Infrastructure planning needs to come first for telcos
Cloud-network convergence and cloud-network synergy will help operators accelerate digital transformation. But this depends on infrastructure construction. And to build stable, reliable, flexible, and efficient infrastructure, strategic thinking and advance planning are a must.
A new test of infrastructure
China's Internet traffic soared 50 percent during the pandemic, and in hard-hit areas like Wuhan, it shot up by up to 70 percent. Despite this, networks weren’t congested, services weren’t interrupted, and performance wasn’t reduced.
In the initial period of the outbreak, over 63,000 new 4G and 5G base stations were built in China. Moreover, a 5G base station was built in Wuhan's Huoshenshan Hospital in just 24 hours, and a communications network was deployed in Leishenshan Hospital in 36 hours. Feats like this can only be achieved with the support of strong network infrastructure. In these cases, local operators had carried out long-term systematic planning – and it paid off.
As of Q1 2020, 456 million broadband users were split between China's three major providers, and broadband penetration was about 90 percent. Fiber network users accounted for 93 percent of this figure and average access bandwidth was over 160 Mbps.
In Europe, data from the Portuguese national telecommunications authority ANACOM reveals that in the last week of its state of emergency – April 27 to May 2 – data traffic rocketed by 55 percent. Altice Portugal, a subsidiary of the European telecommunications and media giant Altice, had formulated a fiber strategy years ago. And so its fiber network provided solid guarantees in the fight against the pandemic. As of September 2019, FTTH/FTTB coverage was 78 percent in Portugal, and even in rural areas FTTP coverage was up to 53 percent, similar to Europe’s generally high levels.
Since there will always be uncertainty, planning and building stable, reliable, flexible, and efficient network infrastructure is a fundamental requirement for operators.
Creating new value in the post-pandemic era
A Speedtest report on the impact of COVID-19 on Internet performance revealed that the Internet download rate in China is still rising, even after the pandemic’s peak in February. What this confirms is that the home is now an important place for work, study, and entertainment. And it means that home broadband above 100 Mbps is now a basic requirement.
New services for new times
China Unicom has launched Dual-gigabit Learning Broadband on top of its integrated gigabit package. The service employs AI to reduce online education service latency by over 50 percent. The telco also added an online education benefits pack to improve high-quality online education products, enhance user experience, and consolidate the value of the pipeline.
Meanwhile, physical activities have been shifting from offline to online, with remote commercial connectivity services for remote offices, education, and telemedicine all on the rise.
Leveraging its advantages in cloud-network convergence, China Telecom has launched cloud conference, online collaborative office, distance education, and various other IT products and services for its corporate customers. The operator has continued to consolidate its cloud-based digital transformation based on the idea of creating service ecosystems.
As early as 2016, China Telecom determined the strategic direction of its digital transformation, moving network, services, and IT to the cloud and establishing the layout for its cloud-network converged infrastructure, comprising two cores, 31 regions, and X edge nodes. In 2018, the telco began its “decade one, optical transformation; decade two, cloud transformation” strategy.
Today, China Telecom has built more than 300 cloud nodes across the country, allowing the network to move with the cloud, giving convenient access to cloud and uninterrupted access between clouds and meeting user needs for on-demand, low-latency cloud access.
How operators can thrive
In the post-pandemic era, new industries and applications are emerging beyond the consumer market. Methods of production and lifestyles will change, creating conditions that can help operators avoid the dumb pipe scenario brought about by over-the-top (OTT) services and instead empower them to provide new digital transformation services for society.
First, operators have resource advantages such as network connections and data center (DC) server rooms. They can leverage trust-based relationships established with government and industry through long-term cooperation. And they can build edge computing through cloud-network convergence to lower latency and achieve "cloud in the network and network in the cloud".
By meeting the various digital transformation needs of government and industry, operators can establish
service application ecosystems, improve overall competitiveness, and differentiate themselves against OTT cloud services. At the same time, cloud-network convergence will solve the issue of how to move services to the cloud for operators and lay a solid foundation for virtualization to move networks to the cloud and digitalize their own operations by moving IT to the cloud.
Second, operators can leverage their ability to control network connections and cooperate with the OTT supply chain. Through cloud-network synergy, they can meet SMEs' needs for on-demand multi-cloud and improve the user experience. Although the user experience is reflected in the cloud, the key support is still in the network. In the Internet era, bandwidth and latency will always be competitive strengths.
In the future, cloud-network convergence and cloud-network synergy will help operators accelerate digital transformation, but doing so is infrastructure-dependent. Infrastructure is the road and whoever builds the road first can reach the competitive window of opportunity first.
Strategic and systematic
Digital transformation requires strategic thinking and planning. And with it, stable, reliable, flexible, and efficient infrastructure architecture is the key to operators' sustainable development.
Telecommunications networks have two major characteristics. The first is end-to-end, which means network infrastructure construction requires global vision plus a network-wide perspective and coordination capability to improve efficiency. The second is economies of scale, whereby operators must expand the network and scale of services to reduce costs.
Systematic planning is an effective way to build things on a larger scale through collaborative planning. Changing the features of infrastructure, like base stations, DC server rooms, and fiber networks after deployment, is difficult due to their wide coverage and long construction periods. Therefore, strategic thinking, including top-level design and systematic planning, is necessary to avoid redundant construction and strengthen operators' strategic confidence and ensure enterprises' ability to achieve sustainable development.
A real-world example involves the systematic planning of a fiber network for a CBD with 163 buildings covering around three square kilometers. Before the operator carried out systematic network planning, it relied mainly on user demand to sets its fiber deployment planning. Up to that point, it had built 51.2 km of optical cables, covering 98 buildings. The operator decided to adopt a unified fiber network planning concept (when you plan the fiber network considering B2B/B2C/B2H service requirements). It planned fiber cable coverage for the 163 buildings in one go, finding it required only 31.5 km of cable. And the average cost of fiber cable for a single building was only about one-third the cost of the original project.
Fiber networks aren’t point-to-point. Instead, they require structured and flexibly configurable fiber. Good planning can greatly reduce the cost of fiber construction and a flexible wiring design can improve the utilization efficiency of fiber resources. More importantly, a fiber network can ensure that there are fiber access points near every building (within 200 meters), which can slash service response time. In terms of enterprise service response time, TTM is a key competitive strength. TTM largely depends on infrastructure readiness, including fiber networks and DC server room resources.
Infrastructure is a physical entity that determines whether all services, technologies, and network plans can ultimately be deployed. The systematic planning of infrastructure requires coordinating service goals, the direction of technology evolution, and network planning where service planning drives technical planning and technical planning drives network planning. It also requires coordination between various specializations, including front- and back-end departments such as marketing, planning and construction, and O&M, as well as cross-supply chain and even cross-industry cooperation. It’s a complex and systematic project that if coordinated well can provide operators immense cost-savings and flexible architecture that’s stable long-term. But if it’s done poorly, it may limit operators' large-scale development.
In systematic planning, infrastructure integration should be considered, especially the integration of fixed and mobile sites. As long as these sites are integrated, the fiber network, transmission network, IP network, and access network will naturally merge.
Also, systematic planning must have a high-value focus. This means a holistic approach to network planning. Construction should be implemented in a planned and step-by-step manner based on high-value areas and service development priorities.
When the business division cannot produce a business plan, operators must still use a digital transformation strategy to guide infrastructure planning. Because the infrastructure planning and construction cycles are long, you cannot use the “toothpaste-squeezing” method. If you wait for service requirements to plan and build the infrastructure, you’ll miss a valuable competitive window of opportunity. You also won't get long-term stable and efficient network architecture, because the network design will lack a global and network perspective.
Without fiber, network capabilities won't be strong and without cloud, service development won't be good. China's strong IT infrastructure has been achieved using systematic planning-based thinking and methods, and this has laid a solid foundation for the development of 5G, cloud, and AI.
2020 is an especially significant year. The pandemic has had a huge and far-reaching impact on global socioeconomic development. How can operators seize opportunities in an era of accelerating digital transformation, leverage high-quality network connectivity to build a foundation to develop the digital economy, and become the distribution centers of the value chain again?
Huawei believes that in addition to focusing on what's ahead of them and exploring new business models and service types, operators should also focus on what's below their feet, and begin strategic planning and deployment of infrastructure for 2025 as soon as possible. Because infrastructure forms an operator’s roots, service and commercial innovation can bear fruit only when the roots are firmly established.
The question today is not whether or not operators should go down the road of digital transformation, but whether they should go fast or slow. If you go fast you will seize the advantage. When implementing a digital transformation strategy, cloud-network convergence/cloud-network synergy is the difficult part, but infrastructure planning is the priority. And so that needs to come first.