Telcos should focus on "connected data"​ not just "edge computing"​

Note: A version of this article first appeared as a guest blog post written for Cloudera, linked to a webinar presentation on May 4, 2022. See the sign-up link in the comments. This version has minor changes to fit the tone & audience of this newsletter, and tie in with previous themes. This version is also published on my LinkedIn newsletter with a comments thread (here).

Telcos and other CSPs are rethinking their approach to enterprise services in the era of advanced wireless connectivity - including their 5G, fibre and Software-Defined Wide Area Network (SD-WAN) portfolios. 

Many consumer-centric operators are developing propositions for “verticals”, often combining on-site or campus mobile networks with edge computing, plus deeper solutions for specific industries or horizontal applications. Part of this involves helping enterprises deal with their data and overall cloud connectivity as well as local networks. (The original MNO vision of delivering enterprise networks as "5G network slices" partitioned from their national infrastructure has taken a back seat. There is more interest currently in the creation of dedicated on-premise private 5G networks, via telcos' enterprise or integrator units).

At the same time, telecom operators are also becoming more data- and cloud-centric themselves. They are using disaggregated systems such as Open RAN and cloud-native 5G cores, plus distributed compute and data, for their own requirements. This is aimed at running their networks more efficiently, and dealing with customers and operations more flexibly. There are both public and private cloud approaches to this, with hyperscalers like Amazon and disruptors such as Rakuten Symphony and Totogi promising revolutions in future.

As I've said for some time, “The first industry that 5G will transform is the telecom industry itself.”

This poses both opportunities and challenges. Telcos’ internal data and cloud needs may not mirror their corporate customers’ strategies and timing perfectly, especially given the diverse connectivity landscape.

If operators truly want to blend their own transformation journey with that of their customers, what is needed is a much broader view of the “networked cloud” and "distributed data", not just the “telco cloud” or "telco edge" that many like to discuss.

Networked data and cloud are not just “edge computing”

Telecom operators’ discussions around edge/cloud have gone in two separate directions in recent years:

• External edge computing: The desire by MNOs to deploy in-network edge nodes for end-user applications such as V2X, IoT control, smart city functions, low-latency cloud gaming, or enterprise private networks. Often called “MEC” (mobile edge computing), this spans both in-house edge solutions and a variety of collaborations with hyperscalers such as Azure, Google Cloud Platform, and Amazon Web Services.
• Internal: The use of cloud platforms for telcos’ own infrastructure and systems, especially for cloud-native cores, flexible billing, and operational support systems (BSS/OSS), plus new open and virtualised RAN technology for disaggregated 4G/5G deployments. Some functions need to be deployed at the edge of the network (such as 5G DUs and UPF cores), while others can be more centralised.

Of these two trends, the latter has seen more real-world utilisation. It is linked to solving clear and immediate problems for the CSPs themselves.

Many operators are working with public and private clouds for their operational needs—running networks, managing subscriber data and experience, and enabling more automation and control. While there are raging debates about “openness” vs. outsourcing to hyperscalers, the underlying story—cloudification of telcos’ networks and IT estates—is consistent and accelerating. The timing constraints of radio signal processing in Open RAN, and the desire to manage ultra-low latency 5G “slices” in future 3GPP releases are examples that need edge compute. There may also be roles for edge billing/charging, and various security functions.

In contrast, telcos' customer-facing cloud, edge and data offers have been much slower to emerge. The focus and hype about MEC has meant operators’ emphasis has been on deploying “mini data centres” deep in their networks—at cell towers or aggregation sites, or fixed-operators’ existing central office locations. Discussion has centred on “low latency” applications as the key differentiator for CSP-enabled 5G edge. The focus has also been centred on compute rather than data storage and analysis. Few telcos have given much consideration to "data at rest" rather than "data in motion" - but both are important for developers.

This has meant a disconnect between the original MEC concept and the real needs of enterprises and developers. In reality, enterprises need their data and compute to occur in multiple locations, and to be used across multiple time frames—from real time closed-loop actions, to analysis of long-term archived data. It may also span multiple clouds—as well as on-premise and on-device capabilities beyond the network itself.

What is needed is a more holistic sense of “networked cloud” to tie these diverse data storage and processing needs together, along with documentation of connectivity and the physical source and path of data transmission.

Potentially there are some real sources of telco differentiation here - as opposed to some of the more fanciful MEC visions, which are more realistically MNOs just acting as channel partners for AWS Outposts and Azure's equivalent Private MEC.

An example of the “networked cloud”

Consider an example: video cameras for a smart city. There are numerous applications, ranging from public transit and congestion control, to security and law enforcement, identification of free parking spots, road toll enforcement, or analysing footfall trends for retailers and urban planners. In some places, cameras have been used to monitor social-distancing or mask-wearing during the pandemic. The applications vary widely in terms of immediacy, privacy issues, use of historical data, or the need for correlation between multiple cameras. 

CSPs have numerous potential roles here, both for underlying connectivity and the higher-value services and applications.

But there may be a large gap between when “compute” occurs, compared to when data is collected and how it is stored. Short-term image data storage and real-time analysis might be performed on the cameras themselves, an in-network MEC node, or at a large data centre, perhaps with external AI resources or combined with other data sets. Longer-term data for trend analysis or historic access to event footage could be archived either in a city-specific facility or in hyperscale sites.

(I wrote a long article about Edge AI and analytics last year - see here)

For some applications, there will need to be strong proofs of security and data custody, especially if there are evidentiary requirements for law enforcement. That may extend to knowing (and controlling) the specific paths across which data transits, how it is stored, and the privacy and tamper-resistance compliance mechanisms employed.

Similar situations—with both opportunities and challenges—exist in verticals from vehicle-to-everything to healthcare to education to financial services and manufacturing. CSPs could become involved in the “networked cloud” and data-management across these areas—but they need to look beyond narrow views of edge-compute. Telcos are far from being the only contenders to run these types of services, but some operators are taking it seriously - Singtel offers video analytics for retail stores, for instance.

Location-specific data

As a result, the next couple of years may see something of a shift in telcos’ discussions and ambitions around enterprise data. There will be huge opportunities emerging around enterprise data’s chain-of-custody and audit trails—not only defining where processing takes place, but also where and how data is stored, when it is transmitted, and the paths it takes across the network(s) and cloud(s).

(A theme for another newsletter article or LI post is on enterprises' growing compliance headaches for data transit - especially for international networks. There may be cybersecurity risks or sanctions restrictions on transit through some countries or intermediary networks, for instance. Some corporations are even getting direct access into Internet exchanges and peering-points for greater control).

In some cases, CSPs will take a lead role here, especially where they own and control the endpoints and applications involved. Then they can better coordinate the compute and data-storage resources. In other cases, they will play supporting roles to others that have true end-to-end visibility. There will need to be bi-directional APIs—essentially, telcos become both importers and exporters of data and connectivity. This is especially true in the mobile and 5G domain, where there will inevitably be connectivity “borders” that data will need to transit. (A recent post on the need for telcos to take on both lead and support roles is here)

There may be particular advantages for location-specific data collected or managed by operators. For example, weather sensors co-located with mobile towers could provide useful situational awareness both for the telco’s own operational purposes as well as to enterprise or public-sector customers, such as smart city authorities or agricultural groups. 

Telcos also have a variety of end-device fleets that they directly own, or could offer as a managed service—for instance their own vehicles, or city-wide security cameras. These can leverage the operator’s own connectivity (typically 5G) as well as anchor some of the data origination and consumption.

Conclusion

Telecom operators should shift their enterprise focus from mobile edge computing (MEC) to a wider approach built around "networked data". Much of the enterprise edge will reside beyond the network and telco control, in devices or on-premise gateways and servers. Essentially no enterprise IT/IoT systems will be wholly run "in" the 5G or fixed telco network, as virtual functions in a 3GPP or ORAN stack.

They instead should look for involvement in end-point devices, where data is generated, where and when it is stored and processed—and also the paths through the network it takes. This would align their propositions with connectivity (between objects or applications) as well as property (the physical location of edge data centres or network assets).

There are multiple stages to get to this new proposition of “networked cloud”, and not all operators will be willing or able to fulfil the whole vision. They will likely need to partner with the cloud players, as well as think carefully about treatment of network and regulatory boundaries.

Nevertheless, the broadening of scope from “edge compute” to “networked cloud” seems inevitable. The role of telcos as pure-play "edge" specialists makes little sense and may even be a distraction from the real opportunities emerging at higher levels of abstraction.

The original version of this article is at https://blog.cloudera.com/telco-5g-returns-will-come-from-enterprise-data-solutions/

I'll be speaking on an upcoming webinar with @cloudera about "Enterprise data in the #5G era" on May 4, 2022 - https://register.gotowebinar.com/register/3531625172953644816

#cloud #edgecomputing #5G #telecoms #latency #IoT #smartcities #mobile #telcos

10 Principles for Telecoms Vendor Diversification in the UK & Beyond

This was originally published as one of my newsletter articles on LinkedIn. Click here for discussion and commentary & to subscribe. 

 Introduction

The UK is currently a hive of activity for government and regulatory involvement in telecoms. I can’t remember a time when so much emphasis has been put on my domain – from election commitments on gigabit broadband, to concerns over “high risk vendors” (HRVs) – notably Huawei.

This week has seen further progress through Parliament of the Telecom Security Bill (link) which makes telcos face legislation on cybersecurity and HRVs. There has also been the linked publication of the 5G Supply Chain Diversification Strategy (link), which ties the removal of Huawei gear with the government’s intentions to expand operators’ choice of other vendors.

I’m going to be spending considerably more time on the policy aspects of telecoms in coming months – not just my normal areas like spectrum, but more broadly the intersection with geopolitics, technology evolution and industrial strategy, competition and trade.

This article focuses on the diversification aspects - my thoughts on the published strategy, plus what I’d like to see in recommendations from the Task Force and policies from government in 2021. It’s a follow-on from my recent post on interoperability. Note: I’m not revisiting the HRV or Huawei issue here.  

I should stress that this isn’t just parochial and UK-specific - it has wider ramifications on the global telecom market, and links up with activities in Brussels, Washington and elsewhere, such as the US Open RAN Policy Coalition, and the EU’s cybersecurity “toolbox” and upcoming European Cybersecurity Strategy review.

Disclosure – my advisory clients span a broad range of UK and international organisations, from startups to large vendors, service providers of numerous types, investors and branches of government. I work with companies and organisations that enable closed macro & small-cell networks, Open RAN, Wi-Fi, satellite connectivity and more. As people who know me will attest, my opinions are my own – and attempts to influence them will often backfire, even if made by paying clients. In fact, people pay me because I regularly say things they don’t want to hear. I like saying “no”.

Background

 Even before the pandemic there was huge UK government engagement – and manifesto commitments - on “full fibre”, 5G mobile networks, sponsored testbeds & trials, and even satellite communications with the investment in OneWeb.

A lot of my own focus in recent years has been triggered by the Future Telecom Infrastructure Review in 2018, which kicked off the current regulatory enthusiasm for localised spectrum, enterprise/private cellular and neutral host networks – although other commentators had also advocated this for some time previously (*coughs modestly*).

In the last 6-12 months, there has been a specific focus on “supply chain diversification”, and a desire by policymakers to increase the number of equipment/software vendors in the market for network infrastructure. This isn’t new – the Government published its initial Telecom Supply Chain Review in mid-2019 – but it has lately taken on greater urgency.

The largest catalyst has been the recent action taken on Huawei and what that means for supply of equipment in the UK as a result, particularly for national 5G RAN build-outs by the four main UK MNOs BT, Vodafone, Telefonica O2 and 3UK.

The net result of this has been the establishment of the UK Telecoms Diversification Task Force as an advisory group (link), aligned with an internal project to develop a strategy and policy for broadening the vendor base, being run by DCMS (Department of Digital, Culture Media & Sport).

The new strategy document highlights what it sees as a duopoly of Nokia and Ericsson, especially for macro RAN gear, and suggests that if that continues it implies a risk to future resilience of the supply-chain. During the various Science & Technology committee hearings this year, there has been input from vendors, operators, security officials, task force members and others.

The discussion has largely been 5G-dominated, although the strategy document also mentions fixed-infrastructure diversification (subject to ongoing consultation and review). Many of the parliamentarians seem to think 5G is something special, and have bought into the “unicorn” visions of GDP uplift and “ubiquity”. (My regular readers know that 5G is “just another G” – an important upgrade, but not something which will change the world).

The strategy proposes three areas of action:

• “Supporting incumbent suppliers” (Nokia and Ericsson) as major vendors, but suggests various approaches towards nudging them to greater levels of openness.
• “Attracting new suppliers into the UK market” – this essentially means working out ways to get Samsung, NEC & Fujitsu more involved, as well as others. The parliamentary debate’s speakers also name-checked Mavenir, Parallel Wireless, Rakuten’s platform business and others.
• “Accelerating open-interface solutions and deployment” – which refers more to the realm of industrial policy around Open RAN, and components such as semiconductors.

As you might imagine, I’ve got some fairly trenchant opinions on much of this.

Is the market that concentrated?

Clearly, the UK MNOs are today almost entirely dependent on Huawei, Nokia and Ericsson for their macro RAN deployments, although Samsung has previously been present in the 3UK’s 4G network, and Vodafone has recently started deploying gear from Mavenir in its Open RAN deployment.

However, some countries such as the US and Japan have maintained a greater diversity in macro RAN supply, despite a lack of Huawei gear - although there are some differences compared to the UK. Continued support of older 2G/3G services currently relying on combined “single RAN” infrastructures is a valid concern – and the Diversification report suggests it might be possible to sunset or improve interoperability there. The Samsung presentation and letter to the committee also had some suggestions about this (link).

I think there’s perhaps also a link to the historical “3GPP monoculture” in UK/Europe. Other regions had a mix of GSM, CDMA and local alternatives, which fostered greater supply fragmentation originally, which endured over time as the "single RAN" approach wasn't as much of an obvious win (or lock-in).

It is worth noting that there is already good diversity for private cellular networks and specific mobile products such as 4G/5G cores, indoor wireless and other niches such as fixed-wireless access. Many alternative suppliers are gaining traction first in rural and other “secondary” areas, rather than dense urban macro locations.

One aspect the government hasn’t appeared to consider is how much of the anticipated 5G “upside” (whether you believe the $billions GDP numbers or not) is conveniently located in these very contexts which have greater levels of supply diversity. Many of the expected new 5G applications are indoors (in factories, hospitals etc), or in sectors such as agriculture.

Another set of “advanced connectivity” applications have alternative technology options, especially over the 3-5 years it will take 5G to mature. WiFi 6/6E/7, LoRa, 60GHz FWA, new satellite constellations and proprietary platforms like Amazon Sidewalk all offer alternatives to 5G. Yet I still hear people talking about 5G for low-latency AR/VR in peoples’ homes when it’s obvious that 90%+ of that will use Wi-Fi, for multiple reasons.

Reading the report and listening to the debates, there seems to be a certain amount of hindsight here, with regrets that previous governments hadn’t thought through possible consolidation from three big cellular vendors to two, irrespective of which was taken out of the equation or how. Some speakers went back further, to the days of Nortel and Marconi, mourning the loss of greater diversity and national sovereign capability.

There’s also an implied sense of worry that one of the existing incumbents might make a mis-step. It’s notable that the “supporting incumbents” line was absent in January discussions, but was perhaps catalysed by Nokia’s 5G woes earlier in this year. The US Attorney General floating the possibility of a US company acquiring either Nokia or Ericsson, probably raised the stakes even further, even if that suggestion was rapidly shot down at the time.

Other concurrent drivers have related to Brexit, trade deals with Japan (and presumably EU, US and S Korea in future) and the enthusiasm of the current administration for more “industrial policy”. There is interest in state-aid for many areas of technology, ranging from hydrogen-powered aircraft (“Jet Zero”) to biotech to quantum computing, with the aim of improving the UK’s export and trading prospects in new and emerging areas. Telecoms technology needs to be seen in the context of a very expansive vision from artificial meat to nuclear fusion. (Wearing my futurist hat, I heartily approve of this).

Open RAN & disaggregation

Perhaps the least-cohesive part of the strategy document (and some initial actions like the testing and interoperability lab announcements) is the focus on Open RAN as the main saviour of supply-chain diversification. It got a huge amount of airtime in the DCMS report, as well as in politicians’ speeches.

In my view, Open RAN is similar to 5G more generally – important, but getting rather over-hyped. It’s going to be very important in future, but it's not the only game in town. Perhaps it will form the centrepiece of 6G, but for 5G macro – which is being deployed now – it’s going to be secondary, even if some of the Huawei rip/replace by 2027 uses it.

There seems to be quite a lot of disagreement between the MNOs as well – Vodafone is clearly a fan, while BT and 3UK seem more sceptical, with O2 somewhere in the middle.

I’m far from convinced that some of the detailed aspects in the document and annex – going as far as discussing eCPRI interfaces and 7.2 O-RAN splits – are the pivot-points for the overall diversification or resilience story. We don’t have TIP specs for OpenRAN 5G Massive MIMO yet, and may not get there for quite a while.

We’ll see a growing amount of vendor orientation on cloud and open RAN approaches anyway – Samsung, NEC and even Nokia are pursuing it. Ericsson and Huawei are being more diffident, but also seem to recognise that virtualisation is important, even if they’re not breaking open all bits of the RAN. Ericsson's recent Cloud RAN announcement could reasonably be described as "tentative" (link).

While there’s a lot of action and excitement with Rakuten, Dish and other greenfield networks, that doesn’t mean that operators in the UK or elsewhere would necessarily follow suit, even if they could do it tomorrow. It would be nice for the option to be there – but I’m a little concerned that the document asserts that interoperability should always be a default rather than a viable option. (If you haven’t seen my post on interop, have a scan through it here). Different operators have different views - and different legacy infrastructure.

Think of an analogy: should the government also suggest that Airbus planes should interoperate with Boeing avionics? Or, for that matter, how many of the advocates would accept Linux as the “default” OS for their laptops, rather than being able to choose Windows or MacOS if they prefer?

I expect we'll see a growing amount of Open RAN in rural and then perhaps suburban areas - but it's going to be a long time before it's common in existing MNOs' urban cores and high-density macro domains. It's an interesting platform for neutral host networks too, as the NEC trial points out. It is part of the overall “choice architecture” for future networks, but arguably the most interesting domains for advanced connectivity will get more choice / vendor competition from non-5G technology options. The normal 5G macro RAN is more about capacity for smartphone broadband, rather than clever new applications. 

What we should aim to see from future UK Diversification recommendations & policy

What comes next is the Diversification Task Force recommendations, which are expected early in 2021. This will feed into the policies and actions taken by the rest of government – potentially DCMS, although some have suggested aspects should reside with Ofcom, the security agencies or other departments.

As some external input, I thought I’d lay out some my own preferences, principles and what I’d like to see. (I may also submit more formal comments into the consultation process).

• Clarity of purpose(s): There is a tendency in the report and parliamentary debate to conflate security, supply resilience, competition, innovation, export opportunity and other drivers for telecoms (de)regulation. All are valid concerns and thus represent areas for government to become involved – but any individual recommendations or rules should break out the underlying purpose(s) clearly. Obviously, few politicians or media commentators are experts in telecoms networks arcana – so communications across Westminster and beyond needs to be crisp, and misconceptions and misrepresentations pointed out swiftly. Soundbites and spin always get attention – but must be rooted in technical reality rather than convenience and media-friendliness.
• Technology neutrality: While there are specific concerns about 5G RAN as it’s a major current focus of investment – and because the intelligence/core functions are increasingly distributed – it’s far from the only important telecom technology, or the only one with a concentrated supplier base. 4G mobile, fibre and fixed-line broadband infrastructure, satellite and assorted other wireless technologies should also be considered as part of diversification. There’s no major UK Wi-Fi player, for instance, which ideally would be rectified. At a component level, we should rightly be considering semiconductors, but also many areas of cloud and software elements involved in ever-more-virtualised telecom networks as well.
• Business model neutrality: This links to my recent post on interoperability. Governments shouldn’t mandate either proprietary or interoperable interfaces, or vertically-integrated or disaggregated solutions – as long as there’s enough competition. Openness is good – but both highest-performance and lowest-cost options may involve “black boxes”. Open RAN (which in any case needs more careful definitions and comes in multiple variants) has huge promise, but shouldn’t be a political football either. We should be encouraging market forces to operate effectively, in the demand side of telecoms networks. Choice is imperative. (You could say the same about net neutrality: if customers have a choice of 10+ ISPs, it doesn't really matter if one of them sells "Ain'ternet" as long as it's accurately marketed & distinguished from the real thing).
• Realistic time horizons & paths: Regular readers of my posts may have noticed increasing mentions of “path dependence”. Timelines matter. If there’s an awkward 4-year gap between promise and reality for a given technology, for instance because of lengthy testing and commercialisation, that needs to be recognised upfront. We can’t leap straight to 6G, terabit FTTx or massive LEO satellite constellations, even if the UK might have an edge in specific components. The new rules need to reflect realistic time horizons – including buffers for delays. That’s especially relevant for things like Massive-MIMO 5G radios.
• Removing obstacles: The UK’s telcos will continue to need large and medium sized international vendors for the foreseeable future. Ericsson and Nokia will obviously remain central, and we should be looking to encourage Samsung, NEC and Fujitsu in 5G – as well as the continued roles for Mavenir, AirSpan, Parallel Wireless, Commscope, Cisco, Juniper, Microsoft and so on. We need to address why, for instance, Samsung is largely absent from UK MNOs’ networks, despite its profile in Korea and the US. If it is about the need for continued support of 2G/3G and other legacy systems (for instance to support eCall), then we should be considering creative solutions for this. I could even imagine a government-sponsored 2G shared network to support M2M and emergency calls, leaving MNOs to focus on 4G/5G differentiation (and reclaiming spectrum).
• Global vision: While I can understand why government likes the idea of home-grown UK telecom startups thriving, this vision needs to be tempered with reality. It isn’t realistic to expect UK firms to tackle all aspects of network infrastructure at the scale and expertise needed by major telcos. This doesn’t just mean “heavy iron” macro 5G networks, but also future elements such as fibre transport or hyperscale cloud for next-generation platforms. There won’t be a UK (or European) equivalent to AWS or Azure any time soon, nor a Qualcomm equivalent. If domestic self-sufficiency and ownership was a desire, there would have been obvious questions about recent sales of ip.access and Metaswitch. The diversification review should address areas where the UK should expect to collaborate internationally – as well as its contribution to new standards, for instance on 6G development.
• Supporting cast: For all the various reasons mentioned above – security, supply resilience, export opportunity and so forth – the “leading actors” of MNOs, semiconductor designers and network hardware/software vendors will need other sets of market players to evolve in tandem. Government is right to be creating testing labs, but should also look at training centres for engineers and installers, university courses, systems integrators, infrastructure financiers, insurance providers and many others. It doesn’t have to (and probably shouldn’t) fund all of these, but it can perhaps advocate for their growth, and help remove barriers if they exist. How many indoor mmWave 5G URLLC vertical specialist engineers - or OpenRAN Massive MIMO maintenance teams - are there in the UK? How can we multiply that by 100x?
• Flexibility to respond to emergent events: Linked to path-dependence is the concept of protecting “optionality”. I can come up with a range of scenarios under which the world might evolve in surprising directions, both technologically and geopolitically. China might reach a different set of compromises with Joe Biden on network vendors, components and trade. Brexit and new UK trade deals may impact supply chains and telecoms demand in unexpected ways – positive or negative. New cybersecurity vulnerabilities might come to light – or new safeguards developed. Any new policies on diversification should aim to enable new vendors and standards, rather than add constraints such as mandating specific interfaces.
• Industry verticals & new applications: The UK authorities, like others around the world, seem focused on Industry 4.0, automation, IoT and the potential benefits of greater network-intensity in many sectors. This filters through to the idea of private networks, cloud/edge computing and other adjacent domains. It may also feature high on the telecoms diversification agenda. My view is that this should revolve around a general principle of “advanced connectivity”, rather than specifically relating to 5G and its supply chain. Wi-Fi, fibre, LoRa, Bluetooth and even proprietary network solutions have equally-important roles to play, and as before, neutrality of policy is desirable. The government should consider technology substitution between options, as well as vendor choice within one technology.
• Awareness of energy & CO2 implications: One of the trade-offs of “abstraction layers” and simplicity/flexibility can sometimes be increased power consumption. “Software-defined X” or “Adaptive Y” can involve lower efficiency than something optimised or hardware-based. The UK should be thinking about a future of networks where everything has a CO2 budget – perhaps with cascading carbon taxes built in. Rather than least-cost routing, we might find networks built around lowest-energy optimisation. I didn't see anything about energy or CO2 in the strategy document.

Overall, as a UK-telecom industry analyst and advisor, I see this as both worthwhile and exciting – and I’m keen to participate in one way or another when possible. I’m certainly intending to check up on how the ongoing pronouncements fit with the principles I’ve outlined here. (I'll also be pondering the international ramifications and linkages).

I think the existing Diversification Strategy makes some good points and has clearly taken inputs from numerous well-placed and knowledgeable sources. However, it’s a bit too focused on 5G, Open RAN and macro networks, rather than the broader realm of “Advanced Connectivity”. I'd like to see more technology neutrality and optionality across the board.

It also blends together multiple issues – cybersecurity, resilience, UK industrial policy, competition, technical philosophy and so on – when they sometimes only have tenuous or debatable links. Interoperability is used as a “glue” to stick together the separate parts. I’d rather see broad top-level goals such as “security” and “optionality” and separate self-consistent analysis for each purpose.

As always, I'll aim to respond to the comments and discussion as much as possible. And please get in touch via email or LinkedIn, if you'd like a deeper dive on any of these areas.

#5G #policy #DCMS #wireless #telecoms #regulation #openran #interoperability #wifi #fibre #broadband #IoT #neutralhost #6G

Telco use-cases for AI: A simple categorisation model

The coming years will see the application of AI technology across all sectors of the economy and life. The telecoms industry is no different. Although I’ve been commenting on telco-sector AI in the context of “TelcoFuturism” for some time (link), and co-ran a workshop on it in May 2017 (link), the last few months have seen a notable upswing in interest. I’d say that the public use-cases now seem to be significantly in advance of those for blockchain, in terms of potentially-transformational technologies.

That said, it can still be hard for many executives to grasp exactly what is likely to change, and when, for AI/telecoms combinations. This is highlighted by the surge in AI-related panels, presentations and even complete streams at industry conferences – although sometimes I see more interest from generalist AI people about the telecoms vertical, versus telecom specialists looking at what’s new. 

Both sides of the equation have large volumes of obscure acronyms, multi-layered technology stacks, and complex volume chains – which can mean that mutual understanding is often confined to narrow niches. AI covers machine- and deep-learning, language processing, machine-vision and much more. Telecoms includes vast realms of internal systems and processes that are unknown to most who are not insiders – domains like core networks, OSS/BSS, network optimisation, toll fraud and service-assurance are alien to those not steeped in the industry.

One of the ways I’ve been using to “set the scene” for describing AI/telecoms intersections is to simplify and categorise the use-case areas. I count three, possibly four, large “buckets” into which a variety of telecom AI impacts will fit. These buckets are not based on either specific AI or telecoms technology slices, but more on understandable business functions and roles:

• Dealing with customers
• Managing operations
• Creating new services
• (External risks)

 Within each of these areas, there are many, many sub-sectors – and also some overlap.

“Dealing with customers” can include everything from voice/text chatbots for customer-service, through to predictions of which customers are least-happy and may “churn” to competitors. Where telcos have retail outlets, it could incorporate various in-store technologies, or it could be about smarter web-consoles for B2B customers running complex managed services.

“Managing operations” is even more diverse – it could be fault prediction for network elements, optimising the 100s of configuration variables for radio networks, spotting fraudulent traffic to international premium-rate numbers, allocating engineering resources more productively, or protecting against hackers and malware. There are hundreds of possible uses here, which mostly overlay on top of existing operational/business support systems (OSS/BSS) See also my recent post (link)

“New services” also spans a range of areas, but broadly splits between AI-enabled and AI-enabling services. An AI-enabled service could be a local-language voice assistant added to a cable operator’s set-top box or remote control. Or it could be the provision of integrated “smart city” solutions including video-cameras and security analytics. AI-enablement could include offering “edge” servers for hosting local processing, milliseconds transport-time away from a device, or it could be the provision of anonymised bulk data for others to apply algorithms to. Telco opportunities with IoT+AI include both enablement and enabled services, in numerous manifestations.

The “risks” category includes a diffuse set of possibilities by which AI might harm the telecom industry, or dampen demand for services. Smarter devices (eg autonomous vehicles) will be able to host their own offline image processing & route-planning locally, rather than needing realtime connectivity at 5G speeds/latencies. Another threat could be customers’ smart assistants renegotiating price-plans on their behalf – after crowdsourcing millions of conversations to deduce how best to game the retention staff’s scripts and objections. (Of course in the latter example, the customer-retention team could themselves be bots). Numerous types of automated “least-cost X” and arbitrage engines are likely to emerge. Various security risks are also probable here too.

Clearly, using just these four "buckets" misses much of the fine-grained detail. But I find it helpful as a starting point, as most top-level industry issues apply differently to each. 

Consider input data, for example – for both customer management and operations, telcos have abundant historical records and ongoing data collection that may generate terabytes per day. But for the former, privacy considerations often come to the fore in terms of regulation and risk, while this is far less of a concern for internal operational data, for example on how the network is running. For new services, almost by definition the focus is on collecting/processing/transporting new data, rather than deriving conclusions from existing sets. 

This four-way framework is also useful for thinking about different types of ROI model - split broadly between impacting existing revenues, existing costs, new revenues and potential changes to underlying assumptions. 

I'll be covering these topics in more depth in various upcoming presentations and reports, as well as looking at other areas of telco-linked innovation such as blockchain, 5G and enterprise verticals. Please get in touch if you would like more detail, or are interested in internal workshops, external support through events or white papers, or are seeking ongoing strategic advisory support.

Reinventing Telcos - a preview of my ITU World panel session

Reposted from an article I wrote for the ITU's blog (link)

On the 27^th of September, I’m moderating a panel discussion at the ITU World 2017 conference in Busan, South Korea, on the theme of “The transformation of telecom operators: reinventing telcos.”

This is a topic we’ve heard discussed for at least the last 10 years in various forms, yet we still seem to be at or near the starting point. The panel will look at what can we do differently, to change the dynamics. In particular, it will focus on the internal organisation and processes of the telecom industry, both within and between telcos. Other conference sessions will consider new services, industry verticals, and the customer perspective.

Across the globe, traditional CSPs are trying to adapt their cultures and operational models, in the face of ever-increasing competition and substitution from new players. As well as other rival service providers such as cable operators, telcos now face challenges from Internet-based peers, niche specialist SPs (for example in IoT), and even enterprises and governments building their own networks. On the horizon, new technologies such as AI threaten to change the landscape even more. The nature of what it means to be a “service provider” is changing.

This goes beyond just implementing next-generation networks, whether fixed or wireless. While these are necessary, they are not sufficient for true reinvention – and they also require enormous new investment. The real question is what options exist for operators to best-allocate scarce resources (money, skills and time) to maximize the value from such investments in infrastructure. There is also a risk that emphasis on the “hard challenges” of raising finance, acquiring spectrum or sites, and building networks, means less focus on the “softer” problems of culture change, service design, organisation, customer-centricity and partnership.

This in turn poses problems for regulators, especially at national levels. Usually driven by domestic politics and local economic situations, they somehow need to ensure a strategically-important sector remains healthy, while also recognising the huge global-scale advances from many technologies and services that transcend national or regional boundaries.

It is not realistic for every country to have three or four competing local providers of social networks, IoT management tools or future AI platforms. Citizens and businesses expect similar functions to work internationally and immediately, with rapid incremental improvements. Unlike networks, innovation in services and applications often favours fast-evolving proprietary platforms, rather than committee-led interoperable services like the PSTN.

Telcos – and their regulators – have until recently been poorly-suited to this new world, although some are making interesting attempts to “turn the super-tanker”.

The session will touch on four or five key areas:

• Innovation: What is the best way for telcos to innovate, given regulatory & cultural constraints? Arms-length subsidiaries? Huge retraining programmes? Business units targeted on verticals / technologies? How much freedom should product units have, for example should they be forced to use the company-wide core network & NFV platforms, or should they be able to go “off piste” and act independently? Are “platforms plays” viable in telecoms, or just unrealistic wishful-thinking?
• Regulation: What should regulators be doing, to simultaneously encourage new entrants/innovators, but also allow telcos to make enough returns to take long-term investment views? And how can regulators deal with the overlaps, competition and tensions between very distinct groups, such as traditional infrastructure-oriented telcos and Internet-based “web-scale” platforms? One group has huge capex and strict regulatory constraints, the other huge R&D and greater risk of failure: how can one set of rules span both, where they intersect?
• Industry coordination: How do the current pan-industry structures (eg bodies like ITU & GSMA & 3GPP) need to change? Can they be made faster, more willing to take risks, faster to acknowledge errors, bring in non-traditional stakeholders?
• Technology catalysts: Are 5G & NFV really “transformational” enablers of re-invention? Or will prolonged hybrid/transition phases from older tech mean there can’t be fast shifts? How should telcos deploy technologies such as AI, blockchain or IoT internally, as part of their reinvention?

One other thing should frame the debate: language – how we describe the problems, or wider communications environment. Words, analogies and narrative arcs are psychologically important – they shape the way we perceive problems, and can either enhance or misdirect our responses. We should recognise the unhelpfulness of terms like:

• “Digital”: Morse Code was digital in 1843. Telecom networks have used digital technology for decades, as have most businesses. It’s about steady progress and evolution, not a “digitalisation” step change.
• “OTT”: usually said in a negative tone, I believe this prejudiced description of Internet services has hugely harmed the telecoms industry over the last decade. For example, it obscures the fact that larger Internet companies do more deep technology than telcos: they make network equipment and chips, build infrastructure and conduct billions of dollars of R&D.
• “Level playing field”: telco executives, regulators and lobbyists use this phrase with abandon. Yet the analogy is meaningless, when everyone is playing different sports entirely.

The narrative needs to change substantially. My ITU Telecom World 2017 session aims to reset the debate, and catalyse thoughtful (but rapid!) future action by operators, regulators and industry bodies alike.


If you are seeking a moderator or speaker for a telecoms strategy or policy event, please contact information AT disruptive-analysis DOT com