Ringing The Changes

On 2nd January 2018 by good2us

Networks are becoming as flexible as computing clouds. They are being converted into software that can be dialled up and down as needed. Such “cloudification” may well create as much upheaval in the telecoms industry as it has done in information technology

IT and telecoms differ in some important respect. The former is largely unregulated, the latter closely overseen by government. Computing capacity is at least in theory unlimited, whereas radio spectrum is not and hard to use efficiently. And, finally, telecoms networks are more deeply linked to the physical world. Cloud-computing providers have data centres packed with thousands of cheap servers using standard processors. On the other hand, telecoms networks are a collection of hundreds of different types of computers with specialised chips, each performing a different function, from text messaging to controlling antennae. It takes months, and sometimes years, to set up a new service, let alone a new network.

However, change looks inevitable. On the technical side, there are severe limitations with the current way of building networks as traffic continues to grow rapidly. The next generation of wireless technologies, 5G, requires more networks to be more flexible.

The most important factor of all though is economic. Mobile operators badly need to cut costs. The boom in smartphones is coming to an end in many places and prices of mobile-service plans are falling.

This shift was evident at the Mobile World Congress in Barcelona in February 2017. Diagrams depicting new technologies called NFV and SDN, “network-functions virtualisation” and “software-defined networks”, were everywhere on the stands of equipment makers. This turns specialised telecoms gear into software in a process called “virtualisation”.

The core of many networks, the central high-capacity gear, has already been virtualised. Now this is also starting to happen at the edges of networks—the antennae of a mobile network. Normally, these plug directly into nearby computers that control the radio signal. However, some operators, such as SK Telecom in South Korea, have begun to consolidate these “baseband units” in a central data centre. Alex Choi, SK Telecom’s chief technology officer, wants “radio” to become the fourth component of cloud computing, after computing, storage and networking.

AT&T, America’s largest operator, has pushed cloudification the furthest By the beginning of 2018 it wants to have more than half of its network virtualised. In areas where systems have already been upgraded its systems, it can now add to the network simply by downloading a piece of software, rather than send a technician.


Despite being a firm with a reputation for caution, AT&T has released the program that manages the newly virtualised parts of its network as open-source software. If widely adopted, it will allow network operators to use cheaper off-the-shelf gear. The rise of the open-source operating system Linux, led to the computer hardware becoming a commodity in data centres a decade ago.

This poses an obvious challenge to equipment-makers but they don’t seem too concerned. Many parts of a network will not get virtualised in the opinion of Marcus Weldon, chief technology officer of Nokia. And there will always be a need for specialised hardware, such as processors able to handle data packets at ever-faster speeds.

Nonetheless, telecoms-gear-makers will have to adapt. Currently a big chunk of their revenues comes from hardware and related maintenance services and they will have to start investing in their software businesses.

Whenever there is significant change then openings for newcomers are created. For example, Affirmed Networks and Mavenir, two American firms, are developing software to run networks on off-the-shelf servers. Affirmed already claims 50 customers. Mavenir wants to work with underdog operators. If the history of cloud computing is any guide, the telecoms world may also see the rise of new players in the mould of Amazon Web Services (AWS), the e-commerce giant’s fast-growing cloud-computing arm.

The big barrier to cloudification is likely to be spectrum, which newcomers will still have to buy. But a clever entrepreneur may find ways to combine assets—unlicensed spectrum, fibre networks, computing power—to provide cheap mobile connectivity. FreedomPop and Republic Wireless, both startups, already offer “Wi-Fi first” mobile services, which send calls and data via Wi-Fi hotspots, using the mobile network as backup.

As AWS has shown, a potential Amazon Telecoms Services does not have to spring from the telecoms world. Carmakers, operators of power grids and internet giants such as Facebook could have a go as they are all huge consumers of connectivity and have built networks. Facebook, for example, is behind the Telecom Infra Project, another effort to open the network infrastructure.

However, this ambitious innovation needs to be tempered by the reality of the sensitivity of the data that is exchanged, at least in Europe. The European Union has very strict guidelines on where the data is stored, how is it stored and for how long. The data is considered confidential and are not allowed to leave the nation’s boundaries.

Secondly. The telecommunications infrastructure of a country is considered to be a governmental asset and therefore it has to be controlled by legislation. Therefore, it is extremely unlikely that a nation will allow operators to send operations to the cloud and risk potential security breaches or (after the NSA scandal) espionage.

However things evolve , the telecoms world is likely to become much more fluid in the coming years, just like IT before it

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