4 top questions being addressed at Mobile World Congress 2023
FEBRUARY 28, 2023 • Q&A
Tom Craig, GM of HPE Communications Technology Group, addresses four major challenges impacting telcos at the show
1. How can telcos generate new revenue from networks?
The challenge of monetizing their network infrastructure is one that telcos have been grappling with for years. Technology companies such as Google, Amazon and Facebook continue to expand their offerings into the telecoms space, putting increased pressure on telcos to create value beyond the ‘dumb pipe’ and deliver new services that can generate revenue. The average revenue per user (ARPU) has also plateaued, with consumers unwilling to pay more for a new network, whether it’s 4G or 5G. Telcos are under pressure to generate new revenue from their networks and boost their top line revenue.
It's no secret that one of the biggest revenue opportunities for telcos is in the enterprise B2B space, particularly with the advent of private 5G networks. Enterprises are demanding a customised 5G experience with low-latency, segregated resources, extended range and security that complements their existing wireless networks. Telcos are looking for simple ways to deploy private 5G networks to meet this growing customer expectation at the connected edge. The enterprise needs to be convinced that private cellular networks can be efficiently deployed and managed. To do this, telcos need to be able to partner with companies that can help them deliver end-to-end private networks, using cost-effective and best-in-class technology that’s fit for purpose.
That is what HPE is delivering today – a holistic approach to delivering private networks that make it simple for telcos to service this market, and in turn give enterprises the confidence to leverage this technology. Moving quickly to exploit the enterprise private network market will be crucial if operators want to start turning a profit from their network and their expertise. With the acquisition of Athonet giving HPE one of the most complete private 5G and Wi-Fi portfolios, we are well placed to support both telcos and enterprises on their private networking journeys.
2. How do telcos reduce network costs?
Achieving greater levels of efficiency across all levels of the network is crucial for telcos to maintain their ability to generate free cash flow and stay afloat in a highly capital-intensive industry.
The capital intensity of telcos has been exceptionally high for decades, with the average Capex-to-sales ratio hovering at around 14% and showing no signs of decreasing. This is due to the continuous doubling of network traffic every 18 months or so, necessitating the addition of more infrastructure to accommodate the increased demand. This in turn incurs additional operational expenses and personnel to manage the new infrastructure. Telcos have tried various measures to address this issue, including outsourcing and network sharing, but these have not provided a significant solution.
However, automation is beginning to revolutionize the economics of running a network. Vodafone’s CTO recently said that automation has saved it €500m in three years. Automation can be achieved end-to-end, from the core all the way to the RAN, with cloud solutions that enable telcos to manage their infrastructure regardless of how widely distributed it is. With the implementation of automation, telcos can realize substantial benefits, reducing costs and catering to the ever-increasing capital demands of the industry.
3. What is the right cloud strategy for telcos?
One of the big opportunities that telcos are assessing today is the public cloud. IT and some network elements that would have been hosted in a private cloud, can now be moved into a public cloud. Telcos are now determining whether this infrastructure can deliver desired business outcomes.
What many telcos are realizing is that this shift to the cloud offers benefits but is not without its challenges. One major challenge is the loss of control over data since it is no longer hosted on-premise. Another is latency, and the time it takes for data to be sent to and from a public cloud, and processed in that environment. It is for these reasons, that we believe the future for telecoms is hybrid cloud, with telcos using the most appropriate cloud environment for different experiences.
As telcos look to leverage different cloud environments, they want a single pane of glass that gives them full control of the data across their different cloud and IT infrastructures, also with the ability to monitor network performance, such as latency. That is exactly why I’m excited about what HPE GreenLake for Telco Cloud is delivering for telcos today - empowering them to move to hybrid cloud environments, without losing control of their customers.
4. How to reduce energy consumption at the network edge?
With the introduction of distributed computing, more data is being generated at the edge of the network. While modern infrastructure, like the HPE ProLiant DL110 platform, offers heavily reduced power consumption, to make a fundamental change a rethink in how data is handled is required. Most power is consumed in the transport and processing of data to get some useful outcome. If telcos and their enterprise clients analyse data at the edge of the network, rather than processing it in a centralized environment, they’re not wasting energy transporting data back and forth that they may not use. Therefore, the overall network becomes more efficient. Once telcos have the capability to offer distributed edge-to-cloud capabilities, they can provision AI and data analysis at the edge of the network, processing data captured from 5G and Wi-Fi simultaneously.
With HPE's help, telcos can navigate the challenges and opportunities facing the industry and emerge as leaders in the telecommunications landscape. We look forward to discussing these and other issues at MWC and beyond.
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