Sometimes people ask when I first got the idea about trying to move the telecom industry to the public cloud. It actually happened during a trip to India back in 2017. I had just become the CEO of a charging company called Redknee, and I was in Mumbai to visit one of our customers, Vodafone India (now Vodafone Idea). At the time, Redknee was managing the telco’s prepaid data charging across the country. It was operating in six urban areas with six failover setups—effectively managing 12 sites (not including emergency capacity).
I noticed immediately that Vodafone India’s charging and rating software was being run client-server out of homegrown, on-premise data centers—you know, like software was managed in the last century. The setup was a nightmare because we were trying to make 12 different sites in 12 different places exactly the same. Let me tell you: they were never the same. Maybe we needed a new server at one, and only the next generation machine was available. Or the manager at one site did things differently than the manager at another. I knew there had to be an easier way.
When I met with the Vodafone India CTO I presented the idea of moving to the public cloud. My team thought I was crazy. They expected Vodafone India to kick me out of the meeting and fire Redknee. But he didn’t. Instead, he said he wanted to start a pilot right away.
Fast forward to 2022, and India has just closed its 5G auction. Four telcos spent a record-breaking $19 billion USD to get in on the game. Reliance Jio spent just over $11 billion for 24,740 megahertz of airwaves—and then announced it would launch 5G service in Delhi, Mumbai, Chennai, and Kolkata by late October, followed by a nationwide rollout of a 5G standalone (SA) network by the end of 2023. That takes bravado, and now all eyes are on the other telcos in India to see what they are going to do to match it.
Thankfully, 5G is written to a cloud-native standard, so now these telcos have the chance to keep up by using the public cloud. After all, elsewhere around the world, telcos like Vodafone, AT&T, and DISH are already on their way. Telcos are moving to the public cloud because of the huge benefits, benefits that are especially powerful for India’s unique telco market.
India and the public cloud: a perfect match
The public cloud is perfect for India for two key reasons: it can provide scale, and do it at a low price. In terms of scale, India is gynormous. Home to 1.4 billion people and a billion subscribers, it’s the second-biggest market in the world after China. That means any software an Indian telco chooses has to be carrier-grade, able to handle the most scale and the hardest use cases, and perform like a rock star. At the same time, India has some of the lowest ARPU in the world—about $2 for India versus a low-side estimate of $20 for the US.
This combination presents a unique challenge for telco operators in India. They need tier-zero, carrier-grade software to handle the scale, so they look to the big vendors like Amdocs, Nokia, and Ericsson. But they also need the lowest price so they can make the numbers work business-wise, and these vendors’ solutions typically cost tens of millions of dollars.
What do you do? You look to the public cloud.
The public cloud can handle the scale
Public cloud data centers are built to support the world’s biggest internet companies like Amazon, Microsoft, and Google. In fact, Amazon built many aspects of AWS to support its own explosive growth and huge demands. Believe me, it can scale. And because of the public cloud and hyperscaler investments, telcos no longer have to build their own data centers. You can use hyperscalers’ cutting-edge data centers and pay by the use—using more one day and less another. It’s the world’s best technology, built and supported by the world’s best technologists, and costing billions to build, like the AWS region in Hyderabad currently under construction. When you can use it and pay for only what you need, why wouldn’t you?
The only catch is this: to truly take advantage of all this technology, you have to select tools that are truly cloud native.
How can you tell if it’s cloud native? With one simple test
I know all your old vendor buddies—Amdocs, Ericsson, Huawei, Nokia, and Oracle—are telling you that the new “cloud-native” versions of their legacy products are ready to support your shiny, new 5G spectrum. It’s really easy for them to say they’re cloud-native, but what they’re really doing is “cloud washing,” which is just rebranding an old product by adding the buzzword “cloud” to it.
The key is Indian operators (and everyone else, too) need to select software solutions that are built for the public cloud. When software and services are truly cloud native, they live on a public cloud and are 80% less expensive than their on-premise cohorts.
You might be asking yourself, how do I know if a product is truly cloud native? I put together a list of the top five ways to tell if your vendor’s “cloud native” application is truly cloud native (which also happens to be a hilarious video I recorded with Ray Le Maistre at TelecomTV).
But really, it’s pretty easy to tell. There’s a simple test: the price. If it’s not 80% cheaper than the on-premise version, it’s not cloud native.
Real cloud verses fake cloud
For example, Totogi, where I’m acting CEO, offers the fully cloud native Totogi Charging System on AWS Marketplace, with a starting price of one penny for the first 500-million transactions per month in a pay-as-you-grow model. Amdocs is also on AWS Marketplace, selling its Digital Brands Suite at $400,000 USD for up to 100,000 users. The page says it’s Software as a Service (SaaS). I mean, if it’s on AWS Marketplace, it seems like it should be cloud-native, right? But that price seems awfully high. Let’s take a look.
- If you take $400,000 and divide it by 100,000 subscribers, that comes out to about $4 per subscriber.
- In the fine print on the Amdocs AWS Marketplace page, it says, “All orders are custom,” and also, “additional taxes or fees may apply.” What fees could those be? Services to implement, customize, or integrate to your other systems.
- The Amdocs 2021 annual report shows the company’s mix of revenue at about 40% software and 60% services. Using that ratio, I would say customers should expect that the software product will be 40% of the total price they’ll pay, and additional fees and services will make up the other 60%.
- So, that’s about a million dollars for 100,000 subscribers, which works out to about $10 each.
That math holds up if we look at Amdocs’ largest customer, AT&T. It famously spends about a billion dollars on its roughly 100-million subscribers, so it’s spending about $10 a sub, too. So, what we’re seeing here is that Amdocs has not updated its pricing model for the public cloud. Compare that to Totogi, where we start pricing at $0.01. ONE CENT! With this kind of price point, it’s a no-brainer to adopt truly public cloud products. Especially for telcos in India.
This is the dawn of a new era in telco software. The new technology is cloud-native. It can scale to meet your needs—easily. The telltale sign it’s the real thing is massively cheaper pricing. You’re going to want to use it, especially as you upgrade to 5G.
The race is on. Not only are public cloud solutions infinitely scalable and cheaper, they’re also faster to deploy. Reliance Jio has thrown down the gauntlet, putting a stake in the ground and planning to launch next year. My advice to the other telcos—Bharti Airtel, Vodafone Idea, Adani Enterprises (and anyone else with 5G plans)—is to use the technology of the public cloud to get the scale, speed, and lower price you need, and maybe beat Jio to the punch. This is your moment! Good luck, and I’ll see you in the public cloud.
I’ll also see you in India! Catch my keynote at the Voice & Data 5G Event in Delhi on September 13 at 10:00 am IST. See you there!
Deploying a new charger used to take a year. The Totogi Charging System takes hours.
The Totogi Charging System is so easy to deploy that people can’t quite believe it’s true. But it’s the real thing.
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