This article was first posted by Constantine Polychronopoulos on LinkedIn
On every front – from content and media, to consumer and enterprise IoT, the Fourth Industrial Revolution, 5G and soft-radio transmitters, sustainable development, and network virtualization (the core themes framing events at MWC2017) – operators face intense competition to deliver relevance and value to subscribers. The key consideration in all of these areas is in knowing where to begin. It’s also about knowing where to end what has gone before.
The conundrum was well articulated in a Reuters blog: “Big telecom operators…are set to reinvent themselves as internet players to escape the industry’s straight-jacket of low growth.” Many are already well advanced with reinvention. The predominant goal is to reclaim the value that lies within their network assets. Monetization has been elusive so far, but that could all be set to change.
Some say that 5G will be the tipping point between the old and the new: “The mobile workforce will benefit, businesses will benefit, and it will help to realise the potential of the Internet of Things,” says Computer Business Review . The article further identifies the hurdles that MNOs will need to overcome to exploit the potential of 5G: “The problem with 5G is that it requires new infrastructure and new technology, which is good for those building it, but time consuming and costly for everyone else, unless the path is a software focused one.”
In its ‘Telecommunications Industry Outlook 2017’, Deloitte highlights the Internet of Things as a key focus in the year ahead. To meet new demands from customers, at pace:
“operators will be moving away from proprietary, hardware-based network equipment to software-based network functions with technologies such as software defined networking (SDN) and network function virtualisation (NFV). This shift should allow them to manage their networks more efficiently and effectively, and be more responsive to changes in consumer preferences.”
My colleague, Honoré Labourdette, further explores the IoT challenges and opportunities in her blog.
I’d suggest that NFV is a necessary and probably exclusive route to the future that MNOs need to be evaluating, if not adopting already. New customer trends and demands, and overwhelming pressure from the enterprise to help deliver competitive advantage provide a compelling rationale.
Consider the old ways of effecting changes in the network, akin to turning a super-tanker around. The old model would involve many detailed stages of testing and qualification in advance. It would require up-front CAPEX for hardware and software (proprietary solutions) which would then probably not be utilized for a year while the market demand caught up. What relaxed times these were; when innovation was measured in years, not months or weeks.
Market demand now dictates speed of response from MNOs, while exploiting new business models and market opportunities require agility in provisioning capabilities and services. It’s a highly competitive market where waiting means missing out. Demands for multimedia content, HD and 4K video, and even VR and AR games, expect to be met quickly. Network operators have to be able to provision for new services quickly, to scale resources as needed, and to turn around in the same way a speedboat does – not a tanker.
Many operators are in a position to embrace NFV, by leveraging the experience of their IT departments. Many IT teams have adopted virtualisation through SDDC, VDI, etc and these teams can advise and guide network operations teams in their transition to NFVI. Significant CAPEX and OPEX savings may also result from IT and network consolidation.
Every MWC over the last 10 years has given high profile to new devices. Smartphones are getting smarter. The sociological and cultural impact of ever-more capable hardware is that its users are getting more sophisticated and demanding too. Some would say the converse is true, that a proportion of smartphone users are simply afflicted with an insatiable desire for immersion in alternative realities.
That the desire is insatiable, however, is the crux of the matter. Therein lies the potential. Investment in NFVI is today more compelling than ever. I predict there will not be another MWC like 2017 where MNOs appeared as…MNOs. There will be new trends and VR enabled devices, players and innovations, but MNOs will project a new “persona”, one that may start looking awfully similar to the likes of AWS, Google, Netflix, Apple and IoT solutions providers.
Mobile Network Operators might never be the same. They show every sign of not allowing OTT players to cannibalize their networks or soak up monetization opportunities that they can now respond to dynamically.
Posted on behalf of Constantine Polychronopoulos