Bring it on: leading telcos are upbeat about facing the future
Some of the speakers at next week’s FutureNet World event discuss their strategic and commercial priorities regarding the future network with Contributing Editor Annie Turner.
We all know that network operators are under pressure to speed up their digital transformations, but what are the main drivers? According to Mallik Rao, CTIO, Telefónica Germany, “Telcos need to manage increasingly complex network and IT architectures to handle the diversity of mobile communications standards and applications. This creates an urgent need for transformation and using new ways for deployment and maintenance.
“Open networking, automation and disaggregation enable telcos to better manage their network and IT services, meet customer expectations and become future-ready. At Telefónica Germany we see ourselves as one of the pioneers in this transformation phase, for instance regarding Open RAN, disaggregation and cloud deployments.”
Get a good start
Terje Jensen, SVP, Head of Global Network Architecture, Director 5G Readiness Strategic Program at Telenor, has distinct ideas about how to speed up their transformations. He says, “Clear ambitions and directions must be set for activities to deliver a coherent result. This [comes from] defining scopes and objectives at the start as well as following up on outcomes, while execution should be flexible. During the initial phase, all personnel need to be onboarded about the purpose [of the transformation] and the planned achievements.
“When activities have clear scopes and expected outcomes, they can run in parallel, which naturally speeds up the overall execution. A condition [for success] is that interfaces are set so each activity relates to an environment as anticipated. Hands-on management is implied to swiftly clear blockers.”
Data difficulties and getting smarter
Data management has presented a huge challenge to operators for years: they have immense volumes of it, the question that has proved hard to answer is how to extract value from data. Jukka-Pekka Salmenkaita, VP AI and Special Projects at Elisa, says, “Many of the AIOps use cases require data across multiple operational systems. Traditionally the data has been very siloed, making use case development and deployment a very slow process. A solid data foundation across source systems is key foundation for AIOps development.”
A reason for many telco failures regarding data management is taking “a very centralised approach,” JPS says, because it “tends to become too rigid, slow to evolve, and fails to engage all required stakeholders. This is key reason why ‘data lake’ initiatives fail to deliver the expected value.” He recommends a more modular approach that distributes responsibilities closer to domain experts and adds that the so-called ‘data mesh’ is a promising approach to operationalise data management in more modular, distributed manner.
A data layer that can handle operational use cases, not only reporting and business intelligence (BI), is a key enabler JPS says, and stresses the importance of fully closed-loop automation. He states, “Our approach has been as follows. First, pilot closed-loop automation in specific domains. Second, add value by moving from heuristic and deterministic use case implementations to machine learning-based implementations. Third, set up fundamental DataOps and MLOps practices shared across the domains. Fourth, expand [the number of] domains covered and cross-domain use cases.”
Jenson notes that currently in the industry, “Smartness gained from AI and machine learning is used to various degree in processes, and gradually we will need to improve that level of smartness as we gain additional insights. End-to-end perspectives are captured by connecting different processes, while process re-design is also done to simplify the overall flow and remove inefficiencies. New technologies often allow higher degree of automation and use expert and learning algorithms. These are part of the modernisation that gradually expands the automation of more end-to-end processes. This is also key for digital interactions with customers and partners.”
Filling the skills gap, stretching the budget
Data management aside, other “blockers” referred to by Jensen can also include what look like intractable problems of lack of the right skills and investment constraints. Jensen is nothing daunted. “Most of the activities involve partners in some ways. Therefore, leveraging each others’ capabilities and capacities is important: [it] is a proven way to gain synergies [and] lower costs as well as improving the speed. This is an option in many cases as partners and customer want to co-create for innovative and sustainable solutions. The approach further strengthens the trust in the solution as it is built to bring value to the customer and society at large.”
On the subject of the common good, sustainability is embedded in almost every telco’s strategy. Juan Francisco Redondo, Senior Manager Network Strategy & Architecture at Three UK, stresses that for operators, sustainability is “not a question of cutting costs, but of actively managing the incremental traffic demand in a sustainable manner from financial point of view. Therefore, the ethical imperative and the responsible costs management of the networks that support our services marry nicely.”
Sustainability by design means “that the resources utilised to deliver products and services are part of the value chain in a way [that] their value is maximised and their cost and environmental impact is minimised,” he adds. “Bringing the sustainability dimension into the decision-making process across different business areas not only addresses the sustainability objectives, but allows the operators to operate ‘at scale’, which is definitely needed in an industry with stagnant revenues and margins under pressure.”
Redondo also highlights the fact that the investment community takes into account the maturity in the environmental, social and governance (ESG) journey as a key metric when making investment decisions, “so the focus in this area for telecommunications companies is a win-win from multiple fronts, including the financial one”.
Jensen is also upbeat about matters financial, saying, “In the case of any investment crunch, several financing models [can] address this, although they have to be aligned with…ownership and accounting rules. While partner and customer collaboration may complement skills, [you can] also systematically work on internal upskilling within key areas.”
Dynamic partnerships power the future
Even so, he thinks that dynamic partnerships will become more crucial, which “makes it even more important to reduce the threshold for engaging and benefiting from collaboration.”
Rao concurs: “Telcos are the central enabler of digitisation and the driver of a connected society. A strong ecosystem is our opportunity to create more value for our business and customers alike. We drive business growth with better network infrastructure and new services, tailored to customers’ needs, without having to develop and operate all those services and features on our own.”
Telefónica Germany’s partnership ecosystem includes IT service providers, hyperscalers, consultancies and start-ups for its “own fundamental IT transformation, further network roll-out and for providing new connectivity solutions to our customers,” Rao says.
In particular, hyperscalers are becoming really important partners for telcos. For Rao, collaborating with cloud providers is all about bringing technical innovations to market faster, flexibly managing its computing capacity and delivering new 5G applications to our customers with more stable services and better connectivity.
He adds, cloud “provides an optimal basis for industrial 5G networks and the necessary APIs to the world’s leading development tools. Network functions can be implemented fast and seamlessly, for example to automate production and logistics processes. Overall, the cloud is a gamechanger for our industry. I am convinced that partnerships between telco operators and cloud hyperscalers will get closer in the future.”
Edging closer to customers
Joanna Newman, Global Edge Computing and 5G Principal Manager at Vodafone agrees. She points out that Vodafone was first to launch Distributed Multi-access Edge Computing with AWS Wavelength in Europe – in the UK in June 2021 and in Germany in December 2021. Vodafone also offers Dedicated MEC, in partnership with Microsoft. “This technology is now changing the landscape of what is possible for businesses in these countries,” Newman says.
She says that Vodafone sees use cases across range of areas, from healthcare to gaming, sports technology, autonomous transport, biometric security, remote VR, and factory automation.
Rao expands on this saying, “Our connectivity solutions can give corporations and SMEs a huge boost in growth, innovation and efficiency. We provide the technological framework for companies to implement their processes, whether via an IoT marketplace, such as our Telefónica KITE platform, or a private 5G network.”
Redondo concludes that to meet wider ambitions, the collaboration that already exists in the industry for the creation of end-to-end solutions, with significant interdependencies between chipsets, hardware and software elements, will have to be strengthened to incorporate new sustainability angles and frameworks, even beyond energy efficiency.
He says, “All players in the value and supply chains of mobile industry have a role to play in the design, delivery and operations of sustainable products and services.
Initially that happens at individual company level, while working against businesses objectives and considering sustainability aspirations. A good example is the successful efforts by the equipment manufacturers when offering new generations of efficient hardware products that are utilised in mobile networks. This is very positive, but it will not be enough.”
He remains confident that telcos will step up to the challenges, and “Meanwhile, the mobile industry continues delivering fantastic capabilities that enable other industries in their own sustainability journeys.”
You can hear more from the executives in this article at FutureNet World 2022 on the 10-11 May. Find out more and register here.