What’s up with… Telco B2B services, the cloud services sector, Lumen

• Telcos need to be smarter at B2B marketing – GlobalData 
• China is the world’s cloud services sector anomaly
• Lumen revamps its back office with Blue Planet, Informatica

In today’s industry news roundup: Telcos need to rethink their enterprise services strategies, reckson the team at GlobalData; the cloud infrastructure services sector is dominated by the same three companies all over the world – except in China; US network operator Lumen Technologies is updating its data management and OSS systems to support the growing demand for its network services; and more!

Telcos should focus on being the best possible providers of connectivity and data networking services, but be smarter with their marketing, in order to maximise their opportunities in the enterprise services market, according to research house GlobalData. Its analyst team believes telcos are making life harder for themselves by constantly trying to develop tailored services for enterprise verticals and should instead learn from their many mistakes while at the same time doubling down on their core competencies. “Over three decades of working with telcos, GlobalData has seen many ambitious statements about building up expertise in specific verticals either in house or through building up ecosystems of partners,” noted Gary Barton, research director for enterprise technology and services at GlobalData. “However, while there are examples of telcos being successful in certain industry verticals, often success is built on opportunism rather than developing a deep relevance to that vertical.” His colleague, principal analyst Rob Pritchard, added: “There are examples of point solutions in areas such as IoT in certain verticals, and co-developed solutions, but these remain the exception rather than the rule.” Telcos should focus on a ‘horizontal’ portfolio of services that apply to all sectors rather than trying to be vertical specialists, believes the GlobalData team. “Telcos’ core capabilities in connectivity and data networking make them naturally horizontal…  this broad appeal is as much a strength as a weakness. Telcos are selling solutions that almost all enterprises need. The challenge for providers is to nuance their messaging around the business benefits of their solutions,” noted the research firm in this press release. Barton concluded: “Telcos should be aware that services such as internet/cloud access and SD-WAN/SASE are essentially horizontal. Instead of seeking deep vertical relevance in their core portfolios, telcos should demonstrate how their solutions will be the crucial enabler for an enterprise’s wider transformation journey as they seek to embrace technologies such as cloud and AI.” Over to you, telco CMOs…  

Synergy Research Group always finds interesting ways to present the latest cloud services statistics and the analyst team there has done it again with its analysis of second quarter trends. It notes that in every region of the world, the top three ranking based on revenues for cloud infrastructure services (including IaaS, PaaS and hosted private cloud services) is the same, except for one market – China. In every other region, Amazon Web Services (AWS), Microsoft Azure and Google Cloud take the gold, silver and bronze medals (in that order), but in China, the top 10 ranked cloud infrastructure service providers are all local companies, with the top three being Alibaba, Tencent and China Telecom, followed by Huawei, China Unicom and China Mobile. According to Synergy Research, the global market for cloud infrastructure services was worth $79bn in the second quarter of this year, with the trailing 12-months total hitting $297bn, so it’s safe to predict that 2024 will be the calendar year in which the market tops the $300bn mark. Read more.  

US network operator Lumen Technologies, which is clawing its way back towards financial stability by focusing its business development efforts on AI-related datacentre interconnect services, has turned to Ciena’s network automation software division Blue Planet to help transform and consolidate its network inventory systems. The operator will deploy Blue Planet Inventory (BPI) to help simplify its operations, give it “streamlined visibility” into its assets and enable it to create a digital twin of its network – this will enable the Lumen network operations team to “run test simulations for network planning, identify potential issues and drive new use cases, such as automation,” noted Blue Planet in this press release. “A single source of truth for our network inventory and data integrity is core to Lumen’s transformation to create a digitised, AI-ready network, one that can quickly address customer needs driven by the major demand for connectivity fueled by AI,” stated Lumen’s executive VP of enterprise operations Kye Prigg. “This work is critical to our mission to connect people, data and applications, quickly, securely and effortlessly, while also driving significant improvements in our overall operational efficiency,” added Prigg. Lumen is also cleaning up its data assets with help from Informatica: Lumen will use the vendor’s Intelligent Data Management Cloud platform to enable it to “work within a single platform to streamline network assets, cloud connectivity, security solutions and collaboration tools.” 

UK mobile operator Three has taken every opportunity possible during the past year to make the case for its proposed £16.5bn merger with Vodafone UK – which is still under review by the UK’s Competition and Markets Authority (CMA) – stating that its very future depends on the deal: It recently reported an operating loss for the first half of 2024 despite increasing its active customer base to 10.9 million. “Despite scaling back our capex, we continued to make a loss driven by the escalating inflationary costs of operating our network. Our cashflows have been negative since 2020 and our costs have almost doubled in five years, meaning investment in [our] network is unsustainable,” stated CEO Robert Finnegan earlier this month. “Our merger with Vodafone will unlock £11bn worth of investment in digital infrastructure, creating a best-in-class 5G network for the UK and helping to grow the UK economy,” he added, not for the first time. Now Opensignal, the specialist company that undertakes detailed and qualified performance tests of mobile networks and analyses market trends, has added grist to Finnegan’s mill by releasing a report that suggests Three is “struggling competitively” due to a multitude of factors, including the impact on subscriber churn of MVNOs (mobile virtual network operators) that provision their services over Three’s infrastructure. The Opensignal report includes detailed analysis of market trends that would only be rendered less intelligible if reworked – if you’re interested in UK mobile market trends, then I recommend that you check out the free-to-access analysis. But it’s worth noting the Opensignal team’s conclusion here: “Three’s struggles are driven by a low subscriber base and high churn resulting from many factors including the halted expansion of its 5G network and pressure from both its own budget sub-brand and competitively from MVNOs such as iD Mobile that compete heavily on price and offer flexible contracts. If these issues are not addressed they could lead to an even more precarious financial situation for Three, making it even harder for Three to resume 5G expansion if the merger were not to happen for some reason. This in turn could lead to even more Three customer churn as other providers have more capital to invest in their networks.” It should be noted that Opensignal does not suggest the CMA should rule one way or another – it is just sharing its insights. But you can be sure that the Three and Vodafone UK teams will be using this analysis to further make their case for the merger. 

But the teams at Three and Vodafone are going to need all the ammunition they can gather because the CMA has just published new submissions from ‘interested parties’ (an unidentified MVNO and the Unite union) that piles additional pressure on the CMA to reject the merger. Unite has always been opposed to the deal “due to evidence that it will lead to job losses, higher prices and further profiteering, without delivering the promised investment,” it noted in its submission. So it conducted a survey of Three customers, the results of which, according to Unite, “directly contradict claims by the companies that the merger is needed to meet the exponential growth in demand for 5G. Furthermore, our polling highlights how the merger, if given the green light, would not only exacerbate the ongoing cost-of-living crisis for consumers, but would also deepen existing structural inequalities, particularly for certain key demographics such low income, female and ethnic minority consumers.” Its main conclusions from the results is that “price is the main driver of Three customers’ consumer choices, not speed and coverage,” and that “the vast majority of Three customers are currently satisfied with the speed and level of coverage provided by their service.” Unite concluded: “Given the weight of evidence that this merger will lead to a substantial lessening of competition in UK telecoms and therefore higher prices for consumers, we call on the CMA” to block the merger.  

Japan’s largest mobile operator, NTT Docomo, managed to reduce data traffic congestion at base stations by up to 15% by using technology from D-Wave Quantum, which develops quantum computing systems, software and services. The operator used D-Wave’s hybrid-quantum technology to apply quantum annealing (an optimisation process) to achieve “demonstrable mobile network performance improvements” by “decreasing paging signals during peak calling times”. According to D-Wave, NTT Docomo is using the vendor’s technology to “optimise base station tracking areas – which are small geographical regions – that collectively send paging signals and process extensive historical data on device movements between stations. This helps Docomo predict future movement patterns and determine the best combination of base stations to re-establish connections as devices move between tracking areas.” Read more.

The UK government minister with responsibility for the telecom sector, Chris Bryant, has called on the country’s telcos to “do everything possible to share infrastructure and deploy [telegraph] poles in a considerate way” and to bring their ideas and plans of action regarding such asset sharing to a roundtable meeting on 12 September. The selection of sites and construction of new poles is constantly causing issues and resulting in complaints to local councils and members of parliament (of which Bryant is one). Bryant also warned that if the resulting actions “fail to address those public concerns and lead to far greater infrastructure sharing and fewer unnecessary pole deployments; I will not hesitate to consider changing existing regulations or wider legislative options to ensure that communities’ concerns are taken into account when deploying infrastructure,” he noted in an open letter to the network operators.  

– The staff, TelecomTV