‘Cloud for Telecoms’ Provides a ‘Silver Lining’ for Network Operators

The telecoms market is changing rapidly and the current evolutionary path is difficult to determine with any accuracy. Network operators are faced with increasing competition and know that they must launch new services in order to differentiate and survive. However, uncertainty around the success of these services and the rate of take-up can often derail the business case. If the new service requires substantial upfront investment, then proceeding would be too much of a gamble. Risk becomes the barrier to progress and stifles innovation. This is the view of Mark Windle, Head of Marketing at telecoms software innovator, OpenCloud, who believes that the Cloud concept can help de-risk the situation.

In the Cloud model, new services are deployed as software within a virtualised environment, which spans an array of standard servers. This model enables network operators to launch new services on a small scale, at a low initial cost. As service up-take increases, the service can be scaled up simply and cost-effectively. Therefore, the reduction of the upfront investment that the Cloud provides de-risks the business case. This allows operators to get on with adapting to their ever-changing environment rather than being burdened with high upfront investment costs.

Network operators are now facing stiff competition when it comes to delivering real-time communications. Communication services delivered over-the-top of mobile broadband are eating in to their core revenue streams. In fact, Analysys Mason forecasts an annual 7% revenue reduction between 2011 and 2016 for mobile network operators in Western Europe. Network operators need to launch new services, such as their own VoIP services and VoLTE, in order to defend their market. However, Analysis Mason recognises that uncertainty in the business case is a barrier for network operators. This uncertainty can be addressed by Cloud: in this case ‘Cloud for Telecoms’.

By adopting a Cloud for Telecoms model the operators would no longer be dependent on Network Equipment Providers (NEPs), which have grown their business on the provision of closed software and hardware platforms. The Cloud threatens this traditional model and it enables network operators to source their own lower-cost servers and provides the scalability to manage expansion. Cloud for Telecoms enables telecom operators to do what they need to do – independently. Furthermore, by using an ‘open’ service layer operators have the ability to develop a wide range real-time communications services and choose from a free-market of independent developers.

Some parts of the mobile network are inherently physical, such as the radio access network, and are therefore not plausible to host in the cloud. Other parts are not. So long as the inter-communication between all parts retains the low-latency, reliable nature of current signalling and content transport, then the non-physical parts, such as the service layer, are perfectly suited to the Cloud.

By definition, a virtualised environment is only achieved if it replicates the real one. The real one already exists and it has been built to meet a specific set of standards. The question is will the operators stick to the traditional model and get bogged down in a standardisation process, rather than follow the example of their internet contemporaries – Google and Skype – that continue to develop and move forward regardless of whether the emerging standards suit their present system or not.

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