If we’re honest, perspectives are mainly self-serving; you can trust vendors to anticipate a surge in demand for whatever-the-next-generation of their IT/network application happens to be. And you can rely on service providers to confidently predict that they’ll see off the competition as their market share swells when their new bundled offering or innovative partnership takes off. In truth, what you might see in a crystal ball is probably obscured by a sea of hype.
But, occasionally a new year brings real change when the fundamental tectonics of a market shift and as a result the landscape is altered. These sorts of earthquakes are not common but there is a real possibility that in telco, 2015 may be a year of such extreme change, which makes predictions rather more interesting than usual.
With LTE/4G services really bedding in; with network function virtualization and software-defined networking redefining the character of the network and its management; with the realization of the importance of customer experience in the bit pipe equation; and with lean approaches to replace and/or complement parts of the legacy IT stack (particularly in business support systems), twelve months from now many of the commercial drivers of the past decade may be consigned to the past.
In their place, we might just see a new operating model. 2015 is interesting because it could be the year that a number of dramatic changes take root. Let’s look at these one-by-one.
Network cloud readiness; reality slowly catches up with hype
NFV will gradually take off, though vendors are already positioning themselves as being “ready” for it – often long before they know what being ready actually entails. Thus, 2015 will be a year of marketing buzz that may expose more than a few software vendors doing their well-practiced impression of the Emperor wearing his new clothes. In my view, 2016 is when NFV will really materialize as more than limited proofs-of-concept, but that emergence will begin in late 2015 starting with private NFV installations at operator sites, then gradually moving to larger, hosted installations managed by the big NEP players running virtualized core networks for many of their operator customers.
IT cloud readiness
More of the lighter “agile” type of applications in BSS/operating support systems will be installed on a virtualized basis, or in an “IT-cloud” (for instance, mediation, service orchestration/activation, OSS fault management systems, etc., all fit into this category). This shift, too, will be over-hyped by some vendors (notice a trend emerging here?) who will position themselves as being fully installable in a data center (private or public) run cloud as if this is a critical advantage. It’s not. It’s more a “tick-in-the-box” next year than table stakes.
OSS – and this is a big one – is going to be reshaped … starting now The moving forces that underlie this reality are myriad and include:
–A focus on CSP customer experience, meaning service monitoring will become precedent over network monitoring. At the same time, a focus on CSP network quality. This means the ability for networks to cost effectively generate and distribute the massive data volumes (streaming session/signaling traces, etc.) required for the reshaping of OSS, but without massive investments in probe systems etc.
–How will it happen? CSPs will require the ability to get instant results from ongoing OSS processing, feedback that will then allow the network to spin up/down capacity and reprioritize traffic as needed. This will all be driven by dynamic infrastructure capacity (NFV and SDN) and smart policy control solutions. In the past, OSS processing often generated a report where capacity issues were highlighted and then a physical installation process started (order hardware, site logistics, new node deployment) to address it. But now, it drives OSS real-time network analytics programs at operator sites. These involve real-time data ingestion (in a combination of charging/BSS data and network/OSS data blended with customer information/product/CRM data), big data analytics solutions and then feedback loops back to networks. The change, when fully functioning, is transformative.
–A worry here that will need to be ironed out beginning in 2015 is that operators and vendors alike have a poor track record managing IT transformation. For instance, is there evidence that much has been learned from the many BSS transformation failures of the past decade? Arguably not much. The winning shift in the reshaped OSS landscape will be leaner OSS applications that sit on top of the data required. There will be apps on top of a common data ingestion layer and these will drive decisions in niche areas. It will be up to either the ingestion layer or the feedback loop layer (or both) to converge/ enable the niche apps’ data feeds and decision paths (such as conflict avoidance etc.).
Partner enablement (but done the new way)
My guess is that in 2015, operators will have to finally put their cards on the table and the ones that enable partners, over-the-top providers and mobile virtual network operators will be the winners. Walled gardens and other failed attempts at protectionism are long since dead. Enablement can best be done by smart integrations for OTT partners/MVNOs in a way that lets them influence the quality of service delivered to the end-customer sitting on the host operator’s infrastructure. This also means things like allowing split billing scenarios (most often an end-customer and partner split), etc. The key to success here is once again going to be deploying smart, lean applications as the enabler and not engaging in a massive mobile virtual network enablement (partner enablement) approach that will deliver an infrastructure as dense as existing BSS and OSS together for the host operator to build and manage.
Lean approaches to BSS and OSS
I’ve already made my prediction for the latter (above). For BSS, 2015 will be another year where operators conclude that buckets/bundled services are best executed and supported when counting is managed close to the network via a very cost effective BSS solution that ideally leverages an application that they have already invested in. Heavy, inflexible billing solutions may have gained purchased but were never the answer to the new services question; this is becoming clear now and in 2015 the pace will increase. The shift is pain driven by long times to market, the high total cost of ownership of introducing new offerings and maintaining existing but simplified offerings in existing legacy stack(s).
Enhanced voice services (a.k.a. VoLTE, ViLTE, VoWI-FI, RCS) will start to change the competitive equation
Operators in number will start to launch voice-over-LTE services this year. But even though there will be a lot of marketing hype (again!) driven by enhanced voice in late 2015, my guess is that operators will still use charging models that are data-centric. Enhanced voice services are a soon-to-be-expected-reality that will enable competition with OTT’s and the operator’s advantage here will be the control of quality and the ownership of the mobile number (a global way of being reached). Charging-wise, enhanced voice will drive more data through the network (video calling, file sharing during calls, etc.) and thus a higher likeliness of customers upgrading their data packages. The enhanced voice revolution may really not happen in 2015, but it will start.
There’s an interesting corollary question here, too. Will the CSP’s really drive this revolution or will they instead try to follow a wave led by the OTT players? Though they might be loath to admit it, the OTT’s have innovation in their DNA to a far greater extent than is the case with most CSPs. Either way, though, whoever leads the revolutionary charge the result will be the same to the extent that it will drive data usage in the CSP’s network.
Data usage in emerging countries starts to tilt the balance
Smartphone penetration will increase in emerging markets. Subscribers will remain unaware of how to evaluate the cost/benefits of specific data plans. Operators providing full predictability/disclosure in their offerings (even calculating usage during a trial period and then suggesting an appropriate or desirable plan to customer) will ultimately gain market share but it might take a while to get there. This prediction is, of course, optimistic on my part, but we can hope.
The tectonic plates on which the telecoms industry is built are shifting. While the earthquake may be more apparent in 2016, the tremors of change will begin to resound more and more loudly over the coming twelve months. There will be winners and losers on all sides of the market – vendors and operators alike. By 2017, don’t expect the landscape to have remained the same.