Janardan Menon, Equity Research Analyst at Liberum, noted, “demand for BSS/OSS systems is accelerating as telecom operators upgrade their systems due to industry changes such as 5G, virtualisation, increased security concerns and greater digitalisation. There are many newer entrants such as MVNOs, cable operators, utility companies and media companies that are offering telecom and media services that require BSS systems. They have smaller budgets than big established operators and therefore cannot afford the products and services of the larger OSS/BSS suppliers like Amdocs, Oracle and Ericsson. The environment, therefore, supports the growth of smaller and more agile solution providers like Cerillion”.
After a year of unforeseen global disruption, the company’s latest blog looks at what is in store for the telecommunications sector in 2021, a year that will be defined by recovery and resilience, and ask what major developments will come to define the industry.
In 2021, questions as to how to survive COVID-19’s disruption will shift towards how successful organisations have evolved – and where some organisations have failed to embrace change.
While stifling innovation in many areas, such as with the somewhat hamstrung rollout of 5G, the pandemic has certainly accelerated many technology trends already in motion. As these faltering developments from previous years regain their momentum, a new range of improvements will come to support and augment the industry as it embarks on the road to recovery.
How enterprises react now to the troubles of the previous 12 months will come to define their trajectory going forward, and those that fail to handle the rapid shifts in the sector will find themselves left behind in the new telecoms landscape.
Here are five of these trends that we believe will have a significant part to play in the telecoms industry this year:
Under lock and G: private 5G networks
Though the COVID-19 pandemic initially disrupted the rollout of new 5G network deployments, efforts have resumed as remote work and videoconferencing have become core parts of our lives. As working from home continues to dominate many enterprises, and may continue to even after the worst of the pandemic has subsided, the role of 5G will become increasingly important in 2021.
This year will be the tipping point for 5G, but it will be private, not public, as Industry 4.0 promises to deliver transformative possibilities for every industry and application.
Private 5G networks will manage the growing demands for connectivity with predictable performance, high data rates and low latency, as well as differentiated pricing and charging models. Private 5G networks can provide dedicated infrastructure, or hybrid models with dedicated and shared infrastructure (dedicated RAN and shared core) through network slicing. This creates virtual independent networks logically separated within a single physical network, creating partitions to manage the likes of factory automation, remote monitoring, surveillance and maintenance.
Businesses with large physical footprints – e.g. factories, schools, hospitals and airports – require large-scale networks that provide the coverage and stability of mobile data with the simplicity of Wi-Fi, but they cannot rely on either of these solutions alone.
In 2021, we expect to see increasing interest in, and adoption of, private 5G networks in multiple industries as 5G network rollouts accelerate.
The cloud comes home: distributed & edge computing
As private 5G enables real-time data processing at the edge, evolving cloud strategies can help organisations strike the right balance for their unique cloud infrastructure needs.
With the decentralisation of business operations and widespread disruptions caused by COVID-19, having as agile and adaptable a cloud infrastructure as possible, routing processes to the most suitable infrastructure, ensures lower latency and reduces the likelihood of outages. A nice example of this is the TM Forum catalyst project “The Edge in Automation”, which the company took part in last year.
Data processing at the edge will increasingly push businesses to the next stage of cloud deployment using a distributed architecture which combines a variety of cloud computing models into a single system to process data at different locations, with local storage and local processing enabling lower latency. Distributed cloud can be used to route key business processes to different physical locations, but the operation, governance and evolution remain the responsibility of the cloud provider.
As the industry moves towards more decentralised computing deployments, distributed cloud will better enable organisations to run these services at physically closer locations, solving low-latency issues, whilst reducing data costs and accommodating geographic data laws. Business infrastructure such as warehouse robots and factory machine tools enabled by the internet of things need local processing and low-latency networks; edge computing and 5G will serve these, respectively.
The edge will add significant value and resiliency to telco digital transformation initiatives, and has been steadily growing over the past few years; many providers such as Amazon Web Services, Microsoft Azure, Google, IBM and Oracle have moved or are in the process of moving more and more of their applications and data to the edge.
As the momentum for 5G continues to build throughout 2021, the opportunities that edge computing brings will see more interesting use cases and partnerships between established telecom players and the cloud hyperscalers, as we’ve already seen with the recent announcement from Google and Nokia.
Superfast Internet… at home
COVID-19 has brought about the rapid advance of distributed, decentralised working, testing the reliability and robustness of the digital infrastructure that we take for granted on a daily basis.
As more people elect to work from home on a continuous basis and some companies downsize their offices, we will likely see migration from business centres in larger cities to cheaper suburban or rural areas as workers and working become decentralised. This will drive greater investment in fibre optic infrastructure and more creative packaging and pricing of broadband services, which will enable even greater productivity in these less densely populated communities. For rural areas to develop their competitiveness, they will depend on robust connectivity to better serve home connections, start-up businesses and regional economies.
While the UK has recently seen many rural areas receive FTTP as part of Openreach’s £12 billion Fibre Cities initiative, the UK is lagging behind in bringing the countryside’s connectivity up to parity with the city, with the government quietly slashing its budget for broadband modernisation from £5 billion to £1.2 billion.
Elsewhere, countries such as Ireland, Malaysia, Ghana, South Africa and Kazakhstan have already earmarked significant portions of their respective budgets for 2021 towards rural broadband enhancements, while the European Investment Bank has reported that around €200 billion of investment is needed for citizens in rural areas across the continent to have broadband access of at least 100Mbps.
For rural areas to enjoy the same benefits that high-speed internet is bringing to the cities, local and national governments must prioritise getting fibre optic into the ground. One major success story in upgrading rural connectivity can be seen in the many co-operative networks operating in the United States; in Chattanooga, Tennessee, the first publicly-owned superfast fibre-optic network, has added $1 billion to the local economy over four years.
Rural broadband modernisation is a long-overdue but essential step to levelling the digital divide across the world, while transforming the way many work, learn and live.
Articulating the true value of 5G
The mobile industry is spending a huge amount of time and money rolling out 5G, but for all this spending, poor communication and engagement means that consumers are still struggling to comprehend the benefits of these new networks.
Effective communication is crucial for digital service providers, particularly in the face of intensifying commercial competition. With consumers still largely in the dark as to the promises of 5G, how can DSPs convey its full potential in 2021?
Digital Communication & Engagement Solutions (or DCES), as defined by industry analysts at Omnisperience, is a new strategy intended to merge communications and engagement technologies across the various departments of telecoms businesses to align them with overarching business objectives and brand values.
A DCES approach simply integrates what channels businesses already have, enhancing the experiences they deliver, driving up customer loyalty and creating longer lasting, more profitable relationships with customers.
With 5G starting to pick up steam – for real this time – service providers can’t afford to delay investing in improving their communications strategies.
To infin-LTE and beyond: stratospheric & lunar base stations
Though bringing mobile connectivity to those in remote locations is high on many governments’ agendas, as seen above, reaching the most isolated of communities remains a huge challenge, given the limitations of the technology and the high costs of deploying such infrastructure.
Loon, a subsidiary of Google parent company Alphabet, has announced that its Internet balloons have been authorised to operate in the skies above Kenya, a decision fast-tracked in the midst of the COVID pandemic. In March last year, a Loon balloon touched down in Mexico after a record-setting flight lasting 312 days.
Aside from Loon, Deutsche Telekom has successfully tested a stratospheric base station, which it hopes will one day deliver connectivity to remote areas across the country using a pilotless aircraft built by British start-up Stratospheric Platforms Ltd.
Meanwhile, SoftBank subsidiary HAPSMobile (High Altitude Platform Station) is working on its own solar-powered, unmanned aircraft-based solution. Dubbed “Sunglider,” this base station had its maiden flight in September 2020, cruising at an altitude of 62,500 feet for over 20 hours.
Another promising venture is AST SpaceMobile, with the support of Vodafone Group, who are working on “the first space-based mobile network” offering satellite-delivered, high-speed connectivity to users in 49 countries around the equator, starting with the Democratic Republic of the Congo, Ghana, Mozambique, Kenya and Tanzania.
And with an eye towards the final frontier, NASA is working with Nokia as part of its Artemis programme to bring 4G (and eventually 5G) to the Moon, providing more reliable long-distance communication than traditional radio. Nokia Bell Labs has developed a high-bandwidth, low-power base station, the first part of an intended network to support video streaming, remote control lunar rovers and, by 2024, management of lunar bases intended for long-term human habitation. Currently in development, the first base station is expected to arrive on the lunar surface in late 2022.
Expect more businesses to begin taking one small step in 2021 in anticipation of one giant leap in the not too distant future.
Cerillion plc (LON:CER) is a leading provider of billing, charging and customer management systems with more than 20 years’ experience delivering its solutions across a broad range of industries including the telecommunications, finance, utilities and transportation sectors.
