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This article is part of: Network Innovation
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Telcos are pursuing a telecom techco vision to renew business models. This report explores how network cloud, automation and AI accelerate this transformation, with insights on scaling these technologies, impactful AI/automation use cases and the advantages of open source.
The relevance of autonomous cloud network platforms in the telecom techco journey
Telcos stand at a pivotal juncture and are intent on transforming into telecom techcos. The telecom techco business model (defined in the figure below) seeks to incorporate the elements of leading technology companies’ business models that have made them successful. This includes how they leverage technology internally and for their services, how they finance investments, operate the business (people, processes and operational systems), and ensure a culture of agility and a growth mindset. Fundamentally for telcos, this has become an almost unilateral ambition due to the challenging financial situation they find themselves in, where it has become difficult to monetise networks through traditional connectivity services.
Telcos will embody different business models in the future
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This report defines autonomous cloud network platforms as highly automated, AI-enabled, cloud-native networks and operations systems that ensure telcos can deliver connectivity services in innovative ways. This includes new as-a-service models, network services tailored to application needs or network capabilities integrated with other technology solutions, etc. These networks leverage automation and AI to manage the network in a more efficient and effective way, for example dynamically allocating resources, optimising performance and supporting real-time adaptability. This makes it easier to deploy ‘networked applications’ such as smart cities, immersive gaming and mission-critical enterprise services.
Cloudifying and virtualising networks have long been associated with helping telcos achieve cost efficiencies, primarily by reducing hardware costs from being tied to proprietary solutions and challenging the ecosystem to drive new competition. However, the survey demonstrated that, in fact, many telcos (fixed and mobile) are primarily motivated to invest in the automation and cloudification of the network and its support systems to increase revenues (see the figure below). This can be achieved either through enhanced customer experience resulting from better network performance, or from the faster development and delivery of new services to customers.
Telcos are investing in network automation and cloudification to improve services and revenues
The potential commercial benefits of the move towards cloud native are now well understood; the figure below demonstrates that it is not the business case that is a challenge. Instead, the primary hurdles are more reflective of the technological progress required by the industry to successfully deploy cloud-native networks. Overcoming these challenges reinforces the need for the ecosystem to work together to ensure that cloud-native technologies, which are mature in IT, can be applied to the networks domain and yet maintain the level of performance expected by the network, comply with regulation and ensure security.
Telcos recognise a wide range of significant barriers to cloud native
Telcos should not view these as insurmountable barriers. Instead, they should adopt a proactive and collaborative approach, recognising that overcoming many of these obstacles will depend on strong partnerships that consider telcos’ needs, bring best-of-breed capabilities and ensure scale across the industry. To help telcos embody this approach and accelerate their journey to becoming telecom techcos, this report provides three key recommendations:
1. Link network modernisation to the telecom techco strategy
2. Pursue AI and automation use cases that generate value in the near term
3. Leverage open source to accelerate the journey to telecom techco
Table of contents
- Executive summary
- Background on our research
- Introduction: The relevance of autonomous cloud network platforms in the telecom techco journey
- 1. Link network modernisation to the telecom techco strategy
- The ambition to become a telecom techco is widespread across the telecom industry
- Autonomous cloud network platforms unlock opportunities for new services
- Telcos are at risk of not reaching maturity levels expected of a telecom techco
- 2. Pursue AI and automation use cases that generate value in the near term
- AI/ML is (unsurprisingly) a top priority for telco networks
- Prioritise use cases based on speed of time to value
- Unified data frameworks are a prerequisite for automation and AI maturity
- 3. Leverage open source to accelerate the journey to telecom techco
- Proprietary vendor-dependent approaches impose a maturity threshold
- Open-source tools provide solutions to key challenges
- Network-specific open-source initiatives will help technologies scale across the industry
- Conclusion: Three recommendations for accelerating the telco to techco journey
Related research
- Finding value from AI, analytics and automation in the telco: Part 2
- Productising NaaS: A case study from India’s most disruptive player
- Network innovation as an engine for growth: A manifesto
- Achieving next-level network autonomy