Telco Cloud Deployment Tracker: 5G standalone and RAN

Telco cloud 2.0, fuelled by 5G standalone and RAN, is on the starting grid

This report accompanies the latest release and 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. It builds on an extensive body of analysis by STL Partners over the past nine years on NFV and SDN strategies, technology and market developments.

Access our Telco Cloud Tracker here

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

Scope and content of the Tracker

The data in the latest update of our interactive tool and database covers the period up to September 2021, 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
  • Category of NFV/SDN technology deployed
  • …and more filters

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5G standalone (SA) will hit an inflection point in 2022

5G standalone (SA) core is beginning to take off, with 19 deployments so far expected to be completed in 2022. The eventual total will be higher still, as will that of NSA core, as NSA 5G networks continue to be launched. As non-standalone (NSA) cores are replaced by SA, this will result in another massive wave of core deployments – probably from 2023/4 onwards.

Standalone 5G vs non-standalone 5G core deployments

STL-5G-standalone-core-cloud-tracker-2021

Source: STL Partners

 

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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NFV Deployment Tracker: Global review and update

Welcome to The NFV Deployment Tracker!

This report is the fourth analytical report in the ‘NFV Deployment Tracker’ series and is intended as an accompaniment to the third update of the Tracker Excel spreadsheet (to the end of June 2018).

The update extends the coverage of the Tracker worldwide: adding a comprehensive set of data on live, commercial deployments of NFV and SDN in the African, Latin American and Middle East markets to the existing data set on Asia-Pacific, Europe and North America. In addition, the spreadsheet contains updated and expanded data on deployments in the latter regions.

The expansion of the Tracker’s coverage worldwide presents an opportunity to gain an overview of global SDN and NFV development and deployment trends, and to assess the prospects for the technologies, and the services based on them, going forward.

Previous editions and other NFV / SDN research

Scope of information provided by the Tracker

The data in the NFV Deployment Tracker is sourced primarily from public-domain information such as telco and vendor press releases and reliable press reports regarding successfully completed deployments and the launch of live, commercial services based on virtualised network functions (VNFs) or SDN. We have also obtained some confidential information direct from operators, which we are unable to present in the detailed break-down of deployments by operator. However, this information has been added to an aggregated data set, which is also provided in the spreadsheet.

The data is therefore limited to verified deployments: production implementations of NFV and SDN powering live services, where we can be confident that the data on the VNFs and IT components involved is accurate and – as far as possible – up to date. We also include some information on deployments planned to be completed by the end of 2017 or by a date as yet unknown, where the information is in the public domain, and where the size and scope of the deployments merit their inclusion.

Contents:

  • Executive Summary
  • The volume and pace of SDN / NFV deployments continues to grow…
  • …but some fundamental challenges remain
  • The focus of deployments varies region by region
  • Operator trends
  • Vendor trends
  • Conclusion
  • Introduction
  • Welcome to the third update of the ‘NFV Deployment Tracker’
  • Scope, definitions and importance of the data
  • Analysis of the global data set
  • Constant growth – but SDN / NFV deployment is far from universal
  • Asia-Pacific ahead on number of deployments despite a slowdown in 2018
  • SD-WAN, SDN, core network functions and orchestration have driven the growth in 2018
  • Operator trends: Leading players rack up the deployments, leaving others lagging far behind
  • Vendor trends: a few major players dominate the scene – but telcos continue to look for alternatives
  • Conclusion 

Figures:

  • Figure 1: Growth in the number of SDN / NFV deployments per year, 2012 to June 2018
  • Figure 2: Breakdown of total deployments by region, 2012 to June 2018
  • Figure 3: Deployments by region, 2014 to 2018
  • Figure 4: Global deployments by higher-level category, 2014 to 2018
  • Figure 5: Deployments in Europe by leading category, 2014 to 2018
  • Figure 6: Asia-Pacific deployments by higher-level category, 2014 to 2018
  • Figure 7: Deployments in North America by leading categories, 2014 to 2018
  • Figure 8: Global deployments of leading VNFs and functional components, 2014 to 2018
  • Figure 9: Total deployments of leading VNFs and functional components, Middle East
  • Figure 10: Leading VNFs and functional components, Latin America
  • 1Figure 11: Leading operators by number of deployments, global
  • Figure 12:  Leading vendors by number of deployments, global
  • Figure 13: Leading vendors by deployment category 25

NFV Deployment Tracker: Asia takes the lead

Introduction

Welcome to the second update of the ‘NFV Deployment Tracker’

This report is the third analytical report in the ‘NFV Deployment Tracker’ series and is intended as an accompaniment to the second update of the Tracker Excel spreadsheet (dated March 2018).

The update provides a comprehensive set of data on live, commercial deployments of NFV and SDN in the Asia-Pacific market. Under ‘Asia-Pacific’, we include all of the countries of Central, Southern and South-East Asia, along with Oceania. In addition to the new set of data for Asia-Pacific, the spreadsheet contains updated and revised data on deployments in the European and North American regions.

In June 2018, the data set and analysis will be extended to all other regions worldwide, with the aim of providing the industry’s most comprehensive, authoritative source of information on live deployments of NFV and SDN.

Scope, definitions and importance of the data

Detailed explanation of the scope of the information provided in the Tracker, definitions of terms (including how we define a live ‘deployment’ and definitions of frequently used NFV / SDN acronyms) and an account of why we think it is important to track the progress of NFV / SDN are provided in the first analytical report of the series – so we will not repeat them here.

Analysis of the Asia-Pacific data set

Overall data and trends: Asia-Pacific is the largest global market for NFV

We have gathered data on 102 live, commercial deployments of NFV and SDN in Asia-Pacific between 2012 and 2018. These were completed by 33 telcos, including all of the major operators in China, Japan, South Korea and Australia. Deployments have been more limited in India: seven in total, including two global implementations by Tata Communications. Altogether, the data includes information on 203 known Virtual Network Functions (VNFs), functional sub-components and supporting infrastructure elements that have formed part of these deployments.

This means that Asia-Pacific is the largest market for NFV and SDN, measured purely in terms of number of deployments. The Asia-Pacific totals outstrip the updated numbers for both Europe (89 deployments and 182 VNFs / functional components) and North America (62 deployments and 126 VNFs / functional components). The number of operators that have completed deployments is also higher than that in Europe or North America.

Contents:

  • Executive Summary
  • Asia-Pacific is the leading global SDN / NFV market
  • Introduction
  • Welcome to the second update of the ‘NFV Deployment Tracker’
  • Scope, definitions and importance of the data
  • Analysis of the Asia-Pacific data set
  • Overall data and trends: Asia-Pacific is the largest global market for NFV
  • SDN, SD-WAN and core network functions have driven the growth
  • Operator trends: Innovators lead the way, closely followed by the Chinese giants
  • Vendor trends: SD-WAN and vCPE vendors lead the way
  • Conclusion

Figures:

  • Figure 1: Total NFV and SDN deployments in Asia-Pacific, 2012 to 2018
  • Figure 2: Asia-Pacific deployments by higher-level category, 2014 to 2018
  • Figure 3: European deployments by higher-level category, 2014 to 2018
  • Figure 4: North American deployments by higher-level category, 2014 to 2018
  • Figure 5: Leading VNFs and functional components deployed in Asia-Pacific
  • Figure 6: Leading Asia-Pacific operators by number of NFV / SDN deployments
  • Figure 7: Leading vendors by number of deployments

NFV Deployment Tracker – North America: SD-WAN tail wags NFV dog

Introduction

Welcome to the first update of the ‘NFV Deployment Tracker’

This report is the second analytical report in the ‘NFV Deployment Tracker’ series and is intended as an accompaniment to the first update of the Tracker Excel spreadsheet (to December 2017).

The update provides a comprehensive set of data on live, commercial deployments of NFV and SDN in the North American market (including the US, Canada and the Caribbean). In addition, the spreadsheet contains updated and revised data on deployments in the European region.

In March 2018, the data set and analysis will be extended to all other regions worldwide, with the aim of providing the industry’s most comprehensive, authoritative source of information on live deployments of NFV and SDN.

Scope, definitions and importance of the data

Detailed explanation of the scope of the information provided in the Tracker, definitions of terms (including how we define a live ‘deployment’ and definitions of frequently used NFV / SDN acronyms) and an account of why we think it is important to track the progress of NFV / SDN are provided in the first analytical report of the series – NFV Deployment Tracker: Europe (September 2017).

Contents:

  • Executive Summary
  • Conclusion: strong growth in 2018 will be delivered by the continuing rise of SD-WAN and new consumer use cases
  • Introduction
  • Welcome to the first update of the ‘NFV Deployment Tracker’
  • Scope, definitions and importance of the data
  • Analysis of the North American data set
  • Overall data and trends
  • ‘Service-led Innovation’ has driven the deployments
  • ‘Technology Evolution’ deployments are less in evidence
  • Operator trends: AT&T and Verizon dispute first place, while other players focus on differentiated offers
  • Vendor trends: SD-WAN and vCPE vendors lead the way
  • Conclusion: A dynamic enterprise market – but consumer use cases still outstanding

Figures:

  • Figure 1: Total NFV and SDN deployments in North America, 2011 to 2017
  • Figure 2: North American deployments by higher-level category, 2014 to 2017
  • Figure 3: European deployments by higher-level category, 2014 to 2017
  • Figure 4: Leading North American operators by number of NFV / SDN deployments
  • Figure 5: Leading vendors by number of deployments (North America)

NFV Deployment Tracker: Europe (September 2017)

This report is discussed in our free webinar recording: Keeping NFV on track – Assessing operator strategies and progress

Introduction

Welcome to The NFV Deployment Tracker!

This report is the first of a new series of statistical and analytical reports tracking the progress of NFV and SDN: ‘The NFV Deployment Tracker’. The ‘Tracker’ builds on an extensive body of analysis by STL Partners over the past two years on NFV and SDN strategies, technology and market developments.

This service will be updated on a quarterly basis and will provide a steadily growing database on live deployments of NFV and SDN by telcos worldwide. The data is presented in an Excel spreadsheet, accompanied by an analytical report presenting the key statistics and trends observed during the quarter.

At launch, the Tracker provides data on the European market; December’s update will also include comprehensive data from the North American market; and in March 2018, we will extend the coverage to Asia and the Rest of the World – while up-to-date information on the markets already included will be added on a continuous basis.

Scope of information provided by the Tracker

The data in the NFV Deployment Tracker is sourced primarily from public-domain information such as telco and vendor press releases and reliable press reports regarding successfully completed deployments and the launch of live, commercial services based on virtualised network functions (VNFs) or SDN. We have also obtained some confidential information direct from operators, which we are unable to present in the detailed break-down of deployments by operator. However, this information has been added to an aggregated data set, which is also provided in the spreadsheet.

The data is therefore limited to verified deployments: production implementations of NFV and SDN powering live services, where we can be confident that the data on the VNFs and IT components involved is accurate and – as far as possible – up to date. We also include some information on deployments planned to be completed by the end of 2017 or by a date as yet unknown, where the information is in the public domain, and where the size and scope of the deployments merit their inclusion.

In terms of size, the research has focused on Tier-One carriers, including the incumbent or former incumbent operators of every European state, along with leading competitive operators in major markets, Pan-European players and the leading cablecos. We have not included smaller local and regional players, Tier-Three providers and all but the largest Tier-Two carriers. We include all deployments within Europe, even if the parent company involved is headquartered outside of Europe (e.g. US-based Liberty Global, which owns cable assets across Europe). But we do not include deployments at non-European subsidiaries of Europe-based operator groups.

We have also not included activity around proofs of concept (PoCs), live tests or demonstrations of NFV and SDN. This is partly because a lot of this work never comes to fruition in terms of commercial deployments – at least not in quite the same combination of elements as the pre-commercial tests – and partly because the aim of the Tracker is to provide a reliable, comprehensive source of information on actual, commercial implementations of NFV and SDN, from which vendor and telco hype about the technologies has been eliminated.

Contents:

  • Executive Summary: NFV still on the roadmap, but horizons of deployment stretch out
  • Welcome to the NFV Deployment Tracker
  • Scope and importance of the Tracker
  • European data: Steady but unspectacular growth in deployments
  • Conclusion: NFV still squarely on the roadmap, but navigating the landscape is taking longer than scheduled
  • Introduction
  • Welcome to The NFV Deployment Tracker!
  • Scope of information provided by the Tracker
  • Definitions
  • What counts as a deployment?
  • Why is this information important?
  • Analysis of the initial European data set
  • Overall data and trends
  • Winners, losers and low-hanging fruit
  • Vendor trends
  • Operator trends
  • Conclusion
  • NFV is still very much on the roadmap, but the horizon of deployment is stretching out further than anticipated

Figures:

  • Figure 1: Definition of main abbreviations used in this report
  • Figure 2: Total NFV and SDN deployments in Europe, 2009 to 2017
  • Figure 3: Deployments from 2009 to 2017 broken down by higher-level categories
  • Figure 4: Deployments by leading network function and infrastructure category, 2014 to 2017
  • Figure 5: Number of deployments by lead vendor
  • Figure 6: Leading operators in terms of number of deployments

VoLTE: Voice beyond the phone call?

Introduction

Telephony is still necessary in the 4G era

Some people in the telecom industry believe that “voice is dead” – or, at least, that traditional phone calls are dying off. Famously, many younger mobile users eschew standalone realtime communications, instead preferring messaging loaded with images and emoji, via apps such as Facebook Messenger and WeChat, or those embedded e.g. in online gaming applications. At the other end of the spectrum, various forms of video-based communications are important, such as SnapChat’s disappearing video stories, as well as other services such as Skype and FaceTime.

Even for basic calling-type access, WhatsApp and Viber have grown huge, while assorted enterprise UC/UCaaS services such as Skype for Business and RingCentral are often “owning” the business customer base. Other instances of voice (and messaging and video) are appearing as secondary features “inside” other applications – games, social networks, enterprise collaboration, mobile apps and more – often enabled by the WebRTC standard and assorted platforms-as-a-service.

Smartphones and the advent of 4G have accelerated all these trends – although 3G networks have seen them as well, especially for messaging in developing markets. Yet despite the broad uptake of Internet-based messaging and voice/video applications, it is still important for mobile operators to provide “boring old phone calls” for mobile handset subscribers, not least in order to enable “ubiquitous connection” to friends, family and businesses – plus also emergency calls. Plenty of businesses still rely on the phone – and normal phone numbers as identifiers – from banks to doctors’ practices. Many of the VoIP services can “fall back” to normal telephony, or dial out (or in) from the traditional telco network. Many license terms mandate provision of voice capability.

This is true for both fixed and mobile users – and despite the threat of reaching “peak telephony”, there is a long and mostly-stable tail of calling that won’t be displaced for years, if ever.

Figure 1: Various markets are beyond “peak telephony” despite lower call costs

Source: Disruptive Analysis, National Regulators

In other words, even if usage and revenues are falling, telcos – and especially mobile operators – need to keep Alexander Graham Bell’s 140-year legacy alive. If the network transitions to 4G and all-IP, then the telephony service needs to do so as well – ideally with feature-parity and conformance to all the legacy laws and regulation.

(As a quick aside, it is worth noting that telephony is only one sort of “voice communication”, although people often use the terms synonymously. Other voice use-cases vary from conferencing, push-to-talk, audio captioning for the blind, voice-assistants like Siri and Alexa, karaoke, secure encrypted calls and even medical-diagnostics apps that monitor breathing noise. We discuss the relevance of non-telephony voice services for telcos later in this report).

4G phone calls: what are the options?

  • CSFB (Circuit-Switched Fallback): The connection temporarily drops from 4G, down to 3G or 2G. This enables a traditional non-IP (CS – circuit-switched) call to be made or received on a 4G phone. This is the way most LTE subscribers access telephony today.
  • VoLTE: This is a “pure” 4G phone call, made using the phone’s in-built dialler, the cellular IP connection and tightly-managed connectivity with prioritisation of voice packets, to ensure good QoS. It hooks into the telco’s IMS core network, from where it can either be directly connected to the other party (end-to-end over IP), go via a transit provider or exchange, or else it can interwork with the historic circuit-based phone network.
  • App-based calling: This involves making a VoIP call over the normal, best-efforts, data connection. The function could be provided by a telco itself (eg Reliance Jio’s 4GVoice app), an enterprise UC provider, or an Internet application like Skype or Viber. Increasingly, these applications are also integrated into phones “native dialler” interface and can share call-logs and other functions. [Note – STL’s Future of The Network research stream does not use the pejorative, obsolete and inaccurate term “OTT”.]

None of these three options is perfect.

Content:

  • Executive Summary
  • Introduction
  • Telephony is still necessary in the 4G era
  • 4G phone calls: what are the options?
  • The history of VoLTE
  • The Good, the Bad & the Ugly
  • The motivations for VoLTE deployment
  • The problems for VoLTE deployment?
  • Industry politics
  • Market Status & Forecasts
  • Business & Strategic Implications
  • Is VoLTE really just “ToLTE”?
  • Link to NFV & Cloud
  • GSMA Universal Profile: Heaven or Hell for Telcos?
  • Do telcos have a role in video communications?
  • Intersection with enterprise voice
  • Conclusions
  • Recommendations

Figures:

  • Figure 1: Various markets are beyond “peak telephony” despite lower call costs
  • Figure 2: VoLTE, mobile VoIP & LTE timeline
  • Figure 3: VoLTE coverage is often deployed progressively
  • Figure 4: LTE subscribers, by voice technology, 2009-2021

Full Article: Technical Architecture 2.0 – On-Demand Networks & OSS-BSS, User Profiles, Enabling Services

NB A full PDF copy of this briefing can be downloaded here.

This special Executive Briefing report summarises the brainstorming output from the Technical Architecture 2.0 section of the 6th Telco 2.0 Executive Brainstorm, held on 6-7 May in Nice, France, with over 200 senior participants from across the Telecoms, Media and Technology sectors. See: www.telco2.net/event/may2009.

It forms part of our effort to stimulate a structured, ongoing debate within the context of our ‘Telco 2.0′ business model framework (see www.telco2research.com).

Each section of the Executive Brainstorm involved short stimulus presentations from leading figures in the industry, group brainstorming using our ‘Mindshare’ interactive technology and method, a panel discussion, and a vote on the best industry strategy for moving forward.

There are 5 other reports in this post-event series, covering the other sections of the event: Retail Services 2.0, Content Distribution 2.0, Enterprise Services 2.0, Piloting 2.0, Open APIs 2.0, and Devices 2.0. In addition there will be an overall ‘Executive Summary’ report highlighting the overall messages from the event.

Each report contains:

  • Our independent summary of some of the key points from the stimulus presentations
  • An analysis of the brainstorming output, including a large selection of verbatim comments
  • The ‘next steps’ vote by the participants
  • Our conclusions of the key lessons learnt and our suggestions for industry next steps.

 

The brainstorm method generated many questions in real-time. Some were covered at the event itself and others we have responded to in each report. In addition we have asked the presenters and other experts to respond to some more specific points.

 

Background to this report

The implementation of new ‘Two-Sided’ Telecoms Business Models has major consequences on telco network architecture. Perhaps most importantly, data from separate internal silos needs to be aggregated and synthesised to provide valuable information on a real-time basis. Key process interfaces that enable new services must be made available to external parties securely and on-demand. Network and IT functions must start collaborating and function as a single entity. Operators need to migrate to a workable architecture quickly and efficiently; vendors have to support this direction with relevant new product offerings and strategies.

Brainstorm Topics

  • What are the implications of adopting 2-sided business models on telco technical architecture?
  • What does the roadmap to a Telco 2.0 architecture look like?
  • As the network becomes more intelligent to support smart phones and App Stores, what are the most important investments for telcos?
  • What are the priority areas for transformation to enable new services?
  • Why are user profiles so important for telcos?

 

Stimulus Presenters and Panellists

  • Werner Vogels, CTO, Amazon.com
  • Richard Mishra, Director, Strategy and Standards, Amdocs
  • Alireza Mahmoodshahi, CTO, COLT
  • Paul Magelli, Head, Subscriber Data Management, Nokia Siemens Networks
  • Michel Burger, Head, Service Architecture, Vodafone Group

 

Facilitator

  • Thomas Rambold, CEO, DESS, Associate, Telco 2.0

 

Analysts

  • Chris Barraclough, Managing Director, Telco 2.0 Initiative
  • Dean Bubley, Senior Associate, Telco 2.0 Initiative
  • Alex Harrowell, Analyst, Telco 2.0 Initiative

 

Stimulus Presentation Summaries

Technical Architecture 2.0

Thomas Rambold, Associate, Telco 2.0, presented on the end of clearly defined services – we now face thousands of segments, and no distinction between ”just voice” and ”just data”. Broadband means that I can simultaneously be an Amazon user, a father, and many other things. Distinctions between enterprise and consumer services, private and public, have changed.

This implies much greater complexity in the customer relationships; the Over-The-Top (OTT) players have struggled to get their arms around the total relationships. Carriers have identified Fort Knox on the diagram (customer and network data management) as somewhere they can excel.

The walled garden is no longer sustainable. OTT offerings are already growing fast and, when they start using Telco APIs in earnest, this will accelerate. We need to link these services with customers – the carriers are the only actor capable of acting as a broker between the API users on the one hand, and the full suite of customer data (residing in ‘Fort Knox’) on the other. It is vital to be on-demand, if not necessarily truly real time. You can’t make people fill in forms to start a service – authentication, sign-on and billing and payment need to be automated.

Paul Magelli, Head, Subscriber Data Management, NSN: ”Would you be happy letting a Telco do data mining on you that you wouldn’t tolerate from the Government?”

Currently we are struggling to bridge the gap between the network and the OSS/BSS systems.  We simply can’t get the on-demand response we need.  So now we’re merging telco and IT organisations together, analysing the telco and IT environments, trying to get them to work together, in concert, and react faster.

The service delivery environment; a year ago, this would have been a big SDP from a traditional telco vendor. But now the services have moved out to the network – into the cloud, into mash-up environments, on to native applications on devices. It’s increasingly challenging to make these services useful and timely and to guarantee security and privacy across all these domains.

 

Service Value Management, Amdocs’ vision for next-generation services

Richard Mishra, Director, Strategy and Standards, Amdocs, said we are living in interesting times: We face sophisticated customers, exotic delivery platforms, and a recession!  Perhaps we need to revisit core values, get back in the box and think more deeply. Revisit the core strengths and disciplines of operating a carrier-grade telecoms network (but not retain the bad attributes).

There is constant talk of service, even by the TM Forum back-office people, who are never seen from outside the Telco. But the next step after resource deployment is, inescapably, fulfilment. And with all this talk of service, what about the shareholders?  Finally, having created the service, spent the capex, and deployed, you need assurance – monitoring service performance against the performance you offered the customers.

We’re working with ever-increasing interdependence between infrastructure, service, consumer and enterprise applications, and devices. This needs diagnostics and monitoring for all these levels, and careful management of the consumer experience.

Our Full Service Provider Integration Framework provides tools for continuous improvement as defined in the left half of eTOM; covered by contracts designed to match. In our deployment in Atlanta, we used this and special tools we developed for the carrier Ethernet network. We didn’t try to recreate the special capabilities there; but we did subject it to the traditional disciplines of managing a carrier network.

As a rule, Telcos no longer customise stuff; we can’t make our own SDH management tools any more, notably for reasons of intellectual property. So it’s now a question of assembling agile value chains from many other vendors, components and sources.

 

Building Trusted Relationships

Paul Magelli, Head, Subscriber Data Management, Nokia Siemens Networks said that customer data plays a key role in Telco 2.0…but does it exist? Is there enough available in our networks?

Nokia Siemens is working on the following assumptions:

1.     A multitude of business models;

2.     Broadband connectivity everywhere;

3.     5 billion subscribers;

4.     Applications all migrated onto the Internet.

This implies that successful applications and services will be information- and subscriber-centric.

Richard Mishra, Head, OSS Strategy and Standards, Amdocs: ”Data will become a treasured part of the business model.”

We really need rich profile information – profiles are what we say about ourselves. It’s clear that there is enough information, but can we get at it? 76% of respondents in our survey think it’s the most important issue; 86% think it’s important for network development.

Consider a use case in banking. To improve contact with customers, we need to know things like: is the customer available? Interested? Is it a good time to reach me? Is this the best way to reach me? Is this the right language? For this, we need the ability to do real-time subscriber profiling as well as historical data analysis.

But it’s more complicated than that. Current data isn’t enough – time series is really important. It is surprising that operators recognise this but haven’t done very much to solve it. Only 14% have real-time data analysis. And identity is more complicated than that – people have multiple devices, multiple SIMs, and multiple identities. Privacy is another big issue. Permission is frequently abused; there is a huge generation gap in attitudes around what constitutes privacy, and the legislation is very different between different jurisdictions (and usually lags the market).

If we could provide a single point of access for managing your identity…huge opportunities await. But it’s crucial to resolve the privacy issue by giving customers control of their own data.

 

Building the business-grade cloud

Alireza Mahmoodshahi, CTO, Colt asked how much do our customers know about cloud computing? Not much, he said, we’ve done well in clouding their minds. He gave a short brief on COLT; its origins in the City of London, its European fibre network, its large enterprise customers.

There is a framework for ICT; the Telco at the bottom, providing dark fibre, bulk data and voice. Then, above that, data centres and IT infrastructure like hosting, co-location, network operation. Then a vast range of applications specific to tasks run on top of that.

Not many operators are enamoured with their position at the bottom of the stack…

…on the other hand, it’s hard to find anyone who can replace the things that Telcos can do. Most clouds don’t offer any kind of SLA, so critical transactional services can’t use them. Traditional clouds are on the left of the diagram, similar to IT infrastructure. Operators don’t want to be penned into the low-value bottom right: they need to push up and left to escape. Meanwhile, clouds tend to have no SLA for the sector from the cloud to the end-user, and not necessarily between the enterprise and the cloud: there are too many participants to provide an SLA covering the whole thing. So the opportunity for the Telco cloud is to provide end-to-end SLAs.

The crucial development to enable business-grade clouds is to virtualise all elements of the system. Then, control priority for applications running on them. This is achieved by queuing them through a COLT-patented policy scheduler; this despatches tasks to a pool of virtualised servers, themselves providing a pool of threads.

Then we set up the API/SDK third-party access to the platform to empower the applications developers. If you want to do this you need to control QoS and also application-layer dispatching across the entire system; carriers are probably the only actors who can offer this.

 

Participant Feedback

Introduction

The fragmented and sometimes opposing views of the audience in the feedback (and voting) are not new or surprising. It is a key indication for service providers and operators that changes are overdue and must be taken seriously. It also demonstrates the complexity of current silo’d approaches, and the inability of a single company to change this. Despite this complexity, operators will have to focus investment on strategically important projects, particularly during these difficult financial times. Such an approach will give us the chance to reduce complexity and reduce operating costs. Most importantly it will enable operators to produce agile technical architectures with the required flexibility to meet customer demands.

 

Feedback: grounds for optimism

The technical architecture session produced some significant levels of optimism from the audience….

·         Promise of new future. [#5]

·         Some real applications of Telco 2.0 model. [#6]

·         Good ideas for large enterprise and government segments. [#12]

·         Triggers my thinking and confirms my assumption. [#15]

 

Feedback: …and cynicism

…albeit tempered with a degree of cynicism about the validity of the examples cited

·         We don’t know when we will get there. [#9]

·         Still industry jargon driven. [#17]

·         All seemed to be a bit ‘defensive’ of legacy models and were more oriented to Telco 1.0. [#18]

o    Re 18 good point. 90% of large carrier environments could not move to Telco 2.0 due to restrictive contracting structures with their existing OSS vendors. To add to the pain, they usually don’t have their source code so they don’t really control their destiny (especially if outsourced). [#43]

·         Mostly still talk, no examples on the ground yet. [#20]

·         Still very much 1.0 and technology driven, to view user and real new business model. [#44]

·         Unfortunately human beings are not compliant to marketers Telco use cases ;-). [#46]

o    46; Telco use cases are uninformed by real data. [#49]

·         Would it be better to define what to do and where to go, before arguing potential obstacles and potential regulatory matter before the idea has started? [#62]

 

Feedback: Customer data issues

In particular, the subscriber data management model seems aspirational, if trust issues can be resolved. However, there were a lot of questions wondering whether Telcos’ use of customer data would be either as accomplished – or consumer-friendly – as Internet-based players like Amazon’s. There also appears to be a debate brewing over whether or not Telcos’ customer data is “better” than that of web players’.

·         Single customer data ‘vault’ from Nokia/Siemens is a great idea; doubtful any carrier brand has the consumer trust to pull this off-more likely for VeriSign, Symantec or someone else. [#25]

o    25 – I agree. There also needs to be reciprocity. I want to be able to authenticate on an operator network with my Facebook ID or similar – or with another operator’s identity. [#33]

·         Very illustrative presentation about profile, profiling and identity. [#39]

·         Nokia Siemens idea seems good, but how can they guarantee that the customer data go to a trustworthy person? The bank manager of today could be the disgruntled laid-off employee of tomorrow selling the data illegally to somebody else. For my part, I rather trust my voice mail box for everybody to leave a message. [#48]

o    48 no business has succeeded by arguing that innovation were dangerous to its established business paradigm. [#51]

·         Give customers even little incentives and they willingly hand over their data. [#63]

·         In France this week a guy spent a night in jail for receiving a SMS whose content was considered ‘security threat’ ….trust????? [#60]

·         Any examples of where operators have offered services using the subscriber profile mgt capabilities discussed by NSN? [#10]

·         In the NSN subscriber profile example, to which extend are the subscriber data exposed to 3rd parties, and by which standardised approach? [#35]

·         For the NSN concept, do we first need a regulatory framework for ‘identity portability’ so that we can churn ID providers? [#37]

·         Why as a user can I not hold my data and share it with who I want, if it is so valuable why don’t I charge for it as well? [#47]

o    Re: 47 THAT IS THE IDEA! The idea of the 2 sided biz model (IMHO) is that your data is valuable. You should sell it by allowing the operator to monetize it with 3rd parties then ‘pay’ you through reduced service charges and greater service coverage/offerings. [#55]

o    47, in a sense you do. You get better products 0n Amazon by giving product feedback; on Blyk you get free minutes and data in exchange for insight and data. Payment from users is not always monetary (it is sometimes data and information) and, likewise, payment to users for their ‘data’ will not be monetary but through increased value. [#61]

·         Further to Werner’s question of who owns the data — who do operators give access to sensitive data? Would customers like it if they know that the carrier may allow their BSS vendors to manage call information or data event records? Do carriers have access to the source code to verify integrity of mission critical apps? [#52]

·         Private information is valuable. Why do not think share the value of private date with the consumer? [#56]

·         Today – what percentage of Amazon’s data it collects is used to improve user experienced and increased engagement + purchasing? [#59]

·         Access to data for Telco 2.0 is regional/legal/societal dependent. Operators need a good PR effort to allow opt in for customers to fuel the two sided revenue model. [#66]

·         Maybe there could be a bureau operator that can abstract the customer and all related data on behalf of the operators … where people that are willing to be Telco2.0 involved can opt in. [#68]

·         Bravo Werner. Telcos need to think about the customer first. What Telcos facilitate the option for customers to send data to 3rd party for monetization opportunities? [#69]

·         Isn’t Telco 3.0 a free connection to the network in exchange for shared consumer behaviour data? [#71]

o    71 could see Google trying this in 5 years time if the cost of Telco network is driven down sufficiently. [#75]

·         People are scared by poor data sunk into Telcos that they have no control over. When is data opening up to cleansing going to happen? [#73]

o    Re: 73 the data is already there. [#76]

 

Feedback: the cloud

There was plenty of interest in the COLT presentation on the Cloud…. but also plenty of cynicism again

·         Colt just showed what Telco 2.0 is all about. That model enables innovation thru cost reduction and state of the art architectures. Why don’t operators run their back office in a similar approach? [#13]

·         Is Colt’s cloud real yet and have COLT sold anything yet? [#16]

·         Bravo Colt. If it exists it is a model as it should be. They sign up for the SLA and they lay forth a bed of enablement. [#19]

·         If Colt has that architecture in operation, they should be running the back office for other Telco operators. [#34]

·         Relative to Colt’s view – what about Salesforce.com who seems to have pulled this off on their own. [#29]

·         Does COLT use its own cloud services? [#38]

·         Where the incentive is for existing OSS vendors who have long terms managed services contracts to innovate and move to Telco 2.0 architectures (e.g. SaaS) like Colt? [#28]

 

Feedback: COLT vs Amazon

… although whether COLT’s vision (or Amdocs’) is as advanced as that presented by Amazon was doubted

·         Amazon ‘eats’ their own cooking (their cloud) and COLT? [#14]

·         What is colt’s business model (price structure) and how does this differ from Amazon? [#8]

·         How does Werner really feel about legacy telecom operator back office Telco environments? [#30]

·         How does Amdocs view Colt’s model? [#23]

·         How would Amdocs view Colt and Amazon models? Seems much difference with their approach. [#7] 

 

Feedback: Carrier-grade – what is it worth?

But do end users really think “carrier grade” is important as the operators? Will they pay a premium for it?

·         I’ll believe in ‘carrier grade’ when enterprises can get SLAs for mobile coverage. [#45]

·         Is carrier grade not shifting now that many users have several alternative means to perform a communication? [#57]

·         Seems the industry still have major problems in freeing themselves from network drives. [#22]

·         Carrier interoperability and collaboration could solve many network issues. [#24]

·         From what I can gather there has been talk about all this for some time. Based on this the Telcos have failed to transform while other companies have. Surely Telcos will change too late to take any true advantage of the possible opportunities that exist today and other companies will take advantage. Why don’t Telcos focus on their core competence – the network? [#36]

o    36, for the simple reason that the value of the network itself is in continuous decline. Got to look elsewhere – make money because they own network not through the network itself. [#42]

·         These arguments are the same ‘net head’ vs. ‘bell head’ arguments that occurred in the late 90’s. How do we resolve the issues? Telcos clearly are behind and are insisting on making everything ‘carrier grade’ at extraordinary costs? Doesn’t seem very 2.0, does it? [#41]

 

Feedback: crucial enablers

There were also various other comments about the enablers of the two-sided platform, and the consequences of personal device proliferation:

·         Cascading SLA’s is old stuff, nothing new. [#50]

·         XaaS is very valid a concept, and so is cloud computing/storage/network, but these are two different things – XaaS may or may not be using cloud principles and technologies. [#65

·         Simplification of capabilities available for third parties. [#27]

·         What is the highest priority issue for Telco 2.0 enabling architectures that does not exist today? [#21]

·         OPEN standards vs. licensed software? [#32]

·         5 B user…. 5o B devices….customer data from all these!! [#26]

·         How many people have more than one mobile device? 5 are extreme. [#31]

o    re31 – in Europe, probably about 1.4 mobile devices per person, and >2 in Italy. Verizon in the US has suggested that ultimately 4+ is not implausible. [#40]

 

Participants’ “Next Steps” Vote

Participants were asked “How well current industry activity around technical architectures supports the development of Telco 2.0 business models?”

  • Very well – the industry is shaping up well for delivery and new business models.
  • Good start but more needs to be done – major building blocks are missing.
  • Lost cause – the industry will never deploy the capabilities for new business models

Lessons learnt & next steps

Since the development of broadband access, the Internet world has recognised that customers can have many, dramatically different roles and attributes, needing specific functionality, preferences, and user profiles. Operators are in a unique position in that they have a fuller picture of customers than any single website or retailer or service provider. Several have already recognised this, and a number of vendors are offering scalable platforms which claim to be in line with the current EU legislation on data protection.

Marc Davis, Chief Scientist, Yahoo! Mobile: ”Data is to the information economy as money is to the economy. But there is a missing infrastructure – because there’s no user interface for this data and what is the equivalent of a bank for this data – who looks after it?”

But as well as user profile data, the 2-sided business model requires on-demand response from the network infrastructure. It will not matter whether it is the network or OSS/BSS/IT element that is breaking down – customers won’t care, they will just find the situation unacceptable. Both the network and IT elements must work together to deliver this. Operators are moving in that direction organisationally and structurally.

Telco 2.0 expects that this will result in new implementations of control & monitoring systems such as Resource & Service Control Systems (RSC). As services are the key business drivers, the opening up of the walled gardens is changing the service delivery platforms quite rapidly, as most new applications are centred around apps stores, mash-up environments, XaaS environments, and smartphone Web browsers, etc. which do not demand a traditional SDP or SDF. In addition, enabling services are becoming an essential element in operators’ core products. These enabling services will, in the future, allow operators to monetize their network assets.

These enabling services need a framework, which is highly flexible, agile and responsive, and integrated with the features defined by NGMN. While not all these points are implemented yet, there is increasing understanding at the operators, upstream service providers, and regulators that this new phase, opened up through the 2-sided business model, represents a historic opportunity for all members of this ecosystem.

Marc Davis, Chief Scientist, Yahoo! Mobile: ”What if we had new, industry standard terms of service under which users owned their data?”

Before the technical details can be finalised, of course, business models need to be scoped. However, the major technical areas discussed above are focal points for technology development. In the short term, Telcos should:

  • Build up a logical semantic database as preparation for database integration;
  • Include migration from 2G and 3G and backwards compatibility in LTE tenders;
  • Prepare a user profile database;
  • Reduce the number of OSS/BSS systems;
  • Develop real-time responsiveness in OSS/BSS systems;
  • Separate the control and data planes, separate services from transport;
  • Implement and deploy an RSC system as a multivendor abstraction layer. 

In the longer term, operators will need to:

  • Integrate the network and IT elements of the on-demand infrastructure;
  • Set up a full user profile with privacy protection and more granular information;
  • Integrate provisioning, activation, network and bandwidth management, and policy enforcement;
  • Recognise that Web-based service environments will overtake the SDP;
  • Develop a collaborative approach to multi-vendor app stores.

Mobile Standards Processes: Do they inhibit business model innovation?

(This is a modified version of a post first published by Dean Bubley on his Disruptive Wireless blog)

An important area for Telco 2.0 strategists to consider is the way that technical standards are created in the communications industry, and the direct and indirect impact this has on future business models.

Either by deliberate intent by “traditionalists”, or accidental inertia, standards often tend to entrench Telco 1.0 thinking and processes. Going forward, it will be important to influence the way standards (and requirements) are developed, in order to ensure that business model innovation is not “frozen” out of future technlogical deployments.

Attendance at the recent LTE Summit in Amsterdam stimulated this note, as various presentations and offline discussions highlighted the way that standards bodies operate (notably 3GPP).  Various examples showed risks that could delay ecosystem development, entrenching legacy business models for operators and others.

This is not necessarily intentional, as many standards groups are staffed by engineering-type people, who often try and avoid the whole issue of commercial models. This is either because they have limited understanding of that side of the industry, or limited time – or perhaps are worried about regulatory and anti-trust implications. But having said that, there is also a huge amount of politics involved as well, ultimately driven by commercial concerns.

Often, this is particularly driven by vendor-centric vested interests, looking to promote inhouse specialisms and protect future revenue streams, rather than operator-based concerns. Where they are operator-based, they tend to reflect “old-school” views from legacy silo business units, rather than the newer “2.0” thinking which is evolving in corporate strategy departments.

The problems arise because certain aspects of technical architecture can act as limiting factors in a market context. Physical SIM cards, for example, need to be distributed physically. Which means that a customer has to go physically to a store, or have them delivered via the post. So what seems like a basic technology-led decision can actually mitigate against particular business models – for instance, ad-hoc usage of mobile networks – by adding in “latency” of hours or days to a process of sign-up for the customer. In this example, there is also an implicit requirement for the distribution of the SIMs, as well as associated production and management costs.

Alternatively, dependencies between otherwise separate sub-systems can cause huge brittleness overall. LTE is being optimised for use with IMS-based core networks and applications. But not all operators want to deploy IMS, even if (in theory) they want LTE – again, restricting business model choices or forcing them towards what is now a non-optimised radio technology. It seems as though 3GPP is trying to use a popular technology (LTE) as a means to crowbar an unpopular one (IMS) into broader adoption.

A specific knock-on impact of this has been the very slow definition of a voice and SMS service for LTE mobile networks – the IMS-based standard called MMtel has been criticised for three years and has achieved almost zero market traction. This now threatens to delay overall deployment of LTE networks – which ironically may mean that vendor politicking and intransigence in the standards processes will ultimately prove counter-productive. It has already drawn pragmatists to work on a non-standard voice-over-LTE technology called VoLGA.

A parallel set of issues are seen in the insistence of a lot of mobile operators to only view each other as peers, through the GSMA club, and various of its standards initiatives like IPX. This reinforces the notion that alternative communications service providers like Skype or FaceBook are *not* peers, but instead deadly enemies, pilloried as “over the top players”. For some operators that competitive stance may be valid, but for others they might be critical partners or even (whisper it) in a dominant role, for which the MNO is a junior part of the ecosystem.

Freezing old-fashioned assumptions into standards and architectures, often without even identifying that those assumptions exist is a recipe for disaster. Numerous other standards processes, such as RCS (Rich Communications Suite) also seem to perpetuate 1.0 models – essentially next-gen walled gardens.

This isn’t to say that standards are bad – but just that there is often no mechanism by which seemingly-sensible technology decisions are double-checked against potential future business models. Having a cycle in which people ask questions like “Will this work with prepay?” or “What’s the wholesale model?” or “What happens if 3 people want to share one ‘account'” and so forth, would avoid many of these mistakes. You can never account for all eventualities, but you can certainly test for flexbility against quite a range.

Again regarding the LTE event, it is notable that there was not a single mention of the word “MVNO” during the whole conference. Nobody has thought what an LTE-based MVNO might look like – or whether there might be cool features which could enable such an provider to provide more valuable services – and generate more revenue for the host MNO. One panel of luminaries returned blank stares when asked about implementing open APIs on the radio network, to make it “programmable” for developers or partners. It seems likely that there won’t be latency-optimised virtual mobile networks for gaming, any time soon.

Many speakers appeared to view the only mobile broadband business models as traditional contract and prepay mechanisms – there was no talk of sponsored or third-party paid access. No consideration of the importance of Telco 2.0 strategies. No discussion about where in the 4G architecture that a content delivery network might interface, and so on.

One option for fixing this problem is via the other industry bodies that don’t set standards themselves, but which can consider use cases and business models a bit more deeply – NGMN, OMTP, Femto Forum and so forth. Many of these groups are pragmatic and much broader in vision than the purely technical standards groups.

Perhaps this is the level to bring in these commercial considerations, so that they can then “suggest” specifications for the standards bodies to work to. They could ask questions like “does this architecture make MVNOs easier or more difficult to create & run?” or “what could be done to the standard to enable richer wholesale propositions?”

So maybe documents which say things like “Future mobile networks MUST be able to support a variety of MVNOs of example types A, B and C” could force the standards groups to refocus their efforts.

In any case, the Telco 2.0 Initiative believes that the future success of business model innovation could be gated by well-meaning but inflexible standards. Strategists and C-level executives must ensure that their organisation’s participants in standards bodies are aligned in thinking with holistic, 2.0 view – and not just trying to protect historic silos against the forces of change.