The top telco trends for 2020 pay homage to the importance of the telecom industry today – telco influences basically every aspect of our lives, from how we communicate to how we commute, how we work, and how we make purchases and relax.
As the decade unfolds, it will give further way to network edge applications, which will benefit from 5G’s ability to provide the right latency, speed, and battery power, while the customer journey and CX will expand to personal experiences on the edge of the smart network touchpoints.
Breaking up is hard to do: Telco faces big questions regarding future commitments and laws
The 2020 telco trends open up a much larger dimension than ever before. In a recent study, McKinsey noted that telcos could generate more value by breaking up, essentially separating the core telephony services from the infrastructure.
In an early article on 5G, The Economist highlighted that 5G actually needs to be run as a public utility, and not by the usual rules of market economy.
This is central to the political, technological, and commercial dispute between US and China on how much leeway in the competitive market for telecom equipment can be given to companies with unknown ownership, with important concerns regarding citizen’s data privacy rights and public security.
At the start of the new decade, we also see the importance of a telco not only in its own ability to generate revenues as a growing concern, but in the much broader importance to the wider industrial economy.
Let’s look at three of the areas which the industry does have the ability to directly change.
Telco trends 2020: The top three
Towers, transmitters, tenancy: Telco is a big player in real estate
Few outside the industry realize that telcos are among the largest players in the real-estate sector, though you can practically see them everywhere – they’re the towers and the transmitters. This is the dimension of the industry, which is unlikely to go a radical change.
Yet even the mobile telephony industry isn’t so mobile at times. Due to the requirements of a backhaul, the last mile had to be either optical fiber or copper networks – but now increasingly a large part of the backhaul is wireless, mostly over microwave links. With 5G the backhaul network will be able to support billions of devices and their related service requests, as well as address ultra low latency in dense networks.
An obvious step is network consolidation, where the real-estate and equipment savings are the uppermost concern. The creation of Everything Everywhere in the UK lead to the decommissioning of over 7300 sites (27% of sites) & moved 40% of IT services to the cloud. The attached analysis by Arthur D. Little provides a good example of similar successes elsewhere.
There’s no single correct answer to this, yet, and it’s among the problems that the telecom industry will solve as it works it way forward.
2. The sustainable way forward: Energy consumption is a big concern
The other secret that the telcos keep is that they are among the biggest guzzlers of energy – roughly accounting for 4% of the global electricity consumption according to an IEEE-published article on broadband communications.
As the decade that opened up with the sights of Australia burning, sustainability ought to be at the top of all our concerns as humanity, let alone the industry.
Telco industry energy consumption by the telephony equipment is one of the biggest sustainability concerns, but impact on the telco bottom lines is also an obvious concern.
Network sharing that saves both the real-estate and energy costs is the obvious way forward. The downside obviously includes reduction of the players, and reduction to a monopoly or duopoly – thereby limiting competition and customer options.
Last but not the least is the technology to ensure that the telco network is greenified. This includes not only that the network equipment is optimized, but also the use of renewables operating in the telco network.
Overall, this is a complex task and the path forward is a gradual one, with smaller successes at each step. This includes network dimensioning to optimization of energy consumption at the sum of the parts of the telco network, as well as monitoring of the equipment for example to limit over consumption, or management of redundancies.
Looking at the energy consumption of the telcos is important, but we should not lose sight of the larger picture of the contribution the telcos make to the sustainability.
The impact of 5G will be felt not only in immediately deducible in bridging geographical divide, but also in several indirect areas such as reducing vehicle emissions, conserving water, reducing food waste, optimizing energy usage, encouraging citizen engagement with sensors, sharing economy with marketplaces, etc.
3. IT and network clouds merge
The industry has been an early adopter of cloudification, with the NFV and SDN being dominant trends in the industry. Telco network virtualization requires a stricter requirement standard for reliability, performance, and availability than IT infrastructure virtualization.
At the same time, the telco networks have not been left unaffected by the broader trends in the IT industry, where Kubernetes is the dominant standard. There have been several attempts to hybridize the approach with the use of Openstack in deploying 5G. Openstack has been the basis for running infrastructure as well as the integration engine to deploy network functions to construct various network services due to its open source nature.
Yet Gartner has provided ample caution on focusing purely on delivering the cloud deployment of the network functions as the way to future. In addition, it recognizes that all the enterprise applications and data previously lived in the data center, whereas now it is more the public internet. The telcos are therefore not disaffected by the trend where data center is not the single point of reference.
Kubernetes is likely to be the key technology to ensure that all telecom applications will be cloud natively designed so as to increase efficiency and utilization of the cloud infrastructure. In addition, 3GPP itself is standardizing the 5G core functions to be cloud native and container based.
The adoption of the IT paradigms by telcos will lead to not only elastic scalability, very much required for the Telco applications due to unpredictable and unplannable spikes in volume, but also offer the future possibility of integration with a broad set of non-telco applications.
Change is the only constant
To summarize, the combination of these broader trends will ensure significant benefits for the end consumers as we move away from the purely consumer experience in terms of a broader journey in form of personal applications benefiting consumers as much as the businesses.
Meanwhile it’s clear that in todays experience economy every service provider needs to deliver first-class omnichannel customer experience that’s hyper personalized and trusted with rich, seamless, and contextual experiences, no matter the touchpoint.