Disruptive ideas for a new era
Wholesale telecoms is starting to explore innovative ideas that break with decades of traditional thinking. Guy Matthews investigates
Wholesale telecoms is embracing innovation with enthusiasm as it bids to consign a sometimes merited reputation for unadventurous and conservative thinking to the history books.
“Wholesale telecoms doesn’t exactly have a name as a hotbed of innovation, certainly not at the pace in which it happens in the consumer segment or even in enterprise business,” says Eric Bozich, vice president of product and marketing at US-based CenturyLink.
In Bozich’s view, the need for innovation is arguably more acute in wholesale than in those higher profile parts of the communications ecosystem: “Wholesale will simply have to evolve as fast or faster compared with the more glamorous sectors to be competitive going forward,” he believes. “The need to support escalating bandwidth requirements combined with end-to-end security, accommodating real-time application-driven changes, are some challenging requirements.” Wholesalers, he says, are challenged by the fact that much of what does pass for radical thinking in their industry happens under the covers, less visible and not as widely reported as advances in other areas of telecoms. “And in wholesale, we have to do everything at scale, from the get go,” he says.
There are plenty of signs that whole-salers are divorcing themselves from an outlook and a service portfolio narrowly rooted in infrastructure alone, and are busy transforming themselves into more software-led organisations. In this respect they are playing catch-up with what the rest of the ICT sector has been doing, with its emphasis firmly on an automated, on-demand, pay-as-you-go, data-driven, intelligence-led, virtualised ecosystem.
There is evidence that pace setters are developing a mindset more akin to a Microsoft or a Google than a traditional telco. And it’s in the software-defined wide area network where this is clearest. “We’re seeing announcements come out almost every day around SD-WAN,” says Karim Eljai, senior director of NTT Com’s global enterprise network business unit.
He points out that his own organisation just launched the world’s largest SD-WAN footprint, covering over 190 countries in the form of its new SD-WAN Service Portfolio. “It’s a game-changer in terms of coverage and performance,” he says. “What’s also new about it is that we have a whole suite of security products available from the cloud. Customers can set up a firewall perhaps with some malware reporting capabilities directly from our portal, with no need to invest in any hardware at their branch offices.”
Orange International Carriers has also got a pipeline of innovation coming to fruition in areas like Wifi roaming, cloud and security, says Frederic Dufal, responsible for strategy and customer experience with the carrier.
“For example we’re making the cloud services we sell through our business division available to our customers, where they can sell it as their own service,” he explains. “We’re also having success with our innovative DDoS protection offer. It’s an exciting area, because whatever you do in security you need to renew all the time. To this end we’ve been acquiring a lot of cybersecurity expertise in areas like SS7.”
Orange’s perspective takes in both the highly evolved markets of Europe and the less developed arguably but more dynamic economies of Africa and Asia. Dufal is excited that innovation is being trafficked in both directions.
“We have seen innovation in Africa which we have then transferred to Europe, for example in the field of mobile payments,” he says. “We’ve been very successful with that across the continent, and now we’re launching banking services in France that leverage that experience.”
Diversity in innovation
He says that conversely the radical progress Orange has made in Europe in the area of lower latency is now being exported to other parts of the world: “We have R&D going on in Africa, Europe and also in the US and Asia so we can benefit from wherever the new ideas are coming from,” he says. “Diversity is a very important fuel for innovation.”
CenturyLink’s Bozich agrees that radical thinking is no respecter of borders or degrees of economic development: “I look at who participates in some of these standard bodies, and it’s truly global,” he says. “There are people in wholesale all over the world contributing open source technology that’s going to help make the virtualised network environment real. Yes, there’s a lot of big investment in North America and Europe, but the playing field of innovation is more level than it was.”
Innovation can often be a marriage of new thinking on both the technical and commercial aspects of a carrier business. Jerzy Szlosarek, CEO of Singapore-based wholesaler Epsilon, believes his company is breaking new ground in what he defines as the “platform economy”. “Our service model is really leading the way in terms of on-demand connectivity, automation, intelligent networking and overall user experience,” he claims. “Our Infiny platform gives our customers and partners the most comprehensive set of services available via a web portal, and APIs with truly global reach.”
He agrees with Bozich that much wholesale innovation is all but invisible to the consumer or the enterprise, but that does not mean it matters less.
“This includes things like the intelligent networking technologies we’ve built into the underlying network that enable us to offer guaranteed QoS and QoE end-to-end,” he says. “That means apps and services work consistently and end-users get a consistent experience.”
The push for digital transformation and that is gripping the enterprise sector also has its equivalent in wholesale telecoms. The drivers are the same: to improve operations, modernise the business, reduce costs, and to make it easier and more cost effective to deliver services to customers.
“Essentially it’s about how to offer more for less,” says Mark Lewis, vice president for products and development at European carrier Interoute.
“Add to this the desire to make it easier for employees to collaborate and improve customer engagement and it becomes easy to understand why innovation is essential for any organisation that wants to stay in business.”
But the nature of the challenge can be very different for a large carrier business with a long history. The particular problem for wholesale carriers, argues Lewis, is that in many cases they still operate old infrastructure that is expensive, unintegrated and often unreceptive to change.
“It’s a little bit like the London Tube system. It was one of the first underground railways in the world, admired by all for its innovative approach to transport, but those who built later, built better, with more advanced technology and greater automation,” he says.
“Fast forward to today and you have an old infrastructure that does an amazing job but is hard to change and update with the latest innovations.”
So where is the next wave of wholesale innovation coming from? From those carriers that stay focused on progressing a cloud-centric business model, says James Slaney, co-founder of cloud call recording and voice intelligence company Dubber.
“The most successful innovators in the carrier sector will be those which embrace a native cloud model, providing telcos and end user organisations with an API as a product so all complementing actors can integrate, scale, automate and innovate new use cases that would benefit the telcos, vendors and the end user,” he says.
The telco cloud will be a combination of a virtualised and programmable network, courtesy of SDN and NFV, and the transition of OSS and BSS services transitioning to cloud and SaaS applications, while additionally leveraging DevOps methodologies, believes Joerg Koenig, director of the global vertical group at Tibco Software, a supplier to the telecoms sector.
“In real terms, what this means is a transition away from the traditional linear pipeline to the platform business model, leveraging the API economy and ecosystem of partners,” he believes.
“While this is easy to say in a couple of sentences, it is radical in terms of organisation, architecture, business models and the inevitable hybrid environments that will exist for many coming years.”
The successful wholesaler of the future will be both cloud-centric but will also need to stay focussed on infrastructure, as it is the wholesale sector ultimately that provides the plumbing than underpins the world’s software-driven communications.
Wholesalers must be good at everything from fibre to security to software, seldom acknowledged even where they are learning to lead the way where once they were happy to follow.