Monday, 20 November 2017

The Telco Platform Economy

An interview with Ronan Kelly, CTO EMEA and APAC, ADTRAN
Friday 06 October 17

Ahead of Connected Europe 2017, Total Telecom caught up with Ronan Kelly, CTO EMEA and APAC at ADTRAN. With the telecommunications industry facing huge challenges, Ronan explains how adopting the platform business model over the traditional pipeline approach could give telcos a new way to monetise the network. 1. What are the biggest challenges facing the telco industry? We are in desperate need of a commercial model where service providers and network operators aren’t expected to just continually upgrade the network for Over The Top organisations to deliver more services…

Ahead of Connected Europe 2017, Total Telecom caught up with Ronan Kelly, CTO EMEA and APAC at ADTRAN. With the telecommunications industry facing huge challenges, Ronan explains how adopting the platform business model over the traditional pipeline approach could give telcos a new way to monetise the network.

1. What are the biggest challenges facing the telco industry?

We are in desperate need of a commercial model where service providers and network operators aren’t expected to just continually upgrade the network for Over The Top organisations to deliver more services, cutting telcos out of the value chain,

As we’ve seen already, the role of the network provider is shifting from ‘dumb pipe’ to ‘services provider’ with value-added services, which can optimise the offering a service provider takes to their customers. Instead of the incumbent pipeline model, which looks towards and tries to monetise everything from the consumer, networks such as these lead to a two-sided interaction between network and service providers - which better lends itself to a platform-based economy.

2. How would this work?

Telecoms operators need to make this shift from a pipeline model to platforms. As business becomes increasingly digitised, and dependence on the cloud accelerates daily, the transparent, horizontal transactions in environments such as software defined networking provide a great opportunity to cloud based service providers, who can go straight to network providers and negotiate enhanced access and transport services; creating the opportunity for agile SDN ready network providers to enhance their offering and ultimately add significant value to their business.

This network flexibility and capability renders new possibilities for providers, working with cloud-based products to provide value-added offerings - which they can monetise. They can classify traffic types on the network in real-time, and make decisions about how the different traffic types are handled across the network. They can offer providers of cloud-based services to whom latency and packet-loss are very important, for example, an SLA (service level agreement) which guarantees their customers an enhanced connection experience,boosting the utility of their cloud-based offering.

3. What technology could enable the platform approach?

Software defined networks (SDN). As the world becomes increasingly digital, it’s impossible to ignore how SD-access might influence a large-scale shift to a much more inclusive, flexible and fair way of doing business.

The open architecture of SD-access creates a less complex environment in which information can be utilised to create novel applications much more quickly. Its malleable, open source nature makes it interoperable, giving you the flexibility to bolt anything on, big or small, which in turn creates an inclusive digital landscape that allows the offerings of smaller, nimbler startups to rub along with the digital giants of the era.

 4. How would this fit in with net neutrality laws?

At the FTTH Conference in February, the EU Commission’s director of electronic communication networks and services, Anthony Whelan, recognised publicly that while net neutrality rules were put in place for good reason, the potential to pose an obstacle to service innovation exists, and clarified that although they want to protect against the negative discrimination of OTT services, this is not at the expense of service providers’ ability to expedite new and improved services.

So while we can’t negatively discriminate against other traffic, current regulation allows us to apply a higher quality of service as we deem fit for different flows. In short, this platform model is compliant with net neutrality laws as they currently stand. 

5. How would Brexit affect this? 

Brexit definitely adds a level of uncertainty to this but it is impossible to predict its implications until the UK’s exit from the European Union is complete.

What I will say is during this time of uncertainty it is even more important for British service providers to stay ahead of the curve in order to remain competitive. There are, undoubtedly, some turbulent, although exciting times ahead in the world of business.

Catch Ronan at Connected Europe 2017 where he’ll be exploring the realities about Gigabit Societies in his keynote on day 1 of the event.

 
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