To respond to demanding use cases in the factory of the future or telemedicine, operators must imperatively upgrade their core network. Today, it is mainly based on hardware boxes provided by Nokia, Ericsson or Huawei. To reduce their dependence on these equipment manufacturers, but also to disregard the underlying infrastructure, the operators started by virtualizing this hardware layer.
At work for several years, the virtualization of network functions (NFV) makes it possible to ensure “programmability” of this core network by executing software functions without having to intervene on the hardware equipment. The next step involves “cloudification”.
On-the-fly network deployment
With the cloud, an operator can deploy networks on the fly to serve new regions or new customers. Conversely, this automatic scaling allows inactive networks to be decommissioned dynamically. The operator thus reduces his energy consumption and therefore his carbon footprint.
The cloud-native microservices architecture enables faster development of new services, reducing time to market. Application programming interfaces (API) allow them to integrate functionalities offered by third parties, partners or developers.
The native cloud also opens the way to artificial intelligence and all its contributions in terms of prediction and optimization. Finally, from an accounting point of view, the cloud transforms capital expenditures (CapEx) into operating expenditures (OpEx).
An imperative to switch to standalone 5G
This move to the cloud is in any case imperative to move to 5G standalone (SA). This “pure” 5G, without cohabitation with 4G in the core of the network, will truly materialize the technical performance, in terms of speed and latency, promised by the new mobile telephony standard.
For businesses, 5G SA will bring network slicing technology. Or the ability to virtually “cut” a network into slices and thus guarantee end-to-end quality of service for use cases with very high requirements such as critical industrial processes.
This context should accelerate the rise in the cloud of operators. In a study, Capgemini Research Institute predicts that half of global network capacity (46%) will be fully cloud native in the next five years, up from 31% currently, representing an average annual growth of 8%.
A quickly achieved ROI
For this, an operator will have to invest 206 million dollars per year on average, or more than one billion over five years. To arrive at these figures, the study took as a working hypothesis an operator achieving 21 billion dollars in annual turnover.
According to Capgemini Research Institute, ROI will be achieved quickly. The research firm expects savings of around $260 to $380 million per year, and $110 to $210 million in additional revenue from new services. Cloud transformation will also reduce operator greenhouse gas (GHG) emissions by 5% over the next three to five years.
While the private cloud is of course the preferred cloud deployment model for obvious security and confidentiality reasons, American hyperscalers have positioned themselves in this buoyant market.
The study relates three significant feedbacks. The fourth largest mobile network operator in the United States, Dish has announced that it has chosen AWS to host its core network. AT&T will move its 5G mobile network to Microsoft’s cloud.
Finally, Spanish operator O2 Telefónica announced that it was working with Google Cloud and Ericsson to migrate its 5G network in Germany to the cloud. This concerns approximately 47 million mobile subscribers across the Rhine.
