Telco networks are experiencing a significant transformation. They are driven by two major concepts: software and cloud. Telcos have realized that vendor lock-in, proprietary hardware, and service creation lifecycles that are measured in years will only lead to depreciation, creating access networks where Webscale players and third parties monetize their precious spectrum and fixed assets. A telco cloud platform is the new network engine, the new heart of the telco network that will enable flexibility, service agility, and cost savings.
Telco cloud platforms will be a vital component for the future of networks, especially when 5G is expected to bring new types of service functionality, including service chaining and network slicing. In a way, SDN, NFV, MEC, and other telco cloud technologies are more important than the evolution of RAN, as they bring new monetization and service opportunities, rather than just faster network speeds. Moreover, the flexible and agile nature of the telco cloud will allow telcos to create new services fast, and it will allow them to be proactive rather than reactive to the market.
The next 5 years will be pivotal for the deployment of telco cloud platforms, as several telcos are now more familiar with the challenges and opportunities these new platforms bring. There have been a few platform contracts in late 2016, and more are expected during 2017, when telcos start to design their networks as shared platforms rather than dimensioning different parts separately. The trend will continue, and in the long-term, all telco networks will become distributed clouds.
This report discusses the opportunities, challenges, and value chain aspects of the telco cloud platform market. Telcos are now deploying their new networks in two distinct strategies: either appliance-based, where they initially deploy virtualized network elements, or platform-based, where they are starting to design their networks in cloud terms. Several technologies are assessed, including SDN, NFV, MEC, and open-source activities, and the value chain is briefly mapped and discussed.