1) Automation brings the industry together
In an industry with lots of companies in lots of sectors trying to achieve the same thing, automation was highlighted as a vital area of focus to improve how to deliver services to end users. As Colt’s Keri Gilder put it in the State of the Industry: Headwinds and Opportunities discussion: “Automation can help us to deliver in a more efficient way as commoditisation happens across the industry”. But as we heard in a session on network transformation, truly effective automation needs alignment both across and within organisations – and cultures need to change as well as tech stacks.
2) The submarine cable market is not going to slow down
Even though subsea investment has boomed for a decade, there is still massive bandwidth required thanks to content provider demands - the domination of OTTs in cable builds, up to 90%, speaks to this. Other factors driving the market that we heard about in London include the need to sustainably renew older cables, geopolitical issues requiring potentially different, longer routes, and an increase in route diversity thanks to edge clusters and fast-growing alternative markets. One aspect highlighted in session was the shortage of cable ships, which will drive future consortiums and cross-collaboration for maintenance as well as construction.
3) Fibre overbuild is on the mind of investors – but it depends on the market
Redundant and extra capacity is always a good thing, but not necessarily if you’re the one paying for it. Investors on a panel dedicated to fibre funding discussed what makes them more likely to choose a project in an era of tighter money availability. The competitive landscape was one factor – one investor mentioned preferring rural fibre over metro in the UK for that reason – but the consensus was that infra firms need to go back to basics. That means a granite business plan, a clear idea of who the customer is, and a clear idea of how to meet their needs. But this varies a lot by market – Spain and Germany have very different fibre penetration levels, we learned.
4) NaaS is a big deal
Network as a Service (NaaS) is a small part of network transformation, but it’s an important one, and delegates and panelists at Capacity Europe spent a lot of time on it. It attracts telcos for various reasons – allowing customer-driven rather than product-driven solutions, for one. But delivering it is hard to do. Panelists on the NaaS panel raised several hurdles for telcos looking to expand NaaS offerings, such as enterprise dislike for variable billing and the difficulty of changing internal culture within organisations.
5) Consolidation is coming to Europe
Several speakers, both on the investor and the telco side, mentioned the fragmented nature of the telco and digital infra market in Europe, with provider counts in many markets far exceeding the three or four thought to give the ideal balance between competition and efficiency of scale.
6) Fraud is on the increase
The ITW Global Leaders’ Forum (GLF) chose Capacity Europe to unveil its sixth annual report on telecoms fraud, and the findings were stark. The share of operators to see an increase in messaging fraud rose from 35% to 61%, and three quarters of respondents reported extra heat from regulators about unwanted traffic. Luckily, there iws also extra focus on fraud from the industry – 92% of carriers consider fighting fraud to be a “top” or “strategic” priority. See the full report here.
7) Network resilience over network performance?
Networks becoming more distributed and geographically varied is an established trend now. At Capacity Europe this year, discussion of network structure changes focused on the security aspect, both internally within telco networks and for their enterprise customers. A strand of discussion related to this on the stages this year was a shift in priorities for customers of networks - security, resilience and availability is potentially taking priority over pure speed and latency, although this depends on the use case.
8) But it’s not just cyber protection that matters – physical security does too
You can have bulletproof cyber protection on your telecoms infrastructure, but it’s not much use if someone cuts your cable in half. During a session on the future of subsea in Europe, speakers paid a lot of attention to the importance of ensuring the physical protection of their cables and other networks – Sparkle’s recent memorandum of understanding with the Italian navy covering submarine cable protection is a great example.
9) A global 5G satellite network could be a threat to MNOs – but opportunities are there for fibre partnerships
As one panellist put it: “A global 5G satellite network could be a threat to national MNOs. MNOs need to be on this quickly, with a strategy, with a go to market, with a partner. Otherwise, somebody’s going to come over the top of you.” On the other hand, we heard during a keynote discussion about the opportunities for LEO/fibre partnerships, where increased government funding means operators are turning to satellite to plug connectivity gaps around the world.
10) Tighter finances mean creative thinking
With interest rates rising across the world, the era of cheap money is coming to an end, and as such connectivity providers are feeling the need to be more creative when adapting to the changing landscape, and not just in the metro fibre market as covered in point 3. One method highlighted in the keynote panel discussion was finding more efficient ways to build new infrastructure, for example using railway lines as ready-made routes that require less digging to deliver the same cable mileage. Another result of this may be more partnerships - such as that announced between Colt and Eurofiber to leverage the latter's presence in France, the Netherlands and Belgium. Demand is not an issue in connectivity, but paying for the capital-intensive investment required to meet it may well be.
11) Voice still matters
Digital infrastructure is a vital area to address for the industry – where to build it, how to pay for it, power it and interconnect it, and more. But voice traffic is still an important part of the work of connectivity professionals. This was clear on the meeting tables and in the coffee breaks at Capacity Europe this year, where delegates told us they estimate around 50% of the conversations and meetings related to voice traffic. It’s declining as a share of investment and attention, but voice isn’t going anywhere just yet.
12) Quantum telecommunications is moving beyond the theoretical
A session featuring BT’s Andrew Lord looked at the quantum network the carrier provided for HSBC in and around London, giving a real-world use case for a science fiction-sounding concept. The benefits are multiple – decreasing energy costs and particularly improving security, with inbuilt properties of quantum network that reveal if a photon has even been looked at.
