By Hesham Fayed, vice president - head of sales Middle East & Turkey, Atos
With modern data networks, the rise of IoT, and the ongoing expansion of product portfolios, such as smart home and building or data platforms - one thing is certain: the telecommunications business is only familiar with rapid technological change.
What trends will shape the industry in 2022?
With growing cloudification, open radio access networks, and increased competition from cloud hyperscalers, the next few years will be no less frantic. As a result, the following six trends will shape the industry beginning in 2022:
Telecom service providers enter the (private) telco cloud
A megatrend in the industry is the increasing spread of cloud solutions in the construction and operation of networks. Many providers have been using standard hardware and software for several years. The path leads away from proprietary network devices and towards networking with software on “cloud-native” platforms such as Kubernetes on off-the-shelf IT servers.
The telco cloud today is mostly still a private cloud: Many national telecommunications companies distrust the hyperscalers and do not want to make the critical communication infrastructures dependent on them. But it's not just about the cloud: Many telcos have recognized the advantages of agile working methods, which are closely linked to cloud technologies. They also use the concepts of continuous integration and continuous delivery (CI/CD) for their operations support systems (OSS). As a result, new network functions are no longer tied to the update cycles of the device manufacturers. Instead of waiting for hardware and firmware to be replaced, telcos are now implementing new network services via software development in the cloud.
There are more and more campus networks for Industrial IoT
With the ongoing proliferation of Industrial IoT solutions, many businesses are learning to value the benefits of 5G: High data rates (up to well over 1 Gbit/s), low latency periods (less than 1 ms), security, dependability, and scalability They are increasingly relying on 5G campus networks to assure self-sufficiency and safety. These are private networks that businesses can utilise for internal data and voice communication. They will eventually replace standard WiFi in many regions due to their high-quality characteristics.
In campus networks, the public cloud is exploding
Parallel to this, a second trend is emerging: the use of “cloud-native” network software in public cloud environments. That is, at least, the case with 5G campus networks and the control functions of the so-called “control plane.”
The first significant telcos, such as Verizon or Telefonica, are delivering private 5G networks from the public cloud and are collaborating with large cloud providers. At the same time, the hyperscalers offer their own 5G campus networks as an independent service. The sector offers space for many players as the demand for 5G increases steadily. Analysts put the current size of the market for private 5G networks at more than 1.3 billion US dollars and expect annual growth of almost 40 percent.
Telecom networks are evolving into software-as-a-service
Software as a service (SaaS) will definitely transform the way communications services providers (CSPs) are using business support system (BSS) software. This has already happened in other industries and few areas of the telecom industry. And now, it’s coming to BSS. Vendors and CSPs will need to “let go” of customizations, and, in return, they will gain faster time to market, rapid deployment of systems, and new capabilities. Done right, SaaS will also eliminate the need for risky and cumbersome upgrades, deliver up to 80% savings on total cost of ownership (TCO), and offer a worry-free, “as-a-service” model.
Edge servers take the place of proprietary hardware.
Another trend that is already on the horizon is the replacement of proprietary hardware at cell phone stations and local distributors with so-called edge servers – conventional IT servers that are specifically tailored for outdoor use. These, too, are based on cloud technologies such as Kubernetes and are intended to replace older products from well-known network suppliers.
Safety concerns, as well as cost considerations, are major driving factors here.
Standard hardware is much less expensive than proprietary telecom hardware because to its broad use. The latter also provides less flexibility in the creation of local services for mobile devices that are connected: Edge servers will be used for edge computing as a value-added service in the future.
Open access: mobile communications with Open-RAN traditional
Network technology has driven network operators to become somewhat dependent on individual manufacturers and their technologies. That is why some of the large telcos have joined forces in the O-RAN Alliance and are propagating Open RAN (radio access network) as an open alternative. As expected, the basis is standard hardware, virtualization, edge computing and cloud technologies. The RAN (radio access network) establishes the connection to the end devices, transfers them when changing the radio cell, allows access to various services and forwards the data to the telecommunications networks. Open RAN is intended to virtualize this on the basis of an open standard as modular software.
More cloud means more competition
The market trends we are seeing all point in the same direction: Telecommunications networks will become a software-based service delivered via the hybrid cloud — a blend of private and public clouds – in the next years. New business models focused on value-added data services, edge computing, and other services will be critical to telcos' long-term profitability.
However, there is a risk here: telcos are losing their unique selling point as networking specialists, while hyperscalers are already prepared and bringing their cloud and software skills into play.