Mobile Europe July 2021

July 2021

www.mobileeurope.co.uk @mobileeurope

Michael Armitage, CEO, Broadway Partners: No excuses for not being ambitious enough with rural fibre roll-out

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Walter Goldenits

CTO Spotlight

Progressing NFV

CTO, Telekom Deutschland says fibre is the future and “digitisation also means competition between different infrastructures”

UPC’s Monika Nowak-Toporowicz recommends asking questions in a new role to benefit you, and the work environment

Kate O’Flaherty explains how NFV is critical to operators’ migration to the cloud and becoming cloud native

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Contents

22 Virtualisation and cloudification Insight report 16 Readership survey

12 Editor’s choice 07 CTO Spotlight Monika Nowak-Toporowicz, VP, CTIO, UPC Polska and UPC Slovakia on moving working from home to the next level, the advantages of diversity and the importance of asking questions

08 CTO interview Telekom Deutschland’s CTO, Walter Goldenits, on competition and partnerships, fibre infrastructure and 5G in DT group’s European powerhouse

12 View from the Top Michael Armitage, CEO of Broadway Partners, an alternative fibre provider in the UK, explains how small can be mighty in bringing broadband to rural areas. It’s all about the right scale and ambition.

Is embracing public cloud a must for mobile operators?

Not everyone is convinced – readers tell us how cloud migration is progressing and their plans for the future.

22 NFV is critical to cloudnative migration Operators accelerate towards a cloud-native approach to drive the new uses cases enabled by 5G SA’s new capabilities, Kate O’Flaherty reports.

25 Operators start their

long ascent to the cloud Less than a quarter of telcos run their applications in the cloud, but they are finally readying themselves for the long trek, Nick Booth finds.

29 Is 5G’s game plan being held to RANsom?

Nick Booth asks how and where vRAN can play constructively with Open RAN and if vRAN is holding 5G back?

29 Full Spectrum 32 Wireless World A whirlwind tour of major developments in wireless and mobile outside Europe in the second quarter of 2021.

34 Final Say Lower spectrum prices, longer deadlines and no obligation for network operators to give rivals access to those networks could have big consequences writes Fiona Vanier, Senior Analyst, Forecasting at CCS Insight

Welcome Editor: Annie Turner anniet@mobileeurope.co.uk Contributors: Nick Booth nickbooth2020@outlook.com Kate O’Flaherty kate.oflaherty@techjournalist.co.uk Sub-editor: Lisa Hughes lisa.hughes@easynet.co.uk Design and Production: Alex Gold Commercial Director: Fidi Neophytou fidin@mobileeurope.co.uk Senior Business Development Manager: Simon La Thangue Acting Marketing Manager: Marcin Piechowski marcinp@sjpbusinessmedia.com Publisher: Wayne Darroch wayned@sjpbusinessmedia.com +44 (0) 20 7933 8999 ISSN: 1350 7362 Subscriptions: Mobile Europe & European Communications is published digitally on a quarterly basis.

To subscribe, please register at www.mobileeurope.co.uk or email subscriptions@sjpbusinessmedia.com Printed By Buxton Press

July 2021

www.mobileeurope.co.uk @mobileeurope

Michael Armitage, CEO, Broadland Partners: No excuses for not being ambitious enough with rural fibre roll-out

Walter Goldenits

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CTO, Telekom Deutschland says fibre is the future and “digitisation also means competition between different infrastructures”

CTO Spotlight

07

UPC’s Monika Nowak-Toporowicz recommends asking questions in a new role to benefit you, and the work environment

Progressing NFV

22

Kate O’Flaherty explains how NFV is critical to operators’ migration to the cloud and becoming cloud native

Front cover picture shows View from limestone cliffs at Llangattock Brecon, Wales

The views expressed in Mobile Europe & European Communications are not necessarily those of the editor or the publisher.

Mobile Europe & European Communications is published by SJP Business Media 2nd Floor, St Mary Abchurch House 123 Cannon Street London, EC4N 5AU

This issue is dedicated to virtualisation – see our brand-new readership survey on page 16 – and our features that cover NFV’s progress as 5G standalone goes mainstream, operators’ journeys to making their IT and network cloud native, and how virtual RAN (vRAN) fits with Open RAN. While we were compiling this issue, Tareq Amin of Rakuten Mobile, was talking about breaking out costs down to hardware component level across the greenfield operator’s network.

It reminds me of the drive by President Obama to force hospitals across the US to publish what they charged for the same operations, with some billing ten times more than others. This had had never been transparent to patients before and was intended to help them figure out if they were getting a good deal from their healthcare provider.

Amin reckons that much of the industry’s resistance to the openness of Open RAN is a fear of plummeting margins, particularly among those who for decades have sold tightly integrated platforms. Critics argue the open RAN case is not proven and point out that, even with a greenfield cloud-native network, it has proved immensely complex to implement vRAN for 4G (see page 29), never mind 5G. Others highlight the fact that Rakuten Mobile is looking making its architecture and best practices available to operators around the world through the Rakuten Communications Platform (RCP). The RCP could prove more lucrative and influential than the network itself.

However disaggregation massively ups the amount of integration. Some are concerned that operators’ over-reliance on three – and now in many countries two – main RAN equipment suppliers will turn into high dependency on systems integrators.

Back in the physical world, as much of Europe scrambles to close the digital divide, our interview with Michael Armitage, CEO of Broadway Partners, an alternative fibre provider in the UK, is inspirational. It turns out it’s not size, but how you scale and relationships with local communities that are key to success in rolling out fibre in rural areas.

And don’t miss our exclusive interviews Monika Nowak-Toporowicz, VP, CTIO, UPC Polska and UPC Slovakia, and Walter Goldenits, CTO, Telekom Deutschland. They’re full of contrasting, but fascinating, insights.

Annie Turner, Editor Mobile Communications & European Communications anniet@mobileeurope.co.uk

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CTO Spotlight

In the spotlight: Monika Nowak-Toporowicz VP, CTIO, UPC Polska and UPC Slovakia

UPC Polska is owned by Liberty Global and provides broadband, TV, telephony and mobile services to over 1.5 million customers in Poland. Its network reaches more than 3.6 million homes and it plans to increase this by 1.7 million in 2023-24 by accessing wholesale infrastructure under the Digital Poland Program initiative.

It has nearly 90,000 mobile, over 1.3 million pay-TV and 1.3 million fixed broadband subscribers.

UPC Slovakia is the largest cable TV operator in the country, and also offers fixed broadband and telephony services, to a total of 406,700 subscribers. As of May this year, it offered 1Gbps broadband to 297,000 households out of its 627,000 household footprint. UPC Slovakia provides fixed line telephone services (VoIP) to 89,300 and video content to 171,000 customers.

What issue is top of your mind right now?

We are all suffering from being isolated and working remotely. It was great at the beginning, because people were very engaged and glad to stay at home, safe from Covid. Now they still appreciate the work, but some are getting tired. That’s what bothers me the most. We need to move to the next level and properly implement this new way of working.

The most important thing is to keep employees energetic and engaged, because business’ needs are growing. For instance, we must deliver more capacity – Covid caused a 54% rise in traffic and that will stay with us, because people have adjusted to this new reality. People value the flexibility of working from home and will go to the office as needed in future.

Broadband is not only about home connectivity, it’s a new work environment and we need to improve considerably the quality of working from home by giving people better collaboration tools.

What are the most useful lessons you’ve learned professionally?

I had a session with Google Cloud recently, directed by women in Poland, as part of a global programme to encourage women to start careers in IT, even without previous experience. The biggest lesson is don’t try to be perfect, just keep trying. It’s not about having talent now or being talented by nature: the most important factor is to be brave, raise your hand and believe your voice is as important as others’.

In 2010, I switched to telco after working in finance for 10 years. I couldn’t understand half the words at first. You need to meet people who speak a different [professional] language and ask them to explain. This is very important, because it opens other people’s minds – maybe they stop just repeating the stuff they’ve been saying for a long time, because a new person makes them think. Ask questions as much as possible, because that will develop yourself and the environment.

You are responsible for two countries. How does this work? Is it helpful or just harder?

People in Slovakia and Poland are not very

different – both are highly competitive environments with huge pressure for effectiveness and further growth acceleration.

The greatest difference is the Polish market is significantly bigger, and as CapEx and OpEx are more limited [in a smaller market], it drives creativity. The larger market can drive how to put things in order, how you implement and follow rules, which use cases to prioritise and which use cases you benefit from. [This means] the two markets are complementary.

I have run more even countries in the past, which means dealing with many different mindsets. To lead you must influence people in a proper way. If you don’t know how to influence – how to talk to people and communicate ideas – you will not succeed.

Running pilots in diverse environments brings you to the next level of leadership.

I see any kind of diversity as an advantage.

The more ideas and perspectives you have, the better, or we all end up looking at things a certain way. Smaller markets are excellent for trials, because you don’t need too much [resource], and people are agile and used to trying things out.

Customers in different markets behave in different ways, yet their needs are similar. Ultimately everyone wants to be served more and more digitally, and they don’t want to deal with services one at a time. Customers want to communicate with one broadband connectivity and mobile provider, to buy things in a package, so they can communicate and act in a digital way.

The pandemic underlined the importance of connectivity. How do you see it evolving over the next five years?

We invested a lot in the last couple of years, but still we are below the European average in terms of Gigabit connections in Poland. It’s clear that more fast connections will drive the economy up. UPC Polska is expanding its fixed broadband (see intro) and 5G backhaul will require more fibre, because some 5G spectrum needs a lot of small towers. 5G and fibre are complementary, and as life becomes more digital, we will always need more capacity.

July 2021 • www.mobileeurope.co.uk

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CTO Interview

Telekom Deutschland reinforces its role as DT group’s European powerhouse Walter Goldenits CTO of Deutsche Telekom’s German operator, Telekom Deutschland, talks about competition and partnerships, and delivering digitisation and 5G with Annie Turner.

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eutsche Telekom (DT) published its Q1 figures in midMay and raised its guidance as net revenue increased by 32.3% to €26.4 billion compared to last year. Certainly, the acquisition of Sprint by T-Mobile in the US was a major factor, but German broadband was highlighted as one of the reasons for the success. It is overseen is overseen by Walter Goldenits who has been Telekom Deutschland’s CTO since 2017.

The pandemic has catapulted reliable, affordable, fast-enough connectivity to the top of operators’ – and politicians’ – agendas. Operators across Europe have gone into overdrive in their determination to close the digital divide as fast as possible.

Telekom Deutschland’s fibre-based lines totalled 16.3 million at the end of Q1 2021 – that’s 1.5 million more than at the same time the previous year – and the company gained 93,000 net broadband additions in the quarter – up by more than 10,000 on the same period last year.

To put this into context, Germany had 41.0 million households in 2020, according to the National Statistical Office, and like two other of the top four largest economies in Europe (Italy and the UK ) it was relatively slow getting started with its full-fibre broadband deployment.

In September 2018, according to the FTTH Council Europe’s research, carried out by iDate and published in March 2019, Germany’s full-fibre penetration rate (that is FTTB and FTTH) stood at 2.3% (and is now 4.9%) compared with top-ranking Latvia at 50.3% (now replaced at the top of the ranking by Iceland with 70.7%). The average for the 28 European Union countries included in the ranking was 13.9% and now the average ranking for the EU 27 plus the UK is 20.5%.

Competing infrastructures Care is needed, though, with the FTTH Council Europe’s figures, which paint something of a slanted picture of countries’ digital infrastructure, as it doesn’t include out cable- and mobile-based broadband, or part-copper offers like fibre to the cabinet (FTTC), VDSL and so on.

So will Telekom Deutschland compete in areas that already have gigabit coverage provided by cable networks like Vodafone’s or concentrate on areas lacking good digital infrastructure? Goldenits says, “We are rolling out fibre wherever there is a need for future-proof infrastructure – and we are convinced that this is the case everywhere in Germany. In the cities as well as in rural areas; regardless of existing cable infrastructure.”

He states that pure fibre connections enable stable gigabit downloads and so are the next stage in the technological evolution of fixed networks. “That is why,” he says, “we have set ourselves the goal of working with other providers to offer all households and businesses in Germany an FTTH connection by 2030.”

He continues, “Digitisation also means competition between different infrastructures. We firmly believe in FTTH and… that people in Germany appreciate the benefits of this technology.”

Goldenits claims that Telekom Deutschland is driving the digitisation in Germany, observing, “We are investing more than ever in our infrastructure and will increase our annual fibre CapEx from the current €1.5 billion to €2.5 billion by 2024.

Overall, we have steadily increased our investments in recent years.”

Partnering for fibre However, he acknowledges, “We cannot manage the fibre rollout for the entire country on our own. That’s why we said, ‘Part comes from us, part must come from competitors.’ Our next milestone is to offer 10 million households an FTTH connection by the end of 2024 and from then on enable at least 2.5 million more households per year to connect to our fibre network.

July 2021 • www.mobileeurope.co.uk

CTO Interview

Walter Goldenits, CTO, Telekom Deutschland

“In our view, fibre roll-out is a task for society as a whole, involving citizens, politicians and companies working toward a common goal.” That’s why he says his company is willing to cooperate with different partners in different regions and to consider new approaches.

He points to Telekom Deutschland’s joint venture, Glasfaser Nordwest, with EWE as an innovative, functioning model, and to wholesale contracts with competitors such as Telefonica, Vodafone and 1&1 as contributions to successful fibre roll-out. Also, the operator constantly reviews external funding as an additional option.

As we went to press, it was reported that following the example of BT in the UK, KPN in the Netherlands and Telefonica in Germany, Telekom Deutschland is looking for an investor to help it fund the fibre build-out.

The operator declined to comment on the report.

Mobile on the up In March Telekom Deutschland announced that 98.7% of the population in Germany has LTE coverage, but how will this mesh with its 5G coverage and strategy, and is the LTE coverage dense enough?

Goldenits remarks, “We already cover 80% of the German population with 5G and are steadily building more. The technology is available in more than 5,000 cities, but for me mobile roll-out is not just about technology standards and leadership, but more about customer experience.

“With an intelligent combination of different standards, we will deliver to all our customers a network fitting [for] their handhelds and behaviours.

Based on these requirements, we will continue to expand and supplement our networks, especially in rural areas. 4G and 5G will go hand in hand in that way, but 5G usage will grow more in the coming years.”

Telekom Deutschland appears to be doing something right: it won 167,000 new mobile contract customers in the first quarter of 2021 compared with 140,000 one year earlier. However, income was slightly down year on year – by 0.8% – due in large part to lost roaming income because of lockdowns. Yet even with that loss of income, predictions are that the estimated growth rate would have been just 1.2%.

Is Telekom Deutschland looking to 5G to boost that growth from consumers and, if so, using which applications? Goldenits says, “Gaming and AR are for sure applications that will boost 5G – just have a look at our new app for the Euro 2020 [football tournament]. You can place avatars of our German football team next to you and wherever you want.”

5G in the core He says 5G standalone is the next step, adding, “In February of this year, we broke new technological ground by demonstrating stable data connections with very low latency via 5G standalone antennas and our standalone core network.

July 2021 • www.mobileeurope.co.uk

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10 CTO Interview

“Telekom carried out a video call without interruption in a pure 5G environment. The call was made via the standalone antenna in Garching to Bamberg in Telekom’s first 5G standalone core network and from there to Bonn. In addition to the stable data connection, very low latency was realised in the live network. In Garching, the response time was 13 milliseconds.”

The 5G technology currently deployed in Germany is based on the 5G Non-Standalone (5G NSA) network architecture and Goldenits says the widespread introduction of 5G standalone depends on when and how the necessary end devices will be available on the market in sufficient numbers to meet customers’ need. Whatever happens, “We are prepared,” he says.

So what’s Telekom Deutschland’s approach to working in ecosystems and pursuing platform-based operational and business models to leverage the new capabilities of 5G for enterprises? Goldenits states, “For 5G to become a flexible, service-enabling platform, Open APIs will be key in two ways.

“One, in terms of importing innovation from outside to optimise our TCO [total cost of ownership] and enhance our service, and the other in a sense that we can expose selected capabilities within our telco network to the outside as network-as-a-service.

“For example, what used to be a telco-specific network capability can be opened up to other parties, be it to developers, enterprises or other service providers, via exposure gateways and packaged together with their services.

This is particularly true for edge cloud and network slicing: APIs will be key to unlocking the potential of edge cloud and slicing to open up new opportunities for differentiation for telcos.”

July 2021 • www.mobileeurope.co.uk

Moving to the cloud In December 2020, Telekom Deutschland signed a seven-year agreement with Microsoft to help develop and execute its cloud and edge strategy.

Goldenits doesn’t comment directly on the Microsoft deal, but states, “Edge computing is an essential part of our campus-network offer for business customers. We are the only operator in Germany who can offer not only the connectivity part for enterprise customers, but also a solution approach for their business processes.”

He says, “Our product EdgAir supports high-performance, latency-critical applications. It has an integrated machine learning solution and provides security and data sovereignty for the customers.”

Where do network automation, analytics and AI fit into Goldenits’ strategy? He says, “Our goal is to transform our infrastructure to a new open, cloudified and disaggregated architecture with a simpler, more intelligent and automated production model.”

Telekom Deutschland has had some successes with network automation, such as with its new voice production platform, NIMS, in Germany, which is multi-vendor, open, fully automated and running on the operator’s cloud.

Goldenits says, “It is hyperscaler-like, yet telco grade. Introduction of new product features now only takes three months, compared to 18 months previously. Our ambition is to move all mobile and fixed voice customers across Germany and Europe onto one automation framework.”

Another example of automation in action is the operator’s AI-driven automation for network planning, which has been proven and is now ready to scale. Goldenits explains, “We use vehicles in the street equipped with

CTO Interview 11

high tech lasers, which capture 360-degree pictures of surfaces and any type of obstacles in the streets.

“AI software algorithms analyse the captured data in a point cloud.

As a result, the planning time of an average fibre rollout area decreases from 25 to only five days. Already the system is deployed in 75% of all new rollout areas.”

Tower strategy As towers are hot property in Europe, as opposed to a cost when on a telco’s accounts, Deutsche Telekom has put its towers in Germany, Austria and the Netherlands into GD Towers. In May 2021, Deutsche Telekom’s CFO, Christian Illek, said the group wants to split out all its towers in Europe into GD Towers, and is assessing its operating companies in the Czech Republic and Slovakia to see if their towers are viable additions.

Goldenits says, “We created new growth by separating towers [in Germany, Austria and the Netherlands] and managing them actively.” He claims that GD Towers has the largest portfolio in Europe after Cellnex: in 2020, there were 56,000 sites plus additional DT tower assets. Goldenits says, “It’s growing and had additional 5,000 sites over the period from 2017 to 2020.

Deutsche Telekom continues its active, value-driven portfolio management as in previous years. In light of this, the Group regularly assesses its investments for possibilities to further increase their value.”

Towers aside, how much does Telekom Deutschland gain from being part of a group of opcos in multiple European countries? For instance, is it able to leverage greater scale for procurement and is the experience and knowledge gained in one market transferred to others?

According to Goldenits, “There are many examples of close and fruitful international cooperation within DT. In technology and innovation for instance, we have various centres of excellence in different countries. They are

working for [the] DT group which means all innovation results are available to all subsidiaries.

“Let me give you one of our latest examples: in April we announced a new achievement in 5G backhaul capacity. Here our Greek colleagues from Cosmote were responsible for research and development, together with our partner Ericsson.”

He continues, “In the strategic procurement area we are bundling the demands, sharing procurement benchmarks, and running joint and cross-country tenders. We [leverage scale] in a lot of areas, from network equipment, such as antennas, to our indirect businesses such as travel services or energy.

“However local operations in the multiple European countries remain necessary to better manage the interfaces to the business side, such as the technology or IT departments.

Keeping the momentum Like so many operators, Telekom Deutschland pulled out all the stops during the lockdowns, but has the pandemic changed the operator’s priorities, or are the priorities the same just with faster execution?

Goldenits replies, “Deutsche Telekom’s fixed network stood and stands for stability in the Corona crisis. The fast connection for households and businesses, and the roll-out strategy of recent years, have paid off in terms of working and learning from home.

“This has encouraged us that our strategy is absolutely right. Bringing fibre to the street cabinets was the first step. By doing so millions of households have benefited from fast internet connections. A total of more than 34 million households in Germany can book a connection with up to 100 Mbps. The second step is now rolling out fibre to the home to bring superfast internet to our customers.”

July 2021 • www.mobileeurope.co.uk

12 View ??????? from the top

How small can be mighty at bringing fibre to rural areas Michael Armitage, CEO of Broadway Partners, the UK alternative fibre provider, tells Annie Turner that there are no excuses for not being ambitious enough.

Michael Armitage, CEO, Broadland Partners

H

ow did Michael Armitage become a broadband provider? Turns out he spent most of his professional life working at Morgan Stanley as a telecoms research analyst, responsible for furnishing investors with information about European companies, from incumbents to the very smallest firms.

When he retired from that, Armitage explains, “I was becoming aware that the telecoms market in the UK was not functioning very well. BT had an unhealthily dominant position in the market and at that time there didn’t seem to be very much government enthusiasm for levelling the playing field so other operators could play.

“So I took it upon myself – perhaps somewhat arrogantly – to think that I could help shape government policy around broadband. That was a fairly challenging couple of years.”

Bumpy start in an unlevel field The government’s Rural Community Broadband Fund was a failure, censured by Parliamentary committees: the idea was communities engaged with suppliers that could perhaps offer more suitable solutions to BT. It totally failed to generate competition. Armitage says it was a good learning experience.

After that, he looked into the possibilities of using the white space in TV spectrum to provide broadband, but this turned out to be commercially unviable and not scalable. Nevertheless, the wireless network using the technology that his company set up on the Isle of Arran, the most

July 2021 • www.mobileeurope.co.uk

View from the top 13

southerly of Scotland’s West Coast islands, is still running and was extended to most of that group of islands.

The future is fibre Armitage says he became “commercially serious” in 2016 and then, “We pivoted into fibre a couple of years ago, because the direction of government policies obviously shifted very substantially with the publication of Future Telecom Infrastructure Review in 2018.

He describes this as “a seminal document from DCMS [the government’s Department of Culture, Media and Sport]” which aligned with telecoms regulator Ofcom’s determination to finally open up the market, offering much more favourable terms for access to BT’s infrastructure.

Armitage says, “[We] quickly realised that fibre was definitely where the world was going, and rather faster than we had assumed, so we jumped onboard.”

Broadway Partners took on its first investor in early 2018 – Sir Brian Souter. He’s a Scottish entrepreneur who, with his sister, co-founded the Stagecoach Group of bus and rail operators, among other travel enterprises. Armitage says, “He’s been a terrific investor,” adding that as fibre is such a capital-intensive business, more capital is always needed.

However, as he notes, “Given the state of the global economy [we need to] stimulate economic activity and with interest rates at less than 1%, there is no shortage of investor capital looking for a home… So that’s one issue we don’t have to worry about anymore.”

Going gangbusters in Wales Armitage says business is “gangbusters at the moment”. Having started in Scotland, the firm soon moved into Wales. He says, “We’ve got a pretty decent shot at becoming a credible alternative to BT in rural fibre in Wales overall: our presence and the relationships we’ve got with local councils is pretty much across the whole of south and mid Wales.

“We’re very good at community engagement, so there’s a big human element… We spend a lot of time deliberately cultivating relationships with local authorities, with local communities, and over time develop their trust and permission to deliver fibre to them. This is substantially paid for the voucher schemes that DCMS is running.”

He states, “We know, for a fact… that if we were given a free run at it, we could definitely deliver 100% fibre connectivity to Wales by 2025. There’s no doubt about it.” Armitage adds that as this is demonstrably the case, he cannot see why any other provider “should Corrie Village, Isle of Arran, Scotland

July 2021 • www.mobileeurope.co.uk

14 View from the top

View from limestone cliffs at Llangattock Brecon, Wales

be let off the hook” for lacking ambition. Most of Wales (pictured above) is mountainous.

Efficiency at the right scale How can such a relatively small company compete against the might of BT? Armitage explains, “We are committed to taking the best of what BT has done – we’re standing on the shoulders of a giant… If BT runs its infrastructure on the back of telegraph poles in rural areas that’s what we do, too. We just borrow space on existing infrastructure. The cost competitiveness comes from the fact that this is all we do – rural – [and we’re] very focused, very targeted.”

He is at pains to stress that his firm’s relationship with BT is good, adding, “Now we can access not just managed circuits from BT, but also dark fibre, which gives us massive potential to deliver really cost economic backhaul across large areas. And that’s economic backhaul for us as well as for third party providers on an open access basis.”

He adds, “We’re also looking at the opportunities in urban areas – companies like CityFibre, Hyperoptic and others are well established in metropolitan areas across the UK. We’re not going to try and compete with them in [major cities] but…tier two or tier three cities and towns are becoming our target areas as well.”

Financing the build He says today’s “adequate broadband of 30 or 50Mbps is going to look pretty derisory tomorrow, and given the government’s funding commitment to fibre broadband, if not now, when will it be time to roll out fibre?

That funding support is not going to be around forever.”

Before the General Election of 2019, the UK government pledged to contribute £5 billion to bringing full fibre coverage across the UK by 2025.

This was reduced to 85% by the end by 2025, with only £1.25 billion to be made available during this Parliament: another General Election will have to be held by early May 2024 at the latest.

However, Armitage remains optimistic, saying, “I think £1.25 billion is the base of what government will spend – I think they will be very receptive when we go to them sometime in the next year with a proposal that gives them a means to spend much more of that money in a very channelled way. I think they’ll be very, very receptive to that, so it’s up to industry to come up with the ideas, is my feeling.”

He also points out that while local authorities are heavily dependent on central government to help finance digital infrastructure, “They also do have their own revenue raising or capital raising powers”.

July 2021 • www.mobileeurope.co.uk

He references the Public Works Loan Board, an instrument of the Treasury, and allows local authorities to raise Treasury-rate finance, at 1% or 2% interest for infrastructure projects. The application, he says, is short and simple, yet this mechanism has only recently been used by those looking to fund digital infrastructure. Broadway Partners is encouraging local authorities to use this funding and a number of Welsh authorities are using it or propose to do so.

Armitage adds, “If you’re organising on a partnership basis with your suppliers, then you’ve got a pretty good formula and you’re not totally dependent on the whims of Westminster”.

Pandemic impact Has the pandemic made a difference? Armitage answers, “Yes. It has been positive for the obvious reason that people are much more dependent on that digital connection than they were before home-schooling and all the rest.

“Whereas before people were sceptical about why they needed 100Mbps or Gigabit service, they’re not skeptical anymore – they’re fully signed up, in principle.”

Right trajectory He states, “The government definitely [understands] that to have any hope of meetings targets, you’re going to have supplier diversity and a mixed model, and that requires supportive regulations. We will roll with the punches. We’re not opinion leaders on the regulatory side, but we look at what’s coming up in terms of consultative responses. Generally, we agree with what they say – we don’t allow much time [for] second guessing the regulator.

“We’ll take the rules as they come and work out how to work with them.

I’m more interested in how government intervenes in the market itself directly – the voucher scheme has been pretty effective. We make as much use of it as we are able to do. And I think others have too.”

Will his business be much affected by Brexit? Armitage says, “Personal views aside, what I hope comes out of Brexit is a form of government that is more devolved and closer to where the problems are.”

He concludes, “As long as the rules are set fairly with a reasonable level playing field, as long as individual operators know how to negotiate around the maze of DCMS and BT, then there’s great business to be done.

I’m very confident that large swathes of the UK will be fibre by 2025, although probably not 100% of remote outposts.

“We have an ambition to deliver fibre to anybody who wants it in Wales by the end of 2025. And if we can do that for Wales, every county in the [UK] should be able to do it.”

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Survey

Survey: Is embracing public cloud a must for mobile operators?

W

hile migration to the cloud is acknowledged as the way forward for customer-facing systems and functions, operators are proceeding with caution and are less convinced on the network front, as our survey highlights (see graph below).

DISH Network Corp., the fourth largest mobile operator in the US, surprised the telecoms industry in April by announcing that its entire 5G network, including radio access and core networks, will be deployed in the Amazon Web Services (AWS) public cloud. The move is

a gamble and it isn’t clear whether other communications service providers (CSPs) around the world will follow suit.

Our most recent survey of Mobile Europe & European Communications’ readers finds that only a small percentage of operators plan to move all their network functions and support systems to a public cloud.

The DISH network will be the first cloud-native standalone 5G network in the US, with service becoming available later this year starting in Las Vegas. DISH expects to spend $8 billion to $10 billion (€6.7 billion to €8.377 billion) constructing the network and the deal has been praised by many industry observers.

“We view this as a bold move, not dipping a toe or a foot into the water, but leaping in and making a splash,” writes Roy Chua, Founder of AvidThink, an independent research and advisory service. “More than a technology or business decision, this sets the tone within DISH for going cloud native.”

Chua adds, “We’ve worked with many enterprises and telcos in the past, and we see a marked difference between organisations that embrace CI/CD [continuous integration and continuous delivery], cloud-native, as-aservice thinking and those that are burdened by legacy culture. Embracing a cloud-native platform can benefit innovation and agility,

Plans to move applications to the public cloud We will move some network components to the public cloud

35.21% We will move some support applications to the public cloud

33.80% We have already moved a large majority of network applications to the public cloud

25.35% We will not move any network applications to the public cloud

12.68% We will move all support applications to the public cloud

12.68% We have already moved a large majority of our support applications to the public cloud

11.27% Other (please specify)

9.86% We will move all network applications to the public cloud

8.45% We will not move any support applications to the public cloud

8.45%

July 2021 • www.mobileeurope.co.uk

Source: Mobile Europe & European Communications

2021 Survey 17

Types of cloud operators are likely to deploy Single public cloud Private cloud All of them in different circumstances

5 years from now

Multiple public clouds Public-private hybrid cloud

4% Now 30%

31%

5.5%

28%

22.5% 28%

24%

7%

20%

Source: Mobile Europe & European Communications

encouraging employees to think and build things flexibly and tap into the larger developer ecosystem.”

In the Asia-Pacific region, Rakuten is also building a greenfield 5G network in the public cloud. So far no public cloud 5G networks have been announced in Europe. However, several European mobile operators, such as Telefónica Germany, Swisscom and Vodafone have said that their 5G core networks will use cloud-native technology. Indeed, it is expected that 5G core networks will need to be cloudbased and software-defined to deliver services such as network slicing.

Readers speak Our Q2 2021 reader survey, conducted in May and June, focuses on mobile operators’ plans for moving networks and operations to the cloud. We surveyed 71 readers, more than half of them working for communications service providers (CSPs) or systems integrators and consultants supporting CSPs. The remainder work for hardware or software suppliers (for full details, see page 20).

The graphic below shows the percentage of respondents who said that they or their customers are moving network functions and operations applications to a public cloud. The percentages are quite similar to our Q1 reader

survey on digital transformation. While about a quarter of respondents said that they or their customers have already moved most network applications to the public cloud, only 8% intend to move all network functions.

Moving too slowly?

Most CSPs are not moving quickly enough to embrace public cloud, according to Danielle Royston, CEO and Founder of TelcoDR, a telco consultancy. Royston is the former CEO of Optiva, a supplier of cloud-native operational and business support systems (OSS/BSS), and an outspoken proponent of cloud-native telco networks. She points to enterprises’ adoption

July 2021 • www.mobileeurope.co.uk

18 2021 Survey

of public cloud as the primary reason mobile operators must migrate the entirety of their own networks and IT environments to the public cloud.

“You [telcos] have to be in that public cloud paradigm, because that’s where enterprise IT departments are building their applications – they are building with the public cloud,” says Royston. “So, you need to be offering them Outposts and Wavelengths – you have to provide a known, standard tech stack.”

She adds, “I think telcos who are ignoring the public cloud – or they’re building their own private cloud – will shut out enterprise IT, who have been very clear that they’re moving to the hyperscalers.”

Consumers are another reason for mobile operators to embrace public cloud, according

to Royston. The biggest draw for consumers is more bandwidth at a cheaper price and mobile operators that adopt public cloud can compete easily on price, because they aren’t spending a lot to construct their networks.

“You don’t have these huge depreciation charges, because you’re building your network for less than 10 billion [dollars],” Royston explains. “You can offer your product for a cheaper price and have higher margins.”

However, many CSPs still have reservations about public cloud. They cite issues such as vendor lock-in (see page 17), loss of control, reliability, physical security of servers and security of users’ data, and allocation of costs (for example, transitioning from a CapEx to OpEx model) as some of the biggest drawbacks.

Types of cloud We asked respondents about the types of cloud they are deploying now and plan to deploy in five years’ time, with options including a single public cloud, multiple public clouds, private clouds, hybrid clouds or all types depending on the circumstances.

The breakdowns over time are similar, except that private cloud becomes a less popular option in future.

Again, only small percentages of respondents favour the approach DISH is taking by throwing its lot in wholly with AWS. Most mobile operators have spent years trying to abolish vendor lock-in in their IT operations, for example, and they are turning to Open RAN for just this reason on the network side.

“Vendor diversity is a hot topic among

Types of applications moving to the cloud first Business support systems (BSS) Operational support systems (OSS)

BSS applications moving to the cloud first

BSS and OSS Customer management Network applications (eg vRAN)

66.20% Self-service and self-help portals

61.97% Service order management

57.75% 23%

Sales functions like configure, price, quote (CPQ)

54.93%

35.21% Chatbots

49.30% Centralised service and product catalogues

38.03%

47.89%

4.23% Charging and billing

36.62% Fulfilment

29.58% Assurance

23.94%

July 2021 • www.mobileeurope.co.uk

2021 Survey 19

How are operators moving applications to the cloud?

Lift & shift – simply transferring legacy applications to the cloud as they are Lift & shift but with a planned migration path to cloud-native Straight to cloud-native iterations

4.23%

Other

22.54%

16.9%

56.34%

MNOs [mobile network operators], as well as many governments in the US, UK and elsewhere, with claims that Open RAN can be used to decrease Huawei’s 5G dominance as well as break the Nordic stranglehold in markets where Huawei and compatriot ZTE are banned,” writes Gareth Owen, Associate Research Director at Counterpoint Research.

“DISH looks like it will be the first network in the world to run its entire network from the public cloud and as such this is seen as a key test case. It will be closely watched by all in the telecoms industry and, if successful, others will inevitably follow. However, there is a real risk here that MNOs could fall into a lock-in that is much worse than what they complain about today!”

Types of applications In our survey, we also asked a handful of questions around the types of applications mobile operators are moving or intend to move to clouds and how they are doing it. For example,

are they going cloud native from the outset or adopting a ‘lift and shift’ approach which entails moving existing applications to a cloud environment? As expected, BSS applications are moving first, followed by OSS and network functions.

Over the past few years, most CSPs have been working diligently to transform their customer engagement systems – and for good reason.

Delivering a digital experience is paramount, as digital native companies like Amazon, Netflix, Spotify and Uber have forever changed users’ expectations about what a high-quality digital experience should deliver.

Telcos’ customers want the same kinds of experiences they get with these companies – that is, on demand, in the cloud and highly personalised. Our survey reinforces this with customer management, self-service and service order management leading among BSS applications that operators are moving to the cloud first.

Revolution or evolution?

While some respondents said that their companies or their CSP customers are moving straight to cloud-native applications, the overwhelming majority – 79% – are using a lift and shift approach, although more than half said they also are making plans for migrating to cloud-native network functions and support systems.

This evolutionary approach makes sense, especially for large incumbent operators.

They simply do not believe they can afford to abandon their investments in legacy hardware and software. TM Forum, an organisation that develops standards and best practices for OSS/ BSS, evangelises the evolutionary approach as part of its Open Digital Architecture (ODA).

“The big question for most operators is how to embrace cloud-native applications and public cloud,” writes George Glass, the Forum’s Chief Technology Officer. “The lift and shift approach of cloud-enabling an entire application and putting it into a container can deliver

July 2021 • www.mobileeurope.co.uk

20 2021 Survey

some quick benefits, such as tackling technical debt by removing dependence on legacy infrastructure, but this approach does not leverage all public cloud’s advantages.

“On the other hand, completely rewriting an application and transforming it to be cloud native typically takes a long time and requires significant investment.”

He adds, “CSPs need a middle ground that allows for gradual migration in a controlled manner to a cloud-native architecture. This is where the TM Forum Open Digital Architecture can help… ODA accepts that not everything has to be cloud native and that cloud enabling some legacy components may well be appropriate to manage costs or avoid technical debt until a component is retired.”

Cloud-native BSS applications have significant advantages. Our survey shows that agility is the biggest driver, with about two-thirds of respondents indicating that fast implementation and regular software updates are the most important benefits of going cloud native.

Cost is the next biggest driver, with more than 40% of respondents choosing multitenancy and only paying for what is used has advantages. A multi-tenant architecture lets CSPs share computing resources in either a public or private cloud.

It will be interesting to conduct a similar survey about mobile operators’ adoption of cloud a year from now. By then we should have a much better idea about whether DISH’s gamble on public cloud is paying off. Certainly,

European operators and others worldwide will be watching the company’s progress and that of Rakuten Mobile in Japan. If the companies are successful, the percentage of respondents planning to move all applications to the public cloud should increase substantially.

Mobile Europe & European Communications conducted this survey of readers in May and June 2021. Of 71 respondents, about a third were network operators and a quarter systems integrators or consultants working for CSPs. About 30% were either network equipment vendors or software providers. More than threequarters of respondents were from Europe, with the rest divided almost evenly among AsiaPacific, the Middle East and Africa, and North and South America.

Ranking the advantages of cloud-native BSS Fast implementation (days or weeks)

64.79% No hardware, regular software updates

60.56% Multi-tenancy options

46.48% Operators only pay for what they use

45.07% Operators can try before committing

26.76% Configuration not customisation

25.35% Enables vendor-independent services

21.13% Easy to import and export data

9.86%

July 2021 • www.mobileeurope.co.uk

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22 NFV

Progressing NFV is critical to the success of cloud-native migration Operators are accelerating towards a cloud-native approach as they look to harness the use cases enabled by 5G standalone networks, as Kate O’Flaherty reports.

N

etwork functions virtualisation (NFV) is quickly evolving towards a cloud-native approach as operators prepare their networks for the arrival of standalone (SA) 5G. The shift to cloud-native networks was made clear in November last year when the ETSI NFV industry specification group defined a roadmap that will enable

July 2021 • www.mobileeurope.co.uk

containerised virtual network functions (VNFs) to be managed in an NFV framework.

Several initiatives are also paving the way.

Organisations such as the Cloud Native Computing Foundation are helping operators to meet the growing challenge of becoming cloud native via containers, service meshes, microservices, immutable infrastructure and declarative APIs. Meanwhile, the Cloud iNfrastructure Telco

Taskforce, jointly hosted by the GSMA and the Linux Foundation, operates as an open committee which is responsible for creating and documenting a common cloud infrastructure framework for the telecoms industry.

Vast native opportunities The opportunities for operators that embrace a cloud-native ethos are vast, including increased efficiency and being able to support

NFV 23

multiple 5G use cases. Yet operators moving to cloud-native networks face many challenges, including how to resource skills and make major cultural changes amid the shift to a very different DevOps-based working culture.

For starters, becoming cloud native can increase complexity for operators, says Aurelio Nocerino, European Lead, Communication and Media Network Practice at Accenture.

“There are 5G Open RAN applications and then the legacy network is ongoing” – and for many will continue for many years.

Fergus Wills, Director of Product Management, Enea, which specialises in cloud-native software for telecoms, agrees, saying the challenge for many operators is operational. “They need to consider the management of a mixed cloud-native network function (CNF) and VNF approach as different parts of the systems evolve at different paces.”

Another issue for operators is avoiding vendor lock-in and adopting a common approach to toolsets, such as making a choice to follow Red Hat’s OpenShift, says Wills. OpenShift is a hybrid cloud, Kubernetes-based application platform for enterprises.

Learning lessons from NFV However, many of the lessons learned to date from NFV projects can be applied to future network evolution, according to Martin Taylor, Chief Technical Officer of Metaswitch Networks, which was acquired by Microsoft last year as part of its push into the telecoms sector.

He says, “Operators are working on third-generation projects where they are applying learnings from [previous] attempts. They are moving on from the virtualised environment to really taking advantage of softwarisation of the network and DevOps.” As part of this, he says progress has been made in acknowledging cloudification and the difference between that and virtualisation. The original vision of NFV created in 2012 talked about software appliances, says Taylor, but that was not the ideal way of approaching it.

He explains, “It means you are using commercial off-the-shelf hardware, but in terms of how you operate the network, it doesn’t change anything – it just replaces a physical box with software. Cloudification means completely rethinking the way software is architected for a cloud environment.”

Taylor cites the example of Netflix, saying, “It’s massively scalable and scales fairly quickly

for its users. It achieved that by building software specifically designed to work in the cloud environment.”

Scaling in the cloud is very different to what operators are used to, Taylor continues.

“The traditional way of scaling the network is replacing a small box with a medium one, then replacing that with a large one. In the cloud, you typically scale with lots of small units, and you increase the number and spin them up in response to demand. You then have the freedom to scale. This is ‘scaling out’ instead of ‘scaling up’, which gives you a tolerant system and a blast radius if anything goes wrong.”

“

In the cloud, you typically scale with lots of small units, and you increase the number and spin them up in response to demand. You then have the freedom to scale.

Widening the scope The transition to cloud-native, container-based solutions is coupled with the expansion in NFV’s scope from its initial focus on the network core to new areas such as the radio and fixed access networks, says Gary Mackenzie, Senior Technologist, Telco Technology Office EMEA, Red Hat. This, he concedes, creates challenges, such as ensuring the existing technologies used in virtual environments are ported to container-based solutions at the same time as introducing new technologies to serve the expanded scope of NFV. He notes, “The other challenge is operationalising this technology to ensure we can smoothly deploy this to thousands of sites and then maintain it effectively in production.

That’s a step-change from the initial tens or

hundreds of sites we saw in the first wave of NFV deployments.”

Mackenzie describes the trends Red Hat is seeing as customers evolve from VNFs to CNFs with OpenShift. “5G deployments are tending to be more multi-vendor than previously seen. This is driving service providers towards a common infrastructure platform to host all these vendors in a neutral environment. With some functions being pushed towards the edge of the network, it doesn’t make sense for each vendor to bring their own infrastructure, so a neutral platform [like OpenShift] is key.”

Meanwhile, he says, operators are learning from their initial NFV experiences and focusing on fixing some of the pain points from those deployments, including bringing software-defined networking (SDN) to operational models.

He adds, “We’re seeing some exploration of the role of systems integrators with more clarity from operators on what they can and want to do in-house, versus what they want integrators to provide.”

Operators’ progress Operators are certainly making progress with NFV programmes such as Telenor’s NFV initiative, which is part of a business, IT and network transformation. It aims to reduce cost and complexity, and capture new revenues via NFV and a cloud platform. The operator is also developing cloud-enabled, analytics-driven automation to improve the speed of network operations and enhance customer experience.

BT has taken a different approach. Its NFV programme is split into two, says Andy Reid, Senior Manager, Protocols and Encodings in Applied Research, BT. “There is what we are doing in terms of roll-out and deployments [where] we have consciously decided we want a standard platform from which we will run all our network apps. We call [it] our ‘network cloud’. We are in the process of building and deploying it, and performing integration focusing on 5G, looking for a single platform from which we will load various apps from different vendors.”

Alongside this, he says BT’s research department is examining possibilities and use cases.

“One thing active at the moment is mobile edge and how we integrate that with the core and also into the SDN and NFV story.” At the same time, Reid says BT is “very engaged

July 2021 • www.mobileeurope.co.uk

24 NFV

Aurelio Nocerino, Accenture

Fergus Wills, Enea

Martin Taylor, Metaswitch

Gary Mackenzie, Red Hat

with applying the DevOps idea as broadly and completely as we can,” but he acknowledges the area presents “its own challenges to the network”.

Yves Bellego, Director of European Network Strategy at Orange, explains it has chosen to virtualise network functions on different infrastructure. “We have our own infrastructure and then we have vendors’ infrastructure. The decision whether we go one way or another has not been made,” he says.

Over the next year, into 2022, Orange will focus on the 5G core network. “We are looking at the 5G core including SDN and other functions, and we are also looking at access with Open RAN,” Bellego adds.

Orange, along with European operator groups Deutsche Telekom, Telefonica, TIM and Vodafone signed an MoU early this year pledging to support and promote

Open RAN. They followed this up with an Open RAN Technical Priority Document in June.

July 2021 • www.mobileeurope.co.uk

5G: moving NFV forward For mobile operators, the specification of the 5G Core by 3GPP as a cloud-native and implicitly container-based architecture has been the big driver for a move to cloud. “It is no longer optional in many respects,” says Mackenzie.

He explains that the move towards greater scale has had an impact too. “When a service provider is deploying thousands of RAN sites, they need completely automated provisioning and configuration processes.” In lots of ways the rollout of standalone 5G with the 5G Core will be the inflection point at which operators need to be ready to support a cloud-native environment, says Mackenzie.

The 5G core is “very important” as it’s a key function that will be fully virtualised, says Bellego. “In the past, it was part of the network, but now all of the network will be based on virtualised solutions. Capacity and reliability are key in telecoms and we will have functions that will boost this.”

5G SA will represent an opportunity to “move the NFV game forward,” says Taylor.

“The 5G SA core is the first generation of mobile technology architected to make it well-suited to cloud deployment. Architecturally it should be easier to deploy in the cloud than previous generations and can realise the benefits NFV brings.”

5G and the move to cloud native is being driven by new use cases, via the so-called fourth industrial revolution and IoT, which will of course utilise 5G SA. With this in mind, private networks are an area of interest as operators continue in their journeys to become cloud native to support 5G SA. Taylor describes the opportunity, saying “There are lots of situations where 5G enables capabilities that just weren’t there before, such as robotic warehouses, port facilities, airports and military facilities.”

Driving new use cases Taylor continues, “These situations include cases where you have a large area to cover and devices that are inherently mobile, such as robots, or high-bandwidth such as cameras.

Wi-Fi isn’t enough and lacks the required guarantees, and wired is not an option. 5G is an enabler for a whole bunch of industry use cases that are often better deployed by using a 5G network.”

He says mobile operators have a great opportunity to participate in this market. “They have the spectrum, the know-how and assets, but they do not have the field to themselves.”

It’s clear that over the next few years, use cases around 5G SA could offer a much-needed revenue boost for mobile operators as their core revenues continue to erode, but first they must embrace the next phase of NFV, including the evolution to cloud and the challenges around it.

“This is a big evolution and the only way to benefit is to ensure [you have] the right skills and ways of working, with the same mentality and culture as an IT department,” Accenture’s Nocerino says. “Operators need to be automating everything.”

Migration to the cloud 25

Operators start their long ascent to the cloud Less than a quarter of telcos run their apps in the cloud (see page 16), but they are finally readying themselves for the trek, Nick Booth finds.

T

here is a consensus that all applications will eventually go to the cloud (or be retired), but as Mark Newman, Chief Analyst at TM Forum, observes, the telecoms industry is among the last to start the journey. Even notoriously late adopters like the security and government sectors have taken to the cloud quicker.

So why are telcos lagging? One factor is that they are too big to make changes fast:

“This space is dominated by an oligopoly of multi-nationals with multi-billion revenues,” says Newman.

Small successes In the meantime, some smaller telcos have had great success in migrating applications to the cloud. For example, Ucell Uzbekistan started its migration four years ago with the help of ZephyrTel, a specialist in public cloud software for telcos.

Ucell’s first step into the cloud was a

customer experience management app, ResponseTek. Customer feedback might not be seen as mission critical, but it certainly gives operators instant information about what customers are experiencing. It provides important input into operators’ efforts to shape experiences, services and processes through in-depth and in-context insights.

These improvements can be used to build other, possibly weightier, automated responses that could also lower running costs. “We’re continually developing our

July 2021 • www.mobileeurope.co.uk

26 Migration to the cloud

offerings to revolutionise the cost equation for the industry,” says Michael Speranza, CEO at ZephyrTel. The international mobile virtual network operator (MVNO) Truphone has also shown how costs can be slashed by migrating applications to the cloud. It moved its real-time charging to the Google Cloud Platform (GCP) and was able to replace 5,000 manual tests with 200 automatic jobs. This eliminated CapEx and shrank the total cost of ownership by 60%. Truphone claims its public cloud database is ten times cheaper and faster than Oracle’s.

Larger players Larger players, however, face multiple difficulties in preparing for and making the move to the cloud. For one thing, telcos are not, for example, enjoying injections of venture capital to tackle the issues on the scale that the financial sector is.

Many, including Speranza, argue that, “Invention should come from within,” but critics say many operators wasted a lot of time, money and internal resources on the wrong things, like trying to become content providers. Examples include AT&T in the US, which, after four eye-wateringly expensive attempts over the last four decades to become a content provider, has landed pretty much back where it started – providing connectivity – but is now lagging behind its rivals in 5G build-out.

On this side of the Atlantic, after its 2012 decision to invest in expensive football broadcast rights, which didn’t bring the expected returns, instead of infrastructure, BT is still scrambling to lift the UK from having one of the lowest fibre penetration rates in Europe.

Telecoms analyst Dean Bubley comments, “Instead of chasing the likes of Netflix et al, they should have invested in R&D, systems integration capabilities or partnerships.” He adds that had the money been spent on B2B specialisms – that will be supported by 5G and OpenRAN – for specific sectors, it would have made the public cloud “a friendlier place” for operators.

Where are we?

A few pioneers aside, where are operators on their cloud journey? On a scale of one to ten, they are at about two point five, says Speranza, suggesting that they lack the leadership to take the bold, aggressive steps.

July 2021 • www.mobileeurope.co.uk

Still, the journey of a thousand miles begins with a single step and, according to Speranza, the first step involves moving applications, while the last will be shifting network operations to the cloud, because, among other things, there’s a question about the public cloud’s real-time response times.

“There’s a prove-it-to-me mindset on the networks,” he says, which is not surprising given the decades of the network engineering five-nines ethos.

System resilience, fault tolerance, disaster recovery and scalability are the key functions that most need redesigning for the cloud, but they are stumbling blocks too, according to Speranza, because communications service providers (CSPs) implement technology in

“

Vodafone Italy uses five different AWS services with personally identifiable information (PII data) to scale its subscriber top-up services securely and elastically. In doing so it has cut CapEx by 30%.

outmoded ways. “The way they deploy servers reminds me of how apps I wrote 20 years ago addressed the machinery,” he says.

Cost-savings are a big driver though: historically operators duplicated everything they bought for the sake of resilience – hardware, software, management capabilities and entire data centres that largely stood idle as redundancy fall-backs. There are huge, obvious savings to be made by using the cloud model to avoid duplication without sacrificing resilience.

Human redundancies are another hurdle, particularly in Europe, where operators are

often seen as part of the state (and indeed in many countries the government holds a so-called golden share) and workers’ rights in some countries are better protected than elsewhere else in the world.

CSPs tend to employ large, dedicated teams to run technical and manual tasks. As higher levels of automation are enabled, in part by the shift to cloud, they are no longer needed.

There is the cost of laying people off or finding them new jobs: Three UK cut 67% of IT jobs and 33% of IT costs with its early move to the cloud in the shape of Microsoft Azure.

Financially, these heavy costs are somewhat offset by massive savings on licences. CSPs’ private clouds spend staggering amounts of money on software licences that are available for “pennies” with the public cloud, Speranza claims.

For instance, Vodafone Italy uses five different AWS services with personally identifiable information (PII data) to scale its subscriber top-up services securely and elastically. In doing so it has cut CapEx by 30%.

BSS OK, OSS not so much yet The jury is split on the issue of business and operations support systems (BSS/OSS).

Customer-facing BSS were among the first things telcos moved to the cloud, but the OSS that monitor, analyse and control the services on the network are a different matter. The OSS need instant response times, not the near real-time typically provided by public cloud, which is good enough for most BSS applications, says Speranza.

However, response times in the public cloud can improve, through putting resources at the edge of the network. South Korea’s SK Telecom uses AWS Wavelength and cut latency by 60%, to 1ms. The operator is using this super low latency to support robot deliveries, autonomous driving, cloud gaming and healthcare.

In June, Vodafone UK announced it too would use AWS Wavelength to offer what it says are the first multi-access computing (MEC) services in Europe.

Danielle Royston, who heads the Texas-based ‘public cloud evangelist’ Telco DR also believes the flywheel is starting to turn.

CSPs have spent millions on big data centres to run their own applications and workloads, becoming proxy cloud providers whose efforts were spectacularly eclipsed by the public cloud hyperscalers – AWS, Microsoft Azure and Google Cloud.

Migration to the cloud 27

Danielle Royston, CEO, Telco DR

George Glass, CTO, TM Forum

Mark Newman, Chief Analyst, TM Forum

All in or don’t bother CSPs are recognising that they need to move to the public cloud, rather than sticking with what Royston calls the “fake cloud”. She argues that all the CSPs’ problems can be understood, addressed and solved by public cloud, but the plug and play benefits of public cloud cannot be realised if CSPs decide to become cloud native and adapt their IT systems to run in public and private environments.

This is because, Royston says, they will not be able to just plug into the predefined services that public cloud providers offer.

She stresses, “You are not just parking your apps, this is your chance to rethink your entire IT and network model, top to bottom…

You can refactor it and get leaner code and use technologies. The move to the public cloud will require CSPs to be ‘all in’.”

DISH Network, the US wireless and data service provider, exemplifies the rewards for making this leap of faith. As part of the regulatory remedies around the Sprint-T-Mobile merger last year, DISH is set to become the fourth national mobile network. Like Japan’s Rakuten Mobile, it is building a 5G network from scratch, rather than gradually upgrading existing infrastructure.

“DISH set the agenda by going all-in on AWS infrastructure. It’s not just the BSS, it’s the entire network: RAN and core. If you’re a CSP still deploying on-premise, your five-year CapEx decision is doomed to be a write-off the day you make it,” says Royston.

Smoothing the path VMware reckons the operators’ path was made easier by the recent launch of its VMware Telco Cloud Platform RAN (VTCPR).

The platform promises to create a modern, open and disaggregated radio access network, with virtualised RAN functions.

The implication is that launching off this platform will be easier than reading out its name. VMWare says this platform gives CSPs their best shot at creating 5G services that people will actually pay for, says Sanjay Uppal, GM of VMware’s Service Provider and Edge division.

Many new services enabled specifically by 5G can only work if the operator can host apps at the edge, close to the customers, rather than the old-school centralised network communications hardware. However, the modern generation of software functions

that used to run have been separated from the hardware and have travelled to all parts of the cloud, residing close to the devices that need them.

VMware says its VTCPR liberates those RAN functions from the metal boxes that house the original, tightly integrated RANs, so RANs now have virtual network functions (VNFs) and containerised network functions (CNFs). Being small, quick and versatile, they fit almost anywhere and can be aggregated to any size.

VMware claims the combination of MEC and network slicing will run faster and help CSPs cater for the needs of different industries and verticals.

Network security Keeping networks safe in a virtual, open world will be crucial. In any migration, there are always casualties, as the exposure of the vulnerable attracts predators.

The evolving CSP will have multitudes of new vRAN sites and devices connecting to the RAN that potentially provide a target for the service deniers and the ransom demanders.

VTCP tackles the security challenge by creating and pushing out consistent security policies to all its RAN sites. This approach is designed to reduce configuration errors and prevent changes from creating new risks, and, as a precaution, each vRAN function is isolated within the virtualisation layer, separating them from other systems.

VMware’s VTCPR is based on its own hypervisor, vSphere ESXi, which virtualises RAN functions and distributes them to containers which are then managed by Kubernetes.

As easy as that?

“Containerisation has dramatically speeded up and simplified cloud migrations,” says George Glass, CTO at TM Forum. He notes that breaking applications out of the operating system, into their constituent services, could make them cloud-native much more easily.

However, Daryl Schoolar, Practice Leader, Fixed and Mobile Infrastructure, Omdia, sounds a warning note: “Before we get there, operators must figure out how to transition without disrupting their services. That’s quite a task.”

July 2021 • www.mobileeurope.co.uk

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vRAN and Open RAN 29

Is 5G’s game plan being held to RANsom?

How and where can vRAN play constructively with Open RAN, asks Nick Booth, and is vRAN holding 5G back?

July 2021 • www.mobileeurope.co.uk

30 vRAN and Open RAN

I

f 5G were an international footballer, by now fans might be chanting, “What a waste of money.” In its defence, the hyped star probably needs better players around it. The RAN is still slow, trying to direct everything from inside the box, and it doesn’t yet deliver the possibilities that 5G creates, which is a waste really, because 5G is designed to take up some very creative positions.

Regular fans – those who’ve worked with mobile operators all their lives and turn up to every fixture at MWC – won’t turn on 5G. They understand that these things take time and require attention to detail, but Caroline Gabriel, Founder and Research Director at Rethink Research, says too many of those driving 5G have varied motives and no coherent message.

Hype has come from vendors who want operators to invest in a new generation of technology. Politicians have used 5G as a catchphrase when they want to sound businesslike on the economy and some operators have hijacked 5G as part of their marketing strategy.

It could have waited…

Granted, everyone thinks they can do the manager’s job, but even so, Gabriel says, “Mobile operators have a more realistic view of 5G,” believing, “It could have waited.” Instead, progress has been driven by a herd mentality and the fear of missing out. “You could argue that 5G has been pushed out earlier than it was really needed and everyone accepted that the first release of standards [the Non-Standalone or NSA] would only support faster broadband,” says Gabriel.

She cites Enrique Blanco, Telefónica Group’s CTO, speaking at the 5G Core Summit in Madrid in September 2019, and suggests that he summed up the situation perfectly when he said, “My personal view is those operators who are really pushing for this [NSA] – in the US and Japan and Korea – have different, more urgent priorities… Because of the Olympics, and whatever else, they want to deploy services using NR much sooner, which means they need the standards to be defined sooner, and the chipset makers to deliver sooner.”

He then added, “5G is not just about sub-millisecond latency and 1Gbps speeds – we can get close to that with 4G already – so what’s new?

The business model needs to be defined; 5G shouldn’t just bring new radios and antenna systems, but new network architecture.”

July 2021 • www.mobileeurope.co.uk

The most daunting migration Meanwhile, back at the RAN, getting the best value for money through virtualisation, containerisation and open standards remains “the most daunting migration challenge operators have ever encountered,” says Gabriel. Even Rakuten Mobile in Japan, with its greenfield site, 300 engineers and huge support from equipment vendors found deploying vRAN incredibly challenging, and it has been open about just how complex it proved.

If it’s that tough for a cloud-native, greenfield operator, it’s little wonder that legacy mobile operators are taking their time and giving themselves deadlines of 2028. Still, there

“

5G is not just about submillisecond latency and 1Gbps speeds – we can get close to that with 4G already…The business model needs to be defined

is a huge amount to accomplish in those seven years, especially in terms of integration.

The most demanding RAN functions, sources in the cloud say, will be Instant Massive multiple transitions and dynamic spectrum sharing, because they need huge computer power. If deep learning applications are used, they will turn up the heat in the data centres even more. Currently the right price/ performance/power consumption ratio isn’t available, reports Gabriel, who has surveyed at least a hundred CSPs on the subject.

One option might be to throw more processing power at the problem. Chip maker Nvidia is developing a platform based on a special graphics processing unit (GPU) for the vRAN distributed unit. However, when Nvidia unveiled its first prototype to analysts it was “guzzling power,” says

Gabriel, “and the machine would cost about four times more than a current baseband,” which obviously is not viableespecially given so many European operators’ pledges of achieving zero carbon.

Non-traditional approaches Traditional networking equipment vendors likes Ericsson, Nokia and CommScope are working with specialist comms software vendors to decouple the RAN software from specialised hardware. The plan is to run it on general purpose ‘white’ boxes at traditional sites for radio broadcast and aggregation, and even at central locations.

Though cloud computing has taken us into the vRAN 2.0 era, there are still doubts about whether it’s all worth the effort, according to Azfar Aslam, Nokia’s CTO for Europe. “The industry is rightly asking ‘Do the benefits of fully virtualised RAN compensate for the challenges of integrating hardware, power efficiency and systems management?’” he says.

Aslam reckons the trade-off between the additional effort and cost has to be weighed against the potential benefits of disaggregation and pooling. In the end, the choice of vRAN versus the classical, highly integrated RAN supplied by Nokia, Ericsson and Huawei for so long comes down to the advantages of high performance, cost and complexity versus the intended flexible architecture and deployment to serve 5G use cases enabled by the edge cloud.

Phil Sorsky, Senior Vice President, Europe, Middle East and Africa, CommScope, says vRAN is an implementation issue. Though vRAN may not excite the end user with new powers and features, it will support the revolution. Sorsky says, “Reduced operational costs, added flexibility and efficiency in the network will encourage mobile network operators to deploy [5G] faster and deeper – if applied appropriately”.

Georg Loeffelmann, Head of Mobile Access at A1 Austria, largely agrees: “Aspects of vRAN are already being used by [mobile network operators] today,” he says. The operator’s vRAN policy is, according to Loeffelmann, “Early involvement, early deployment, early tuning. New players who also walk the walk are always welcome.”

Finding the right partner Others think the problems start way before deployment and that a big difficulty is finding vRAN development partners. Ofir Zemer,

vRAN and Open RAN 31

CEO of Cellwize, acknowledges that vRAN runs within Open RAN, but says the danger is one of commitment. “The two approaches often work in unison, but they serve different purposes,” he says.

In his view, there are two areas that need clarification before 5G demands can be met

by RAN makers. The builders of 5G networks need to work out what their customers could use, and the software developers and systems integrators need to work out how to construct a RAN that caters for their needs.

“

Everyone is underestimating the systems integrator role. It’s a mistake to look at reference designs from sites like Rakuten and WWT. Each mobile network has its own decisions to make…

Dean Bubley, founder of Disruptive Analysis, agrees that 5G is less like an underperforming prima donna and more like a building project. We have got to sort the builders out, he says in a UK government report on 5G Supply Chain Diversification Strategy.

“5G is more like a sizeable extension to an existing house, which just got planning permission,” Bubley adds. The builders are pouring concrete for the foundations without too much thought about how the building will come together.

“Everyone’s underestimating the systems integrator role,” he comments. “It’s a mistake to look at reference designs from sites like Rakuten and WWT. Each mobile network has its own mix and match decisions to make about individual point solutions.”

Open RAN depends on vRAN Bubley fears the 5G RAN journey could take a wrong turn, though. National policy makers – like the UK, as outlined above – have drawn a

Azfar Aslam, VP & CTO, Nokia

Caroline Gabriel Founder and Research Director, Rethink Research

Enrique Blanco, Group CTIO, Telefónica

Ofir Zemer, CEO, Cellwize

link between vendor diversification, innovation and the existing trend in parts of the telcos industry towards open network designs and, specifically, Open RAN approaches. As Zemer observes, “Most players are using the Open RAN term nowadays, [but] it’s really a combination of the open and the virtual that will bring the most value to operators.”

“The collective effort that operators are putting into Open RAN should help float the whole vRAN boat,” says Gabriel. In November 2020 a Heavy Reading survey found that 59% of respondents have installed vRANs, with 28% using them on 4G LTE and 14% on 5G, with the other 17% using them on both, so vRAN seems to be providing 4G with a performance boost

and continuity between generations.

CommScope’s Sorsky gives a wry nod to Amara’s Law, which states, “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” This has been true of every generation of network technology so far – by the time we are reaping the benefits, we’re focused on the next thing.

So can vRAN and Open RAN provide the talented players to ensure 5G reaches its potential? “No,” concludes telco analyst Bubley.

“They might get a few good substitutions – and fluke a goal or two for the 5G Cup in 2023 – but realistically they’re more likely to be winners for 6G in 2029.”

July 2021 • www.mobileeurope.co.uk

32 In the Back

The Wireless World The latest news and innovation from around the globe

Canada Bell Canada, Telus and Rogers As of the start of June 2021, Bell Canada and Telus have live 5G networks in the Canadian capital city, Ottawa. Bell and Telus network-share extensively, including 5G. Rogers Communications, which launched 5G in Ottawa in March 2020, has most recently extended its 5G network to Saint John in the state of New Brunswick, adding to the coverage of Moncton, Fredericton and eight other communities across the province.

Nationwide, Rogers’ 5G is available in more than 700 communities and it has pledged to provide coverage to 1,000 communities by the end of 2021.

United States AT&T In May, AT&T agreed a multi-billion dollar deal to spin off WarnerMedia and combine it with rival Discovery. The idea is to create a media concern big enough to take on Disney and Netflix. This will create the world’s second-largest media company by revenue after Disney. This is AT&T’s fourth – and most costly – major change of direction over the last four decades. These failed attempts have cost the operator dearly in more than monetary terms as it now lags behind rivals Verizon and T-Mobile in 5G roll-out as well.

Brazil 5G spectrum auction Brazil’s Minister of Communications, Fabio Faria, said the initial 5G auction will finally take place in July, according to Reuters, and he expects all state capitals to have 5G Standalone (SA) networks up and running by July 2022. The National Agencia Nacional de Telecomunicacoes (Anatel) approved some 5G-related rules a year after the Ministerio da Ciencia, Tecnologia, Inovacoes e Comunicacoes (MCTIC) approved the 5G auction process.

The spectrum auction is for frequencies in the 700MHz, 2.3GHz, 3.5GHz and 26GHz millimetre wave (mmWave) bands.

July 2021 • www.mobileeurope.co.uk

Chile Movistar Chile Chile’s monopoly commission, the Fiscalia Nacional Economica (FNE), approved KKR Alameda Aggregator’s acquisition of a 60% stake in Movistar Chile’s fibre-optic infrastructure unit InfraCo. The regulator decided the sale would not lead to a concentration of market power as KKR does not have a presence in any of the markets concerned.

It also noted that without the transaction Movistar would retain exclusive control of the network, whereas the acquisition will open it up for wholesale and outside investment, allowing new players into the market. No objections were raised by other industry stakeholders.

In the Back 33

Pakistan PTCL and KPITB State-owned Pakistan Telecommunications Company Ltd (PTCL) and the Khyber Pakhtunkhwa Information Technology Board (KPITB) have successfully trialled 5G technology in Pakistan.

PTCL disclosed few details apart from the use cases in the test included remote surgery, cloud gaming and an overview of other possible 5G applications. Atif Khan, a senior minister in Khyber Pakhtunkhwa, one of Pakistan’s four provinces, was quoted as saying that the trial paves the way for the Prime Minister Imran Khan’s vision of a “digital Pakistan”.

South Korea KT Corp In a trial, KT Corp navigated a 5G-connected cruise ship through the narrow 10km Pohang Canal without a captain on board, controlled from a location roughly 300km away. It relied on using autonomous systems from Avikus Corp, a division of Hyundai Heavy Industries Group. The low-latency 5G network supports real-time sensor data, including 360-degree video alongside radar and lidar data.

United Arab Emirates Angola Unitel and Safaricom Sergio Santos, Angola’s Minister of Economy and Planning, has invited the Kenyan mobile operator Safaricom to invest in Angola and potentially to introduce its M-Pesa mobile payments. In October 2020, the Angolan mobile market leader, Unitel, launched mobile money services, having been awarded a Payment Services Provider licence by the National Bank of Angola (BNA). The government is mulling over bringing in an experienced foreign operator to speed up the adoption of financial services via mobile. Angola has a low level of financial inclusion: the BNA wants to raise the percentage of the population with access to basic financial services from 30% in 2019 to 50% by the end of 2022.

Etisalat Etisalat has contracted Ericsson to deploy a 5G network based on millimetre wave (mmWave) frequencies. The vendor says the roll-out should achieve download speeds of 4.2Gbps and latency of 8 milliseconds for use cases such as Industry 4.0, automation and IoT. The first spectrum in the 26GHz band was allocated by the Telecoms and Digital Government Regulatory Authority (TDRA) in September 2020. Etisalat’s 5G wireless network currently uses 3.5GHz frequencies.

July 2021 • www.mobileeurope.co.uk

34 Final Say

Spanish operators get a leg-up on 5G Lower spectrum prices, longer deadlines and no obligation for network owners to give their rivals access could have big consequences writes Fiona Vanier, Senior Analyst, Forecasting, at CCS Insight.

A

t the end of May 2021, the Spanish government announced that it would be relaxing some of its conditions ahead of the 700 MHz spectrum auction in July. The auction is important for operators wanting to expand their 5G services in the country, because this low frequency band is conducive to wide-area coverage.

The sale could also prove to be more popular than usual, as the government intends to cut the combined starting price for all seven allocations by 15% — from €1.17 billion to €995.5 million. The government is also offering favourable conditions to the roll-out of services in areas that have newly allocated blocks, for example, by extending deadlines for deploying services by a year.

Now, as you can imagine, the Spanish authorities aren’t setting these conditions as an act of charity. An important priority of their Digital Spain 2025 Agenda is the promotion of 5G services nationally so that most of the population is covered by that year. And although the main players, including Telefonica, Vodafone, Orange and Masmovil, have all launched 5G services in Spain, it has come at a heavy cost.

In many ways, the Spanish telecommunication market is typical for Europe (see Regulatory Tide Turns for European Operators).

Companies are faced with fierce competition and burdened with escalating deployment costs as demand for connectivity shows no signs of slowing down. Many operators also carry heavy debts that may take years to reduce as the cost of infrastructure and licences continues to rise. So the new conditions could be seen as recognition by the government that operators will need help if they’re to fulfil its

July 2021 • www.mobileeurope.co.uk

35% of the population. Euskaltel, a smaller player than MasMovil, is set to offer 5G services as a virtual operator from January 2022.

According to the terms for the next auction, the bigger players can refuse to play ball with any of their competitors, or if they do, they can charge whatever they want. So this change could make it difficult for the likes of Euskaltel and MasMovil to widen 5G coverage without their own 5G networks.

pledge of nationwide 5G coverage.

Although lower prices and longer deadlines will be welcomed by most companies, there’s one change that could cause a divide between major players and their smaller counterparts.

This is because the new conditions for this 5G auction remove the obligation for network owners to grant access to their competitors.

Network owners therefore can’t be forced to lease their networks to rivals, but they’re free to negotiate leasing deals with competitors without regulatory intervention.

This change in network-sharing conditions could have grave consequences for smaller players like MasMovil and Euskaltel, which both rely on network-sharing deals with Orange for their 5G services. MasMovil’s agreement, signed back in October 2019, allows it to offer 5G services in 4,500 locations, covering

Too fragmented It therefore makes sense for both companies to join forces, and this is arguably a welcome move in a sector that has been criticized in the past for being too fragmented. From a 5G perspective, the merger will be good for Euskaltel, given that MasMovil’s Yoigo 5G service is based on its own network as well as that of Orange. MasMovil owns 80 MHz of spectrum in the 3.5 GHz band, thanks to a deal with Eurona Wireless Telecom and its acquisition of Neutra Network Services in 2018. The operator is well-placed to expand its 5G network, and should have substantial independent coverage by the time its contract with Orange ends in 2028.

When it comes to making money in the Spanish 5G segment, independence will be key. And it looks like the state of play isn’t set to change any time soon, especially when taking into account the government’s decision to double the duration of licences from 20 years to 40 years. According to Spain’s Ministry of Economic Affairs and Digital Transformation, longer licences will “guarantee an adequate return on investment for the operators”.

In other words, when considering existing debts and the heavy investment needed to expand 5G coverage, it’s going to be a while before Spanish operators can start to see a return on their 5G ventures.