The challenges faced by telcos

Secure, reliable, low-latency connectivity is no longer a luxury, and telco networks need to transform to meet evolving customer demands.

A new generation of use cases for telecom networks includes the metaverse, smart cities, connected healthcare, and autonomous vehicles. As telcos prepare for these emerging realities, they have a difficult terrain to traverse. 

Challenges include:

• Reducing margins: As over-the-top (OTT) providers use telco networks to push out richer and more engaging content, telcos also need to maintain their legacy networks, which leads to higher operating expenses.

• Exponential growth in network traffic: High rates of content delivered on video, audio, and gaming platforms—not to mention billions of IoT-enabled connected devices—are placing more demands than ever on networking capabilities.

• Low agility: Many telcos work within a closed network environment built on monolithic architectures and delivered over proprietary hardware and software.

   

The five pillars of telco cloud

To tackle these challenges, telecom network service providers can look to the cloud.

We’ve identified five foundational pillars that can be used to accelerate network innovation and better monetize network investments. 

1. A software-oriented approach

Next-generation industry standards like 5G and XGS-PON require significant investments in network infrastructure. However, the next wave of innovation will come through cloud-native software.  

Software, being inherently easier to deploy and manage than hardware, can enable a more granular control of network functions, security, and SLAs. This can lead to commoditized hardware that supports multiple network functions.

2. An open ecosystem

In traditional access networks, the key components tend to be vertically integrated and come from a single vendor. This has led to a closed estate, where telcos have low visibility of their network operations and are locked into vendors. Industry initiatives to allow for more open network architecture, such as Open-RAN, may help overcome these challenges.

Interoperable network components also enable “best of breed” architectures, where each individual component can be sourced separately and still interact with other components. 

3. The power of edge

As carriers move toward an open ecosystem and decentralized architecture, edge computing is poised to be another key differentiator. Telcos can use far-edge infrastructures, which place devices closer to users and can provide ultra-low latency, location-centric processing. 

Alternately, near-edge infrastructures can be used to deploy content delivery network (CDN) services, which can serve many locations.

4. Cloud native  

Cloud-native architectures enable fast auto-scaling and portable apps. Containerized network functions (CNFs) managed using container management platforms (built on Kubernetes, such as Google Anthos, Azure Arc or AWS EKS-A) can be used to seamlessly manage private and public cloud resources within a cluster. 

Using CNFs, it is much easier to make small, quick updates to network software, while enabling advanced monitoring. Also, through cloud-native management controls, CNFs can help provide better security oversight, granular traffic routing, and automated network operations.

5. Smart use of automation

Automation can help telcos manage growing network complexities and costs. Its benefits can spread across the entire network implementation cycle.

Service management and orchestration-type frameworks allow automation across a diverse set of CNFs and virtual network functions (VNFs), which can span multi-vendor deployments.

Automated CI-CD pipelines can be used to deploy VNFs and CNFs on private or public cloud or at edge locations, and they can help build and tear down virtual networks “on-the-fly.” This enables fast network service deployments, thereby reducing time to market and managing costs. 

Key considerations for migration 

Operators looking to move from traditional telco networks to telco cloud should remember the following considerations.

1. Bake in security

An open ecosystem comes with inherent risk – one that, if not managed properly, can jeopardize large-scale network modernization plans. The distributed nature of an open architecture implies higher exposure.

To mitigate the challenges, telcos need to implement multiple layers of encryption and authentication. Additionally, implement granular access control that mandates policies based on “Principle of least privilege”, “Defense in depth” and “Zero-trust”.  Telcos should make use of modern SIEM (Security Information & Event Management) solutions to identify incidents, events, and threats. When augmented with advanced statistical analytics on network behavior, SIEM solutions can help deliver advanced detection of malicious activities.

2. Create a scalable migration and rollout strategy

‘Brownfield’ telco operators have invested huge sums in implementing their networks. These infrastructures can provide stepping-stones towards a scalable, open-cloud native architecture.

For example, as more operators ramp up their 5G footprint, the 4G setup can be used as a supplement in the radio access space.

However, operators must be mindful of the fallacy of sunken costs and watch for opportunities to truly modernize their networks – even if they don’t decide to do a complete overhaul. 

Typically, an assessment of the current state of virtualization and applications helps create a holistic migration plan. 

Additionally, contextual knowledge of use-cases, user density and user location can help define effective rollout strategies. Start with the leaf nodes of the network before transitioning to the access and core networks.

3. Find ways to optimize your organization

When embracing cloud, telcos have an opportunity to share skills across IT and networks and to break down organizational silos. The network planning, build, and management departments must be geared to thrive in such a software-oriented world. 

This means being more agile to changes and adopting a cloud-native mindset in terms of cost management, reliability, operational excellence, and performance. 

4. Choose the right hyperscaler offerings 

Hyperscalers are stepping up to provide customized, telco-oriented platforms and solutions. These can span edge computing and IoT and even include customized solutions targeted towards private clouds. 

Hybrid and multi-cloud strategies can help telcos avoid being locked to one vendor. 

Also, several service offerings target the different legs of network deployment. These can be used and customized to create solutions for different use cases. Some telco-oriented service offerings may still be evolving and hence be at different levels of maturity – so organizations will need to do a contextual assessment to find the best fit. 
 

A vision for the future

Next-generation networks built on the cloud can not only improve scale and resilience, but also can open entirely new revenue streams.

So how can telcos monetize their investments in telco cloud transformation to unlock new business opportunities? There is an ever-growing list of use-cases and partnerships.

A few highlights:

• Targeting the consumer segment, telcos can explore new markets through immersive experiences that transform user engagement. Whether it’s a virtual cup of coffee with a colleague, a live music event, or portable gaming, telcos can manage high user densities at a low latency through technologies like Multi-Access Edge computing (MEC).

• Telcos can help enterprises usher in an “Industry 4.0” by transforming factory floors and assembly lines. Operators can remotely manage vast device fleets enabled through IoT services over dedicated network slices. Data gathered through these fleets can also help build prescriptive machine learning models that can ensure effective resource utilization.

• Telcos can contribute towards communities through initiatives such as “Smart Cities, Connected Cars” by enabling a hyper-connected virtual reality.

In all these scenarios, telcos have a prime role to play – either as a service provider, an aggregator, or a network provider. 5G, IoT and edge computing hold great promise for telcos. However, to convert this promise into business opportunities, telcos will need to transform traditional networks based on the pillars of telco cloud.