To prep for this blog post, I looked back at the 2021 predictions I posted late last year. And I have to say… I totally crushed it! 2021 was DEFINITELY the year of the public cloud in telco. I’ll take an extended victory lap next month. But for now, I’m gonna get out my crystal ball and take a look into the future. Here’s what I think is in store for telcos in the coming year.
1. More public cloud
Well, this year was insane for the public cloud in telco. Of course you have to start with the Mobile World Congress ‘21 takeover by TelcoDR, but it’s bleeding into MWC22, with the recognition that for the first time “Cloud” is a theme at the iconic event. More and more carriers are signing deals, moving workloads, and starting to understand the benefits of the public cloud. At this point, cloud is not only coming to telco, it’s a full-on trend. As the public cloud evangelist, I couldn’t be more thrilled! A great example of how it’s accelerating is the announcement by Amazon Web Services (AWS) at re:Invent of its Private 5G service (you can find the announcement at the 40-minute mark). With this turnkey, fully managed, pay-by-the-usage private 5G network, AWS is providing a service that enterprises want without the hassle that traditional telecoms have presented to get it. The hyperscalers are here to stay, and they’re showing the telco industry that if you don’t figure out how to leverage the public cloud in telco, someone else will.
This rock-the-telco-world announcement isn’t a one-time thing. It’s accelerating. There are going to be hyperscaler data centers everywhere. By the end of next year, if you’re not on this train, it’s going to be too late.
2. More OpenRAN
I don’t see OpenRAN slowing down in 2022.
The great thing about OpenRAN is that it disaggregates the hardware and software in the radio access network (RAN), enabling software to be virtualized, with data processed in the cloud, as opposed to the traditional model of using dedicated equipment for each base station. This model opens the network interfaces, giving operators more choice around which vendors they use in the network.
As more telcos understand that OpenRAN is their ticket to escape overpriced infrastructure and hardware-vendor lock-in (and their ticket to lower costs and better performance), the more they’re going to adopt it.
As they realize it can also help them expose a tech stack at the edge so hyperscalers and enterprise customers can use their spectrum (see Verizon’s announcements to integrate with all three hyperscalers – Azure, AWS, Google Cloud – at the edge), they’re going to embrace it even more.
The US government is on board, seeing OpenRAN as a way around having to use telecommunication equipment from Chinese vendors. Just last month, five European telcos issued a joint statement calling on EU countries to make OpenRAN a priority so the EU keeps up with North America and Asia on its network technology. And in early December, the UK issued an announcement about a joint ambition with telcos in that country to have at least 35% of their infra running on OpenRAN by 2030. OpenRAN is not only not slowing down—it’s accelerating.
Since the summer, I’ve seen stories of NEC and NTT Docomo in Japan experimenting with it, four big European telcos opening two new collaborative lab facilities dedicated to OpenRAN R&D, three Middle Eastern operators partnering to roll out OpenRAN tech, and Bharti Airtel partnering with Tata to roll out a pilot in January. I’m sure there are more I’m missing, but you catch my drift.
This puts Ericsson, Huawei, and Nokia in a pickle. Fight the fight, or give in and provide a solution? While OpenRAN is probably still not ready for prime time, it’s only a matter of time before it is. If I were Ericsson / Huawei / Nokia, I’d get going on providing an OpenRAN solution.
3. DISH crushes it.
With last year’s prediction, I didn’t have visibility into which telco would go “all-in” on the public cloud. By April, it was clear: DISH. That’s when the company announced that it’s building a fully virtualized, OpenRAN-based greenfield network using AWS to deliver both core and edge infrastructure to subscribers. With every subsequent piece of info we get on DISH, we understand a little more about what it’s trying to do.
In the Q3 earnings call (as well as in the Q1 call), Charlie and the executive team mentioned the company’s strategic partnership with AWS, and how they’re working together on “enterprise opportunities.” At AWS re:Invent, DISH network chief Marc Rouanne said its new network will be optimized for human and machine-to-machine communications, and therefore be a “game changer” for enterprises. He even said “some say we are the AWS of wireless.” Bold!
The AWS Private 5G press release quotes Stephen Bye, chief commercial officer, saying that the AWS platform unlocks “new business models for enterprise customers” and that the new network will give DISH the “ability to support dedicated, private 5G enterprise networks.” Just yesterday it used to take months to deploy private networks; now AWS has taken that down to days. DISH finds itself in an enviable position of being the network that is able to offer its spectrum to enterprise customers in the United States that want a private network. Pretty cool.
Will there be another telco that copies DISH? I’d like to see a traditional telco go more all-in on the public cloud. AT&T sold its carrier-grade Network Cloud platform technology to Microsoft Azure—it’ll be years before we see the impact of that move. I hope we’ll see at least one more. Maybe it’ll be… you?
4. And there will be telcos that still do it the old way, like…
Just as someone is experimenting with the public cloud the right way, there will be carriers that still do it the old, expensive, slow way in 2022. And for this prediction I’m looking at you, 1&1. We wrote a blog post explaining how these guys are spending twice as much to do the same thing DISH is doing, which is building and running a cloud-native network—but with a private cloud. Rakuten has a great cloud-native message, but Germany’s 1&1 is going to spend hundreds of millions to build its own data centers.
Big mistake, 1&1. All that CapEx you’re spending is a write-off waiting to happen. Unlike towers, data centers have no future buyer. Save your euros and leverage the CapEx investment the hyperscalers have made in Germany for your infrastructure. Spend those euros instead on growing your ARPU. For other telcos watching this deal: this is the “old way” of deploying new networks. I’d be watching DISH vis-a-vis 1&1 to see which one is economically better, and which one drives a better quality experience. We shall see.
5. The metaverse will drive network evolution.
Everyone is going meta. I mean, Zuckerberg thinks it’s such a big idea he renamed Facebook to Meta. (Maybe to deflect heat from the company, maybe not.) Microsoft dedicated lots of airtime to the metaverse at Ignite. The New York Times has been publishing stories about it. It’s the buzzword of the moment. It’s still mostly an idea, but whatever it ends up being, it’s going to require a killer network.
There’s a lot of chatter about what the killer use case is for 5G. I’m not saying it’s the metaverse, but there are a lot of ideas floating around that, when you put them all together, could collectively be a game changer for telco. Want to change your trajectory? Start experimenting with these ideas, both for the consumer AND for the enterprise. What they all have in common is that you need the public cloud in almost every case to make them possible.
For example, you need to make it easy for all these metaverse applications to use your network for their users. You need to expose a public cloud tech stack at the edge that’s both easy to use but also incredibly familiar—that means it needs to be able to use the public cloud. (See #2 and #3 above.) If you do, application developers will be able to build enterprise, planetary-scale, heavy-use applications that use your super awesome, low-latency, high-bandwidth network. It’s a great opportunity to prove how forward thinking you are, that you’re not just a utility. You’re actually providing technical leverage on your network instead of just leveraging it with marketing bundles. Use your network to make it happen.