By: Mark Cummings, Ph.D.

Telcos, cellcos, and cable companies (CSP’s) and their large infrastructure vendors are facing a "softwarization" revolution. Customers, regulators, and technology evolution are creating serious scale, complexity, and volatility problems that can only be dealt with through innovative software. To be successful, CSPs need to have an ecosystem of innovative suppliers that includes small and start-up companies. This means that changes in business structures and technical ways of onboarding and deploying new technology are required.  

Of course, change doesn’t come easily, and many steps are involved. These include funding early technical and business case studies, proof-of-concept demonstrations, lab tests, and so forth. And then, companies must provide an on-ramp to paid field tests, small deployments, and more. Implemented properly, these serve as stepping stones to successful innovations.

Softwarization, technology evolution, and pricing pressures—plus new entrants— make the reliable availability of software innovation a survival question for today’s CSPs and their large infrastructure vendors. Let’s take a closer look.

Softwarization Changes the Game

Technology is moving so fast now that yesterday’s advanced technology is today’s legacy. Examples abound, but a few stand out. NFV (Network Function Virtualization) was touted as the transformative force for telcos as recently as last year (and some declare it still is today). But many are now saying that virtualization is passé. What is needed is cloud-native and containerized. Another example can be found in the concept that though we are in the very beginning stages of 5G, there is already work underway on 6G.

What lies behind all this is a move to a software-dominated world. In a software world with DevOps, this morning’s advanced technology system can become old hat by afternoon. As the customer base embraces softwarization, demand for communication services is more and more often generated by software, while the infrastructure itself becomes software-centric. SDR (Software Defined Radio), SDN (Software Defined Networking), cloudification, and more are part of a wave crashing over earlier hardware-centric infrastructures—both systems and people.

5G Adds More Scale and Complexity

To meet the demand for ever-increasing bandwidth, 5G dramatically grows the number of basestations. Estimates of the increase vary by market and range from 8X to 15X. This creates an obvious scale problem, but the complexity of deploying and operating such a carpet of cells also goes up dramatically. 

At the same time, demands on service are dramatically increasing. 5G IoT (Internet of Things) applications also require dramatic increases in latency, bandwidth, and reliability. To add to the complexity, network slicing is starting the industry on a path away from traditional “best efforts” service contracts to explicit SLA’s (Service Level Agreements) with significant financial costs for failure to meet them.

Meeting these requirements with today’s highly manual operations will result in a dramatic increase in costs. Such an increase is not sustainable, especially in the face of continuing pressures on prices.

The Way Out

Given this environment, innovative software offers the only way out. How can we be sure that innovative software can solve these problems? The reason is that it has been done before. Examples abound in enterprise and OTT, the software-based businesses that ride on top of CSP services. Examples include Google, Uber, Facebook, Salesforce and more. In each case, small groups of talented people came together to develop innovative software that propelled them all forward.

Up until now, the CSP space has been “protected” from this kind of activity by a combination of regulation and high cost of entry. But the rise of super funds—like those developed by Son-san and SoftBank—and the decreasing costs in related spaces like satellite launch are spawning new entrants.