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Digital Transformation Has Been a Rocky Road |
NEWS |
Digital transformation has had a rocky ride over the past three years. While AT&T and Verizon have been very bullish in their plans to re-architecture their networks for a digital services future, momentum on the ground for other Tier One and Tier Two operators appeared more tepid in 2015, 2016, and 2017. The year 2018, however, is proving to be a more optimistic for cloud and virtualization rollouts. At Mobile World Congress (MWC) 2018, Amdocs, Ericsson, Netcracker, and Nokia reported significant increases in digital transformation orders from telcos.
This was underscored by MWC briefings with Telefónica, Orange, and Vodafone. All three operators have a footprint in multiple markets. What is remarkable is their aggressive approach to roll out a consistent business support system (BSS)/operations support system (OSS) digital transformation strategy across all the markets they are in. In the case of Vodafone, it is not just its Vodafone branded networks but also joint venture partners—40 markets in all. Its game plan is not just to streamline implementations and reduce operating costs in the mid to long term but also to roll out value-added services across all markets that allows them to offer voice over long-term evolution (VoLTE), virtual private network (VPN), software as a service (SaaS) services, etc. on a consistent basis to multi-national companies with end users in multiple markets.
The Ocean Vision |
IMPACT |
Vodafone’s Ocean Network functions virtualization (NFV) initiative is the operator’s master plan to achieve this vision of “agile” services that can be made available across all markets. The Ocean NFV initiative makes a number of demands of its engineers:
At MWC Barcelona 2018, Vodafone announced that Netcracker will be playing a key role in helping the operator to streamline and automate operational processes across its geographic markets. Utilizing Netcracker's Hybrid Operations Management (HOM) solution to enable domain orchestration, Vodafone is able to launch new services and enable dynamic, closed-loop operations with automated lifecycle capabilities. ABI Research anticipates other mobile telcos going down this route of automating operational processes, especially for multi-national mobile telcos, as they need to be more versatile and able to rapidly spin up new microservices with reduced manpower and operational complexity.
Preparing BSS/OSS for 5G |
RECOMMENDATIONS |
As highlighted by Dimitris Mavrakis in a recent Executive Foresight Why are Telco Cloud Deployments Stalling?(IN-5066), there has been a material absence of Tier Two and Tier Three mobile telcos reporting their progress in digital transformations, especially in NFV. While organizations such as ETSI, the OPNFV, and the TM Forum have taken significant steps to wave the flag for digital transformation, mobile telcos have been inherently conservative. Many of these Tier Two and Three telcos will be paying close attention to the developments of mobile telcos like Vodafone’s Ocean initiative. ABI Research believes mobile telcos across all tiers are in the procress of upgrading their OSS and BSS platforms to manage not just legacy equipment but also handle anticipated 5G services relating to connected vehicle, fixed wireless broadband, massive Internet of things (IoT) deployments and smart manufacturing. This is being reflected in increased OSS/BSS investment by mobile telcos. Tier One mobile telcos that operate in multiple markets will be first to roll out these OSS/BSS upgrades, followed by Tier Two and Three telcos. Tier One telcos are targeting multinational enterprises that need access to a consistent set of value-added services. Smaller, standalone telcos also need to ensure their competitive edge against these Tier One mobile telcos as well as specialize in more localized value-added services the Tier One telcos refrain from targeting. In the operator’s core network, the BSS needs to be upgraded to support:
And on the OSS side, mobile telcos need to support:
These findings and recommendations are discussed in greater depth in ABI Research’s latest reportNext-Generation OSS & BSS: Operator Deployments and Trends(AN-2547). ABI Research estimates that total BSS/OSS solution revenues reached US$47 billion in 2017 and will grow to US$55.5 billion by 2022.