Getting Ready for a New Phase in the Telecom Industry

New Realities – New Demands

The global pandemic has altered the way in which individuals work and live. According to the most current Microsoft Work Trend Index, “73 percent of employees and 78 percent of business decision-makers feel they need a greater incentive to go to work than company expectations.” This is broadly consistent with the Becker Friedman Institute’s finding that 76% of employees whose employment can be performed partially from home desire to work remotely at least once per week after the pandemic has ended.

People increasingly rely on Internet platforms for entertainment, shopping, education, healthcare, etc. in their daily lives. In South Korea, the proportion of mobile video traffic increased from 57.1% in December 2019 to 61.1% in December 2021. In the first half of 2022, Chinese online goods retail sales reached 5.45 trillion RMB, representing 25.9% of total consumer goods retail sales for the same period. According to the China Internet Network Information Center, around 300 million Chinese would have used online healthcare services by June 2022.

All changes will necessitate new requirements for the architecture of telecom networks, from wide area networks to workplace networks and even home networks. For the new reality, the performance and service dependability of wide area networks, including both fixed and mobile networks, are becoming increasingly crucial. According to my most recent blog post, a dependable network is vital to the connected world. CSPs should employ all available technological, organizational, and procedural tools to enhance network performance and dependability.

From an organization perspective, adaptability and security are critical network infrastructure requirements. Industrial actors have largely adopted the multi-cloud strategy to manage their software and apps across different public cloud platforms in a flexible manner. Multi-cloud is a de facto standard, according to the Flexera 2022 State of the Cloud Report. 89% of businesses polled indicated having a multi-cloud strategy, while 80% are adopting a hybrid strategy that combines the usage of both public and private clouds.

As data has become one of the most valuable company assets in the modern economy, guaranteeing data security is a crucial responsibility of ICT infrastructure. The security of telecom networks and services should be viewed from a comprehensive lifecycle perspective, encompassing technological standardization, product development, network deployment, and network operation.

Remote employment, internet entertainment, the platform economy, and other factors have increased the need for home networking. According to China Telecom’s Digital Home Index Report, the average number of smart gadgets per household has expanded dramatically over the previous several years. To support the increasing number of smart devices, the Gbps Wi-Fi router has become the norm in Chinese households, however the interior radio coverage at the 5 GHz band is becoming an impediment to enhancing the user experience.

The post-COVID era necessitates the creation of new sorts of devices and apps. It is anticipated that businesses would accelerate their deployment of IoT devices and apps. China’s MIIT stated this week that the number of cellular IoT connections surpassed the number of human users. According to the most recent prediction by Strategy Analytics, global IoT cellular connections would expand at a compound annual growth rate (CAGR) of 14% between 2022 and 2030. In the meanwhile, the rising desire for quality entertainment experiences and effective working cooperation will generate momentum in the metaverse. Strategy Analytics expects that the installed base of metaverse devices will be doubled from 2022 to 2024 and the CAGR in shipments of metaverse devices will be up to 39% from 2022 – 2027.

These advancements necessitate that CSPs update their network infrastructure in multiple dimensions. For instance, a completely immersive metaverse experience will require at least 2.35 Gbps of bandwidth, whereas IoT devices may need a battery life of over ten years. Concurrently, network energy efficiency has become a concern for both CSPs and enterprise customers, given the net-zero emission goal and soaring energy prices.

Coming New Generation Networks

Industry standardization organizations have accomplished the requirements. In December 2021, 3GPP initiated Release 18, the first standard release of the 5G-Advanced system. With a white paper titled “F5G advanced and beyond,” ETSI also initiated a dialogue around the continued evolution of fixed telecom networks – F5G Advanced.

5G-Advanced and F5G Advanced are the most recent technological advancements. They intend to drastically improve user experiences. The 5G-Advanced system will be capable of providing a downlink peak rate of 10 Gbps, an uplink peak rate of 1 Gbps, and a network latency of 5 milliseconds. Additionally, the system will allow expanded mobile IoT access capabilities. Through FTTR technologies, the F5G Advanced system should be able to enable a 10 Gbps everywhere experience in the home setting. To deploy intelligent QOS management for home access, the home network should be fully upgraded to Wi-Fi 7. All PON, MAN, and backbone networks must be upgraded accordingly, e.g., to 50G-PON, 800G+ OTN, etc.

5G-Advanced or F5G Advanced is committed to enhancing network automation and energy efficiency in addition to enhancing the user experience. Automation and Artificial Intelligence (AI) have been acknowledged as potent technologies for CSPs to manage their networks and improve the user experience. CSPs can also make their AI capabilities available to support their customers’ digital transformation by assisting with crucial decision-making, problem-solving, and process automation, for example. This could provide CSPs with additional opportunities to monetize their networks and services.

According to our latest analysis, What Are Operators’ Concerns for 5G-Advanced RAN Standardization?, energy efficiency has become one of the top priorities for 3GPP RAN standardization of 5G-Advanced. ETSI F5G Advanced aims to optimize the energy efficiency of fixed networks from three perspectives: the network level, the equipment level, and the design level.

The increasing demand for digital transformation and multi-cloud services necessitates that CSPs expedite the development of cloud-network synergy. CSPs can fully employ compute (public cloud, edge cloud, private cloud, etc.) and networking resources to offer a solution to serve enterprise customers that is resource-coordinated. We anticipate additional improvements to backbone networks, data center networks, campus networks, and so on. Similar to wireless networks and fiber networks, if datacom networks evolve in a generational manner, they will be more conducive to the orderly expansion of the connectivity industry and facilitate the seamless integration of network connectivity and computing resources.

Collaboration Is Crucial for the Upcoming Phase

Technology improvements are moving the telecom industry into a new era. As Huawei’s Executive Director of the Board, David Wang, stated at the recent “Striding Towards the Intelligent World Summit” at Huawei Connect, “5.5G” is a significant step towards a “Intelligent World.” In the meantime, we must acknowledge that, as the telecom industry enters a new phase, a broad partnership across a variety of players will become increasingly crucial.

First, the win-win collaboration between telecom operators and telecom equipment vendors must be enhanced to accelerate technology innovation. Technology innovation should focus on the expansion and profitability of telecom operators’ businesses, as opposed to innovation for the sake of innovation.

Cross-industry collaboration between CSPs and vertical industry players is vital for CSPs to understand the requirements of vertical industries and speed the integration of network solutions with industrial applications. Industrial alliances, open laboratories, or other sorts of collaboration platforms will be advantageous for CSPs and vertical players to work together for industrial digital solutions.

As cloud services have become an integral part of digital services, CSPs must utilize their own resources and/or work with hyperscalers to construct their cloud services offering. CSPs can leverage their local or regional resources, such as connectivity, edge and regional data centers, sales channels, local service offerings, etc., to strengthen their positions in collaboration with hyperscalers and add more value to their B2B service offerings, as mentioned in my previous blog.

Finally, the collaboration between industry participants, government authorities, and regulators is one of the important components for the healthy development of the telecom sector. CSPs must engage with authorities and regulators on a variety of issues, including spectrum allocation, infrastructure sharing, data privacy and security, M&A strategies, etc. This is vital for CSPs to gain a supportive policy environment in the new stage.

In essence, the telecom business must develop to be aligned with the new market reality in the post-COVID era. The technology breakthroughs such as 5G-Advanced and F5G Advanced are building technical foundations for the progression. CSPs need to modernize their networks, services, and business strategies to suit the shifting requirements in the new world. For CSPs entering the next phase, wide coordination with vendors, vertical players, hyperscalers, and regulators will be crucial.

Source: Strategy Analytics

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