadays is broadband connectivity in aviation. Commercial airlines will soon have another option for in-flight connectivity (IFC) with Intelsat securing a global distribution partnership with OneWeb. Reportedly, the latter has delayed the planned start date for its Ku-band LEO satellite-based inflight connectivity service to early 2024.

Another use case is maritime communications. Between ships and LEO satellites, cloud solutions and remote control applications have more potential to enable autonomous vessels, improved IoT in maritime and real-time monitoring of operations.

Additionally, a fundamental integration of cellular- and satellite-based communications at the physical layer from day one is key to the commercial success of LEO-based satellite communications in 6G.

Clearly, the growth of LEO adoption is looking positive. In 2022, there were about three to four launches made, consisting of 50 satellites per deployment launch, and in 2023, it is expected that at least 1,800 to 2,400 new LEO satellites will come online.

LEO satellite subscribers are forecasted to reach over 2 million in 2023 while the global number of LEO satellites will reach more than 30,000 by the end of the decade.

In the digital era, reducing latency by a factor of 15 to 40 milliseconds puts LEO operators ahead of the competitive curve.

In the coming years, more LEO satellite systems will be launched and more capabilities will become available, pushing the race to deploy LEO satellite constellations to be more competitive. This will require multi-stakeholder cooperation to deliver inclusive connectivity as no single government or company can bridge the digital divide on its own.

How Connectivity Demand Will Grow

Linking everyone is no longer enough, as ITU aims for universal and meaningful connectivity across borders and reduced coverage and usage gaps. Thus, for the 2020-2030 decade, the possibility for everyone to enjoy a safe, satisfying, enriching, productive, and affordable online experience, becomes mandatory.

The convergence of networks holds great possibilities for bandwidth, efficiency, security, and flexibility with various connectivity players targeting to achieve these.

As both Wi-Fi and cellular continue to develop ever-increasingly comparable capabilities, we can expect to see each of them aid the other through their complementary strengths and become a converged, user-transparent unified platform.

Indeed, the digital transformation in this decade is demanding more from the evolved connectivity ecosystem composed of multi-cloud, edge, 5G, and IoT technologies, to name some. From reachability to rich connectivity, CSPs must work on carrying out connectivity in a sustainable and frictionless manner.

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