I was delighted to attend Network X, the flagship telecoms event for Informa Tech, as a media partner with my podcast Digitel Talk. Wearing my business hat, I also had the opportunity to speak to industry leaders.
The amount of effort that has gone into this event is exceptional. It doesn’t matter which part of the industry you come from there is something there for everyone. As we know the industry is converging and that is the whole point of Network X, to allow the industry to share and learn from each other. Bringing together the various areas within telecoms, including both fixed, mobile and NTN as well as the various telco domains, including infrastructure, transport, core and access. With the aim of fostering business and innovation there was a connected France, start-ups and scale-up programme.
Here is what I learnt and took away from the conference.
Glass half full, not half empty
The headline presentation was given by Dario Talmesio and it gave an optimistic outlook on Telecoms, presenting figures of connectivity revenue reaching $1.24t in 2023, up 1.3% on 2022. Since 2020 the industry has grown 4.7%. Fixed broadband outperformed other segments with 5.1% annual growth in 2023 versus 0.9% for mobile. Since 2020, fixed broadband revenue has grown 17.7%, FCF (Free Cash Flow) $272bn in 2023, the highest level in a decade.
5G- finally!
I have long been a proponent that you only reap the rewards of 5G and actually have 5G when you have standalone 5G which is a combination of RAN and CORE. Dario presented that 5GSA deployments are ramping up with commercial availability by 55 operators (June 2024) representing 54.4% of the global subscribers driven by 5GSA: Capacity, latency, number of devices, (some) slicing and QoS with FWA is the fastest growing Home-broadband segment globally.
Network API
I have been quite a sceptic related to the hype and noise made out of this latest initiative related to network API’s which has been long in the making. With network-API’s it has been part of the Operators portfolio for more than a decade. However, it is predicted that the operator revenue opportunity is about 9 billion dollars which is about 1% of global service revenues by 2030. I had the chance to sit down with Marcus Kümmerle from Deutsche Telekom who is the project manager of CAMARA who pointed out some aspects which might be overlooked but, or in themselves, important milestones for the industry.
- 12 of the largest operators have united to develop a family of APIs which developers can use globally. It is an important milestone that these operators are working together given this is normally a commercially sensitive area.
- By nominating a third party such as Ericsson they are also all getting around the antitrust regulations which would otherwise jeopardise such an initiative. It will be up to Ericsson to ensure that the API is developed in line with CAMARA and the one API initiative. The payment will be the same for all Operators.
- This will be a JV (subject to approval) led by Ericsson and they have also agreed on the revenue share between the relevant parties.
From Telco to Tech-co
I sat in a panel discussion with representatives of Orange, Telenor, NTT Docomo and Deutsche Telecom which was very interesting. We’ve been here before, where we think that technology will solve all our problems. As long as it’s in the cloud everything is solved and will be OK, I hear. I would argue this is an oversimplification, as not all clouds are equal and we also need to consider the edge. In practice, no 2 clouds are the same and need to be tuned and optimised depending on the type of activity and workloads they are expected to process.
We all recognise that the public cloud can manage IT workloads which is also helpful for data analytics. However, that is not adequate for the performance of running network functions telcos themselves. This is something the larger telco groups are working on which will mean the operators themselves taking on the responsibility of running their own telco clouds. This is quite a mind shift and will require a very different way of working between the operators and the vendors where network functions are run within the telco cloud. This will mean a root and branch overhaul of how operators engage with vendors and the acceptance of joint responsibility. For operator groups such as Orange or Deutsche Telecom with multiple operations, this is the direction of travel, starting with 5G. With this approach running one cloud architecture across the complete footprint for network functions could become a reality, if only egos were not involved.
Have Telco bought into sustainability
Sustainability was part of the main presentation given by Arnaud Vamparys CTIO of Orange. He particularly referred to the switch off of 2G and 3G technologies, the move from copper to fibre and the Sylvia open-source cloud initiative. Yogesh Malik the CTO of Tele2 has said that sustainability is now a central part of their mission. In Scandinavia, The Times Magazine rated Tele2 as being the most sustainable company in Sweden,16th in Europe and 37th globally. He highlighted they had been developing their core network themselves moving from 3 cores to 1 core. With Tele2 being known for their thrift, they realise that if done properly sustainability also drives down costs.
There was another panel discussion regarding the future of telecoms regulation and standards who still, in my view, seem to be focusing more on engineering and capacity increases and moving and processing data packets. NGMN the lobbyist organisation representing the Operators have made a clear statement on behalf of the operators that they would like to see 6G being a software upgrade. This also underlines the importance of O-RAN, where you break the RAN down into logical parts which can be replaced. In any case, I would suggest both software and hardware to be designed in a component fashion allowing upgrades of individual parts rather than the whole and needs to be in the standards.
Automation and AI go hand in hand
As the saying goes you need to be able to walk before you can run. The industry seems to be quick to forget its legacy and is keen to sweep this under the carpet. However, legacy is and will remain part of the telecom network domain for the foreseeable future and most traffic is running in this environment. From an investment perspective, it’s for the telcos to decide whether they continue to keep the legacy alive due to network reality and/or obligations or do they move to more flexible, efficient and effective technologies.
From a network perspective, there is still a chasm to be breached through the use of automation to create a baseline to be able to use AI in the networks. In any case, telecoms needs to sort out their network data to be able to leverage both the talent pool of the future and AI. As the head of AI from Liberty Global Nirali Patel said in answer to my question, automation and AI go hand in hand.
To conclude Network X
In telecoms, change is accelerating and Operators need to change the way they operate and focus on the value they deliver value. The serve-co, net-co, tower-co and infrastructure-co are the direction of travel as the exposure of service and API’s becomes easier. We are at several exciting crossroads in telecoms, let the best Opco win!
