Operationalising Open RAN: Design and deploy

Webinar: Operationalising Open RAN: Design and deploy

This webinar will take stock of where the industry is at with regards to Open RAN adoption, using data from STL Partners’ Telco Cloud Tracker, and experience from Red Hat and Tech Mahindra who have been trialling a multi-vendor Open RAN solution.

The session will seek to answer the following key questions:

  • ​What are the drivers behind adopting open RAN, compared to traditional RAN and virtual RAN? ​
  • What are the key steps in transitioning from vRAN to open RAN? How can open RAN integrate with existing RAN?​
  • What are the recommended underlying infrastructure considerations to build open RAN at scale on a cloud-native infrastructure?
  • What are the new security challenges to adopting open RAN and what can the ecosystem do to overcome these?​
  • Over what timeframe is it realistic to see large deployments of open RAN, and when can we expect to see the benefits of the economies of scale?

You’ll need to submit your name and email to access the webinar

Telco cloud will drive network evolution

One of the core value propositions of telco cloud platform providers is that they offer to deliver to telcos a standardised and open, horizontal telco cloud that will enable them to deploy and operate multi-vendor, cloud-native network functions using standard orchestration and automation tools.

The key element that is presently facilitating this is the open-source Kubernetes container orchestration platform. Similar to OpenStack, there are various ‘flavours’ of Kubernetes: for example, those of Red Hat (OpenShift), VMware (Tanzu), and each of the big three hyperscalers, AWS, Azure and Google Cloud. But the difference is that, in part because of its open-source character, Kubernetes remains sufficiently generic across all its flavours to ensure that CNFs deployed to Kubernetes can be delivered and distributed across multiple clouds that use different Kubernetes versions. Accordingly, Kubernetes is a driver of multi-cloud and hybrid cloud operations: enabling NFs to be distributed, scaled and orchestrated far more easily and flexibly across multiple environments and locations – although telcos may still, initially at least, require support from SIs or platform vendors to orchestrate their services across multiple Kubernetes instances. This standardisation potentially eliminates much of the operating cost telcos have hitherto expended on private telco cloud development, and on testing, validation and integration of NFs to their private clouds. One of the vendors we spoke to even suggested that telcos should go further by using the hyperscalers as the development department for their NFs themselves. The respondent cited the example of AT&T and gave a positive assessment of AT&T’s divestment of its Network Cloud (private telco cloud) to Microsoft Azure. This included, according to our respondent, teams and activities involved in developing AT&T’s 5G Standalone (SA) core.

Network evolution through cloudification

Source: STL Partners

This could look very much like a cloud take-over of the telco network. But what counteracts this risk is telcos’ evolution of their own cloud-native operations and software practices, particularly CI/CD and DevOps. In our survey, vendors and telcos alike stressed how imperative it was for telcos to develop and manage their own CI/CD pipeline. Why is this? It is because this is the means for telcos to assert control and ownership over the development of their network capabilities and innovative services even as the NF and infrastructure building blocks they are using are becoming more generic, open and common to multiple third-party clouds, including those of other telcos and hyperscalers. Even if the development of the telco cloud and of the CNFs deployed by telcos is outsourced to platform providers, hyperscalers and vendors, the mastery of these cloud-native operational processes by telcos can ensure that telcos are not just passive recipients and consumers of the cloud products and services of others.

After all, DevOps implies an interdependence of NF software development and operation. So it is not the case that telcos will simply operate what others have developed: in the cloud-native world, operating a network successfully implies continuous development of it – continually improving and adapting network capabilities so that they can cost-effectively serve the needs of customers and applications.

For more details please see our report Telco Cloud: Short-term pain, long-term gain?

STL Partners related research:

Telco cloud: short-term pain, long-term gain

Telcos have invested in telco cloud for several years: Where’s the RoI?

Over a number of years – starting in around 2014, and gathering pace from 2016 onwards – telcos have invested a large amount of money and effort on the development and deployment of their ‘telco cloud’ infrastructure, virtualised network functions (VNFs), and associated operations: long enough to expect to see measurable returns. As we set out later in this report, operators initially hoped that virtualisation would make their networks cheaper to run, or at least that it would prevent the cost of scaling up their networks to meet surging demand from spiralling out of control. The assumption was that buying commercial off-the-shelf (COTS) hardware and running network functions as software over it would work out less costly than buying proprietary network appliances from the vendors. Therefore, all things being equal, virtualisation should have translated into lower opex and capex.

However, when scrutinising operators’ reported financials over the past six years, it is impossible to determine whether this has been the case or not:

  • First, the goalposts are constantly shifting in the telecoms world, especially in recent years when massive 5G and fibre roll-outs have translated into substantial capex increases for many operators. But this does not mean that what they buy is more (or less) expensive per unit, just that they need more of it.
  • Most virtualisation effort has gone into core networks, which do not represent a large proportion of an operator’s cost base. In fact, overall expenditure on the core is dwarfed by what needs to be spent on the fixed and mobile access networks. As a ballpark estimate, for example, the Radio Access Network (RAN) represents 60% of mobile network capex.
  • Finally, most large telco groups are integrated operators that report capex or opex (or both) for their fixed and mobile units as a whole; this makes it even more difficult to identify any cost savings related to mobile core or any other virtualisation.

For this reason, when STL Partners set out to assess the economic benefit of virtualisation in the first half of 2022, it quickly became apparent that the only way to do this would be through talking directly to telcos’ CTOs and principal network engineers, and to those selling virtualisation solutions to them. Accordingly, STL Partners carried out an intensive interview programme among leading operators and vendors to find out how they quantify the benefits, financial or otherwise, from telco cloud.

What emerged was a complex and nuanced picture: while telcos struggle to demonstrate RoI from their network cloudification activities to date, many other benefits have accrued, and telcos are growing in their conviction that further cloudification is essential to meet the business, innovation and technology challenges that lie ahead – many of which cannot (yet) be quantified.

The people we spoke to comprised senior, programme-leading engineers, executives and strategists from eight operators and five vendors.

The operators concerned included: four Tier-1 players, three Tier-2 and one Tier-3. These telcos were also evenly split across the three deployment pathways explained below: two Pathway 1 (single-vendor/full-stack); three Pathway 2 (vendor-supported best-of-breed); and three Pathway 3 (DIY best-of-breed).

Four of the vendors interviewed were leading global providers of telco cloud platforms, infrastructure and integration services, and one was a challenger vendor focused on the 5G Standalone (SA) core. The figure below represents the geographical distribution of our interviewees, both telcos and vendors. Although we lacked interviewees from the APAC region and did not gain access to any Chinese operators, we were able to gain some regional insight through interviewing a new entrant in one of the major Asian markets.

Geographical distribution of STL Partners’ telco cloud benefit survey

 

Source: STL Partners

Virtualisation will go through three phases, corresponding to three deployment pathways

This process of telco cloudification has already gone through two phases and is entering a third phase, as illustrated below and as decribed in our Telco Cloud Manifesto, published in March 2021:

Phases of telco cloudification

Source: STL Partners

Effectively, each of these phases represents an approximately three to five-year investment cycle. Telcos have begun these investments at different times: Tier-1 telcos are generally now in the midst of their Phase 2 investments. By contrast, Tier-2s and -3s, smaller MNOs, and Tier-1s in developing markets are generally still going through their initial, Phase 1 investments in virtualisation.

Given that the leading Tier-1 players are now well into their second virtualisation investment cycle, it seems reasonable to expect that they would be able to demonstrate a return on investment from the first phase. This is particularly apt in that telcos entered into the first phase – Network Functions Virtualisation (NFV) – with the specific goal of achieving quantifiable financial and operational benefits, such as:

  • Reduction in operational and capital expenditures (opex and capex), resulting from the ability to deliver and run NFs from software running on COTS hardware (cheaper per unit, but also more likely to attract economies of scale), rather than from expensive, dedicated equipment requiring ongoing, vendor-provided support, maintenance and upgrades
  • Greater scalability and resource efficiency, resulting from the ability to dynamically increase or decrease the capacity of network-function Virtual Machines (VMs), or to create new instances of them to meet fluctuating network capacity and throughput requirements, rather than having to purchase and maintain over-specified, redundant physical appliances and facilities to guarantee the same sort of capacity and resilience
  • Generation of new revenue streams, resulting from the ability that the software-centricity of virtualised networks provides to rapidly innovate and activate services that more closely address customer needs.

Problem: With a few exceptions, telcos cannot demonstrate RoI from virtualisation

Some of the leading telco advocates of virtualisation have claimed variously to have achieved capex and/or opex reductions, and increases in top-line revenues, thanks to their telco cloud investments. For example, in January 2022, it was reported that some technical modelling had vindicated the cost-reduction claims of Japanese greenfield, ‘cloud-native’ operator Rakuten Mobile: it showed that Rakuten’s capex per cell site was around 40% lower, and its opex 30% lower, than the MNO incumbents in the same market. Some of the savings derived from automation gains related to virtualisation, allowing cell sites to be activated and run remotely on practically a ‘plug and play’ basis.

Similarly, Vodafone claimed in 2020 that it had reduced the cost of its mobile cores by 50% by running them as VNFs on the VMware telco cloud platform.

The problem is that the few telcos that are willing to quantify the success of their virtualisation programmes in this way are those that have championed telco cloud most vocally. And these telcos have also gone further and deeper with cloudification than the greater mass of the industry, and are now pushing on with Phase 3 virtualisation: full cloud-native. This means that they are under a greater pressure to lay claim to positive RoI and are able to muster data points of different types that appear to demonstrate real benefits, without being explicit about the baseline underpinning their claims: what their costs and revenues would, or might, have been had they persisted with the old physical appliance-centric model.

But this is an unreal comparison. Virtualisation has arisen because telco networks need to do more, and different things, than the old appliance-dependent networks enabled them to do. In the colourful expression of one of the industry experts we interviewed as part of our research, this is like comparing a horse to a computer.

In the first part of this report, we discuss the reasons why telcos generally cannot unequivocally demonstrate RoI from their telco cloud investments to date. In the second part, we discuss the range of benefits, actual and prospective, that telcos and vendors have observed from network cloudification, broken down by the three main pathways that telcos are following, as referred to above.

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Table of Contents

  • Executive Summary
  • Telcos have invested in telco cloud for several years: Where’s the RoI?
    • Virtualisation will go through three phases, corresponding to three deployment pathways
    • Problem: With a few exceptions, telcos cannot demonstrate RoI from virtualisation
  • Why do operators struggle to demonstrate RoI from their telco cloud investments to date?
    • For some players, it is clear that NFV did not generate RoI
    • It has also proved impossible to measure any gains, even if achieved
  • Is virtualisation so important that RoI does not matter?
  • Short-term pain for long-term gain: Why telco cloud is mission-critical
    • Cost savings are achievable
    • Operational efficiencies also gather pace as telcos progress through the telco cloud phases
    • Virtualisation both drives and is driven by organisational and process change
    • Cloud-native and CI/CD are restructuring telcos’ business models and cost base
  • Conclusion: Telco cloud benefits are deferred but assured
  • Index

Related research

Report: Pursuing hyperscale economics

Pursuing hyperscale economics: What, why and how telcos can do it

In this report, we evaluate whether telecoms operators can realistically pursue hyperscale economics by adopting some of the hyperscaler technologies and practices, and if so, how?

Enter your details below to download a copy of the Pursuing hyperscale economics report.

As telco operators move to advanced, data intensive services such as 5G, they are looking to transform their network infrastructure to provide the greater flexibility, scalability and speed of innovation required to support their business needs. Increasingly, they have started to evaluate the role that cloud-native architectures and disaggregation can play within their networks to enable ‘hyperscale economics’.

This refers to the ability to separate the rate at which your capabilities scale and meet increasing demand, to the way that your cost base grows as a result.

This means an increase in capabilities is (mathematically) fundamentally different from the resources and costs needed to do so (exponential for the former in relation to linear trajectory for the latter). With the need to support growing demand across telco networks, telco operators are exploring how they can pursue hyperscale economics; nevertheless, the roadmap to achieving this still remains unclear.

 

1&1 Drillisch AG: forging ahead with Open RAN

1&1 Drillisch AG: forging ahead with Open RAN

The greenfield German telecoms operator 1&1 Drillisch AG announced plans to speed up the deployment of its own Open RAN technology, aiming to provide at least 1,000 5G base stations by 2022. But it will probably take until the beginning of 2023 before the network can go live and existing customers can be migrated to its own infrastructure.

Open RAN still waiting to ramp up

In recent years, operators across the globe such as Vodafone, Turkcell, Telefonica have made announcements about their progress in deploying open RAN, but much of this progress is still at the relatively early stages.

Our analysis of the market to date indicates that it is still early days for open RAN and even virtualised RAN in terms of live deployments. Although there was a flurry of activity in 2020 for open RAN with small scale trials, some of which continued to carry live traffic, that has seen a slower period in 2021. Focus on trials, integration, operational models and other key aspects has meant that there was a lack of commercial deployments in 2021. However, significant potential progress and planned deployments are expected in 2022 not only from 1&1 but also from the likes of DISH, Verizon, Vodafone UK, MTN and others.

We dive into more detail and analysis in the latest update to our Telco Cloud Deployment Tracker, see our accompanying report here ‘Telco Cloud Deployment Tracker: Open RAN deep dive’.

A greenfield opportunity

1&1 Drillisch AG is a German telecommunications service provider has set its eyes on becoming Germany’s fourth mobile network operator. The firm is 75% owned by United Internet and already has 10 million customers, and provides both mobile and broadband services, via leasing agreements with Telefonica Germany (O2), Vodafone Germany and other network service providers.

1&1 acquired 5G spectrum in 2019 as part of its pledge to become a fully-fledged mobile network operator. The operator is now committed to building out its own nationwide fully virtualised greenfield 5G network using Open RAN technology. By doing so, it will become the first European operator to commit to building a complete Open RAN-based network and add fuel to the growing fire raging under the Open RAN sector.

1&1 has established goals of building 1,000 sites by the end of 2022 and serving at least 25% of the German population by 2025 and 50% by 2030 with its greenfield network. These goals are part of its commitments made as part of its agreement with the government when it purchased needed 5G spectrum, which it hopes to accelerate and exceed according to CEO of 1&1’s parent company United Internet.

A collaborative approach

Rakuten Communications Platform (RCP) to play key role

1&1 is working with Rakuten and NEC to build out the new network and plans at least $10 billion in investment this decade. According to 1&1, Rakuten will take over the installation of the active network equipment and will also be responsible for the overall performance of the 1&1 mobile network. It will make use of the spectrum 1&1 acquired for just more than €1 billion in mid-2019, namely two frequency blocks of 5 MHz in the 2 GHz band and five frequency blocks of 10 MHz in the 3.6 GHz band.

1&1 will leverage the Rakuten Communications Platform (RCP) with its access, core, cloud and operational solutions as well as Rakuten’s partner network. In this context, Rakuten will also provide its own developed orchestration software so that the 1&1 network can be operated in a highly automated manner. Rakuten says its technology offers flexibility and lower costs, including up to 30% cheaper operational costs than with traditional networks.

Learning from previous experience for speed

Michael Martin, CEO of 1&1 Drillisch, is confident that Rakuten Symphony can leverage its experience in deploying open RAN in its own network in Japan for Rakuten Mobile and ‘take the learnings into [their] Germany Open RAN 2.0 network’. This not only includes the deployment but also the ongoing operational aspects with greater use of automation and analytics for more intelligent networking.

AT&T is using part of Rakuten’s cloud-based network solutions to design and simplify network deployments. But 1&1 is the only company that has signed a greenfield deal to build a network from scratch with Rakuten Symphony, the Amin-led enterprise to sell Rakuten’s technology internationally.

“1&1 is going to build a network in Germany that I think is going to be superior architecturally to what exists in the marketplace today.”

Tareq Amin, CEO, Rakuten Symphony & Group CTO, Rakuten Group

With Rakuten’s capabilities, experience and acquisitions of Altiostar and more recently Robin.io, the partnership ultimately enables 1&1 to step up to the challenge to compete with the likes of Deutsche Telekom, Vodafone Germany and Telefonica Germany.

For more information on our analysis of Rakuten in the wider industry context, see our recent report, Why and how to go telco cloud native: AT&T, DISH and Rakuten.

Author: Xinyi Fang is a Consultant at STL Partners, specialising in telco cloud and edge computing.

Telco Cloud insights pack

This 24-page document will provide you with a summary of our insights from our virtualisation research and consulting work:

  • Overview of Telco Cloud deployments worldwide
  • Benefits of telco cloud: state of the industry
  • Deployment approaches: implications and challenges
  • How STL Partners can support you

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What is SASE?

What is SASE?

Distributed users and applications need a network that can support them dynamically and securely. SASE aims to bring structure to this challenge with a standardised network and security architecture.

What does SASE mean?

SASE (pronounced ‘sassy’) stands for Secure Access Service Edge. SASE is a cloud-based networking platform designed to secure decentralised networks that connect users, applications and devices from anywhere.

How does it work?

Network perimeters have expanded over the past few years, further accelerated by the shift to hybrid working. Alongside this, networks have become increasingly cloud-centric, with users needing to access cloud-based applications off premise and from a variety of devices. These three factors have highlighted a glaring flaw in use of centralised appliance-based security systems. Employees collaborating from home, rather than from the office, need to access their cloud-hosted applications and tools. This traffic, under traditional network architectures, is likely to travel via a virtual private network (VPN) to a data centre or office HQ first. By connecting from remote locations, and often on their own devices, employees are unknowingly expanding their organisation’s vulnerable attack surface. Therefore, SMBs and enterprises need to secure and gain enhanced visibility and control over these expanding networks. This is to ensure that their employees can work both efficiently and securely across network domains.

Enter SASE. Despite its naming, the architecture draws together more than just security. It takes a holistic approach, incorporating network, security, and device and identity management elements. Specifically, the framework looks to leverage WAN technologies, such as SD-WAN, and combine them with security. SASE security functions are Next-generation firewall-as-a-service, Secure Web Gateway, Cloud Access Secure Broker and Zero Trust Network Access.

SASE

To accommodate for the shift to a more decentralised network approach, security is placed at the cloud edge. This means that wherever a user is connecting to the internet, they can maintain network security and protect their data.

What are the benefits?

There are three key benefits to SASE for enterprises:

  • Secure decentralised network: first and foremost, the framework provides enterprises with peace of mind that their employees can connect to applications from anywhere, without a significant rise in attack risk. Central to this is SASE’s zero-trust network access principle – provision of access to specific resources and continuous authentication reduces available attack surface. Furthermore, this reassurance may encourage organisations to move more application hosting to the cloud.
  • Reduce latency: given that SASE allows users to connect directly to the cloud by hosting security functions there, rather than on premise or on device, workloads do not have to make two hops to connect to the cloud. Access can be inspected directly at the cloud edge and not at a datacentre before moving to the cloud. For heavy workloads, such as video (surveillance) and collaboration (e.g. Microsoft Teams, Zoom), reduction of latency is critical to ensure a smooth end-user experience.
  • Reduced IT cost and complexity: to secure their network estates and users connecting to the cloud, enterprises have had to use a patchwork of security solutions. This tessellation of solutions has brought about considerable cost and overheads related to their management. Borrowing concepts from the world of edge computing, SASE aims to bring security and user authentication access closer to where it is required. This model also enables far greater scalability, as the need to connect new users and locations to a centralised datacentre will disappear.

Who are the key players?

There are two key types of players in the SASE space, looking to exploit the latent opportunity at hand.

  • Security specialists: this group will be well positioned to offer services to enterprises, as network security and identity services have been their bread and butter
  • Examples: Z-Scaler, Palo Alto, McAfee
  • Full suite vendors: this group can offer security and next generation network services (e.g. SD-WAN) to provide and end to end solution, making them an appealing proposition for organisations looking to procure technology from a small handful of trusted partners.
  • Examples: Cisco, Nokia, Fortinet, Versa Networks, VMware

Conclusion

Next generation and cloud focused networks continue to bring benefits to consumers and enterprises alike. They also have raised questions, primarily around security when data and applications are being hosted and accessed on public clouds. SASE is a big step towards allaying concerns by creating a clear path for organisations to bring together their new and existing network investments in a dynamic and unified manner. Although it is unlikely that many enterprises have a SASE framework in place today, the industry hype around SASE is palpable. Gartner estimates that 60% of enterprises will have implemented or have a clear pathway to implementing SASE to secure their networks by 2025. One such pathway may be use of SSE (Security Service Edge), an emerging framework that covers the security aspects of SASE, working independently of SASE’s network elements. Time will tell whether SASE can continue to provide answers in an ever-expanding network ecosystem.

Author: Patrick Montague-Jones is a Senior Consultant at STL Partners, specialising in a range of topics across the telecommunications value chain

Telco Cloud insights pack

This 24-page document will provide you with a summary of our insights from our virtualisation research and consulting work:

  • Overview of Telco Cloud deployments worldwide
  • Benefits of telco cloud: state of the industry
  • Deployment approaches: implications and challenges
  • How STL Partners can support you

Just click on the button below to request your free pack.

 

Read more about Telco Cloud, Cloud Native, NFV & SDN

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Telco Cloud Deployment Tracker: Open RAN deep dive

Telco Cloud: Open RAN is a work in progress

This report accompanies the latest release and quarterly update of STL Partners ‘Telco Cloud Deployment Tracker’ database. This contains data on deployments of VNFs (Virtual Network Functions), CNFs (cloud-native network functions) and SDN (Software Defined Networking) in the networks of the leading telcos worldwide. In this update we have added some additional categories to the database to reflect the different types of virtualised / open RAN:

  1. Open RAN / O-RAN: Fully open, disaggregated, virtualised / cloud-native, with CU / DU split
  2. vRAN: Virtualised CU/DU, with open interfaces but implemented as an integrated, single-vendor platform
  3. Cloud RAN: Single-vendor, virtualised / centralised BU, or CU only, with proprietary / closed interfaces

Cloud RAN is the most limited form of virtualised RAN: It is based on porting part or all of the functionality of the legacy, appliance-based BU into a Virtual Machine. vRAN and open RAN are much more significant, in both technology and business-model terms, breaking open all parts of the RAN to more competition and opportunities for innovation.

Accordingly, the report presents data on only open RAN and vRAN deployments however a granular analysis of each category of RAN deployment can be carried out using the Telco Cloud Tracker tool.

Access our online Telco Cloud Deployment Tracker tool here

Download the additional file for the full dataset of Telco Cloud deployments

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Open RAN and vRAN deployments, 2018 – 2022

Open-RAN-Deployments-Apr-2021-STL-Partners

Source: STL Partners

Open RAN and vRAN

Both Open RAN and vRAN are virtualised (with the exception of NTT DoCoMo as outlined in the report), but ‘open RAN’ implies full disaggregation of the different parts of the RAN (hardware, software and radio), and open interfaces between them. By contrast, vRAN incorporates the open interfaces but is generally deployed as a pre-integrated, single-vendor solution: hardware, software and radio supplied by the same vendor.

To date, there have been significantly more open RAN than vRAN deployments. But vRAN is emerging as a potentially competitive alternative to pure open RAN: offering the same operational benefits and – in theory – multi-vendor openness, but without the overhead of integrating components from multiple vendors, and a ‘single neck to choke’ if things go wrong. Deployments in 2020 were mostly small-scale and / or 4G, including trials which continued to carry live traffic after the trial period came to an end.

The stark contrast between 2021 and 2022 reflects a slight hiatus in commercial deployments as work intensified around integration and operational models, trials, performance optimisation, and cost economics. However, major deployments are expected in 2022, including greenfield networks 1&1 Drillisch (Germany) and DISH (US), Verizon, Vodafone UK, and MTN (Africa and ME).

Scope and content of the Tracker

The data in the latest update of our interactive tool and database covers the period up to March 2022, although reference is made in the report to events and deployments after that date. The data is drawn predominantly from public-domain information contained in news releases from operators and vendors, along with reputable industry media.

We apply the term ‘deployment’ to refer to the total set of VNFs, CNFs or SDN technology, and their associated management software and infrastructure, deployed at an operator – or at one or more of an operator’s opcos or natcos – in order to achieve a defined objective or support particular services (in the spreadsheet, we designate these as the ‘primary purpose’ of the deployment). For example, this could be:

  • to deploy a 5G standalone core
  • to launch a software-defined WAN (SD-WAN) service
  • or to construct a ‘telco cloud’ or NFV infrastructure (NFVi): a cloud infrastructure platform on which virtualised network services can be introduced and operated.

The Tracker is provided as an interactive tool containing line-by-line analysis of over 900 individual deployments of VNFs, CNFs or SDN technology, which can be used to drill down by:

  • Region where deployed
  • Operator
  • Technology vendor
  • Primary purpose
  • Type of telco cloud function deployed
  • …and more filters

Telco Cloud Trial Deployment Tracker

Take a look at the trial of our interactive tool with live, commercial deployments of VNFs, CNFs and SDN technologies worldwide

Previous telco cloud tracker releases

Each new release of the tracker is global, but is accompanied by an analytical report which focusses on trends in given regions from time to time:

 

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Trial telco cloud deployment tracker

About the Telco Cloud Deployment Tracker

The Telco Cloud Deployment Tracker is our comprehensive database of live, commercial deployments of virtualised and cloud native network functions (VNFs and CNFs) and SDN technologies by leading telcos worldwide. It builds on an extensive body of analysis by STL Partners over the past eight years on NFV and SDN strategies, technology and market developments. The Tracker is provided as an interactive tool containing line-by-line analysis of over 900 individual deployments of VNFs, CNFs or SDN technology, which can be used to drill down by: • Region where deployed • Operator • Technology vendor • Primary purpose • Category of NFV/SDN technology deployed • …and more filters Below is a limited trial version of the tracker that allows you to look at the overall trend of deployments over time, the breakdown of deployments by primary purpose and how each category changes on a yearly basis. You can also select and filter by primary purpose using the dropdown menu on the right.

To access the full version of our interactive Telco Cloud Deployment Tracker, click the button below

Trial Version

Our accompanying analytical reports

We also publish accompanying analytical reports with each release and update of our Telco Cloud Deployment Tracker. Each report focuses on trends in specific regions or domain areas, in addition to global findings.

Our data

The data is drawn predominantly from public-domain information contained in news releases from operators and vendors, along with reputable industry media. In addition to these mainly public-domain deployments, there are many non-publicised deployments that are inevitably omitted from the Tracker. However, the ever-growing ‘Tracker’ database now constitutes a considerable body of research that offers a reliable snapshot of the overall market and the main trends in the evolution of telco cloud. As the Tracker contains details only of deployments in live, commercial telco networks (either completed or in progress), this provides a useful corrective to the hype of some vendors’ pronouncements about agreements with operators, which often relate only to collaboration arrangements and preliminary trials, rather than commercial roll-outs. The one exception to this rule is a limited set of data on some of the current live network trials of open and / or virtual RAN (vRAN). The reason for making this exception is the very high level of interest currently in open RAN.

More information on the scope and content

Here, the term ‘deployment’ to refer to the total set of virtual network functions (VNFs), CNFs or SDN technology, and their associated management software and infrastructure, deployed at an operator – or at one or more of an operator’s opcos or natcos – in order to achieve a defined objective or support particular services (we designate these as the ‘primary purpose’ of the deployment). For example, this could be: • to implement a virtualised mobile core • to launch a software-defined WAN (SD-WAN) service • or to construct a ‘telco cloud’ or NFV infrastructure (NFVi): a cloud infrastructure platform on which virtualised network services can be introduced and operated. In terms of the telcos included, we limit the database mainly to Tier-1 international and national telecoms operators, along with national fixed and mobile operators in smaller markets. For subsequent updates, we may expand the range and types of service providers included, because telco cloud is opening up opportunities for new players to provide cloud- and CNF-based connectivity and related services that are competing strongly with classic telco services.

Telco Cloud Deployment Tracker

The following dashboards showcase the most up-to-date insights from STL Partners’ Telco Cloud Deployment Tracker. Our tool is interactive and contains different high-level analysis and underlying data of what operators have done (and plan to do) globally in telco cloud. In-depth analysis can be found in our accompanying reports.

Any deployments with ‘Null’ as the deployment year below are ‘In progress’ or ‘Pending’ deployments. See explanatory notes and definitions at the bottom of the page.

Summary of total deployments

Deployments by operator

Deployments by vendor

 

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Definitions and explanatory notes

Deployments and deployment numbers

  • We define as a ‘deployment’ the implementation of a given VNF and any named sub-components, or of a whole NFV or SDN solution including several explicitly referenced VNFs and components.
  • A deployment can also be the roll-out of a VNF and supporting infrastructure across multiple subsidiaries of an operator group, which are counted as a single deployment, even though there are multiple instances of it.
  • In our dashboards, we show both the deployments and all of the components involved, including information on the vendor and vendor solutions where known.
  • In our ‘Detailed dataset’ worksheet, we have numbered the deployments from 1 to 748 to make this distinction between deployments and deployed components clearer. The numbering is determined by alphabetical order of region where the operator is based, and then by operator names and chronological order of deployments.

Dates

  • Dates are presented in the form ‘Jan-20, ‘Feb-20’, etc. Dates showing the month of December (e.g. Dec-19) mean ‘by the end of 2019’, unless we have added a comment stating explicitly that the month of December of that year was the deployment / go-live date. In all other cases, where we have shown a December date, this means that the precise date / month of the deployment is not known, but we have information or are confident that the deployment went live by the end of that year.

Operator names

  • The names of operators – shown in the dashboards and column C of the ‘Detailed dataset’ worksheet – are those of the operator group parent company, where applicable. If the local operating subsidiary carrying out the deployment has a different name from the parent company, this is shown in column H in the worksheet.

Country where operator based vs country where deployment is carried out

  • In our dashboards, a deployment is assigned to a given region (e.g. Asia-Pacific (APAC)) if it occurred in that region or if it was carried out on a global basis by a telco based in that region. Consequently, the total deployments for Asia-Pacific also include those carried out by or at local subsidiaries of telco groups based outside Asia-Pacific.
  • In column D of the ‘Detailed dataset’ worksheet, we show the country where the operator or operator group is based. If the country where the deployment has taken place differs from the location of the company’s head office or domestic market, we show the country where the deployment was carried out in column F.

Non-complete deployments

  • Deployments that have not yet been completed, or not been announced as completed, we categorise as either ‘in progress’, ‘planned’ or ‘retired’ (these are marked as ‘Null’ in our dashboards on the ‘Year implemented’).
  • ‘In progress’ means that the deployment is ongoing; ‘planned’ means the deployment was announced but we are not sure how far it has progressed; and ‘retired’ means that the deployment was completed and went live, but the solution has now been taken out of commercial operation.
  • We continue to show retired deployments for the purposes of historical trends analysis.

Our regional key:

APAC: Asia Pacific (including Central and Southern Asia)
EUR: Europe
NAM: North America (including the Caribbean)
ME: Middle East
LAM: Latin America (including Central America)
AF: Africa

What is the RIC, and why should CSPs care?

What is the RIC, and why should CSPs care?

As CSPs move towards O-RAN, the RAN Intelligent Controller (RIC) will be a key component in enabling transformation. In this article we explore what the RIC is, how far along the industry is with adoption, and how the RIC will benefit CSPs.

The RIC is a platform that brings intelligence to the RAN

The RIC stands for the RAN Intelligent Controller, which is an open platform that brings intelligent control and automation to the RAN (radio access network) and has been cited as a key part of O-RAN architecture.

RIC

The RIC is important because it brings intelligent decision making to the RAN using AI and ML. One way to think of this is that if the RAN were a human body, the RIC would be the brain. It provides intelligence and programmability to the RAN, and enables the onboarding of third-party applications. These applications can use intelligence from the network to orchestrate, optimise and assure operations in the RAN. They can also enable new use cases, such as assurance for edge computing.

However, CSPs have yet to adopt the RIC as deploying the RIC and unlocking its capabilities rely on establishing open interfaces in the RAN.

There are two forms of the RIC

There are two types of RIC, as defined by the O-RAN Alliance:

  • The non-real-time RIC
    • This is where rApps are hosted.
    • It is typically located centrally in the radio access network.
    • It enables non-real-time actions that take over one second.
  • The near-real-time RIC
    • This where xApps are hosted.
    • The near-real-time RIC is typically in more distributed parts of the RAN, within telco edge cloud or regional clouds, but can be located centrally.
    • It enables actions that take between 10 milliseconds and one second to complete.

The two RICs have different primary functions, but can communicate with each other

The non-RT RIC is a part of operators’ Service Management and Orchestration (SMO) Framework, so can be viewed as the controller for ‘bigger picture’ activity in the RAN. It provides instructions to the Near-RT RIC to ensure that RAN workloads are orchestrated to meet customer requirements. These orchestration and management-like capabilities are why many view the Non-RT RIC as an evolution of the SON (self-organising network).

RIC

On the other hand, the Near-RT RIC is responsible for the execution of critical RAN functions.

An example of the two RICs in action is network slicing in the RAN:

  • The Non-RT RIC is responsible for continuously monitoring slice usage.
  • If an SLA violation is detected, the non-RT RIC makes configuration changes and updates the xApp in the Near-RT RIC that is responsible for RAN slice assurance.
  • The xApp then makes configuration changes to CUs and DUs, then feeds back to the rApps (in the non-RT RIC) to confirm SLAs are now being met.

Other examples of xApps and rApps include:

  • Quality of experience (QoE) optimisation
  • SLA assurance
  • Local indoor positioning
  • Traffic steering
  • Congestion management

Adoption of the RIC will be tied to CSP O-RAN timelines

RIC adoption will be closely tied to O-RAN adoption, which could be 2 to 4 years away. However, some CSPs are already exploring how they could leverage the RIC. They see the non-RT RIC as being the more mature opportunity that will be addressable in the next year or two, whereas the near-RT RIC is seen as being further out.

Vendors are jumping on this opportunity, and some are already bringing out RIC solutions. The tendency is for vendors to only focus on one type of RIC (real-time or non-real-time), although some vendors such as VMware are offering both.

Other companies that have announced RIC plans include:

  • Non-RT RIC: Ericsson, Amdocs and Mavenir
  • Near-RT RIC: Nokia, Sterlite and Altiostar
  • Both Non-RT RIC and Near-RT RIC: VMware, Juniper

The RIC can bring cost saving and monetisation opportunities

The RIC provides an opportunity for CSPs to drive efficiencies in the RAN. It can also bring new innovation, and enable new use cases or enhance existing ones through greater network intelligence and resource assurance and control. This could ultimately bring CSPs cost savings, improved quality of service for customers and new sources of revenue generation.

To summarise:

  • The RAN Intelligent Controller is a platform that brings intelligent control and automation to the RAN.
  • It is a key part of O-RAN architecture.
  • There are two types of RIC: non-real-time and near-real-time.
  • CSPs have not yet adopted the RIC as it relies on open interfaces first, but vendors are beginning to bring out solutions.

Author: Miran Gilmore is a Senior Consultant at STL Partners, specialising in telco cloud, private networks and edge computing.

Telco Cloud insights pack

This 24-page document will provide you with a summary of our insights from our virtualisation research and consulting work:

  • Overview of Telco Cloud deployments worldwide
  • Benefits of telco cloud: state of the industry
  • Deployment approaches: implications and challenges
  • How STL Partners can support you

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Making network slicing a reality: how should telcos transform?

Webinar: Making network slicing a reality: how should telcos transform?

Network slicing promises to provide new ways for telcos to monetise their networks by enabling innovative, tailored solutions for customers in key industry verticals.

However, to maximise value from this, telcos will need to take steps now to prepare their technology, organisation, and revenue models.

In this webinar, we explore the network slicing monetisation opportunity, discussing key questions such as:

  • When will network slicing bring real monetisation potential to telcos?
  • How will policy, orchestration and BSS need to evolve to enable this?
  • What organisational changes will be required to prepare?
  • Which next steps should telcos take to begin this transformation?

You’ll need to submit your name and email to access the webinar

Disaggregation of the telco industry and value chain

Disaggregation of the telco industry and value chain: What does this mean and look like?

The increasing shift to cloud native and disaggregation of telco networks opens up the telecoms landscape to new types of players in both the infrastructure and software layers that impact the nature of telcos’ business model and role within the ecosystem. In the first part of this article series, we explore the shift towards disaggregation in the industry and what’s driving it.

What do we mean by telco disaggregation?

Disaggregation means separating out the processes, services and functions of technology, the economy and society and recombining or coordinating them to better meet changing needs. In our ‘Why and how to go telco cloud native: AT&T, DISH and Rakuten’ report, we define telco disaggregation as the breaking up of telecoms technology, organisations, value chains and processes into their component parts and re-engineered. This could mean separating out network functions (from their underlying hardware but also into their component parts), changing organisational structures, or changing what it means to be a telco with new business models.

Disaggregation can manifest in three different aspects of the telco business:

  1. Technology
  2. Organisational structure and operating model
  3. Value chain and business model

Telco disaggregation

Why now?

The telecoms industry is undergoing the process of ‘computerisation’, i.e. digitisation, softwarisation, virtualisation (NFV) and cloudification. The ‘telco disaggregation’ is inherently part of this evolution. With the breaking up of processes, systems and functions, this means that telcos are facing increasing competition from new types of players across different areas of the value chain. New types of telecoms service providers are starting to emerge in a huge variety of different shapes, sizes and backgrounds. Therefore, the overall competitive landscape can include players such as:

  • Computing, IT and cloud players
  • More specialist and agile network providers
  • And vertical-specific actors that deliver connectivity services to vertical-specific applications.

We explore this in more detail in our ‘The new telcos: A field guide’ report.

Why it matters: Opportunity or threat?

Connectivity services are increasingly becoming commoditised. Though telcos are continuing to invest in improving the connectivity services they provide to customers, they are effectively competing in saturated markets where it tends to be difficult to differentiate their propositions and maintain revenue growth. In some markets, growth is even stagnating. Value is shifting to the services that run on top of the network, which introduces a host of new types of competition (including the big internet players) but this is also ultimately where telcos should also invest.

At the same time, as telco networks are being softwarised, virtualised and cloudified, networks are also moving from static, monolithic architectures to becoming more open, disaggregated and flexible. This means that networks are also becoming increasingly visible, programmable and ‘instructible’, which opens up new opportunities to innovate and leverage network intelligence to enable better application outcomes.

However, given that competitive threats are coming from multiple directions, which puts telcos at risk of being relegated to connectivity providers, telcos need to be able to innovate in a much more agile way than they have been able to before in order to compete against new competitors. Telco disaggregation can help separate and unlock very different operating and business models, which can fundamentally allow telecoms operators to address key opportunities without one part of the business impacting the ability of another to innovate.

In our next few articles, we will dive into different operator case studies in the context of technological, organisational and business model disaggregation. Within these dimensions of disaggregation, we will also explore the following questions:

  • Which part of the value chain should telcos focus on?
  • What roles can and should telcos play?
  • How will this impact the telco business? (e.g. telco financials, core IP etc.)

Author: Reah Jamnadass and Yesmean Luk are Senior and Principal Consultants at STL Partners respectively, specialising in the strategic implications of telco cloud on telecoms operators’ role.

Telco Cloud insights pack

This 24-page document will provide you with a summary of our insights from our virtualisation research and consulting work:

  • Overview of Telco Cloud deployments worldwide
  • Benefits of telco cloud: state of the industry
  • Deployment approaches: implications and challenges
  • How STL Partners can support you

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5G Standalone vs Non-standalone: deployment models

5G Standalone vs Non-standalone: Deployment models

Operators are exploring the practicalities of launching a 5G service. From a technology perspective, they must make some key decisions with regards to their 5G roadmap: non-standalone 5G core first or direct to standalone 5G. This decision is informed by a number of factors, such as speed to market, cost, required capabilities. In this article, we explain the difference between the two architectures and bring them to life with some live operator case studies.

The 5G era is upon us

5G, the next generation of mobile connectivity, has been hyped for many years as heralding a quantum leap in wireless network speeds and bandwidth. Many operators globally sense the opportunity that this presents and are eager to explore a route to deploying 5G services. Consumers are using more data hungry applications like 4K live streaming and online gaming. Enterprises are transforming and optimising the way they operate through greater use of IoT, digital twins, AI/ML, and accompanying use cases such as predictive maintenance, and environment condition monitoring. First mover advantage may well be key from an operator perspective to capture market share within these customer groups.

5G Standalone vs Non-standalone

Several operators globally are engaged in acquiring spectrum, network planning and deploying commercially, at scale. However, most operators are in relatively early stages, trialling technology and running PoCs. Many countries, including those in Asia Pacific and Latin America, have yet to auction or allocate spectrum licenses. Operator 5G programme advancement is dependent on three key factors: regulation (whether the regulatory body has made spectrum available), technological readiness and organisational readiness. In planning their 5G strategy, operator technology teams must decide whether to deploy a non-standalone core first for 5G and leverage existing 4G LTE network assets, or move straight to deploying a standalone core (SA). Ultimately, the launch of 5G SA core is a question of “sooner or later” – some key considerations are laid out below:

Standalone

Non-Standalone
Definition
  • 5G network with dedicated equipment and network functions
  • 5G radios coupled with cloud-native, service-based core network functions
  • These network functions are completely virtualised and cloud-native
  • 5G network supported by 4G core infrastructure
  • 5G radios coupled with LTE Evolved Packet Core (EPC)
  • Network functions running on dedicated appliances, in some cases
Pros
  • Full 5G capabilities available (eMBB, URLLC, MMC)
  • New features, functionality and services enabled (e.g. network slicing)
  • More flexible architecture and dynamic linking of network functions
  • Faster roll out – can act as stepping stone as part of the transition to SA deployment
  • Maximise utilisation of existing network assets
  • Lower level of investment required
Cons
  • Higher level of investment required
  • Organisational training required for 5G core and service operation
  • Less flexible architecture
  • Limited incremental 5G functionality 
Example Deployment

DISH

Country: USA 

Launch year: 2021

Primary vendor(s): Nokia

Rationale: Capabilites

Dish decided to leadpfrog NSA as a potential stepping stone to a full standalone 5G network. The cloud-native player is building an Open RAN-based network from scratch, looking to run its service from the public cloud. Over time they are expanding national coverage to offer the broadest possible coverage – target is to increase coverage to 70% by end of 2023.

Deutsche Telekom

Country: Germany

Launch year 2019

Primary vendor(s): Huawei, Ericsson

Rationale: Broad coverage and speed to market

Deutsche Telekom has taken the other approach, opting to leverage their 4G/LTE stack to deliver 5G services. This has allowed them to deliver a service that is perhaps not as fast as pure 5G, but achoeves the purpose of providing broader national coverage to a much larger proportion of the population faster. The evolution to an SA core is also currently underway but the timing will be dependent on the availability of use cases for 5G SA.

The information above is contained in our Telco Cloud Deployment Tracker. The tracker gives a detailed insight on which operators are deploying 5G networks, who they are partnering with, at which part of the technology stack. The table above also draws insight from a short article we published, detailing Tier-1 operator approaches to 5G, including Telefonica, Telia and Vodafone.

As highlighted in the table above, NSA deployments cannot benefit from the full range of capabilities offered by an SA deployment. While NSA deployments build on LTE’s ability to offer enhanced Mobile Broadband, they cannot offer the same bandwidth, low latency or reliability offered by a pure 5G deployment.

However, the decision is not necessarily binary – SA or NSA. NSA can bridge the gap between 4G and fully-fledged 5G. In practice, many operators have started their 5G roll out journey with an NSA deployment, and a view to graduation to a standalone deployment within a few years. This strategy, when employed correctly, accelerates time to market with initial proposition to ensure they attract a good share of the market. Most commonly, the first service deployed is targeted at the consumer mobile market. This allows users to benefit from the enhanced speed, without requiring use cases that strain the network in terms of bandwidth and reliability.

In the coming months and years, operators will continue to drive their 5G programmes forward towards a standalone deployment to simplify their network operations and improve end-customer experience. One of the key standalone features that operators will look to leverage is network slicing. Network slicing will allow operators to create dedicated segments of the network to serve specific customers or use cases, with dedicated SLAs, policy control and quality of service. Each network slice will present an opportunity for operators to monetise their network differently to the current mode of operation. This is likely to be two to three years away for the majority of operators, however.

Looking forward

As 5G programmes accelerate, consumers and enterprises stand to benefit greatly from the enhanced connectivity options on offer. They will be have access to faster, more reliable and secure wireless connectivity than ever before. In some cases (e.g. manufacturing campus locations and smart cities), 5G may be used as a replacement for Wi-Fi or traditional high-capacity wired connectivity. The real challenge for operators will be in navigating the pace of change and in deciding how to transform (technologically and organisationally) to maximise value for themselves and their customers. Time will tell which operators will be able to rise to the challenge.

Author: Patrick Montague-Jones is a Senior Consultant at STL Partners, specialising in a range of topics across the telecommunications value chain

Telco Cloud insights pack

This 24-page document will provide you with a summary of our insights from our virtualisation research and consulting work:

  • Overview of Telco Cloud deployments worldwide
  • Benefits of telco cloud: state of the industry
  • Deployment approaches: implications and challenges
  • How STL Partners can support you

Just click on the button below to request your free pack.

 

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VNFs on public cloud: Opportunity, not threat

VNF deployments on the hyperscale cloud are just beginning

Numerous collaboration agreements between hyperscalers and leading telcos, but few live VNF deployments to date

The past three years have seen many major telcos concluding collaboration agreements with the leading hyperscalers. These have involved one or more of five business models for the telco-hyperscaler relationship that we discussed in a previous report, and which are illustrated below:

Five business models for telco-hyperscaler partnerships

Source: STL Partners

In this report, we focus more narrowly on the deployment, delivery and operation by and to telcos of virtualised and cloud-native network functions (VNFs / CNFs) over the hyperscale public cloud. To date, there have been few instances of telcos delivering live, commercial services on the public network via VNFs hosted on the public cloud. STL Partners’ Telco Cloud Deployment Tracker contains eight examples of this, as illustrated below:

Major telcos deploying VNFs in the public cloud

Source: STL Partners

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Telcos are looking to generate returns from their telco cloud investments and maintain control over their ‘core business’

The telcos in the above table are all of comparable stature and ambition to the likes of AT&T and DISH in the realm of telco cloud but have a diametrically opposite stance when it comes to VNF deployment on public cloud. They have decided against large-scale public cloud deployments for a variety of reasons, including:

  • They have invested a considerable amount of money, time and human resources on their private clouddeployments, and they want and need to utilise the asset and generate the RoI.
  • Related to this, they have generated a large amount of intellectual property (IP) as a result of their DIY cloud– and VNF-development work. Clearly, they wish to realise the business benefits they sought to achieve through these efforts, such as cost and resource efficiencies, automation gains, enhanced flexibility and agility, and opportunities for both connectivityand edge compute service innovation. Apart from the opportunity cost of not realising these gains, it is demoralising for some CTO departments to contemplate surrendering the fruit of this effort in favour of a hyperscaler’s comparable cloud infrastructure, orchestration and management tools.
  • In addition, telcos have an opportunity to monetise that IP by marketing it to other telcos. The Rakuten Communications Platform (RCP) marketed by Rakuten Symphony is an example of this: effectively, a telco providing a telco cloud platform on an NFaaS basis to third-party operators or enterprises – in competition to similar offerings that might be developed by hyperscalers. Accordingly, RCP will be hosted over private cloud facilities, not public cloud. But in theory, there is no reason why RCP could not in future be delivered over public cloud. In this case, Rakuten would be acting like any other vendor adapting its solutions to the hyperscale cloud.
  • In theory also, telcos could also offer their private telcoclouds as a platform, or wholesale or on-demand service, for third parties to source and run their own network functions (i.e. these would be hosted on the wholesale provider’s facilities, in contrast to the RCP, which is hosted on the client telco’s facilities). This would be a logical fit for telcos such as BT or Deutsche Telekom, which still operate as their respective countries’ communications backbone provider and primary wholesale provider

BT and Deutsche Telekom have also been among the telcos that have been most visibly hostile to the idea of running NFs powering their own public, mass-market services on the public and hyperscale cloud. And for most operators, this is the main concern making them cautious about deploying VNFs on the public cloud, let alone sourcing them from the cloud on an NFaaS basis: that this would be making the ‘core’ telco business and asset – the network – dependent on the technology roadmaps, operational competence and business priorities of the hyperscalers.

Table of contents

  • Executive Summary
  • Introduction: VNF deployments on the hyperscale cloud are just beginning
    • Numerous collaboration agreements between hyperscalers and leading telcos, but few live VNF deployments to date
    • DISH and AT&T: AWS vs Azure; vendor-supported vs DIY; NaaCP vs net compute
  • Other DIY or vendor-supported best-of-breed players are not hosting VNFs on public cloud
    • Telcos are looking to generate returns from their telco cloud investments and maintain control over their ‘core business’
    • The reluctance to deploy VNFs on the cloud reflects a persistent, legacy concept of the telco
  • But NaaCP will drive more VNF deployments on public cloud, and opportunities for telcos
    • Multiple models for NaaCP present prospects for greater integration of cloud-native networks and public cloud
  • Conclusion: Convergence of network and cloud is inevitable – but not telcos’ defeat
  • Appendix

Related Research

 

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Telco cloud – a key growth enabler of the Coordination Age

Telco cloud – a key growth enabler of the Coordination Age

The Coordination Age is coming

As we have set out in our company manifesto, STL Partners believes that we are entering a new ‘Coordination Age’ in which technological developments will enable governments, enterprises, and consumers to coordinate their activities more effectively than ever before. The results of better and faster coordination will be game-changing for society as resources are distributed and used more effectively than ever before leading to substantial social, economic, and health benefits.

A critical component of the Coordination Age is the universal availability of flexible, fast, reliable, low-latency networks that support a myriad of applications which, in turn, enable a complex array of communications, decisions, transactions, and processes to be completed quickly and, in many cases, automatically without human intervention. The network remains key: without it being fit for purpose the ability to match demand and supply real-time is impossible.

Historically, telecoms networks have been created using specialist dedicated (proprietary) hardware and software. This has ensured networks are reliable and secure but has also stymied innovation – from operators and from third-parties – that have found leveraging network capabilities challenging. But the Coordination Age requires more from the network than ever before – applications require the network to be flexible, accessible and support a range of technical and commercial options. The network must be able to impart actionable insights and flex its speed, bandwidth, latency, security, business models and countless other variables quickly and autonomously to meet the needs of applications using it. Telco cloud is the enabler of this future.

Telco cloud: a new approach to the network…

STL Partners has long argued that operator network-driven capital expenditure is not the means to growth. Instead, operators should shift resources towards operating expenditure which can be more easily redeployed where it is needed – proportionally more OpEx would enable operators to change direction quicker rather than being caught in ten-year capex cycles centred on the latest network generation.

Telco cloud is central to this shift to operating expenditure. We are not suggesting that network capex disappears. It is, and will, remain an integral part of the telecoms financial and operational model. But the implementation of a software-defined network enables operators to negotiate use-based licensing from vendors – they can enjoy the same reduction in risk and increased flexibility from their suppliers that other enterprises are seeking in their ICT solutions.

…a fundamental shift in what it means to be an operator…

The move to cloud native represents a fundamental shift in what it actually means to be an operator in the Coordination Age. It lies at the heart of a broader business model change in terms of how telcos operate, not only from a technology standpoint but more importantly in terms of culture, processes, decision-making, incentives and the overall organisation.

The new normal within the industry will be about how effectively operators can adopt continuous integration-continuous deployment (CICD) pipelines and build an innovation flywheel. Telco cloud is not just about technology, it is about changing the operating model, moving to a DevOps/CICD model that enables operators to pursue agile product/service development. Without this, the new flexible Telco cloud infrastructure is pointless because customers will not pay more for connectivity enabled by a Telco cloud network: they will only pay more for additional services. And these additional services require operators to move beyond connectivity and match the rapid innovation achieved by the internet players and other technology companies.

…and a driver for future telecoms differentiation and growth

Telecoms operators often talk about moving beyond connectivity: Telco cloud is the means of enabling this because the network behaves like and integrates with the applications that run on it. Operators that embrace telco cloud technologies and practices will have gained the skills required to successfully develop applications that are enabled by the network. Indeed, the ability to integrate applications with the network should become the telecoms industry’s fundamental competitive advantage. That is not to say operators shouldn’t open up their networks to third-party applications – they should – but their knowledge and expertise in network development means that their own applications should integrate more efficiently and effectively: they should perform better than those provided by ‘OTT’ players for whom the network remains an obstacle rather than an enabler.

Realising the telco cloud vision

 

Moving to telco cloud is challenging

While the rationale for embracing telco cloud is clear, there are three factors that are slowing the industry’s movement:

Different operator segments will take different paths

While the move to more virtualised networks may be inevitable, the end goal and the pathways for getting there can vary widely from operator to operator. The reality is that relatively few operators can themselves take on the risk of a pure ‘best of breed’ approach to telco cloud. The resources required to design, test, integrate, and manage an open ‘best of breed’ solution are too high for all but the very largest operators. Most players will need to compromise between the benefits and shortcomings of the old network model and those of the new.

While all telcos are different, we see at least three segments and associated telco cloud implementation models developing. No one model is right for all circumstances (or for all telcos): each is appropriate for the characteristics of that segment and each requires the telco to think about how it can best maximise the benefits of telco cloud while minimising implementation risks.

We outline three generic telco cloud implementation models below and some of the considerations for operators adopting each model.

At STL Partners, we see a clear rationale for telco cloud beyond more flexible, agile, cost-effective, OpEx-centric networks and operations. Telco cloud is also about enabling further telecoms differentiation and growth through application and use case-specific networking, and ultimately about creating technology, practices and organisations fit for the Coordination Age.

Many telco operators today are grappling with whether they should be driving progress in telco cloud more proactively or wait for the industry to coalesce (with industry standards, maturity of vendor solutions). The key questions that telcos should ask themselves are:

  1. What do you see as your core competencies and what value are you trying to provide as part of that?
  2. Recognising your key strengths and limitations, how willing are you to take risks in driving innovation yourself, rather than letting competitors and potential disruptors steal the lead?

Choosing a more cautious approach and failing to innovate is in itself a significant strategic risk and telecoms operators should recognise that moving too slowly can also be a risky strategy, and that their existing business model is under greater threat than they realise. This includes the risk of not realising who the competition is and shaping up to them, as well as the dangers of not being able to capitalise new opportunities arising from 5G.

For more information and the full Telco Cloud manifesto, please see download our report below

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What are operators’ strategies for 5G rollout

What are operators’ strategies for 5G rollout?

With demand for 5G continuing to grow, operators are racing to progress their rollout of 5G. In this article we explore the 5G rollout strategies of six different operators, and look at their goals for deployment of both standalone and non-standalone 5G over the coming year.

With demand for 5G continuing to grow, operators are racing to progress their rollout of 5G. In this article we explore the 5G rollout strategies of six different operators, and look at their goals for deployment of both standalone and non-standalone 5G over the coming year.

Telia

5G rollout: Telia first launched a public 5G network in Finland in 2019, followed by Norway, Sweden and Denmark in 2020. It now offers at least some coverage across all the countries it serves (Finland, Norway, Sweden, Denmark, Lithuania, Latvia and Estonia).

Initially Telia focussed on deploying non-standalone 5G (5G NSA), so as to maintain pace of development of networks. However, Telia recently launched its first 5G standalone (5G SA) core in Finland. This was the first commercially available 5G core network launched in the Nordics and Baltics region. It is now in the process of launching standalone 5G in Denmark, Estonia, Lithuania, Norway and Sweden. Telia worked with Nokia and Ericsson to deploy 5G RAN, but has awarded the contract for 5G SA core across these 6 countries solely to Nokia.

Telefonica

Telefonica has launched 5G in four key markets – Spain, Germany, UK and Brazil.

  • Spain: Telefonica has achieved 80% population coverage (across over 1,250 towns and cities).
  • Germany: Telefonica aimed to reach 30% population coverage by the end of 2021 (and was on track as of October 2021) and is now working towards the target of 50% coverage by the end of 2022.
  • UK: O2’s 5G network reaches customers in over 150 UK towns and cities. O2 is now focussed on densification to improve the quality of service for customers.
  • Brazil: Telefonica has rolled out 5G services in eight cities.

Because Telefonica invested heavily in its 4G networks, the company is using 4G LTE as part of its early introduction of new 5G capabilities. It has therefore largely deployed non-standalone 5G, although it announced in November 2021 that it plans to begin deployment of standalone 5G services in 2022. It has awarded the contracts to deploy its 5G SA radio networks to Ericsson and Nokia.

Vodafone

Vodafone first launched non-standalone 5G in 2019, and as of 2021 offered 5G services commercially in 12 countries across the EU including the UK, Germany, Italy, Spain and Ireland, reaching more than 142 million homes.

It is now continuing to expand its 5G offering, but has opted for a slower pace of rollout by focusing on 5G standalone technology. Vodafone Germany was the first operator to offer standalone 5G in Europe (from April 2021). The network provides coverage in 170 cities, and Vodafone Germany has set ambitious targets to extend this coverage. Ericsson and Nokia both provided equipment for the RAN and core.

In 2021 Vodafone also launched a commercial pilot of 5G SA in the UK (the UK’s first live deployment to test 5G SA at scale), and in parallel has deployed a 5G SA core pre-commercial network in Spain.

Deutsche Telekom

Deutsche Telekom is extensively rolling out its 5G offering both in Germany and across its host of subsidiaries worldwide, such as T-Mobile in the United States, where it deployed one of the first commercial standalone 5G networks in the world.

According to its website, DT Germany already offers 5G to 85% of the German population. This takes the form of non-standalone 5G, which is available in more than 60 cities, with the plan to cover 99% of the German population by the end of 2025. DT is also ready to launch standalone 5G, which it said would happen in 2022 at the latest, and currently has four 5G SA test sites in operation.

In the US, DT subsidiary T-Mobile stands out among operators because it was first to launch a nationwide standalone 5G network in August 2020. It partnered with Cisco and Nokia for the 5G core, and Ericsson and Nokia for the RAN. Although its 5G SA network doesn’t yet live up to the full potential of 5G, further speed improvements and the launch of network slicing are in the works.

T-Mobile already covers 308 million people with its Extended Range 5G set up (low-band 5G, which offers low data transfer speeds). T-Mobile is now focused on its midband Ultra Capacity 5G service, which covers over 200 million people.

AT&T

AT&T has so far only deployed non-standalone 5G, and is focused on strengthening its low-band, midband and high-band 5G rollout through 2022.

AT&T’s 5G network reaches more than 250 million people across more than 14,000 towns and cities in the United States. This is primarily through 5G via dynamic spectrum sharing (DSS). AT&T’s 5G service is generally split up into a ‘nationwide’ sub-6GHz and ‘5G Plus,’ which offers far higher speeds at the cost of a far more limited range. The ‘nationwide’ label, however, is something of a misnomer as there are still areas of the US which it is yet to cover. 5G Plus is currently only available in cities (38 in the US as of May 2021) and high-traffic indoor spaces (such as airports and sports arenas) but it expects to extend this coverage.

AT&T also planned to deploy the first 40 MHz of the 80 MHz C-band spectrum by the end of 2021. It will dramatically increase this effort across the next couple of years, and cover 70 to 75 million people across the United States with C-band by the end of 2022.

As far as standalone 5G is concerned, AT&T is still in the testing phase.

DISH

DISH is the only operator in the US to be building a greenfield 5G network. Starting from scratch without the burden of legacy equipment means it will be deploying a cloud-native, Open RAN-based 5G network (with Nokia’s equipment). Uniquely, DISH intends to be the first in the world to run its service from the public cloud, after committing to using AWS’s servers to control the 5G network.

DISH has been struggling to keep up with its timelines for deployment of 5G. It initially aimed to have one 5G market live before the end of 2020, but after multiple delays it eventually launched in a 90-day beta in Las Vegas in the final quarter of 2021. Its goal is to expand in early 2022 and reach a critical mass of 70% network coverage in the US in 2023. Additionally, the company has been mandated by the federal government to provide complete network coverage by 2025.

Author: Rob Hindaugh and Daniyal Islam are Consultants at STL Partners, specialising in 5G, edge computing and telco cloud.

Telco Cloud insights pack

This 24-page document will provide you with a summary of our insights from our virtualisation research and consulting work:

  • Overview of Telco Cloud deployments worldwide
  • Benefits of telco cloud: state of the industry
  • Deployment approaches: implications and challenges
  • How STL Partners can support you

Just click on the button below to request your free pack.

 

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Why the telco industry is revisiting convergence​

Why the telco industry is revisiting convergence

Convergence in networks has been pursued for many years to varying degrees but operators have often pursued divergence to support the speed and need for innovation at the expense of convergence. We explore what has changed and why the balance of forces has now shifted in favour of convergence.

Cloud native and disaggregation have shifted the balance of forces towards convergence

Communications service providers (CSPs) have consistently explored and sporadically pursued convergence over many years but they have always had to navigate the balancing act between the forces of convergence and divergence. Convergence has been part of the pursuit of simplification while divergence was seen as a means of innovation, given the need for speed and challenges with specificity in the traditional appliance-based world. This often meant that it was easier and quicker to deploy isolated islands to quickly address customer opportunities at the expense of any convergence efforts.

However, the advent of cloud native operating practices and increasing disaggregation means that CSPs no longer have to compromise between convergence and the need to support innovation, and move towards having a common network that serves diverse needs. By enabling operators to decouple and recombing various building blocks, disaggregation can separate and reduce any interdependencies while highlighting potential commonalities and areas that make convergence more viable.

Source: STL Partners

The renewed pursuit of convergence is driven by both internal and external drivers

Through our research with CSPs globally, we identified four main drivers for why CSPs have renewed their interest and pursuit of convergence:

Convergence

Source: STL Partners

1. Reducing total cost of ownership (TCO) through simplification and consolidation

  • Reducing duplication in capital deployment, better resource utilisation, economies of scale
  • Easier to assure and manage, common infrastructure and management toolset
  • Seamless foundation for other solutions on the network

2. Enabling greater control, resilience and automation

  • Ability to navigate greater network intricacy: Enabling mass scale visibility, greater automation and E2E control of the network for easier operations
  • Creating the basis for infrastructure-agnostic service design (e.g. access agnostic) for third parties

3. Creating a sustainable platform for massive data growth

  • Maximising use of infrastructure to support volume expansion and high performance demands
  • Extract greater synergies from access fibre to reduce own environmental footprint as part of greater emphasis on sustainability (see more in our report here)

4. Supporting greater innovation and ecosystem development

  • Creating the basis to deliver customer-specific services (e.g. via network slicing) with ability to define, manage, deliver and route app-specific services end-to-end
  • Exposing network programmability and capabilities to customers and partners to support requirements

…but convergence is multi-faceted and the pursuit is not without its challenges

Convergence should not be seen as just a technology decision but a fundamental strategic one. The demands on the network and from customers of all shapes and sizes are only going to increase. CSPs are also under pressure from new types of ‘co-opetition’ (e.g. the hyperscalers, greenfield operators, other digital players) to respond much faster to market and customer demands. Therefore, they need to be able to handle these demands and accelerate the beat rate of innovation in a way that provides greater operational simplicity, cost effectiveness and agility. Or be at risk of their market share and value eroding as a result.

The drivers for convergence as a broader concept are clear. However, through our research, we found different definitions of what exactly the term convergence means to CSPs. Furthermore, CSPs are also taking different approaches in pursuing convergence. In our report, we explore the following key questions:

  • What are the different dimensions of convergence? How are these related to one another and how do these (in different combinations) enable CSPs to address the four key drivers?
  • What strategies and approaches are different types of operators pursuing and why?
  • What are the key challenges and/or barriers that operators are facing?
  • Given the challenges and inherent complexity, how can they overcome them?

Our findings are based on an interview programme with telecoms operators globally. For more information and to access the full report, please use the link here.

Author: Yesmean Luk is a Principal Consultant at STL Partners, specialising in all things Telco Cloud

Telco Cloud insights pack

This 24-page document will provide you with a summary of our insights from our virtualisation research and consulting work:

  • Overview of Telco Cloud deployments worldwide
  • Benefits of telco cloud: state of the industry
  • Deployment approaches: implications and challenges
  • How STL Partners can support you

Just click on the button below to request your free pack.

 

Read more about Telco Cloud, Cloud Native, NFV & SDN

Research

NFV goes mainstream: How cloud-native is contributing to growth

The number of deployments of NFV and SDN continues to grow – but while some markets are moving on to the next phase, others are just getting going.

Read more

Research

Open RAN: What should telcos do?

Alongside the roll-out of 5G cores and radios, the Radio Access Network (RAN) is evolving to a more open, virtualised and distributed architecture. What are the opportunities and risks for telcos?

Register now

Research

Telco Cloud: Why it hasn’t delivered, and what must change for 5G

Telco cloud made big promises for the transformation of telecoms. It is a fundamental enabler for 5G and the exciting opportunities ahead. Why hasn’t it delivered yet – and what needs to change?

Read more