Driving sustainability in telco metro networks

Against the backdrop of the recent energy crisis, there is a new sense of urgency around energy consumption and sustainability. Enterprises are doubling down on their green targets, in many cases accelerating plans for an ambitious endgame – net-zero emissions. As we have covered extensively in previous reports, the telecommunications industry is not an exception to this. In this report we explore how telcos can drive sustainability in their metro networks.

Telecoms operators face a particular challenge in that they have experienced and anticipate future high levels of growth in traffic (20% to 40% per annum). Furthermore, consumption patterns are changing with even higher levels of traffic growth originating and terminating within the metro network. The metro network (sometimes referred to as access and aggregation) is the section of communications service providers’ (CSPs) network between the last-mile access and the core backbone. STL Partners estimates that metro network traffic will increase threefold to 2030. This is driven by:

  • growth in demand for increasingly immersive user services
  • proliferation in high-bandwidth connections to machines, vehicles and sensors
  • the deployment of multi-edge compute (MEC) infrastructure and applications
  • the need to support next-generation services to support the above.

In light of CSPs’ net-zero commitments, the significant growth in traffic across the metro network makes it imperative to drive down energy use and associated emissions (including embedded greenhouse gas emissions) to make the metro network sustainable. The challenges faced in the metro network are not dissimilar from those faced by cloud providers – massive growth in scale coupled with ambitious sustainability commitments. While cloud providers have already been addressing these challenges, operators have typically been further behind. Our research, therefore, sought to address the question:

How should operators better incorporate energy and sustainability goals into their metro networks: applying cloud principles and lessons from leading operators?

To understand telcos’ sustainability efforts, we conducted an interview programme with key decision-makers at Tier-1 and Tier-2 operators across North America and Europe. We focused our conversations on telco networks and how they are designed, built and maintained to address both near and long-term sustainability challenges, with a special interest in operators’ metro networks.

In the interviews, we asked operators about their strategies to reduce Scope 1 to 3 emissions, which are defined as:

  • Scope 1 emissions: Direct emissions from day-to-day operations, e.g. fuel combustion, coolant leakages
  • Scope 2 emissions:Indirect emissions from electricity suppliers, e.g. to power metro networks and facilities-supporting infrastructure (heating, aircon, uninterruptible power supply, etc.)
  • Scope 3emissions: Indirect (non-energy) emissions e.g., embedded carbon from suppliers of equipment and services (e.g., civil works, equipment in metro locations, trucks).

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Classification of greenhouse gas emissions reporting

The interviews confirmed our initial hypothesis: sustainability is a growing concern for operators and there is significant work to do:

  • All operators in our interview programme confirmed that they are on a path towards decarbonisation, but where they are on their journeys varies significantly from operator to operator and from region to region.
  • European operators tend to have more established approaches to sustainability and are particularly focused on energy use given the current energy crisis affecting the region:
    • Going green is both a cost imperative as well as ‘the right thing to do’ for European operators, in addition to the stringent regulatory environment in which they operate.
    • On the one hand, this is a positive change as it has raised the profile of energy efficiency which is now increasingly seen as an executive-level agenda item.
    • However, there is also a hidden impact: telcos are pushing hard on energy and Scope 2 But at the same time, this has deferred the operators’ efforts to reduce their embedded (Scope 3) emissions which is the biggest contributor to their overall carbon footprint (Scope 3 accounts for 80% to 95% of most operators’ total emissions).
  • The North American operators were less focused on the cost of energy, and therefore in reducing it through greater efficiencies, but nonetheless were aware of the need to meet the ambitious net-zerotargets that they have set.

In this report, we will discuss our learnings from closely watching the industry and speaking to the leaders driving operators’ efforts. The four main sections of this report discuss what we are referring to as common practice, best practice, and next practice strategies and actions that operators are pursuing to meet their sustainability goals, with a particular emphasis on their activities within the metro network. For operators to meet their targets, they will need to go beyond the low-hanging fruit of common practice and focus on the additional initiatives they will need to start adopting. Operators already undertaking best practice initiatives should focus on next practice. Less mature operators should take lessons from those further ahead in their net-zero strategies and aim to cover the best practice initiatives of their peers. All operators can also borrow concepts from other industries, notably cloud providers. Ultimately, without taking on the tougher challenges in their access and metro networks, operators will miss their net-zero goals.

 

Table of contents

  • Executive Summary
  • Introduction
  • Common practice: Where are metro network operators focusing their sustainability efforts?
  • Best practice: Applying cloud principles to metro networks
  • Next practice: What future measures need to be incorporated into current thinking?
  • Recommendations for operators: Identifying the right tools and methodologies

 

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The Future Value of Voice and Messaging

Background – ‘Voice and Messaging 2.0’

This is the latest report in our analysis of developments and strategies in the field of voice and messaging services over the past seven years. In 2007/8 we predicted the current decline in telco provided services in Voice & Messaging 2.0 “What to learn from – and how to compete with – Internet Communications Services”, further articulated strategic options in Dealing with the ‘Disruptors’: Google, Apple, Facebook, Microsoft/Skype and Amazon in 2011, and more recently published initial forecasts in European Mobile: The Future’s not Bright, it’s Brutal. We have also looked in depth at enterprise communications opportunities, for example in Enterprise Voice 2.0: Ecosystem, Species and Strategies, and trends in consumer behaviour, for example in The Digital Generation: Introducing the Participation Imperative Framework.  For more on these reports and all of our other research on this subject please see here.

The New Report


This report provides an independent and holistic view of voice and messaging market, looking in detail at trends, drivers and detailed forecasts, the latest developments, and the opportunities for all players involved. The analysis will save valuable time, effort and money by providing more realistic forecasts of future potential, and a fast-track to developing and / or benchmarking a leading-edge strategy and approach in digital communications. It contains

  • Our independent, external market-level forecasts of voice and messaging in 9 selected markets (US, Canada, France, Germany, Spain, UK, Italy, Singapore, Taiwan).
  • Best practice and leading-edge strategies in the design and delivery of new voice and messaging services (leading to higher customer satisfaction and lower churn).
  • The factors that will drive best and worst case performance.
  • The intentions, strategies, strengths and weaknesses of formerly adjacent players now taking an active role in the V&M market (e.g. Microsoft)
  • Case studies of Enterprise Voice applications including Twilio and Unified Communications solutions such as Microsoft Office 365
  • Case studies of Telco OTT Consumer Voice and Messaging services such as like Telefonica’s TuGo
  • Lessons from case studies of leading-edge new voice and messaging applications globally such as Whatsapp, KakaoTalk and other so-called ‘Over The Top’ (OTT) Players


It comprises a 18 page executive summary, 260 pages and 163 figures – full details below. Prices on application – please email contact@telco2.net or call +44 (0) 207 247 5003.

Benefits of the Report to Telcos, Technology Companies and Partners, and Investors


For a telco, this strategy report:

  • Describes and analyses the strategies that can make the difference between best and worst case performance, worth $80bn (or +/-20% revenues) in the 9 markets we analysed.
  • Externally benchmarks internal revenue forecasts for voice and messaging, leading to more realistic assumptions, targets, decisions, and better alignment of internal (e.g. board) and external (e.g. shareholder) expectations, and thereby potentially saving money and improving contributions.
  • Can help improve decisions on voice and messaging services investments, and provides valuable insight into the design of effective and attractive new services.
  • Enables more informed decisions on partner vs competitor status of non-traditional players in the V&M space with new business models, and thereby produce better / more sustainable future strategies.
  • Evaluates the attractiveness of developing and/or providing partner Unified Communication services in the Enterprise market, and ‘Telco OTT’ services for consumers.
  • Shows how to create a valuable and realistic new role for Voice and Messaging services in its portfolio, and thereby optimise its returns on assets and capabilities


For other players including technology and Internet companies, and telco technology vendors

  • The report provides independent market insight on how telcos and other players will be seeking to optimise $ multi-billion revenues from voice and messaging, including new revenue streams in some areas.
  • As a potential partner, the report will provide a fast-track to guide product and business development decisions to meet the needs of telcos (and others).
  • As a potential competitor, the report will save time and improve the quality of competitor insight by giving strategic insights into the objectives and strategies that telcos will be pursuing.


For investors, it will:

  • Improve investment decisions and strategies returning shareholder value by improving the quality of insight on forecasts and the outlook for telcos and other technology players active in voice and messaging.
  • Save vital time and effort by accelerating decision making and investment decisions.
  • Help them better understand and evaluate the needs, goals and key strategies of key telcos and their partners / competitors


The Future Value of Voice: Report Content Summary

  • Executive Summary. (18 pages outlining the opportunity and key strategic options)
  • Introduction. Disruption and transformation, voice vs. telephony, and scope.
  • The Transition in User Behaviour. Global psychological, social, pricing and segment drivers, and the changing needs of consumer and enterprise markets.
  • What now makes a winning Value Proposition? The fall of telephony, the value of time vs telephony, presence, Online Service Provider (OSP) competition, operators’ responses, free telco offerings, re-imaging customer service, voice developers, the changing telephony business model.
  • Market Trends and other Forecast Drivers. Model and forecast methodology and assumptions, general observations and drivers, ‘Peak Telephony/SMS’, fragmentation, macro-economic issues, competitive and regulatory pressures, handset subsidies.
  • Country-by-Country Analysis. Overview of national markets. Forecast and analysis of: UK, Germany, France, Italy, Spain, Taiwan, Singapore, Canada, US, other markets, summary and conclusions.
  • Technology: Products and Vendors’ Approaches. Unified Comminications. Microsoft Office 365, Skype, Cisco, Google, WebRTC, Rich Communications Service (RCS), Broadsoft, Twilio, Tropo, Voxeo, Hypervoice, Calltrunk, Operator voice and messaging services, summary and conclusions.
  • Telco Case Studies. Vodafone 360, One Net and RED, Telefonica Digital, Tu Me, Tu Go, Bluvia and AT&T.
  • Summary and Conclusions. Consumer, enterprise, technology and Telco OTT.