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Awakening the private line market

Unlike home broadband, private line services for enterprises have seen little investment or growth. But, digital transformation has spurred a surge in demand. Now's the time for telcos to strike.

By Peng Song, President of Global Carrier Marketing & Solution Sales, Huawei
Sep 2019

Over the past decade, the home broadband penetration rate of basic services has been increasing due to the national broadband policies of governments around the world. 

While operators have increased the bandwidth access capability of each home by up to 200 times, the enterprise private line market has developed sluggishly. Traditional SDH, MSTP, and MPLS VPN private-line networks face bottlenecks in capacity and coverage, and differentiated requirements from different industries for bandwidth, tariffs, delays, and service provisioning duration haven’t been met. Agile, on-demand private-line products for enterprises with a bandwidth of over 10 Mbps are rare and, due to a lack of investment in private lines, many have to lease bandwidth at the same capabilities seen in home broadband 10 years ago and at 10 times the price.

However, enterprise digital transformation has meant that demand for private line services has remained high. For example, banks require highly reliable independent private lines from different carriers. Smart terminals are using new IoT applications like facial recognition and big data analytics. And security cameras have upgraded from 720p to 1080p, with surveillance in real time expected, causing huge traffic increases.

The slow response of telcos has left room for the SD-WAN services offered by OTT players and one-stop subscriptions from cloud service providers. 

However, opportunities – and challenges – are abundant for telcos as millions of enterprises move to cloud. Multi-cloud scenarios are inevitable, but the connections oriented for multi-cloud may be unique. China’s top three operators all define the private line service as a new growth engine, and have launched differentiated high-quality private line products and networks. All have benchmarked the Internet service experience and quantified service standards, paving the way towards visualized, self-service, and intelligent services. The private line market has delivered quick ROI and is the only area where China’s top three operators’ revenues have grown in the past two years.

We need to enhance private line services to converge clouds through networks. The burgeoning private line market isn’t just a revenue source for operators; it’s also a future control point in the cloud era – one that offers unlimited possibilities.