Saturation threatens growth
Once a status symbol for a privileged few, mobile phones are now the rule, not the exception. In economically developed regions like Europe and the Middle East, penetration rates surpass 100 percent, and worldwide the total number of mobile users is approaching the global population of 7.25 billion. With traditional telecom services facing this level of market saturation, carriers are finding it hard to grow.
Meanwhile, Internet services like real-time chat apps have skyrocketed and muscled in on operators' traditional territory. In 2014 alone, one Chinese carrier saw its profits from SMS, its most profitable service, plummet by 20 percent.
Facing a bleak outlook, external competition, and internal complications, carriers must transform to combat these threats.
Where do we go from here?
The Internet model has succeeded, and can give operators some major pointers. First, we have the Internet's diversity of services for sectors ranging from transportation, entertainment, and socializing, to retail, and finance.
Then there's the Internet's cloud-based infrastructure and universal, standardized IT hardware, which enables rapid service innovation, minimizes costs, and allows easy scalability and capacity expansion. This advanced model of architecture is one of the key reasons why the Internet has grown so quickly.
In contrast, carriers are still lumbered with rigid, siloed IT architecture. Service updates come at a snail’s pace, and single services such as voice, SMS, and broadband pale in comparison to the diverse and varied services offered by the Internet.
To transform and escape stagnant growth in a saturated market, operators need to build IT-based networks on standard and flexible infrastructure. With cloud computing and high-performance x86 servers becoming mature, cloudified data centers are without doubt the best way for operators to do this. They can provide a firm foundation for carriers to develop digitized services, implement ICT integration, and rapidly deploy new services. Networks can be expanded more flexibly, and operating efficiency greatly increased.
Huawei's cloud data center solution
We believe IT-based networks are the future. All control and service layers on this kind of network will be software-based and run on cloud data centers outfitted with general-purpose x86 servers. Future networks will be built on data centers, making agile, efficient, and open cloud data centers a key requirement for ICT transformation for operators.
Huawei's cloud data center solution is based on Huawei's service-driven distributed cloud data center SD-DC². At the core of SD-DC² lies the OpenStack framework-based FusionSphere cloud OS. Huawei's solution transforms IT infrastructure including servers, storage and networks into standardized, shared cloud resource pools.
By cloudifying the VAS operators provide, the BSS enables elastic resource scalability and automatic service deployment. Not only does this improve resource utilization and reduce OPEX, it also helps operators provide services such as public clouds and generate new business.
New services can be deployed via the network management system interface based on automation and process orchestration technologies. Hardware, middleware, operating systems, and applications can be installed with a mouse-click.
As a result, new services can go online in days, enabling operators to rapidly respond to business needs and market changes.
Phased transformation
Due to the extreme complexity of operator network structures and the variety of different hardware and software, cloudification is a long-term process. Initially, operators will cloudify periphery and simple services before moving on to core and complex services.
They will be able to build unified and flexible IT resource pools by rebuilding internal data centers and using highly versatile and low-cost cloud computing software and hardware platforms. They can then cloudify and migrate upper-layer IT services and systems such as BSS, OSS, and VAS to reduce OPEX and increase service efficiency.
Many of the world's leading operators, including China’s big three, have already adopted this strategy. China Mobile's 2+N data center building strategy, for example, aims to meet long-term growth requirements. It calls for constructing two modern, world-class data centers – China Mobile International Information Port and Southern Base – and involves concurrently building province-level data centers in major provinces.
Operators will also need to use their existing fixed assets, including telecommunications networks, data centers, and large consumer and enterprise user bases; develop IaaS and SaaS public clouds; find new revenue sources; and successfully transform into ICT service providers.
Growth is stagnant for operators; but, if they deploy Huawei’s solutions, they can transform and unlock the great potential that the connected world of the future holds.