Technology enablers driving innovation for the CSPs
Communications service providers (CSPs) are changing their business models to something closer to digital service providers: adopting technologies, practices, and processes that are similar to a successful technology business. CSPs are becoming more agile and open, using software to create a modular foundation from which they can innovate. Red Hat has been a key partner in helping telcos enable this for decades.
Telcos also face industry-specific constraints; they are heavily regulated and face pressures in delivering a utility the world increasingly depends on – connectivity. Red Hat’s technologies have helped telcos to ensure their security, compliance, and governance. For example, Red Hat’s Identity Management, Container Security and SELinux technologies are helping telcos to secure their networks and ensure compliance with regulatory requirements while adopting cloud-native solutions.
CSPs are grappling with this dilemma: meeting customer demands and building the foundations to prepare for an uncertain future and ensure continued growth. Technology evolution is key to building an innovation platform, which will allow telcos to leverage their existing assets and investments but develop new services and business models. Red Hat has been supporting telcos to adopt these 5 enablers, which we believe to be essential in adapting to the future:
- Telco Hybrid Cloud
- Analytics and AI/ML
- Private Wireless Networks
- Edge Computing
- Underpinning these technologies is the need to drive growth in a sustainable way. Prioritizing sustainability and incorporating it into a telco’s technology transformations will be critical to driving successful, ethical long term growth.
Red Hat is an active participant in the telecoms industry, working with CSPs around the globe.
Telco Hybrid Cloud
The concept of virtualizing network functions has been around for over a decade, and CSPs have virtualized their network functions and reduced their reliance on proprietary hardware. The benefits of this technology include increased agility and responsiveness to changing market conditions, as well as reduced costs. For telcos, the 5G standalone core is built on cloud-native technologies and will be critical in enabling the network to move from pipe to platform. Cloud-native technologies are also evolving workloads from Virtualized to Containerized.
The hybrid cloud is a blend of public and private cloud computing resources and services, and telcos are building these to deliver and manage their network and IT operations. The challenge for CSPs will be to harness the benefits across these clouds while avoiding silos and complications in operations. By having a common platform that orchestrates across the telco hybrid cloud, CSPs can achieve optimal flexibility and efficiency in their operations.
Red Hat enables telcos and CSPs to build, operate and manage hybrid clouds with its suite of software products, as shown below:
In the future, CSPs need to move from rules-based automation to intent-based automation, expanding automation from a single network or service domain to using it throughout their business. A survey by STL Partners found that less than 10% of operators report being fully automated in a single domain; on average they have automated 40% of processes within a domain.
Accelerating this will be important to drive savings that can be redistributed towards areas such as service innovation, as demonstrated by STL Partners below.
Source: Telecoms operator accounts, STL Partners estimates and analysis
As the network expands due to 5G and edge computing, being able to automate network operations, infrastructure and services becomes critical. Ease of use, cross-platform compatibility and integration with other tools becomes extremely important. Red Hat’s Ansible Automation Platform is a popular tool that addresses these challenges and is increasingly becoming a key part of telcos’ automation and IT operations strategy.
Analytics and AI/ML
Analytics, AI and ML technologies are improving CSP capabilities across sales & marketing, customer experience, network planning & operations, service innovation and back office functions. Being data-driven is fundamental for an organization to be successful now and in the future, research shows that integrating AI, analytics and automation (A3) into an average CSP’s operations can deliver more than $1 billion dollars in value per year (equivalent to 8% of total revenues) through a combination of revenue uplift and opex and capex savings.
However, it is a huge task to restructure processes to be more data-centric, therefore, few telcos have implemented A3 across all areas of the business. As a benchmark, Telefonica is one of the leading operators for adoption of AI to improve efficiency and in 2019 it reported operational savings of €429mn across the whole group, indicating that there is still much more value to be captured from AI and analytics.
Private Wireless Networks
Private wireless networks are wireless communication networks that are deployed within a private or closed environment. Private wireless networks can be used to meet specific requirements, such as low latency, high throughput, and high reliability or to close any gaps in network coverage that the enterprise may face.
For CSPs, this is an opportunity to provide 5G services that enable industrial transformation. Manufacturers are testing the use of private 5G to connect robots of the future; warehouses are using it to track assets and inventory; ports are deploying private wireless networks to enable remote control of gantry cranes.
Red Hat’s provides tools for building private wireless network solutions that feature greater flexibility, innovation, and cost savings compared to proprietary solutions. Additionally, our open platform approach allows for integration with existing IT/OT infrastructure, enabling these business critical applications to be run where they provide the most value.
Edge computing is a computing architecture that enables data processing to be performed closer to the source of the data, reducing latency, improving data security and optimizing the economics of cloud computing. There is a large spectrum of what constitutes ‘the edge’, but for telcos the focus is on deploying edge computing infrastructure at their network edge data center or at customer premises to tap into the USD $445 billion opportunity (in 2030).
Edge computing can be coupled with private wireless networks to allow CSPs to offer new services to enterprise customers that span network, infrastructure, cloud and end-applications. Edge compute platforms help organizations extend their open hybrid cloud to the edges of their business, enabling faster decision-making and greater flexibility.
Driving sustainable telco transformation
According to the TM Forum, service providers account for about 3% of the total power consumption of humanity. BT Group alone consumes almost 1% of total UK’s electricity consumption and is one of the top consumers for Energy in the UK. It is therefore important that, as telcos undergo the transformation to becoming more like digital service providers, they grow and evolve their business in a sustainable way.
Red Hat, being a leader in the open-source community, is extremely passionate about bringing change in the lives of our society and making it more sustainable while adopting the best in technology.
While we progressively build cloud-native solutions, microservices led customer journeys, we also work closely with our partners like Intel on how to adopt the energy efficient designs and architectures.
Red Hat won the “Outstanding Catalyst – Impact on society and sustainability” award at DTW Copenhagen 2022, for Intelligent Edge for Sustainable Agriculture. This showcases how Red Hat is driving innovation with the CSPs and creating an impact on other industries like agriculture too.
About Red Hat
Red Hat is a technology company that is widely recognized for its expertise and leadership in open source software solutions. Red Hat provides a range of tools and technologies that enable telcos and CSPs at every stage of their digital transformation journey, from virtualization and containerization, to middleware and AI, and cloud computing technologies.
Want to learn more about Red Hat? Come and visit us at DTW Asia, Bangkok
Red Hat is present at Booth #46 at the DTW Asia in Bangkok between 14-16 March 2023. We are also present at Catalyst booth #C7 for “Ethical AI” to discuss some of the more popular use cases.