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Communications and the service provider’s role

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Kathy Gibson reports from SATNAC 2015 – When we talk about the future communications galaxy – the theme of this year’s SATNAC conference – service providers are vital to making it a reality.
That’s the word from Peter Ford, MD of Cisco EMEA, who points to the speed at which the industry has developed in just a few short years, making it very difficult to map the future.
While service provider revenue is currently from connectivity, this is going to change quickly as value-added services become more important. African service providers will, in fact, have increased competition from international players as they target Africa for connectivity revenue.
Ford says Cisco sees four forces that will have an impact on telecommunications in general and on African service providers in particular.
They are: the traffic tsunami; networks; security and privacy; and digital disruption/Internet of Things (IoT).
The amount of traffic Is rising rapidly, he says, with various devices all generating orders of magnitude more traffic than before.
“So service providers first have a challenge regarding how to physically carry this traffic on their networks,” says Ford. “But carrying that traffic costs money, so they have to find ways to monetise it. If you build up the network, but fail to capture the monetisation opportunities you have a problem.”
He cites the example of e-health, with a typical MRI scan taking 32Mb and an X-ray taking up 50Mb, adding up to phenomenal amounts of data.
In mining, Rio Tinto on its own, generates about 3,5 petabytes of data per day, much of which needs to be sent back to the data centre.
Self-driving cars produce about 2,7Tb of data every hour – and this has to go somewhere, Ford points out.
Networks will undergo tremendous changes, he adds.
Fibre is an example of technology that has changed the game, becoming more ubiquitous. All the operators are now having to offer high-speed fibre networks as essential building blocks for their other businesses.
Another technology that will change the way networks operate is based on Google’s Project Lune, with balloons being used to provide access in rural areas. In fact, Sri Lanka will be the first country in the world to get countrywide access to LTE using Project Lune.
WiFi is also proving to be disruptive, Ford says, with a role to play in the future telecommunications galaxy.
“There will be 341-million WiFi hotspots around the world by 2018,” he says.
The revenue from these hotspots, he believes, will come not from connectivity, but from the analytics associated with data generated on the network.
Security is a huge challenge, Ford adds. “2015 has been a remarkable year for demonstrating that everything connected to the Internet will be hacked. Nobody is cyber-safe. This has huge implications for user trust of the Internet.”
Security implications go beyond financial or personal information, he says. The ability to hack cars shows that there could be real physical danger as well.
“Users will look to service providers to provide this security,” he adds.
Privacy is another hot potato, Ford says. And there is constant pressure from governments to infringe on their customer’s privacy.
Digital disruption and IoT is happening across all industries, Ford says. “The companies that embrace technology and put it at the centre of their business models are fundamentally changing industries around the world.”
An example that could have huge implications for Africa includes the use of drones to capture soil and growth information on a farm; or in mines the use of drones for pit survey, stockpile management and road analysis.
“We are also going to see cities deploy smart parking solutions, managing parking based on realtime information.”
Smart lamp-posts will also be implemented that will do much more than providing light, but adding surveillance, parking , motion detection, unattended object loitering, car counting and other applications.
“These won’t be deployed by the state, though,” says Ford. “Governments will be looking for someone to run and manage these solutions.”
The bottom line, Ford says, is that the integrated telco business model is effectively broken. “We are moving to a world of services where there are low barrier to entry, low risks, and the market moves at a high speed.
“To succeed, it’s about seamless ubiquitous connectivity, lean utility-type production, built to scale networks, differentiated by speed, quality of service, price and services. It’s about smart service enablement and the ability to manage disruption.
“We believe there is a stark choice for service providers: they can become experience enablers where they sell low cost raw material in the form of bits, quality of service, location, presence and other services; or its about becoming an experienced integrator, aggregating, building and marketing a full portfolio of integrated services,” he explains.
But the telco can’t have it both ways, Ford says. “I haven’t seen a single example of  a service provider successfully doing both of these things. So you don’t want to plan for one scenario and find yourself in the other.”