The Indian service providers are in the phase of heightened network evolution for the next phase of growth. They realize that the current network infrastructure is incapable of helping them to fight competition from Over-The-Top (OTTs) and also meet the changing demands of the customers. At the same time, they have to prepare the network infrastructure for the upcoming era of the always-connected world of 5G and Internet of Things (IoT).
The industry is advancing faster than it has ever moved in the past because of the growing competition from Over-the-Top (OTT) players and the ever-increasing demand for more capacity and speed from both the enterprise and the retail customers. India is one of the biggest markets for social media platforms, like Facebook and WhatsApp. Growing usage of these OTT services is affecting the revenue of the communication service providers. Besides, the Indian telcos have to continuously think of newer strategies to defend their market share in a hyper-competitive environment, where the Average Revenue Per User (ARPU) is challenging at the best of times.
Drivers Of The CSP Transformation
The changing market dynamics mean that the telcos have to transform to meet the changing customer expectations and also to grow market share in the emerging areas.
Virtualization is a crucial part of this transformation to bring down both their CapEx and OpEx and also to increase the network agility and flexibility for faster response to the changing market demands. The traditional hardware-centric approach needs to give way to the software-focused network strategy, which in turn will allow them to achieve IT-like cloud transformation.
During this transition, the CSPs will move from large and complex functions with complicated service configurations to an approach where they are able to handle more tasks in a simple to configure manner. With this they will be able to slice the network dynamically to add more functions to the network. Network slicing is the key to the 5G architecture and will allow the service providers to support and effectively scale various IoT services.
Even before 5G is a reality, the telcos will use virtualization by enabling deployment of 4G Virtual Network Functions (VNFs) to build out their virtual data centers and cloud infrastructure in a way that will allow them to evolve their business and operational processes towards IT cloud principles.
The Indian telcos need to invest in new architectures and solutions now to prepare for 5G, IoT and additional-cloud-based services since these services will lead to significant additional revenue and will also delight their subscribers. Network Functions Virtualization will also enable the movement of the Indian telcos towards a full communications cloud. It is also a natural next step in network management and service delivery.
However, even as the Indian telcos start to adopt virtualization to leverage its many benefits, they are beginning to encounter orchestration issues, which threaten to impact their transformation journey. A fundamental problem is a confusion whether they should go for Open Source or standards. The Linux Foundation’s Open Networking Automation Platform (ONAP), OpenStack Foundation’s Tracker and ETSI’s Open Source MANO (OSM) projects are some of the emerging standards and they are all addressing the different aspects of the orchestration challenge in the open source environment. The telcos and VNF vendors would do well to monitor the progress of various standards and open source, especially on those, which are relevant for their specific VNFs.
Another critical issue is the lack of a data model for the VNFs. The data model is yet to be standardized, and the service providers should make their use cases clear for end-to-end service orchestration, while VNF vendors should simplify configuration and better parameterize templates.
Even as the standards are being formalized, it is important to realize that the CSPs gain at every step of their NFV journey. Be it basic virtualization, basic automated deployment, advanced automated deployment, basic service orchestration or full-service orchestration, lifecycle management, the service providers stand to benefit from each step of the process. While basic virtualization will help in saving on capital expenditure, the advanced automated deployment will bring down the operational expense for the service provider.
Advocating Standard Taxonomy and Tackling Lack of Standardization
The telecom industry will benefit from having a standard taxonomy for evaluation of the VNFs. The telcos can then use this taxonomy to assess their supplier’s readiness for automation and orchestration. The common language and terminology will lead to a better comparison between the different VNF suppliers and will also gives them a common framework for discussing their requirements.
Secondly, interoperability remains a challenge because of the lack of standardization for data models used to define VNFs. It is for this reason that the service providers tend to go for a single vendor to avoid integration and interoperability issues even when they would like to pick from various VNFs.
The virtualization-driven transformation of the telecom service providers promises significant cost savings and additional revenue streams. The Indian CSPs should start their journey towards virtualization even as the orchestration market develops since they stand to gain at every step of the virtualization. Reduction in capex is the short-term benefit while automation brings down opex and also enables faster launch of newer services in the long-term.
(The author is Group Vice President, Japan and Asia Pacific, Oracle Communications)