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Exploring the benefits of digitalisation – Telecoms.com

Exploring the benefits of digitalisation – Telecoms.com



Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece freelance Technology Journalist Kate O’Flaherty looks at how digital services based on virtualized networks are set to benefit mobile operators and MVNOs.

At a time of fierce competition coupled with declining revenues, mobile operators and MVNOs are digitising their businesses to boost efficiency and offer better services to customers. According to a World Economic Forum and Accenture report, digital transformation in the telecoms sector has the potential to unlock more than $2 trillion in value over the next decade.

Fuelled by network functions virtualisation (NFV), this transformation is already starting to happen. Efficient use of the network in combination with analytics allows services to be offered dynamically to customers. At the same time, it is forcing a change in business models, with areas such as the Internet of Things (IoT) starting to emerge as new battle grounds.

It is resulting in multiple opportunities to innovate, but there are challenges as operators and MVNOs digitise their businesses. For example, cyber security is a concern as networks are virtualised, because it widens the surface for attack. There can also be technical barriers when implementing networks, while new ways of working such as DevOps require cultural change inside the business.

But experts point to multiple benefits for mobile operators and MVNOs, if they get their digitalisation strategies right. Indeed, NFV is already enabling agility when provisioning services, says Gabriele Di Piazza, VP Products and Solutions, Telco NFV Group, VMware, citing the example of software defined wide area networking (SD-WAN). “It took weeks in the past, and now you can provision on a screen in a few minutes.”

It is with this in mind that the move to virtualised networks is accelerating, with many of the big operators already pushing ahead in their trials and deployments. Carriers are now trying to work out how they will monetise soon-to-launch 5G – which is based on these virtualised networks.

According to Ian Hughes, Analyst at 451 Research: “Mobile operators are upgrading their infrastructure in preparation for 5G. They now need to work out how to partner to take advantage of the benefits.”

It’s a challenge for large operators, but in the meantime, nimble MVNOs could use cloud infrastructure to launch new services, says Carsten Brinkschulte, CEO at Core Network Dynamics. He points out: “With no expensive legacy infrastructure weighing them down, MVNOs are well-positioned to leapfrog mobile operators and jump straight to the public cloud to run their core networks and other network components.”

This also opens the door to other markets, he says. “By controlling critical elements such as the evolved packet core (EPC) themselves – including user authentication and handling data traffic – MVNOs can differentiate and gain a first mover advantage in new, fast-growth markets such as IoT and private LTE.”

Secure networks

The move to virtualisation also brings with it the ability to better control networks. Although the shift away from physical networks raises concerns about hacking, NFV provides the ability to move security functions such as encryption or firewalls from purpose-built hardware onto virtual servers. “This means greater control, agility and connectivity across the network, keeping costs down,” says Conrad Mallon, Chief Network Architect, SSE Enterprise Telecoms.

Virtualisation creates new ways of thinking about security, Pierre Bichon, Consulting Engineer EMEA at Juniper Networks says. “Securing the network with physical appliances is very efficient but relatively static and you need to decide where you apply security. Virtualised networks allow you to do it from anywhere.”

This could become especially important in IoT, he says, pointing out that large fleets of devices that must exist in the field for years are currently very difficult to secure. “Today, IoT is creating the need for a new way to address security,” he explains. “It comes from systems that do not have the processing power to have a firewall or virtual firewall, so the idea is to implement security in the network, as close as possible to the devices.”

There are also multiple opportunities beyond security. At a time when customer churn is high, artificial intelligence (AI) is having a major impact by allowing providers to optimise virtualised networks and provision services more effectively.

AI is also being used more broadly in customer services. Outside NFV, this is seeing the implementation of real-time chat and voice bots to automate and augment traditional agent-to-customer interactions, says Omar Javaid, Chief Product Officer, Vonage.

Solutions such as these can be use by MVNOs and operators to increase efficiency and improve customer service. And several mobile operators have launched their own offerings, such as Vodafone’s TOBi and Telefonica’s Aura. But Javaid says it’s important to ensure bots are seamlessly integrated across all channels.

Barriers to digitalisation

The benefits of digitalisation are clear, but there are still challenges to be overcome before the area can be fully utilised by the telecoms industry. Mallon thinks several barriers are slowing down operator progress: “Slow design processes make transformation projects a faraway reality, and rigid legacy IT systems often make updates or overhauls complicated.”

Meanwhile, at a technology level, says Phadke: “These new technologies are often based on an open source philosophy and utilise collaborative development. This creates interoperability challenges.”

At the same time, the new operating model is “very different from what we see today”, says Phadke. “As it’s software driven, it’s dependent on automation, analytics and AI.”

Cultures are having to change too.  “How do you bring organisations together to create a DevOps-type business model?” asks Phadke. “We are starting to see a merge of design, engineering and IT and this is a challenge.”

But organisations are starting to accept this. “There is recognition that you need an operational and people mind set change” says Di Piazza. “Now, you are blending the world of IT and networks –  and combining skills over three decades based on how you provision, launch, sell and market technology.”

There is no doubt the move to virtualised networks and digital services is one of the biggest changes the telecoms industry has seen. But once the issues are ironed out, operators and MVNOs using their networks can take advantage of a whole range of dynamic services.

And this moment could even come sooner for MVNOs than for the operator giants. Because they can launch solutions based on cloud infrastructure, MVNOs can be among the first to offer their own disruptive digital services.

Meet with the key MVNO leaders from around the world at the MVNOs Series events – including the MVNOs Asia and MVNOs North America.






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