How can operators avoid becoming a dumb pipe?

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Francesca Greane, Content Lead for Broadband World Forum, explores how increased connectivity is changing the role of operators, and how telcos can stake their claim in order to avoid becoming a mere dumb pipe.

In the era of hyper-connectivity, society stands on the cusp of change. We have evolved from the basic internet connections introduced two decades ago and are now edging towards real-time mobile connectivity with 4G and the convergence of the physical and digital that is being driven by the fifth-generation mobile network and the rise of the Internet of Things (IoT).

However, with increasing complexity comes an increasing demand for bandwidth, speed and efficiency.

Network operators and the ecosystem partners that supply and work with them are the epicentre of these evolutions. They are uniquely placed to serve almost every industry and every vertical as everyone looks to innovate how they connect and how they communicate.

But the telco reality is that they are tasked with simply providing an ever-increasing bandwidth capacity simply to support these advancements – rather than being pivotal in helping to drive them forward. Thus, the question remains, how can operators leverage the emerging opportunities that increased connectivity providers in order to avoid becoming a mere ‘dumb pipe’.

The answer is different in each industry, as we briefly examine below:

Automotive

According to Ericsson’s VP of Global Sales Connected Vehicles, Jueraen Daunis, “Only 5G has the necessary capacity to make truly self-driving cars a reality from a connectivity standpoint.” It’s a pretty bold statement; one that solidifies quite how dependent the automotive industry is on operators and the wider telco ecosystem.

It is the fusion of IoT, 5G and AI that will transform the auto industry into a digital services business and thus, to stake their claim in this space, telcos are advised to partner with established digital players such as Microsoft and Google as they build their operating systems into the 250 million connected cars due on the road by next year (Gartner), as well as start-ups in the automotive space.

Malaysian operator Altel Communications, for example, allied with Chinese firm ECarX to develop car connectivity tech services for Malay car brand Proton. Industry leaders Uber and Renault will be further examining the role of connectivity and telecommunications in the automotive industry at Broadband World Forum 2019.

Cloud Gaming

Intel predicts that AR and VR entertainment will deliver cumulative revenues of $140bn between 2021

and 2028. Immersive applications that don’t even exist today could generate $67bn a year by 2028 –and the key technology underpinning this trajectory is 5G. Synched with this is the need for

edge computing; both of which will provide the speeds necessary for these next-generation gaming experiences.

Matthieu Duperre, Founder of Edgegap, summarised the position of telcos in this industry pretty succinctly when he said: “In the early 2000s, operators lost the battle against the OTT. They kind of stopped bringing value, or lost track of where they were bringing value. So, then they became the dump pipe that we’ve all heard of. What’s happening now is a unique opportunity for them to regain value and that control over the pipe and to move away from the dump pipe mentality; they own the network and the last critical mile. Betting on that last mile, and on creating an infrastructure that can’t be done by the likes of Google or Amazon, is going to be key to their success”

Smart Home

With OTT streamed content eating into their traditional pay TV subscriber revenues, and competition in broadband access intensifying, service providers need to tap new revenue streams. With established and credible consumer relationships on their side and a router into the heart of the home, network operators are well placed to exploit the opportunities related to broader management of home connectivity.

Whilst wary of being the fall guy for everything from streaming video glitches to cybersecurity, operators can leverage their position as the first point of call and take ownership of the whole home network.

“The solution is to have very effective and robust guidelines,” explains Bruno Tomas, Director of Programme Management at the Wireless Broadband Alliance. “These guidelines will effectively ask customers to commit to only using equipment provided by their telco –or their recognised partners”

Telefónica, for instance, has integrated its AI-powered digital assistant Aura with Facebook Messenger, Google Assistant, and Microsoft Cortana. In Spain, Aura is built into Movistar Home, which Telefónica aims to become home hub for user management of all connected devices.

 

Broadband World Forum’s latest report – Staking Telco’s Place in a Connected World – dives deeper into the role of operators in each of the above industries as well as numerous others. To download this report for free, simply click here. Want to stay ahead in the broadband industry? Discover the latest technology trends and solutions from leaders in the broadband universe with a free visitor ticket to Broadband World Forum (October 15-17, Amsterdam, The Netherlands). Your ticket gives you access to 25+ hours of content delivered by leading speakers, 150+ technology providers from Tier 1’s to startups in our expo hall and endless networking opportunities with the 4,100+ leaders in attendance. Click here to claim your free ticket.

AI plays critical role in network security, according to BT boffin

Artificial intelligence (AI) is going to play a critical role in network security in the coming years and is already helping BT defend its infrastructure.

Ben Azvine, the Global Head of Security Research & Innovation at BT, has been at the heart of cutting-edge network security developments at BT for several years and has helped develop a cybersecurity strategy that combines AI-enabled visualization of cybersecurity threats with highly-trained network security personnel. He shared some of his thoughts on the matter with attendees at this week’s Broadband World Forum event.

“We are taking AI and making it help humans to be better… We are more about the Iron Man version of AI than the Terminator version,” he said, sparking ludicrous cinematic pitch ideas in the minds of some of his audience (I mean, Alien vs Predator sort of worked, right?).

Azvine pointed out that with the number of connected devices growing rapidly, old ways of securing assets were no longer relevant: Now, companies (including network operators) need to think about having a cybersecurity strategy comprising three steps – prevention, detection/prediction and response. The response needs to be much quicker than in the past (hours, not days) while the detection/prediction is tough to do without sophisticated analytics and AI algorithms.

What BT is doing is a great example of analytics and AI in action in the communications networking sector, rather than AI as a marketing hype machine — see ‘Why BT’s Security Chief Is Attacking His Own Network’ for more details.

But security is just one of seven key telecom AI use cases, as identified in a recent report, Artificial Intelligence for Telecommunications Applications, from research house Tractica (a sister company to Telecoms.com).

That report identified the seven main use cases as:

1) Network operations monitoring and management

2) Predictive maintenance

3) Fraud mitigation

4) Cybersecurity

5) Customer service and marketing virtual digital assistants (or ‘bots’)

6) Intelligent CRM systems

7) Customer Experience Management.

“The low hanging fruit seems to be chat bots to augment call center workers,” said Heavy Reading Senior Analyst James Crawshaw, who will be one of the expert moderators digging deeper into the use of AI tools by telcos during Light Reading’s upcoming ‘Software-Defined Operations & the Autonomous Network’ event.

“The more challenging stuff is making use of machine learning in network management. That’s still a science project for most operators — Verizon’s Matt Tegerdine was pretty frank about that in his recent interview with Light Reading. (See Verizon: Vendor AI Not Ready for Prime Time).

That analysis from the Verizon executive shows it’s still early days for the application of machine learning in production communications networks. And, as Crawshaw noted, AI is not a magic wand and can’t be applied to anything and everything. “It can be applied to the same things you would apply other branches of mathematics to, such as statistics. But it’s only worth using if it brings some advantage over simpler techniques. You need to have clean data and a clear question you are seeking to answer — you can’t just invoke machine learning to magically making everything good,” adds the analyst, bringing a Harry Potter element to the proceedings.

So what should network operators be ding to take advantage of AI capabilities? BT appears to have set a good example by hiring experts, investing in R&D, applying AI tools in a very focused way (on its cybersecurity processes) and combining the resulting processes with human intelligence and know-how.   “You don’t need to recruit an army of data scientists to take advantage of machine learning,” said Crawshaw. “Nor should you remain totally reliant on third parties. Develop a core team of experts and then get business analysts to leverage their expertise into the wider organisation.”

BBWF 2018: Open data is the key to nailing smart cities

In an entertaining session at Broadband World Forum, a common theme emerged; open data, which is a key component of any successful smart city programme.

The format was an interesting one. Four smart cities were given seven minutes to explain their proposition, and then three minutes to answer questions. Featured were Milan, Athens, Helsinki and Amsterdam, though thanks to your correspondent getting lost on the show floor, the Amsterdam pitch was missed and will not get the attention it deserves. That said, the common theme throughout was open data.

Starting in Milan, data is being used to create a hub of intrigue for start-ups. There isn’t necessarily a focus on segment or vertical, more a top-line ambition to create jobs and value for the economy. As part of the initiative, more than 300 data sets have been made available for citizens and businesses to create new applications and services. Looking at the numbers, the scheme should be deemed a success.

There are currently 1600 start-ups based in the city, out of the total of roughly 8000 across the whole of Italy. 10,000 people are directly employed (or own) start-ups, 80% of which survive the first two years of operation, the most dangerous time for any business. These are certainly promising numbers.

In Helsinki the message is the same. The Mayor has an ambition to create the world’s ‘most functional city’ through digital, with tourism a key factor. Part of this story is opening data up to the community and local businesses to create value.

Finally, over in Athens, open data has been used in a different way. Thanks to financial difficulties in Greece, governments are not trusted. This makes it incredibly difficult to launch new schemes, though by opening up data to the general public and businesses, Konstantinos Champidis, the Chief Digital Officer for Athens, said the team are regaining credibility. The aim here is not only to try and help those citizens create something new, but develop a culture of transparency to regain the trust.

Trust is a key element in these smart cities strategies, as while open data does fuel innovation, the data has to be sourced in the first place. Should citizens not be open to having information about them or their activities collecting and analysed, the whole concept of the data economy runs dry.

We’re sure the presentation from the city of Amsterdam was equally as interesting as the three we saw, but the theme was plainly clear here; open data is a critical component of the smart cities mix.

BBWF 2018: A casual reminder: 5G is not the bees knees everywhere

Every now and then a reality check is appreciated. Today’s reality check regards 5G; it isn’t always a massive deal.

In the ‘developed’ markets around the world the 5G buzz is starting to reach almost unbearable levels. Unfortunately for some, with Verizon claiming a world first with its 5G FWA proposition, the shouting match is only just beginning. Domestic competitors will start clamouring for attention, while each nation will start posturing claiming their own leadership position. If you think 5G euphoria has reached a peak, just wait till it’s actually been launched somewhere.

One panel session at Broadband World Forum put some perspective on development. There are countries where 5G is about as relevant today as the Teletubbies.

“None of our incumbents have the desire to rollout 5g right now aside from entering into a pissing contest,” said Paul Hjul, Director at Crystal Web, a South African start-up ISP.

“We’re not looking to deploy 5G within the next five years,” said Martin Wessel, Head of Technology Evolution at Telecom Argentina.

5G might be a defining era for some countries who are looking to maintain a leadership position in the technology world (the US) or perhaps those attempting to retain relevance in a fast-changing global economy (the UK), but the buzz is considerably quieter in some regions.

In both Argentina and South Africa, the market is not ready for 5G. 4G is still developing and creating new angles in the national economies. Basic connectivity might be an issue, or ARPU perhaps inhibits vast expenditure, maybe the country is at the beginning of the digital transformation curve. Irrelevant to the underlying reasons, 5G is simply not a pressing priority.

This is not to say it has not been factored into conversations. Hjul highlighted 5G brings about a different mindset in South Africa with the focus on ‘fibering’ up the country as opposed to launching 5G services, while in Argentina there are long-term discussions about potential evolution. It’s more a ‘fifth generation’ mindset than a focus on 5G technology. However, the message is the same; we’re not at that stage just yet.

It is easy to get lost in the excitement of 5G, on the very same panel Leo Lundy of Irish rural ISP Imagine Communications bemoaned the political issues surrounding spectrum availability and Muhammed Sameh of Telecom Egypt suggested it was a great way to avoid ‘dumb pipe’ references, but a reality check is needed every now and then. 5G is not all its hyped up to be in some places.

BBWF 2018: Chorus sings the praises of centralised infrastructure model

Yesteryears rumbling story was the enforced separation of BT and Openreach, and while this might have been nothing more than a thinly veiled show, Ofcom might look at the success of Chorus for future inspiration.

Down in New Zealand, Chorus is an example of what can be achieved through structural separation and effective centralised investment in broadband infrastructure. The business is rolling out fibre faster than many in the world, giving rise to a landscape which benefits the consumer and is remaining profitable in the meantime. Speaking at Broadband World Forum in Berlin, Kate McKenzie, CEO of Chorus, demonstrated just what is actually possible.

Back in 2011, Telecom New Zealand was completely separated into two legal entities; Spark for mobile and Chorus for broadband. Unlike the Openreach and BT separation, these are two entirely separate (and listed) businesses, both of which are proving to be a success.

Fibre broadband penetration is at roughly 70%, with the team targeting 87%. Ubiquitous penetration would be perfect, but due to the at times harsh environment in New Zealand, it is just commercially impossible with today’s economics. New Zealand might be a small country, but the environment is incredibly varied and population density can be a nightmare. Technology is now the third largest contributor to the economy, accounting for 8% of GDP, and is steadily growing. The country now even has its own space programme, and fibre penetration has been heralded as part of this success.

“Coming up with a plan and sticking to it is key to success,” said McKenzie. Sensible regulations, consistent government policy, an understanding of consumer demand, as well as a vigilant board to keep a close eye on costs and returns, are needed to create a successful centralised infrastructure model.

The only suspect outcome is the 90+ service providers in the market. This might be great for the consumer, but it is not sustainable. Barriers are entry are almost none existent allowing anyone to get involved, but numerous of these businesses will fail due to the cut throat nature of competition. However, there certainly are some interesting models. One example is energy companies bundling energy and broadband services together.

Of course, there are dangers of centralising so much spending. Without a resilient and robust regulatory framework, the monopoly could be abused. Australian broadband providers are supposedly feeling the sting of NBN’s dominance with Telstra complaining wholesale rates are double what they should be. The political agenda also needs to be quite stable, as too much interference or changes from different government administrations could cause disaster.

Despite the negatives, New Zealand seems to have struck the right balance. Perhaps this is a country Ofcom should have a close look at. BT might have resisted (and will obviously continue to do so) pressure to remove Openreach from its business, but under the right conditions, New Zealand has shown the great benefits which can be realised for the economy and the consumer.

BBWF 2018: Telefonica Germany pitches case for FWA

Telefonica’s UK business O2 might be avoiding convergence like the plague, but for its cousins in Germany, FWA is one of the biggest drivers for the adoption of 5G.

Speaking at Broadband World Forum in Berlin, Cayetano Carbajo Martín of Telefonica Germany is not fearful of the convergence distraction. In fact, it might just save the country from a connectivity embarrassment.

“5G implementation will be driven by different needs from fixed wireless access to ever increasing eMBB demand and even co-created new industry and service solutions,” said Martín.

As you can probably imagine, dealing with the tsunami of internet traffic is a big driver for 5G within Telefonica, but FWA is a long-term money making opportunity. In terms of the rate of growth, Martín highlighted traffic increased 160% over the last 12 months on O2’s network. Looking forward, even if you take a conservative estimate of 50% year-on-year growth, by 2027 internet traffic will be 38 times greater than it is today.

Looking at today’s resources, the network will hit full capacity by 2022 and the demand for new frequencies will become a necessity. And of course, these are conservative estimates not taking into consideration the unknown usecases of tomorrow. From a bandwidth perspective, 5G is increasingly becoming a necessity, with the deadline is becoming shorter and shorter.

This will also facilitate the telcos plans to venture into the FWA market. Martín highlighted there are no ambitions to explore the possibility of 4G FWA, it simply wouldn’t be able to compete with the experience of traditional broadband, though trials in Hamburg are readying the assault on the FWA space. If you listen to Martín, the opportunity is quite significant, with the CTO predicting 20-25% of Germany will convert to FWA, and perhaps this will dig Germany out of a hole.

Like the UK, Germany is one of those markets which has not glorified itself with an ambitious fibre rollout and is now playing catch-up. The FWA buzz which is beginning to build might just disguise a couple of blushed Bavarian cheeks should 5G-driven FWA be able to cover up the fibre-less cracks across the country.

What is worth noting though is FWA will not be the saviour many are plugging it to be. Some, no names mentioned, believe it might be able to bridge the connectivity gap between urban and rural environments, but this is exaggerated. The same financial pressures will be on FWA as there will have to be suitable population density to build the business case. FWA will not mean gigabit speeds will be democratized.

Even at what is supposed to be a fixed broadband conference, 5G has managed to muscle in on the action. It’s almost embarrassing how much its hogging the limelight.