Telcos’ path to digital transformation

Telcos must adopt horizontal architectures, moving beyond siloed network functions to offer competitive services and platforms beyond connectivity

The transformation of telecom operators (telcos) or communication service providers (CSPs) into Digital Service Providers has been underway for the better part of the last decade, though progress has been sluggish. During the last few years, telcos have made multiple attempts to modernise their networks and shift away from the architectures that featured vertical stacks and siloed network functions.

The urgency of these transformation efforts has been heightened by the hyperscaler community’s continuous progress in developing high-value network-related services on top of the telecom infrastructure. Hyperscalers benefit from their horizontally architected infrastructure, allowing them to address vertical industry use cases that demand scalable compute resources like Infrastructure-as-a-Service (IaaS) or Platform as a Service (PaaS). To remain competitive globally, telcos must adopt a similar strategy and evolve into Digital Service Providers or TechCos, offering services and platforms that extend beyond mere connectivity to enterprise customers.

To differentiate from hyperscalers, telcos must bundle a variety of value-added services like SDWAN, CDN, and Private 5G Services into their cloud offerings

Telcos have made some progress in moving beyond traditional capex-based models towards subscription and as-a-service offerings but there is still plenty of work to be done. New, horizontal architectures will mean that all the elements of network service at the application, infrastructure or network layer will increasingly need to be accessed by APIs, which would support horizontal representations that can hide the rising complexity in the network. Complexity is further increased with the advent of new technologies like 5G and edge computing leading to a shift towards decentralised architecture with the adoption of container-based applications.

Rx FOR DIGITAL TRANSFORMATION

The concept of Network as Code abstracts the underlying complexity of networks and their operations, exposing capabilities through simplified programmable methods like business APIs and SDKs. It brings openness and programmability to the network, enabling the inclusion of developer and vertical ecosystems for new value creation.

Telcos also have a drive to transform their operations from network-centric to customer-centric due to increasing competition, both from within and outside the industry. To achieve this, telcos will need to embrace automation in a big way via digitisation across their networks and IT systems.

Network as Code fosters openness and programmability in the network, facilitating developer and vertical ecosystems for new value creation.

The industry offers technology solutions that can help telcos achieve closed-loop automation in their daily network and service operations. Telcos also need to address changing consumption behaviour of customers with the availability of local content and enablement of low latency use cases, especially for entertainment, like Augmented Reality, Virtual Reality, and gaming.

Moving forward, in their bid to differentiate from hyperscalers, telcos can also bundle a range of services in their cloud offerings, such as value-added services like SDWAN, CDN, and Private 5G services. However, they need to learn from the flexible pricing models that the hyperscalers offer.

TAPPING NEW OPPORTUNITIES

Some telcos have taken different approaches to expand beyond their connectivity roots. Rakuten Mobile and Reliance Jio have developed their own technology stacks to design their networks and services. However, building and managing an in-house operational stack requires engineering skills that are hard to attract and retain. Additionally, due to a lack of awareness of ecosystem evolution globally, the telco may find it challenging to build a scalable telco-grade solution and manage its roadmap.

Technological advances such as 5G, Edge and horizontal clouds are empowering asset-intensive industries to embrace data-driven processes and zero-touch automation, transforming the way man-machine interactions happen. Telcos are in a prime position to tap this emerging enterprise opportunity, which is at the heart of Industry 4.0.

Telcos have made some progress in moving beyond traditional capex-based models, but there is still plenty of work to be done.

Telecom operators in India are following the path of their global counterparts, transitioning from vertical clouds that initially served their internal needs to horizontal architectures for new customers and business models. Moreover, there is a growing trend towards sovereign clouds in response to rising geopolitical and cybersecurity concerns, with governments emphasising the importance of keeping locally generated data within their borders.

As the industry moves forward, embracing these transformations will be crucial for telcos to stay competitive and meet the evolving demands of the digital era. The future of Indian telecom operators lies in their ability to adapt swiftly and leverage these advancements for sustainable growth.

By Arvind Khurana- India Market Leader of Cloud Network Services (CNS) at Nokia

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