True E2E automation has not yet been achieved, but network automation is a reality now, and one which telcos must master to survive. What steps are telcos taking to implement network automation, what challenges must be overcome and what benefits can be expected?
Automation, analytics and AI: A3 unlocks value for operators
STL Partners has been writing about automation, artificial intelligence (AI) and data analytics for several years. While the three have overlapping capabilities and often a single use case will rely upon a combination, they are also distinct in their technical outcomes.
Distinctions between the three As
Source: STL Partners
Operators have been heavily investing in A3 use cases for several years and are making significant progress. Efforts can be broadly broken down into five different domains: sales and marketing, customer experience, network planning and operations, service innovation and other operations. Some of these domains, such as sales and marketing and customer experience, are more mature, with significant numbers of use cases moving beyond R&D and PoCs into live, scaled deployments. In comparison, other domains, like service innovation, are typically less mature, despite the potential new revenue opportunities attached to them.
Five A3 use case domains
Source: STL Partners
Use cases often overlap across domains. For example, a Western European operator has implemented an advanced analytics platform that monitors network performance, and outputs a unique KPI that, at a per subscriber level, indicates the customer experience of the network. This can be used to trigger an automated marketing campaign to customers who are experiencing issues with their network performance (e.g. an offer for free mobile hotspot until issues are sorted). In this way, it spans both customer experience and network operations. For the purpose of this paper, however, we will primarily focus on automation use cases in the network domain. We have modelled the financial value of A3 for telcos: Mapping the financial value.
The time is ripe for network automation now
Network automation is not new. In fact, it’s been a core part of operator’s network capabilities since Almon Strowger invented the Strowger switch (in 1889), automating the process of the telephone exchange. Anecdotally, Strowger (an undertaker by profession) came up with this invention because the wife of a rival funeral parlour owner, working at the local community switchboard, was redirecting customers calling for Strowger to her own husband’s business.
Early advertising called the Strowger switch the “girl-less, cuss-less, out-of-order-less, wait-less telephone” or, in other words, free from human error and faster than the manual switchboard system. While this example is more than 100 years old, many of the benefits of automation that it achieved are still true today; automation can provide operators with the ability to deliver services on-demand, without the wait, and free from human error (or worse still, malevolent intent).
Despite automation not being a new phenomenon, STL Partners has identified six key reasons why network automation is something operators should prioritise now:
- Only with automation can operators deliver the degree of agility that customers will demand. Customers today expect the kind of speed, accuracy and flexibility of service that can only be achieved in a cost-effective manner with high degrees of network automation. This can be both consumer customers (e.g. for next generation network services like VR/AR applications, gaming, high-definition video streaming etc.) or enterprise customers (e.g. for creating a network slice that is spun up for a weekend for a specific big event). With networks becoming increasingly customised, operators must automate their systems (across both OSS and BSS) to ensure that they can deliver these services without a drastic increase in their operating costs.
One wholesale operator exemplified this shift in expectations when describing their customers, which included several of the big technology companies including Amazon and Google: “They have a pace in their business that is really high and for us to keep up with their requirements and at the same time beat all our competitors we just need to be more automated”. They stated that while other customers may be more flexible and understand that instantiating a new service takes time, the “Big 5” expect services in hours rather than days and weeks.
- Automation can enable operators to do more, such as play higher up the value chain. External partners have an expectation that telcos are highly skilled at handling data and are highly automated, particularly within the network domain. It is only through investing in internal automation efforts that operators will be able to position themselves as respected partners for services above and beyond pure connectivity. An example of success here would be the Finnish operator Elisa. They invested in automation capabilities for their own network – but subsequently have been able to monetise this externally in the form of Elisa Automate.
A further example would be STL Partners’ vision of the Coordination Age. There is a role for telcos to play further up the value chain in coordinating across ecosystems – which will ultimately enable them to unlock new verticals and new revenue growth. The telecoms industry already connects some organisations and ecosystems together, so it’s in a strong position to play this coordinating role. But, if they wish to be trusted as ecosystem coordinators, they must first prove their pedigree in these core skills. Or, in other words, if you can’t automate your own systems, customers won’t trust you to be key partners in trying to automate theirs.
- Automation can free up resource for service innovation. If operators are going to do more, and play a role beyond connectivity, they need to invest more in service innovation. Equally, they must also learn to innovate at a much lower cost, embracing automation alongside principles like agile development and fast fail mentalities. To invest more in service innovation, operators need to reallocate resources from other areas of their business – as most telcos are no longer rapidly growing, resource must be freed up from elsewhere.
Reducing operating costs is a key way that operators can enable increased investment in innovation – and automation is a key way to achieve this.
A3 can drive savings to redistribute to service innovation
Source: Telecoms operator accounts, STL Partners estimates and analysis
- 5G won’t fulfil its potential without automation. 5G standards mean that automation is built into the design from the bottom up. Most operators believe that 5G will essentially not be possible without being highly automated, particularly when considering next generation network services such as dynamic network slicing. On top of this, there will be a ranging need for automation outside of the standards – like for efficient cell-site deployment, or more sophisticated optimisation efforts for energy efficiency. Therefore, the capex investment in 5G is a major trigger to invest in automation solutions.
- Intent-based network automation is a maturing domain. Newer technologies, like artificial intelligence and machine learning, are increasing the capabilities of automation. Traditional automation (such as robotic process automation or RPA) can be used to perform the same tasks as previously were done manually (such as inputting information for VPN provisioning) but in an automated fashion. To achieve this, rules-based scripts are used – where a human inputs exactly what it is they want the machine to do. In comparison, intent-based automation enables engineers to define a particular task (e.g. connectivity between two end-points with particular latency, bandwidth and security requirements) and software converts this request into lower level instructions for the service bearing infrastructure. You can then monitor the success of achieving the original intent.
Use of AI and ML in conjunction with intent-based automation, can enable operators to move from automation ‘to do what humans can do but faster and more accurately’, to automation to achieve outcomes that could not be achieved in a manual way. ML and AI has a particular role to play in anomaly detection, event clustering and predictive analytics for network operations teams.
While you can automate without AI and ML, and in fact for many telcos this is still the focus, this new technology is increasing the possibilities of what automation can achieve. 40% of our interviewees had network automation use cases that made some use of AI or ML.
- Network virtualisation is increasing automation possibilities. As networks are increasingly virtualised, and network functions become software, operators will be afforded a greater ability than ever before to automate management, maintenance and orchestration of network services. Once networks are running on common computing hardware, making changes to the network is, in theory, purely a software change. It is easy to see how, for example, SDN will allow automation of previously human-intensive maintenance tasks. A number of operators have shared that their teams and/or organisations as a whole are thinking of virtualisation, orchestration and automation as coming hand-in-hand.
This report focuses on the opportunities and challenges in network automation. In the future, STL Partners will also look to more deeply evaluate the implications of network automation for governments and regulators, a key stakeholder within this ecosystem.
Table of Contents
- Executive Summary
- End-to-end network automation
- A key opportunity: 6 reasons to focus on network automation now
- Key recommendations for operators to drive their network automation journey
- There are challenges operators need to overcome
- This paper explores a range of network automation use cases
- STL Partners: Next steps
- Automation, analytics and AI: A3 unlocks value for operators
- The time is ripe for network automation now
- Looking to the future: Operators’ strategy and ambitions
- Defining end-to-end automation
- Defining ambitions
- State of the industry: Network automation today
- Which networks and what use cases: the breadth of network automation today
- Removing the human? There is a continuum within automation use cases
- Strategic challenges: How to effectively prioritise (network) automation efforts
- Challenges to network automation– people and culture are key to success
- Recommendations for vendors (and others in the ecosystem)
- Recommendations for operators