The competitive landscape
As a Tier 2 or Tier 3 communications service provider (CSP) trying to expand into new regions, you’re faced with a dizzying array of challenges. Competition is fierce—and intensifying—between incumbent local exchange carriers (ILECs) and competitive local exchange carriers (CLECs) already operating in certain regions while expanding into others. Also, government telecommunications regulators tend to favor incumbent providers and CLECs over any new competitors, as they are already a known quantity.
Then we mustn’t forget end users. In an era of everything cloud and Internet of Things (IoT), they expect an excellent quality of service and experience on their phones—both fixed and smart—as well as on their PCs and tablets. If one CSP cannot deliver, then they’ll easily find another that can.
The question for emerging CSPs to keep in mind is how does one differentiate oneself from both ILECs and CLECs to win the minds (and wallets) of end users?
Other challenges and risks
In addition to the competitive landscape, you're faced with the need to:
- Define key market and service differentiators;
- Maintain cost attractiveness:
- Ensure your CAPEX investments are the right ones; otherwise, they are wasted.
If your recipe for expansion isn’t the right one, it will not be successful. And even when you do get it right, you risk a new wave of competition that occurs when the ILECs and CLECs notice your success and influence.
So how can you meet the challenges and mitigate the risks?
Deliver innovation through 'co-opetition'
CSPs have always been market innovators with new products and solutions that pave the way for enterprises, education, healthcare and government. But innovation without help is expensive, risky and time-consuming. As a result, a new model has gained popularity: co-opetition. This is a blend of “collaboration” and “competition”, and is now being used to better enable expansion into new regions, more rapidly and with fewer costs.
The principle of co-opetition between telecom operators is to establish reciprocal business in order to win new enterprise business coming from multinationals or any international organizations such as NGOs, Banks, among others.
So, for example, one operator sells another operator a ‘connectivity footprint’ into its territory without the need for any extensive capital investments or the burden of extra operational costs to support new customers. The deal could then be reciprocated so that, ultimately, both operators can extend their footprint.
While this co-operation approach with competitors can be somewhat limited in scope, it can help mitigate risks such as the uncertainties of a new business environment and culture of a new region. By partnering with competitors that are more knowledgeable about the territory and its best practices, you can quickly deliver innovative services. Rather than a win-lose scenario, everyone wins when using this approach.
Another area that benefits from cooperation is the technical evolution behind software-defined networking (SDN) and network functions virtualization (NFV). While focused on using the most influential open-source software innovations, SDN/NFV will remain a transitional change while it still interoperates with existing proprietary services that CSPs have invested in for the past 10 or 20 years. But the point is: as competing operators continue to broker joint deals, building infrastructure using virtualization solutions will increasingly become a ‘must-have’ to support newly-won services.
Increase service density through cloud-ready PoPs (point-of-presence)
Throughout the history of telecommunications, achieving service density has been a challenge. In prehistoric times, we used drums and smoke signals to communicate over distances with growing numbers of people. Then fast-forward to homing pigeons and semaphore systems, all the way through telegraph, telephone, radio, television and eventually the computer era.
The technologies have changed but we still face the same challenges: finding cost-effective ways to increase reach.
Today, most regional and multi-regional CSPs are expanding their coverage with cloud-ready points of presence (PoPs) that can deliver services via virtualization technologies—and this virtualization model significantly decreases CAPEX and OPEX. The operating cost of a standard PoP generally ranges from $500,000 USD to $2 million USD. These costs fluctuate depending on the expected scale of users and the bandwidth demanded. With its amazing market push, SDN/NFV has dramatically changed the perspective of PoPs regarding where to expand services and footprint. In addition, SDN/NFV has created the concept of cloud-ready PoPs.
Leverage open-source innovations to avoid vendor lock-in
The days of vendor lock-in are over thanks to a large—and growing—open-source ecosystem. From infrastructure through to application development, you can leverage open-source innovations to work with any vendor’s proprietary virtualized network functions (VNFs) instead of purchasing one vendor’s top-to-bottom services software. However, it is vital to educate yourself about all the open-source possibilities, so you make the best choices.
The best choices don’t necessarily remove proprietary services. Instead, you may opt for a combination of proprietary services and solutions that integrate alongside open-source innovations.
Move to SDN/NFV - with the right partners
For CSPs to move from physically-attached services to virtually-attached services requires significant service infrastructure changes. Typically, they have sourced multiple vendors. However, many vendors have had difficulties transitioning from physical services to virtual services and, consequently, to facilitate further collaboration with white box suppliers. This has slowed down CSPs’ transformation to SDN/NFV.
White box suppliers such as Kontron have been working hard to smooth the CSP transition to virtual services by searching for new collaborations, most notably with software vendors. These software suppliers are providing NFV infrastructure-layer software, orchestration software and SDN Controller service layers. Some supply VNFs such as virtual routers, software-defined WANS (SD-WANs) virtual CPEs and virtual firewalls.
The latest inception of ONAP (Open Network Automation Platform), with its Amsterdam release, has fundamentally changed the service provider’s expectations. The broken ETSO (End-To-End SFC Orchestration) MANO (Management & Orchestration) approach left service providers feeling somewhat hopeless, due to the lack of visibility into bridging legacy services infrastructure with future 5G services, while still building a vertical service architecture. This required a solid set of APIs and a wide market consensus that would negate any lock-in strategies.
The right approach would be irrelevant without:
- A platform dense enough to alleviate the burden of instantiating NFVi solutions such as
OpenStack for full production and commercial roll-outs, and still make it replicable on a large scale.
- A service agnostic platform large enough to accommodate any service aspects. A platform that embraces the benefits of proprietary solutions that are based on payable licensing models such as VMWARE and open source innovations from which services such as OpenStack / Kubernetes / OpenDaylight / DPDK Virtual acceleration / Tosca-based Orchestrators and obviously ONAP could be combined with any virtual services (SD-WAN ; VNFs ; Containerized services) available at a customer’s fingertips.
- Universal Virtualization: a scenario where a CSP has the freedom of leveraging – from a single service platform such as SYMKLOUD – the possibility of instantiating either CPU- or GPU-based service workloads. Such workloads could be for data-, media- or AI/Deep Learning / Blockchain / Data Mining-oriented solutions and services supported by OpenStack (VMs) or Kubernetes & Docker (Containers).
If you’re thinking this is the future, well I’m happy to say dear readers, that this can be achieved today, with SYMKLOUD converged platforms.
Change your hardware approach
The market is changing before our eyes and revealing various new requirements as it evolves. In order to support virtual services, you will require a different approach to your hardware infrastructure.
As CSPs extend their virtualized services through SDN and NFV, there are clear requirements for a high-density platform that will help them be more scalable and agile. The platform should also significantly reduce OPEX through savings on power consumption and through a smaller footprint (less rack space). The platform needs to be fast to deploy, in other words, operational in hours, not days. And it needs to be easily upgradable.
The SYMKLOUD MS2900 series of converged infrastructure platforms for OpenStack controllers meet all of these needs, and deliver:
- A high-density, turnkey 2RU OpenStack platform (not 9U in most cases)
- 65% savings on power consumption
- 70% OPEX reduction
- 90% footprint reduction
- Validated for NFV infrastructure and SDN, with an expanding partner portfolio of pre-tested VNFs
- No vendor lock-in
- Lower CAPEX
Besides the obvious cost reductions, the growth or expansion of a CSP’s footprint has always been a very complex situation that largely impacts a given business operation, requiring a lot of planning.
The obvious question remains: how scalable and structurally solid is my expanding infrastructure, in comparison to the resources required to operate it?
Another question CIOs and COOs have been asking for a long time is: how cost-effective is my infrastructure in terms of rack space usage and power consumption?
The last element of that puzzle would be: how scalable am I expecting my physical infrastructure to be?
For the first time in telecom history, there is an answer to these lingering questions that aims to alleviate some confusion – an “Open Services” platform based on SYMKLOUD white box hardware pre-integrated with community-coded, open source software.
Putting it all together
There is a lot to consider when expanding into new market regions, and ultimately, any new service being introduced. Co-opetition is one helpful strategy. Cloud-ready PoPs is yet another, and are now an efficient approach for increased service density. Underneath this are the open-source innovations that prevent vendor lock-in and help expand your infrastructure more intelligently and cost-efficiently.
The reality is hardware still plays a very important role as you search for ways to dramatically reduce your product rack occupancy, extend service footprints into new territories and fully leverage the benefits of SDN and NFV.
For more information about Kontron hardware designed for a software-defined world and our extensive portfolio of NFV partners:
- Read the interview on developing telecoms
- Play the Light Reading webinar Making MEC a Reality - Lessons Learned From a Multi-Party MEC Platform Benchmarking Project
- Visit our SYMKLOUD website