Kathy Gibson is at Satnac in Hermanus – In most mature markets, communications service providers are experiencing flat growth and are looking for new opportunities to advance their businesses.

Even though the Internet has grown the market, service providers have actually captured a limited portion of those revenue streams, says Dr Enrique Hernandez-Valencia, partner at Nokia Bell Labs Consulting.

At the same time, traffic has exploded – in fact it quadruples every five years – with the potential to spike in the years to come to reach a massive 15 zettabytes by 2025.

“This is just the tip of the iceberg,” he says. “But we are barely exploiting the data that is being generated.”

If data is, in fact, the new oil, the refinery of the future will be analytics, Dr Hernandez-Valencia says.

Only a relatively small number of industries have actually invested in digitalisation. Technology, content/media, finance and insurance, and professional and technical services are the leaders in investment.

But these companies account for just 30% of the GDP and 25% of the workforce.

The new era will look to the automation of everything, Dr Hernandez-Valencia says.

“This will give us the new networks and also the future service provides.”

He adds that there are six megatrends driving massive new technology requirements.

They are networked compute and storage; Internet of Things; augmented intelligence; human/machine interaction; social and trust economics; and the digital ecosystem.

In future, service providers can radically increase their enterprise business and create new value by the dynamic and intelligence management of network slices, enabling partner ecosystems and automation.

There are physical limits to exponential growth, Dr Hernandez-Valencia says. Bandwidth is constrained by spectrum, spatial efficiency and spectral efficiency.

“There are many challenges that need to be researched and solved,” he adds.

Latency is the other limitation, so in future we are going to have to build new data centres closer to customers.

“We are going to have to go for a more distributed architecture,” Dr Hernandez-Valencia says.

The new architecture will have a core cloud that consists of a few centralised data centres co-located with IP and optical points of presence to support non-realtime services.

On the edge, there will be new regional and metro data centres to support access to net terminals and logical IP edge and RT apps.

The difference between the way we’ve built them in the past and the way we’ll build data centres in the future will see IP networks, broadband access and compute/tech that meet where the core cloud meets the edge cloud.

“So we need a radical new architecture to meet these requirements,” Dr Hernandez-Valencia says.

Nokia believes there are eight critical domains needed to support the new architecture.

They are massive scale access; a converged edge cloud; a smart network fabric; universal adaptive core; programmable network operating systems; augmented cognition systems; digital value platforms; and dynamic data security.

Dr Hernandez-Valencia believes the future is bright. “We are entering an exciting new era,” he says.

But for service providers to make the most of the opportunity they need to look past their comfort zone, to embrace the cloud to deliver flexible and contextual services that will aid their customers on their digital journey.