Rather than have their lunch eaten by Facebook or WhatsApp, network operators hold the keys to their own future as 5G becomes a reality, according to Huawei’s Aileen Smith.
Let’s be clear, mobile operators have been quite angry about how their networks are the conduit through which OTT players like Facebook, WhatsApp and Google are deploying services that replace voice and SMS.
Earlier today, Facebook predicted how phone numbers will soon become obsolete, making its ambitions very clear.
In a recent interview with Joe Cunningham, who along with Gilbert Little deployed the first commercial rollouts of SMS in the 1990s, he warned that operators need to seize back the momentum or continue to lose ground to OTTs.
Smith will be speaking alongside Cunningham at the upcoming Telecoms Graduate Initiative (TGI) event on Monday 11 April in Dublin, which is focused on commercialising telecoms research.
The 5G world beckons
The speed at which mobile has grown from a standing start in the 1980s and 1990s to today, where 5.6bn people will be connected to mobile devices by 2020, has been largely down to the network operators.
But as 5G, machine-to-machine (M2M) and internet of things (IoT) come into play, operators have indeed a chance to regain the initiative, says Aileen O’Toole, an Irishwoman who is head of ecosystem development at Chinese telecoms equipment giant Huawei.
“The service providers are working through a transition from being hardware centric to virtualising their networks and hardware is starting to become a commodity,” she told Siliconrepublic.com.
When 5G arrives, the revolution will be largely software-driven, enabling users to get more out of their networks in terms of bandwidth and energy.
‘Low latency is very important, especially if it is the 5G network telling the car to brake’
– AILEEN SMITH, HUAWEI
“5G is still being actively standardised but the promise of 5G is in the software. The first advantage of 5G will be increased bandwidth because the network world is running out of bandwidth fast and is striving to find bigger pipes.
“Another critical promise of 5G will be less latency. If you have 5G networks with lower latency and you have self-driving, autonomous vehicles travelling at high speed then low-latency becomes very important, especially if it is the network telling the car to brake.
“The third promise of 5G is it is going to increase the number of connections per unit at the base station – the number of ‘things’ that can be connected to a base station at one time is going to be greater than what it is today.”
The miracle of 5G won’t necessarily be higher speeds but more intelligent switching.
“A network is a network is a network – some apps will require lots of bandwidth, like video conferencing or streaming, but on the other hand with the internet of things you don’t necessarily need a high bandwidth profile but actually smaller packets of infrequent traffic. Virtualisation of the networks will enable operators to optimise the network to support this kind of traffic at the lowest cost.”
Software skills shortage will hit telcos very hard
Smith said that the biggest challenge for network operators in the years to come won’t be investment or OTT operators, the biggest challenge will be software skills to manage the new networks.
“When I qualified from college with a Master’s in Computer Science and a primary degree in Engineering, it was electrical rather than electronic.
“But the changes that have happened in the last 25 years since I qualified are in programming languages, approaches [and] methodology, and just the ubiquity of software is an incredible change.
“But the challenge isn’t so much in educating people to be up to speed, but training them in such a way that they can be adaptable, flexible and innovative to drive things forward.”
She said the network operators need to mirror the internet and software world and collaborate around software and standards. “They need to learn from each other.”
‘They understand the risks but see the opportunities of the data age and they believe it outweighs the risks posed by OTT players’
– AILEEN SMITH, HUAWEI
While the OTT providers are a threat from a revenue perspective, they are also emerging as a threat on the standards front.
“When I look at Google Loon and Project Fi and then what Facebook proposes to do with drones, the OTT players are not just stretching the capability of the internet but they are also openly challenging service providers and saying they may not be needed in a few years time.
“It is important for network operators to come with an appropriate response to that threat. There’s a lot of work to be done in understanding what advantages the network operator has to do to counteract that threat.
“They can defend their current revenue base or they could accept that some revenues are going to be cannibalised and there are some network operators that have already made this decision.
“Some have already had serious grown-up discussions with companies like Amazon about this, they understand the risks but see the opportunities of the data age and they believe it outweighs the risks posed by OTT players.”
If anything, Smith said, network operators need to consider the metamorphosis of Amazon from a pure-play online retailer into a fully-fledged cloud infrastructure giant as a model.
“40pc of Amazon’s revenues now come because they opened up to retailers. They made brave decisions that opened up a different and bigger revenue stream for them.
“Some network operators are prepared to embark on a similar strategy.”
Smith said that there are other things that network operators can do even if they do decide to prevent OTT players cannibalising their core revenues.
“Data storage, privacy, security, the culture of a community of users that vary from region to region.
“Network operators need to realise that they actually may have a competitive advantage over OTT providers in areas like e-health or they could use data analytics as a service to help brands understand trends. They could take advantage of their local knowledge to seize opportunities that the bigger global giants cannot,” Smith concluded.
“Network operators need to work together better, realise what they are uniquely good at and exploit those opportunities.”