• The ability to shuffle data and functions around the globe at a moment’s notice is highly prized – which is fortunate, seeing as that’s what telcos do best
• While open clouds and applications create the opportunity, advanced networks provide the all-important interconnections
• Boundaries are being broken down – telcos can take advantage if they adapt and collaborate

One sector that appears to understand the advantages of openness – and how it can be applied to “raise all boats” – is the UK banking sector. Over the past few years, it has led Europe in terms of so-called open banking, and the UK now has a long and growing slate of ‘open banks’ where customers happily move their money around a mix of accounts to best meet their financial needs. 

These dynamics clearly resemble those operating on and between the cloud environments (public, private, hybrid, core and edge), where similar juggling acts are applied to data and functions as a means of improving efficiencies and customer experience and saving both money and the environment.

In fact, much of the innovation now associated with the combination of next-generation networking and the various cloud platform options often just focuses on doing things a bit better, more economically, or more sustainably. Given the prevailing economic conditions – inflation, high interest rates and sluggish growth – it’s likely that this scrimping and saving is going to be the way forward for some time, with zero carbon and other sustainability targets providing ongoing impetus.

The trend has already been the catalyst for some cunning hacks in many segments: Internet of things (IoT) applications, for instance, are being encouraged to do more processing closer to the data source, with a view to distilling the information before streaming it onwards. In one instance of many, specialist chip designer Halio announced a product that embeds a chip incorporating a digital signal processor, a central processing unit and an AI accelerator in a video camera. The resulting Halio-15 solution is then able to handle the vision analytics and save power and bandwidth by just streaming the insights rather than streaming the video. 

This is a classic example of how function relocation can save costs – in this case, data processing is distributed to the edge device, a move that decongests central processing systems, saves on access bandwidth and, of course, improves latency.

So how might telcos take advantage of this trend, considering all the data shuffling usually involves networks?

One way forward may be to recognise that, just because telcos are adapting to, and adopting, next-generation IT and network techniques, such as microservices, software-as-a-service (SaaS), general purpose high-speed infrastructure and cloud-native processes, that doesn’t mean the only way forward is to tap the hyperscalers for infrastructure development. There are other routes to exploit all or some of the above technologies for the benefit of customers and their own bottom lines.

They could, for instance, develop their own edge computing facilities, including regional datacentres, to challenge the “incumbent” cloud model via an enhanced ability to host high-performance, low-latency applications. As an assist, both users and regulators are looking to ensure that such options cannot be snuffed out by their larger, scaled-up competitors. From the user side there is the ever-increasing adoption of open-source software, system interoperability and adherence to standards, all of which contribute to their ability to side-step lock-in. At the same time, regulators appear to be riding to the rescue to crimp the activities of dominant cloud players by coming down hard on market abuse, even to the point of breaking them up (or at least preventing them merging) when they get too full of themselves – see Giving the UK’s edge a push.

That said, we’ve seen a flurry of deals between telcos and hyperscalers over the past couple of years as telcos have sought to use the scale and capabilities of the cloud giants; ever mindful of the danger of lock-in, though, they have usually kept their options open by lining up with at least two cloud players. BT, for instance, last year signed strategic partner deals with both Google Cloud and Amazon Web Services (AWS).

In fact, telcos may be witnessing a “what goes around comes around” situation. The brewing regulatory action against hyperscalers – in both Europe and now the US – is something they’ve already been through in the 1980s and 1990s.

Back in the 1980s and 1990s, AT&T was split into multiple standalone operations (but has since, of course, largely reformed), while telecom deregulation in Europe saw most of the major European telcos privatised and facing competition in their home markets, often from each other. But now that the antitrust guns are being trained on the hyperscalers, telecom operators, rather than expressing grim satisfaction, are probably just hoping that regulatory action (if it comes) won’t limit the ability of their new hyperscaler partners to serve their needs.

Multi-cloud strategies (an analogue to open bank behaviour) are often being pursued by corporates, opening up more opportunities for telcos to help with the necessary interconnections. At the same time, evolving technology ‘escape hatches’ are being engineered to reduce the danger of enterprises becoming too reliant on any one technology or platform provider and thus limiting their room for manoeuvre. Software or systems, such as containers, which make it easier to lift and shift data and applications from one environment to another when required, are not new, but a general move towards openness is turning these technical capabilities into the foundations of cost-saving and efficiency-enhancing strategies, especially if egress fees are done away with. 

The upshot is that the ability to lift, shift and exchange data across platform boundaries is giving enterprises the ability to save considerable sums on their applications for the reasons set out above, in addition to an enhanced ability to develop new services.

Open caching may be another way forward for telcos, as it enables them to work together to better deliver video (and other services) across each other’s access networks – see Disaggregating video delivery via the edge.

Following its partnership announcement with Qwilt, Telefónica, in conjunction with Iceland’s largest operator Síminn, says it’s continuing to innovate with open caching: The two telcos have demonstrated federated TV and video delivery across telco roaming borders by interconnecting their content delivery networks (CDNs) using the open caching standard defined by the Streaming Video Technology Alliance (SVTA).

Since video accounts for most of the traffic carried by telco access networks, subscribers are bound to take their specific video-watching habits with them when roaming: The trouble is that local CDNs aren’t up to the task of delivering video to users when they travel to other countries, since not only are they physically distant from the host access network (with the attendant quality issues) but streaming over international links significantly adds to costs. In the test case, a Síminn user accessed his/her Icelandic TV service from Spain via Telefónica’s network, with a Telefónica CDN delegated for local delivery of the content instead of a remote delivery from Iceland.

Shaving costs from roaming services is obviously welcome, but users’ appetite for savings never stops. According to Juniper Research, telcos’ still buoyant roaming revenues are under threat from a number of directions, such as services that offer cellular users the option of temporarily adopting embedded SIM (eSIM)-based ‘local profiles’ allowing them to essentially take on a local service (at local rates) while in other countries. 

Now telcos will be tested on openness in much the same way as the big banks were with open banking. They have the networks and the customer relationships to enable them to take advantage of customers’ demands for data and application mobility and agility, but do they have the right set of tools and platforms to be reactive and proactive in the cloud-enabled era? And do they have the right strategy to allow them to take advantage? They need the mindset and desire to open up their networks to enable broad collaboration and the exposure of their capabilities: This isn’t just a technology play. One thing is certain – if they don’t meet the needs of their users, other players will.