Making predictions for 2021 in such a chaotic world might look bold, if not quite foolish. But there are some clues that allow us to foresee what the near future of the telco industry might look like when it comes to network evolution. Three key emerging realities will likely determine what we can expect in the coming months:
1. Cloud service providers (CSPs) are looking to reduce OpEx and CapEx more than ever. Knowing that telecoms revenues in 2020 are expected to be 3.4% lower than the year before (Analysys Mason) and that an overall economic crisis will put more pressure in their top-line, operators need to find way to generate savings, the network being their biggest expenditure, and one for which CSPs will seek extreme efficiency gains.
2. CSPs broadly manage to keep their level of service during lockdown, despite the high change in traffic patterns. But they still need to improve customer experience, to protect their revenues.
3. Finally, with the expansion of 5G and a continuous rise in traffic and device usage, networks are becoming increasingly complex to manage. This makes the need to simplify network operations ever more urgent.
These three needs drive all of the predictions that follow.
#1: Operators cannot ignore OSS integration and cloudification anymore
Operators’ operational support systems (OSSs) often remain an obstacle to evolving networks faster, most of them having been designed and built in the 2G/3G era. This needs to change radically, especially when it comes to deploying 5G.
Marc Serra,
CMO & Head of
Strategy & Development
Infovista
By design, moving toward virtualized networks requires some technological agnosticism and as much integration as possible. This will lead to the development of technologies that are fully open, API-capable, and support the interconnection of all OSS elements.
Additionally, operators are about to move their OSS to the cloud to become more agile while reducing their total cost of ownership (TCO). This way, they can “softwarize” their OSS, expanding it at low cost, making it horizontally scalable to deal with the promised network expansion, and ensure it is built on standard best practices that are easy and efficient to manage.
Such OSS transformation goes along with the adoption of Open RAN (radio access network) - or ORAN - technologies. A cloudified OSS dramatically eases the adoption of Open RAN, which, beyond its cost reduction promise, enables CSPs to diversify their vendor landscape and reduce dependency on some of their suppliers, helping in regions in which some vendors are banned.
A few operators have started to pave the way to this cloudification of the network. Rakuten, Elisa and DT are some of the most visible examples, each of them following specific paths and dealing with radically different backgrounds. But they all demonstrate how crucial network functions - such as planning, design, service assurance, troubleshooting and optimization - can now be cloudified.
#2: The zero-touch network is (finally?) on its way: the full network lifecycle gets automated
Since the early 2010s, the promise of SON (self-organized networks) has failed to deliver on expectations. This does not mean, though, that CSPs have stayed idle. For several years, there have been efforts to automate parts of the network lifecycle through specific use cases. These have paid off and are encouraging the industry to go further, with a recent study showing that half of CSPs intend to deploy or expand automated solutions within the next 12 months as a top priority.
The latest improvements of AI and machine-learning technologies, combined with cloud-native applications and the high pressure on network costs, lead automation to span the full set of network lifecycle activities. 5G is a prime example: by its very nature, it brings a substantial increase in network complexity and would hugely benefit from an optimized lifecycle, with minimal human intervention.
Disruptors in the industry - such as Rakuten in Japan, Dish in the US or Jio in India - have started their mobile networks from scratch in the 4G/5G era, with the big advantage being no legacy technology to support. They have leveraged not only the latest RAN technologies but advanced network automation to produce “GBs” at 40-50% lower cost than leading carriers. This is not going unnoticed by other operators, which are starting to prioritize automation, looking for more interoperability, as well as vendors which can offer integrated solutions.
#3: Consumers will eventually get 5G first
2021 will finally be the year when 5G devices become widely used. Following the lead of other manufacturers, Apple recently unveiled its iPhone 12. 5G smartphones are expected to represent 27% of all those shipped in 2021 (ABI Research). This is one hint among others that suggest that 5G monetization will start with the consumer rather than with businesses, as we initially thought.
In the consumer market, especially once lockdowns have been eased in response to a Covid vaccine, people will return to mobility, albeit with new habits and hobbies. Video will continue to drive the bulk of data consumption, but higher definitions will be demanded. Gaming has been booming in the past 12 months and its fans will continue to play outdoors, requiring really low latency and high download and upload speeds.
Finally, fixed-wireless access (FWA) technology, which aims to provide “fiber-like” connectivity at homes through 4G/5G, will scale, especially in suburban and rural areas.
All this may help counterbalance the uncertainities toward 5G within the Enterprise market, where the pandemic aftermath will be felt in many industries, some harder than others.
Efficiency gains to generate new revenue
By happening concurrently, these three trends will drive network evolutions that guarantee truly 5G experiences. Boosted by cloudified, automated and open network environments, CSPs give themselves the opportunity to launch new services, which will in turn enable easier monetization of these assets.
