Going virtual: a new dawn for Asian networks

As 5G roll outs across Asia, bringing broadband speeds to millions on the move, progressive telcos are turning to network virtualisation to transform operations

In Asia, a voracious appetite for media has fuelled demand for 5G across the continent – with South Korea becoming one of the first ever countries to install the network.

In China, more than 782 million people now use a smartphone (still just 55% of the population), prompting GSMA to forecast 460 million 5G connections by 2025.

While it would be hard (foolish, even) to forecast what 5G might bring, if its impact is anything close to 4G’s – which brought us Uber, Instagram and Deliveroo – we’re in for some significant changes.

 

The Internet of Things (IoT) and augmented reality (AR)

Despite being around for some time, neither IoT or AR has yet to penetrate the mainstream quite as predicted – Pokemon Go and fitness bands notwithstanding. Many believe 5G will change this, with McKinsey predicting the IoT market to be worth 4 to $11 trillion globally by 2025.

In traditionally tech-advanced nations like Japan, it’s hoped that 5G will provide a much-needed economic boost. Research by McKinsey suggests that if installed correctly, 5G could bring the tech revolution needed to revive Japan’s flagging mobile and motor industries – boosting exports and returning the island nation to a world leader for phones and cars. But whether it’s via connected cars in Singapore’s smart suburbs or faster download speeds in the Himalaya, one thing’s for certain: both data consumption and volume is set to explode.

To meet this demand, CSPs and their suppliers must update the current patchwork of legacy networks that currently exists. This is nothing new, as TM Forum’s chief analyst, Mark Newman, wrote in a report published in June 2018: “For the past five years, network teams have been trying to figure out a migration path from current network technology, which integrates hardware and software in specialized routers, switches and appliances, to a new approach that decouples software from hardware.”

 

Network function virtualisation (NFV) and software-defined networking (SDN)

 This new approach is, of course, network function virtualisation (NFV) – the concept of replacing network appliances such as routers and firewalls with software on servers. Such is the necessity for NFV and its sister technology SDN (software-defined networking), that TBR predicts the total CSP capex and external opex spend allocated to NFV/SDN by the end of 2022 to reach 27.5%.

“CSPs are under pressure to invest in NFV/SDN to reduce total capex and opex spend as well as introduce new services and stay competitive in the data-driven digital economy, which is increasingly dominated by webscale and over-the-top players,” wrote TBR’s principal analyst, Chris Antlitz in June. “This pressure will prompt more CSPs to spend on NFV/SDN during the forecast period.”

Inevitably, network virtualisation will require an overhaul of the systems that support it too. To meet the demands of next-generation technologies, both OSS (operations support systems) and BSS (business support systems) must become fully digitised in order to forecast potential network faults, as well as identify actual faults and initiate action, and track service performance over time.

As a result, we’re already seeing significant investment in OSS/BSS – investment that’s set to keep rising. According to Dow Jones’ MarketWatch, the Asia Pacific OSS/BSS market is projected to register an accelerated growth at a CAGR of over 10% from 2018 to 2024.

 

Implications for HR

It’s an unprecedented time for the telecoms industry and its employees. For business leaders, gatekeepers and c-suite executives in general, many of the strategic decisions made now could have lasting implications for their company’s future. Understanding the business opportunity of 5G and NFV is essential: not only at board and c-level, but throughout the business as a whole.

In TM Forum’s second annual Digital Transformation Tracker (DTT 2), which tracks the status of digital transformation in the telecommunications industry and CSPs’ perceptions about progress, culture was listed as the greatest barrier to NFV deployment. Almost a third (29%) of respondents selected, “The need to make significant cultural changes to realise the promise” as a very serious inhibitor to NVF – almost double the number from the previous tracker.

Evidently, more work needs to be done to educate task forces, a factor we’re already seeing in the changing nature of the CIO. In a survey by Forbes Insights Studies, over four out of five CIOs said their role had increased in importance over the last five years. According to the report, five years ago CIOs believed their most important skill was technology know-how, whereas today they believe it’s contributing to corporate strategy – and that the most important personal qualities required are leadership (39%), communicating and influencing (37%), and partnering with others (36%).

With any luck, they’ll use this influence to transform networks.

Please click here to read more on how our team has been supporting Telco Transformation Projects in Asia-Pacific. If you would like to discuss your  resourcing plans please contact Jeremy Hopwood (Regional Director, Asia) at jch@rpint.com or +65 6236 1681