Dr Satyamoorti Sivasubramanian
Global Chief of Security
Bharti Airtel

Future Telco – Trends and Opportunities

In any business, technology functions as an enabler for the business, but in a telco, technology is not just a business enabler, but it is the business itself. It manifests as products and services for the customers and it is an integral part of the way customers interact with the brand. In this article, instead of focusing on how the new technologies manifest into innovative products, we will be discussing the changes a telco will be undergoing internally as a consequence of these changes.

To foresee how telcos will be in the coming years, it is worth reviewing how and how fast the telcos evolved in the past.

Telco Technology Adoption

Globally, the rate of technology assimilation in telcos is amazing.

In the 1980s telcos moved from fixed line to mobile communications with the first generation (1G). It remained a novelty with patronage restricted to business users who could afford the high price of the limited services. The security was never thought of and had no security built into it.

In the 1990s, it moved to second-generation (2G) mobile technologies. It made mobile as an alternate medium of communication. The coverage was extensive and the business adoption took off and home users with necessity embraced mobile communication. Unlike in the previous era, where voice conversations could be eavesdropped, the voice traffic on 2G was encrypted; security became a part of the technology offering.

In 2000s telcos moved to third-generation (3G) technology. With its coverage, functionalities, and competitive price it displaced landline to be the primary medium of communications. The society adopted 3G widely cutting across economic strata. 3G also heralded mobile data usage, despite poor speeds, the convenience drew the users to this feature. Security took a more prominent position by bringing about identity management and data encryption.

In 2010s telcos embraced fourth-generation (4G) technology. With its speed and broadband capabilities it opened new possibilities of using the mobile medium outside of voice. Data overtook voice in growth and consumption. Lifestyle changes began to take place in terms of mobile commerce, merging of communication and entertainment on the mobile platform, and applications began to emerge and quickly dominate the way the masses conduct their lives. Security shifted gears to catch up on the runaway growth by borrowing traditional IT security paradigms and attempted to offer platform-level security to 4G.

The fifth generation (5G) is ready to become operational from 2018 and it is likely to be adopted by the telcos in a few countries. Once adoption takes off, it is set to promote a new world order predicated on mobile technology. New lines of business will emerge or enlarge with 5G as an enabler. Creative thinking of entrepreneurs will be the limit for this explosion.

Some of the entrepreneurial applications of mobile technology initiatives around Smart Cities, remote health care, remote and community education, industrial automation, autonomous vehicles (driverless cars), and Smart Homes have commenced using 4G technologies. These early trains that have left the station are set to take off with the rollout of 5G technologies.

Telco Technologies Go Open and Virtual

Traditionally telecommunications technology was implemented on specialized hardware and software to carry out different functions ranging from text messaging to controlling antennae using closed protocols. With the advent of 4G, the protocols have become open and today, the specialized hardware and softwares for the network gears are fast moving into the world of virtualization using commodity hardware in the cloud.

The words network function virtualization (NFV), software defined network (SDN), and cloudification (widespread adoption of cloud technologies) have become the core vocabulary of the telco technology leaders in delivering faster services at reduced costs. Virtualization in telcos is already a reality.

South Korean Telecom (SK Telecom) has begun consolidating the baseband units in a central data center. Their CTO, Alex Choi, wants radio to become the fourth component of cloud computing, after computing, storage, and networking.

AT&T wants to have more than half of its network virtualized by end 2017. In areas where it has already upgraded its systems, it can now add to the network simply by downloading a piece of software. Its CTO Andre Fuetsch says “Instead of sending a technician, we can just spin up a virtual machine.”

The network technologists in telco are talking like their IT counterparts, the era of convergence of network and information technologies would be the one to watch for in the coming years. Soon, telcos will have a single head of technologies that will manage both IT and networks. Globe Telecom, Philippines has already embraced this change with the Chief Technology and Information Officer (CTIO) heading the combined function of networks and IT.

Changing Product Play – Challenges and Opportunities

The new technologies are changing the way the telco does its business. Telcos are moving from pure-play technology offerings like voice and data into providing solutions and services. With increasing bandwidth availability of 4G, the faster 5G on the anvil and as the IoT pervades the enterprise and consumer worlds, things like autonomous cars, home automation, Smart Cities, telemedicine, and tele-education will become ubiquitous. In other words, telcos will be moving toward delivering customer lifestyle and quality of life-enhancing products and services.

The network divisions of the telcos, when delivering these customer-centric products and services on virtualized infrastructure and open technologies will face the same operational and security challenges its IT arm faces.

Like OTT players who stole the voice-lunch of the telcos, the communication service providers (CSP) will come up with disruptive competitive strategies taking the share of new products and services. The market dominance in this field will be determined by the quality of service (QoS) and end-user security that underpins customer experience and customer confidence.

QoS – the Differentiator

Traditionally, telcos used QoS to measure network performance and as the ability to provide different priority to different applications, users, or data flows. Soon QoS will move to measuring the service quality to the consumer.

In the new era, service quality will become increasingly context sensitive consequently QoS will become granular and dynamically changeable to suit a given context. For example, the QoS for vehicle navigation would be significantly different from the QoS for in-vehicle entertainment services and both would scale up or down to suit the situation. Such a dynamic capability of QoS will become one of the factors determining the customer experience and product differentiation.

Context-sensitive QoS capability and its commercial exploits are new to the telco and its evolution in the telcos will be interesting to watch. The one that delivers this context sensitive and dynamically configurable QoS capability as a part of the product offering or as an add-on to enhance the products, will be the winner.

Cybersecurity – Customer Experience Lever

As the network technologies embrace open platforms and virtualization they will face the same cybersecurity challenges as that of IT. Fortunately they could be easily surmounted with the expertise from the IT. But, a new problem that would be lurking around this space would be the customer privacy, with boundaries between Telco and user networks blurring, maintaining end to privacy and security of solutions will become the next big challenge.

Another complex security problem to address would be stemming from device ecosystem in the IoT arena. The devices in the IoT ecosystem are unlikely to be built to the security rigors of a network device nor be managed with regular patches and upgrades, therefore, they will become the proverbial weak links in the chain, causing serious customer experience and customer confidence issues on the services.

But these weaknesses, collectively offer great opportunities to the telco. We will be witnessing telcos offering smart overlays that make IoT consumption secure and safe for customers.

Managing the Changes

The challenges of the new telco are not that onerous as it appears, for the solutions for the new changes are already available in-house within the telco and convergence would help leverage the IT in addressing these problems. How the telcos will be working toward this convergence organizationally and organically will be a topic for a different discussion.

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