Digital Services Provider – A new story

Telecommunications is an industry driven by technology disruptions, guided by worldwide standards (ETSI, TMForum, 3GPP etc), controlled by the regulations, extremely sensitive to the demographics and is capital intensive. 

A lot is being said recently about how the telecommunication network operators need to have a digital strategy in order to prepare for the future disruptions of business models and technologies.

With very few case studies available globally for being a truly complete digital service provider as against just communications service provider, a lot will depend on how a network operator leverages new technologies for its operations, transforms to an agile business, lowers its cost of ownership in assets and creates synergies by means of strategic partnerships. The article details how the network operators can achieve this.

Consumer/Business – As telecommunications has evolved from fixed line to wireless and from 2G to 4G (LTE), the voice market is saturating globally with more and more hope of earnings expectations coming from the digital services and content.

Research indicates that the IoT market in India alone is projected to grow at a CAGR over 28% during 2015 – 2020 and the number of mobile connected devices will reach figures of 9.2 billion and 11.6 billion respectively by 2020. 

This opens doors to redefine the customers and businesses that interact with network operators in a completely new way. A converged customer view and their needs, rather than the view of just the services offered to each customer will act as a key differentiator for the network operators. This goes beyond just customer intelligence and mining. The more the network operators get innovative with this aspect the better would be the results of their digital initiatives.

Business – In the customer section, the business meant the businesses that interact with the network operators. In this section, business means the business of the network operator.

As the communications service providers embark on the journey of becoming digital services providers in true sense, business models and services need to evolve and transform to actual end to end IoT service providers. The maximum value will be derived by putting efforts to move towards agile business, which can easily adapt to the changing scenarios and changing definitions of the customers.

According to the NGMN 5G White Paper (NGMN, 2014) , The Fifth Generation Of Mobile Technology (5G) is positioned to address the demands and business contexts of 2020 and beyond. It is expected to enable a fully mobile and connected society and to empower socio-economic transformations in countless ways many of which are unimagined today, including those for productivity, sustainability and well-being. The demands of a fully mobile and connected society are characterized by the tremendous growth in connectivity and density/volume of traffic, the required multi-layer densification in enabling this, and the broad range of use cases and business models expected. 

Lot of legacy business (2G) will see retirement paving way to new business models triggered by improved parameters (4G, 5G).

IT/Operations – Business agility goes nowhere with tightly coupled legacy IT and operations. 

The 5GIC is the UK’s Research Centre dedicated to the next generation of mobile communications. According to their research studies, 5G is expected to be standardized by the year 2020 and will be commercially deployed a few years later. Although 5G will introduce new technologies, much will be an evolution of 4G LTE- Advanced and WiFi both of which are developing to offer ever greater peak and average user data rates and new and innovative services.

 According to the network and software architecture being proposed by the standardizing organizations, it is evident that they are considering the role of current evolving technologies and its use to devise optimal 5G Architecture. The 5G architecture will be based on LTE Advanced architecture and would have requirements on the maturity of LTE evolution by network providers to take into account SDN (software defined networking), NFV (network functions virtualization), XaaS (everything as a service), Satellite Communications, Network Slicing, Self-optimizing networks, Backhaul systems, FOG Computing, Mobile Edge Computing, Block Chain, etc.

Hence it can be rightly interpreted that digital transformation is more about writing a new story for LTE with easy upgradation to 5G, as against simplifying existing landscapes or just having an End to End Architectures.

Agile LTE platforms, services operations centers as against network operations centers, business process optimizations and automations, services orchestrations, network orchestration, network function abstractions, software controlled softwares and converged platform will be some of the key principles for the New Generation Architectures.

Networks – As mentioned, telecommunications is a capital intensive business with the investments in the passive (network infrastructure) as well as the active (spectrum) infrastructure. The less the cost of ownership, the lesser the exit barriers and higher will be the network agility of the digital operators. Lot of COOs will move from the low CAPEX outlook to low Cost of Ownership outlook.

Many network operators are in the process of reducing the cost of ownership by means of exploring new ways of networking. A key differentiator will be to work towards a network that is shared, sliced, orchestrated, intelligent, self optimizing and offers easy extension to the 5G network requirements.

Again legacy infrastructure for 2G will retire and 2G, 3G spectrum will see a lot of spectrum re-farming for optimal use of telecommunications most expensive resource.

Strategic Sourcing/Partnerships – Cleary in order to evolve as a digital services provider, the telecommunications operator cannot walk the journey alone. The best way forward will be to make key strategic partnerships and attain innovation using the Partner’s capabilities as well. 

Recently in India, we heard about the Partnership between Bharti Airtel with Nokia for the 5G platform, Managed Services with Ericsson of multiple vendors, Tata Communications – HPE partnership for the roll out of the LoRA network for IoT. 

This is just the tip of the ice berg and a lot will be possible to achieve by creating digital strategic partnerships. However the key differentiator for the network operators will be to identify the right partners offering top notch capabilities for LTE with a clear compatibility vision for 5G.

A good digital transformation strategy hence will answer the following questions in detail:

-What are the key dimensions to be considered for readiness evaluation for this transformation? What are the critical success factors in this transformation journey?

– What are the new business models for the telecom operators that could evolve in this context? 

– What is the ideal LTE Advanced architecture and roadmap for the network providers to gear up for adoption of 5G?

-What will be the fate of legacy communications channels like 2G and 3G?

About the Author:

Dr. Jigna has done her Masters in IT Management and Doctorate in Business Administration (Digital Transformation) from S P Jain School of Global Management. Jigna has worked close to two decades in telecommunications industry.

P.S: This article was first published on LinkedIN and TM Forum in 2017