Cloud Pays Off

Improves telcos’ operational efficiency and adds new revenue stream       

Data consumption has grown manyfold in recent years, primarily driven by an increasing number of connected devices, the launch of various government-led digital initiatives, and the surge in over-the-top platforms. 5G roll-outs will further drive data usage. To support the rising data usage, telecom operators need to upgrade and modify their existing network infrastructure and make it more agile and efficient.

To this end, the cloud has emerged as a key solution, that allows operators to enhance their operational efficiency and reduce capital costs. Telcos are also exploring the cloud as a new revenue stream, taking up the role of cloud service providers for enterprises. They can provide cloud services through their data centres, which are spread across a large geographical area. These data centres are already being accessed by various enterprises to avail of collocation services. Their vast IT and network capabilities will provide operators a competitive edge in the cloud services space.

A look at how the cloud is being used by telcos to gain agility and efficiency, and drive new revenue streams…

Network transformation

Telecom operators need to redefine their network infrastructure, making it stronger, more agile and efficient. This can be achieved by transitioning to open and scalable multi-cloud networking options.

The cloud enables telcos to automate operations and remotely access their platforms, thus eliminating the need for physical infrastructure. Through cloud computing, telcos can leverage network function virtualisation (NFV) and software-defined networking (SDN) to replace the hardware component of their network infrastructure with software that can run on servers located anywhere. This will help overcome limitations related to the physical location of hardware. Given the unpredictable data growth, network agility is crucial for operators. It enables them to scale up operations as and when needed. The cloud can help provide scalability by automating resource optimisation. With this, operators will be able to expand services as per the demand of users. In addition, by providing access to their technology and platform services on the cloud, operators can save the cost and time invested in the planning and deployment of physical infrastructure.

In view of the various benefits of the cloud, operators are deploying the technology across their network and IT applications in order to provide nationwide coverage. Vodafone Idea is deploying a state-of-the-art, automated multi-cloud network across the country to provide superior experience to its retail and enterprise customers. It is also deploying a large integrated cloud platform for its IT and network applications, and has collaborated with Cisco to deploy a distributed multi-cloud architecture. This automated cloud scale architecture is synchronised with applications, operating systems, infrastructure, and the underlying IP/MPLS (internet protocol/multiprotocol label switching) core.

In a press statement, Vishant Vohra, chief technology officer (CTO), Vodafone Idea, said, “We are in the midst of a large-scale network integration and transformation programme. Building a robust, secure and future-proof network infrastructure based on the cloud is a key component of this transformation. The distributed cloud architecture will enable edge and fog computing services for our customers in both the enterprise and consumer spaces.” Earlier, in an interview, Vora had stated that the company already has multiple key network applications in a single cloud and is planning to soon go live with more than 100 edge cloud locations across the country.

Recently, Reliance Jio partnered with Ciena to future-proof its national transport network with transport SDN capabilities. This laid the foundation for an adaptive network, which can cater to fast changing capacity requirements and application demands, and can be scaled up with high efficiency. Ciena’s multi-terabit optical technology provides self-healing service restoration capabilities to Jio’s 4G network core, along with a highly resilient mesh network that can support a large subscriber base.

The new network framework will also provide Jio more flexibility in launching new services and faster time-to-market. According to Jyotindra Thacker, president, technology and procurement, Reliance Jio, “This highly scalable, reliable and self-healing Connect Network Platform will allow us to focus on the front end of our business and deliver the best end-user experience. The addition of automation capabilities is a significant step in our network transformation journey to an adaptive network that will enable higher levels of scale and network intelligence.”

In February 2019, Airtel awarded a contract to Nokia’s Nuage Networks for data centre automation. As per the deal, Airtel will deploy Nuage Networks’ virtualised service platform across 15 circles in the northern and southern parts of the country to automate its data centre networks. The solution will allow Airtel to provide new and innovative services, including voice over long term evolution (LTE) and mobile edge computing to its customers, as well as a superior network performance. “The upcoming technologies, including 5G and internet of things (IoT), demand that data centres come closer to the customers, so we are able to provide ultra-high speeds and extremely low latency. This is crucial for new-age use cases such as virtual reality, autonomous driving and remote surgery,” says Randeep Sekhon, CTO, Bharti Airtel.

Deeper insights

By analysing the vast pool of data stored on the cloud, telcos can develop insights into customer preferences and consumption trends. By running analytics on the huge amount of data generated on their network, they can better position their service offerings in terms of both pricing and provisioning. Further, big data analytics will enable them to tap into new revenue opportunities through the provision of new offerings that are in demand.

Revenue opportunity

Over the past few years, enterprises have emerged as a key customer segment for telcos. The role of telecom operators in the enterprise domain has widened as organisations across verticals are deploying new technologies like artificial intelligence, IoT and machine learning. From being providers of traditional voice and data services, telecom operators have now emerged as enablers of new-age technology solutions and services. By supporting enterprises on their digital transformation journey, telcos are tapping into new revenue streams.

One of the areas where telcos can play an important role is the provision of cloud services to these enterprises. Enterprises are increasingly looking for solutions that optimise the performance of their workload irrespective of where they are hosted. Telcos can meet this requirement by providing solution portfolios that include SDN, hybrid cloud and managed services. To this end, they can enter into partnerships with cloud companies such as Microsoft, Google and Amazon. Under such partnerships, operators can combine cloud service offerings from third parties with their own data centre services. This will enable them to meet customer requirements with a range of customised solutions, and also provide a migration path between different solutions.

In February 2019, Bharti Airtel launched its cloud enablement platform (CLEP) in partnership with Hewlett-Packard (HP). By leveraging HP’s aggregation platform, CLEP will offer hosted software-as-a-service and infrastructure-as-a-service to small, medium and large enterprises on a pay-as-you-go basis. In addition, Airtel will offer solutions such as enterprise resource planning, accounting packages, storage and computing, under its B2B division, Airtel Business. The operator’s cloud services are a part of its office solutions suite, which includes a host of services such as storage and customer relationship management.

Meanwhile, Jio is building a data centre with a capacity of 1 million square feet at its Navi Mumbai campus. About 50 per cent of the facility is complete and has started operations. Last year, the Ministry of Electronics and Information Technology had empanelled Reliance Industries Limited’s subsidiary Reliance Corporate Information Technology Park as a cloud services provider. Bharti Airtel’s subsidiary Nxtra Data has also received the government’s approval for the service. Nxtra Data owns and operates eight large data centres across the country. In November 2018, it had announced its plans to set up 10 new data centres, of which one each will be set up in Pune, Chennai, Mumbai and Kolkata.

The way forward

Going forward, once 5G hits the market, the cloud is expected to become a critical component of telecom infrastructure, from being an optional technology.

The cloud opportunity is expected to grow with the release of the data localisation regulations. As per the recent regulations, data generated within India must be stored within Indian territory. India is one of the largest data generating countries in the world. While earlier this data was parked in data centres abroad, the new regulations will ensure that this data does not go beyond Indian boundaries. With this, the data centre business of Indian telcos is expected to take off in a big way and can emerge as a revenue generating avenue.

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