The Top 5 Telecom Problems can be Solved

Maarten Ectors

on 20 November 2015

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This year’s TAD Summit was a success but it was another sign that telecom operators are more likely to follow Kodak than become the next Google. The future of telecom will look very red, blood red, not Vodafone red, unless telcos start really upping their game. The future looks bad because telecoms have reached their revenue peak. From here onwards data plan, call and SMS revenues only have one way to go and that is down. New revenue is needed and it is needed fast because an IoT data tsunami is coming in the shape of 50 billion connected devices and 4K IP cameras that will see the cloud as their unlimited data store. We are in an age of exponential technologies which means data growth from IoT will not be linear.

The TAD Summit showed that the solution to the telecoms ‘ problems are no longer limited by technology. The technology is ready to be adopted and open source solutions of all key elements are available. So now the question is, do telecoms want to thrive by working with innovative partners or do they want to stubbornly keep on sending RFPs to the same usual suspects that have not brought them any solutions to their key problems.

For those unfamiliar with the top 5 telecom problems, here they are:

  1. Billions of new revenue to offset falling existing revenue
  2. Cost reductions by a factor of 10 to offset mounting network costs
  3. Substantial revenue from over the top players
  4. Elimination of churn and de-commoditisation of broadband
  5. Deploying, integrating, scaling telecom solutions in hours not months

All these problems have technology solutions that in 2016 can be deployed in production but the bigger problem is how to change the mindset of operators.

Operators are used to have a horde of suppliers take them to Hawaii for “business trips” and being told that all requirements they put in RFPs make perfect sense. Operators also assume that their marketing department knows best what their subscribers want. Finally operators, like most corporations, want 100% security in the form of a business case before any investment is made. In a world of disruptive technologies nobody has 100% certainty any more. Google is the best example. They have an “Alphabet” of innovations in which they are investing without knowing which one, if any, will be their next billions of dollars revenue stream. Android, Google Fiber, OnHub, Fi, etc. all seem to be heading one direction though: Google not needing telcos any more.

Solving the 5 top problems

Time to market for new solutions: hours/days not weeks/months

Let’s start with the obvious problem of making telecom solutions deployable in hours. The solution here is to have a network app store. App stores can run in the core network, in central offices, on mobile base stations/DSLAMS/CMTS, etc. One of the most impressive TAD Summit demos was from Dataart and Telestax in which telecom cloud solutions were combined with best of the cloud technology like Mesos, Marathon and Docker. Deployment is as simple as one drag or two clicks of a bundle in Juju [Try it yourself even if you are not technical!!!]. You can deploy this on any public/private cloud or bare metal servers. This is a demo of how telecom apps can be packaged with Juju and run inside Docker containers, deployed, integrated and scaled out in minutes. From there it is a small step to build an app store for telecom network apps. There are already tier 1 operators putting mini clouds inside central offices and working on deploying enterprise solutions in this completely new way.

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Eliminate churn

Broadband today is a complete commodity so price wars drive churn. The end result is a race to the bottom in which nobody wins. Provided you offer a good service at a competitive price, by app enabling your network and all customer premise devices, you will be able to create a lock-in that will dramatically reduce churn. You can see this with phones. Install five apps on your new iPhone and you won’t want to swap it with anybody else’s. Put apps on your network and in your CPEs and let customers personalise their experience and it will become very hard for them to churn. Think about parents that have personalised parental control solutions for each of their children. House owners that have integrated IP cameras, HVACs, etc. Businesses that have integrated their Microsoft Active Directory, building access control systems, conference facilities, etc. Each customer should have a completely personalized solution. The more time they invest in creating a unique solution via apps, the more likely they will not want to change.

Over the top revenue

Partner apps in a network and especially on the edges can be extremely beneficial. The edges allow for low latency solutions that are almost impossible for public clouds to compete with. However at the moment such solutions are not available or are very telecom specific. What is needed is one way of simply creating an app and putting it on any telco’s network without having to update anything. The basic building blocks for this are available already. What needs to be added is a spot market place, hence telecom operators can sell compute and storage on the edges to whomever pays most. Lots of over the top players will be interested to run their apps on base stations, DSLAMs, CMTS, in central offices, etc. Imagine if over the top players could pay to know in real-time where most people are in a city and in aggregate form what they are doing. Uber would redirect cars towards hotspots of people that are not at home on Saturday night. Amazon would pay to know which neighbourhoods are streaming lots of Netflix. Google would pay to know more about Facebook usage patterns. Facebook would pay to know which mobile app is picking up very fast and buy them before you and I heard of it.

Cost reductions by a factor of 10

This is the first time that a revolutionary device for which we are organising a joint crowd-funding campaign with Lime Microsystems is made public. The #SoDeRa is the cheapest software defined radio you can buy. The #SoDeRa will have an app store and will be able to provide any type of (bi-directional) radio communication going from LTE, Lora, WiFi, GPS, Bluetooth, radar, radio-controlled toys/robots/drone, digital radio, digital TV to even MRI scanners, satellite and air traffic communications by just installing an app. The #SoDeRa is the Arduino of the Telecom and Radio Engineer.

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So if software defined radio can be open sourced and any radio technology can be downloaded from Github, then this will allow for mobile base stations to be setup in completely new ways. These are some examples of the future shape of mobile base stations:

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Including #SoDeRa in any type of smart device will greatly reduce the cost of deploying a mobile base station network because by open sourcing the hardware design it will become commodity. By including software defined radio in lots of devices, often with a completely different purpose, will allow these devices to become a smart cell via installing an extra app. In the future, support for software defined radio will likely be embedded directly in Intel and ARM chips. The foundational steps are already happening. This will likely reshape the telecom industry. Not only from a cost perspective but also from a perspective of who runs the network. Telecom operators that don’t deliver value will see their monopoly positions being put in danger. As soon as spectrum can be licensed on a per hour basis, just like any other resource in the cloud, any type of ad-hoc network can be setup. The question is not if but when. Open sourcing and crowdfunding will make that “when” be sooner than later. Smart operators that align with the innovators will win because they will get the app revenue, enormous cost reductions, sell surplus spectrum by the hour and lots of innovation. Other operators that don’t move or try to stop it will be disrupted. What do you want to be?

Billions of new revenues

Mobile app developers are bored of Apple and Google. Making a profitable app has become harder than winning the lottery. They need new spaces to go and conquer. Telecom operators can provide these but only if they launch app stores in their networks in the next 12-24 months and win adoption. Afterwards somebody will find a way around them. Apps and App Stores on modems, base stations, DSLAMs, CMTS, central offices, core networks, etc. are technically possible with the latest open source solutions. These app stores can bring in billions of new revenue. The good thing about open source is that anybody is able to try it. The bad thing about open source is that anybody is able to build competing networks now:

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So what is it going to be: Walking Dead or Smart Telco. You can put apps everywhere. Technology is not an issue. Open source beats any test license you can get from your regular suppliers. You have nothing to loose by trying.

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If you are a telecom executive, it is now or never. Unless you want to end up like Nokia Phones, Blackberry, Kodak, etc. If you work for a telecom corporate investment fund then there are many new startups you should know about. If you are into microcells the #SoReDa campaign is something you definitely need to get behind. Struggling with launching new telco solutions? Want to see app stores everywhere? If you work for a telecom vendor that needs some upgrade? Now is the time to act…

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