The existence of 5G promises telcos with new heights of profit, growth and change in a market that by some estimates will be worth close to a trillion dollars within the next decade. But, it's existence alone cannot help these companies get there. With 5G set to drastically change the way business is done, companies are honing in on their business models; reviewing and changing them to align with their 5G-fueled ambitions.
At KNect365’s 5G World at ExCeL London, a panel of industry experts offered advice on what CSPs should consider in their business models. Gabriel Brown, Principal Analyst, Heavy Reading, moderated the discussion with:
- Paul Doany – CEO, Turk Telekom
- Mats Lundback – CTO, Telia Sweden
- Matt Hancock – Secretary of State, Department for Culture, Media and Sport, Gov UK
- Hassan Ahmed – Chairman and CEO, Affirmed Networks
- Shekar Ayyar – Executive Vice President, Strategy & Corporate Development, and General Manager Telco NFV, VMware
Who do you want to be?
Anyone involved in a transformation project knows that the best thing to do first is define your goals, so that you can clearly focus the rest of the project.
“I think in most cases operators need to focus on their positioning in the market,” Turk Telecom’s Doany advised.
Turk Telecom opted to focus on its strength as a fixed operator with a broad fiber base while sharpening and growing it’s weaker mobile business.
“We see that we’d be an important network provider, service provider, and using 5G technologically, we also want to be a technology provider,” Doany said.
Some of the firm’s activities include increasing the density of its 5G network, in particular by turning to small cell technology. Although small cell nodes aren’t as powerful as cell towers, they can deliver more capacity and coverage.
Getting radical with the cloud
VMware’s Ayyar described 5G as the catalyst for lots of points of convergence (convergence in the sense of gaining new capabilities when certain elements meet 5G).
“We see convergence in wireless and wireline; we see convergence in IT and the network edge core, and potentially radio as well. “We also see convergence in cloud.”
When most people think of cloud, they think Amazon Web Services, Google and Microsoft Azure, not telcos or CSPs.
“What we find interesting about 5G,” Ayyar added, “is that it is going to be the point in time where at least some subset of operators are going to be first-class citizens in the cloud economy.”
Adopting a radical new approach to operational and business support systems (OSS/BSS) that includes embracing cloud technology will give CSPs an opportunity to increase agility. They will be able to launch services in minutes and hours rather than months and years, and truly be able to compete in the OTT economy.
“As our colleagues from the service providers have said, different service providers might attach themselves to different parts of this. Some might go all the way up to offering new services to compete with OTTs; others might actually offer up their network as a service; and yet others might offer just base connectivity,” Ayyar said. “But we see this as a convergence point.”
Affirmed Networks’ Ahmed was in agreement on Ayyar’s agile mindset, stating that two primary drivers underlie a big chunk of transformation:
“We have to be able to scale economically, and operators need to be able to innovate at a much faster rate. These two drivers are changing the way people not only build their networks but how they are monetizing and managing them.”
In the next part of this series, I’ll cover what the experts had to say about 5G coverage, collaboration and regulation.