13/10/2017 Cloudification will mean upheaval in telecoms

Cloudification will mean upheaval in telecoms
It will allow startups to challenge incumbent operators

Print edition | Business Apr 12th 2017

IN THE computing clouds, startups can set up new servers or acquire data storage
with only a credit card and a few clicks of a mouse. Now imagine a world in which
they could as quickly weave their own wireless network, perhaps to give users of a
fleet of self-driving cars more bandwidth or to connect wireless sensors.

As improbable as it sounds, this is the logical endpoint of a development that is
picking up speed in the telecoms world. Networks are becoming as flexible as
computing clouds: they are being turned into software and can be dialled up and
down as needed. Such “cloudification”, as it is known, will probably create as much
upheaval in the telecoms industry as it has done in information technology (IT).


https://www.economist.com/news/business/21720670-it-will-allow-startups-challenge-incumbent-operators-cloudification-will-mean-upheaval?fsrc… 1/4

if not years. The next generation of wireless technologies. On the technical side. says Stéphane Téral of IHS Markit. by contrast. are a collection of hundreds of different types of computers with specialised chips.com/news/business/21720670-it-will-allow-startups-challenge-incumbent-operators-cloudification-will-mean-upheaval?fsrc… 2/4 . as the smartphone boom ends in many places and prices of mobile-service plans fall. to set up a new service. called 5G.economist. The data centres of big cloud-computing providers are packed with thousands of cheap servers. the current way of building networks will hit a wall as traffic continues to grow rapidly. a consultancy. which stand for “network-functions https://www. The shift was evident at the Mobile World Congress in Barcelona in February. It takes months. let alone a new network. the Why the North American west is on fire THE ECONOMIST EXPLAINS other overseen closely by government. a market-research firm. each in charge of a different function. which is In “Rest”. And telecoms sharp edges of grief PROSPERO networks are more deeply linked to the physical world. Mobile operators badly need to cut costs. “You cannot turn radio See all updates towers into software. Telecoms networks. requires more flexible networks. America turns its back on refugees Computing capacity is theoretically GRAPHIC DETAIL unlimited. One is largely unregulated. Yet the most important factor behind cloudification is economic. Charlotte Gainsbourg explores the hard to use efficiently. from text messaging to controlling antennae. powered by standard processors.13/10/2017 Cloudification will mean upheaval in telecoms inRead invented by Teads Latest updates IT and telecoms differ in important respects. But powerful forces are pushing for change.” says Bengt Nordstrom of Northstream. Equipment-makers’ booths were plastered with diagrams depicting new technologies called NFV and SDN. unlike radio spectrum.

These usually plug directly into nearby computers that control the radio signal. Even more surprising for a firm with a reputation for caution. And there will always be a need for specialised hardware. chief technology officer of Nokia. Spin me up. storage and networking. the central high- capacity gear. By the end of 2017 it wants to have more than half of its network virtualised. America’s largest operator. https://www. AT&T’s chief technology officer. If equipment-makers are worried about all this. They turn specialised telecoms gear into software in a process called “virtualisation”. In areas where it has already upgraded its systems. Both Affirmed Networks and Mavenir. such as SK Telecom in South Korea. Nokia and other telecoms-gear-makers will have to adapt.economist. Affirmed already claims 50 customers. If widely adopted. its chief executive.13/10/2017 Cloudification will mean upheaval in telecoms virtualisation” and “software-defined networks”. after computing. says Pardeep Kohli. which currently form a big chunk of their revenues. two American firms. we can just spin up a virtual machine. are developing software to run networks on off-the-shelf servers. Cloudification may also create an opening for newcomers. Many networks have already been virtualised at their “core”. AT&T The carrier that has pushed cloudification furthest is AT&T. AT&T has released the program that manages the newly virtualised parts of its network as open-source software: the underlying recipe is now available free. Alex Choi. led to the commoditisation of hardware in data centres a decade ago. an open-source operating system. such as processors able to handle data packets at ever faster speeds. argues Marcus Weldon. If the history of cloud computing is any guide. it can now add to the network simply by downloading a piece of software. have begun consolidating these “baseband units” in a central data centre. for instance. But some operators. Mavenir wants to work with underdog operators “to bring the incumbents down”.” says Andre Fuetsch. they will have to beef up their software business. it will allow network operators to use cheaper off-the-shelf gear—much as the rise of Linux. Still. they are not letting it show. SK Telecom’s chief technology officer. wants “radio” to become the fourth component of cloud computing. “Instead of sending a technician. But this is also starting to happen at the edges of networks—the antennae of a mobile network.com/news/business/21720670-it-will-allow-startups-challenge-incumbent-operators-cloudification-will-mean-upheaval?fsrc… 3/4 . They will make less money from hardware and related maintenance services. Many parts of a network will not get virtualised. At the same time.

According to John Delaney of IDC. computing power—to provide cheap mobile connectivity. fibre networks. Startups such as FreedomPop and Republic Wireless already offer “Wi-Fi first” mobile services. just like IT before it. expect the telecoms world to become much more fluid in the coming years. a research firm. for instance. is behind the Telecom Infra Project.13/10/2017 Cloudification will mean upheaval in telecoms the telecoms world may also see the rise of new players in the mould of Amazon Web Services (AWS).com/news/business/21720670-it-will-allow-startups-challenge-incumbent-operators-cloudification-will-mean-upheaval?fsrc… 4/4 . operators of power grids and internet giants such as Facebook could have a go: they are huge consumers of connectivity and have built networks. using the mobile network as backup.economist. As the case of AWS shows. which newcomers will still have to buy. Amazon itself is a candidate. which send calls and data via Wi-Fi hotspots. a potential Amazon Telecoms Services does not have to spring from the telecoms world. the e-commerce giant’s fast-growing cloud-computing arm. another effort to open the network infrastructure. Facebook. the big barrier to cloudification is likely to be spectrum. This article appeared in the Business section of the print edition under the headline "Telecomulonimbus" https://www. But carmakers. However things shake out. But a clever entrepreneur may find ways to combine assets—unlicensed spectrum.