Unlocking B2B revenue growth with Net5.5G

Ken Wieland, Light Reading contributing editor

Carriers looking for new revenue streams in the future can’t rely on old technologies from the past.

Achieving better returns on network investment will require a new, simplified and automated architecture capable of supporting much higher bandwidth. Carriers’ data center interconnect networks (DCNs), to support the migration of enterprise IT workloads to the cloud, will also need upgrades.

Research firm Omdia estimates that service provider networks, by 2030, will have to carry 10x more bandwidth compared with ten years previously. Moreover, noted Omdia, DCNs will not only need to scale accordingly to keep up with increased traffic volumes, but also scale by another 10x to meet greater demand for remote processing.

Root drivers for change are threefold: meeting enterprise requirements for cloud-based IT services and an application-aware network, the latter most commonly demanded by fintech firms and public sector organizations; the imminent arrival of the ‘5.5G era’, both in mobile (from 5G to 5G Advanced) and fixed broadband (from F5 to F5.5G, including 50G PON), which cranks up access bearer capacity; and upcoming upgrades of enterprise campus networks from Wi-Fi 6 to Wi-Fi 7.

The bandwidth capabilities of future wide-area networks will, according to Omdia, put today’s WANs in the shade. The research firm foresees the need, within the next few years, of upgrading base station access from 10GE to 50GE, and metro aggregation and backbone transmission jumping from 400GE to 800GE.

Laying Net5.5G foundations

Omdia’s bandwidth forecasts formed part of a recently published whitepaper entitled ‘Research on the Trends of Data Communication Network for 2030.’

Authored by Omdia in partnership with various carriers, universities, research councils and equipment vendors, including Huawei, the whitepaper is designed to promote industry consensus on Net5.5G.

Net5.5G, in broad terms, envisages a new network architecture fit‑for‑purpose in a 5.5G era of ubiquitous computing, sustainability, 5G Advanced/F5.5G, high-end resilient data centers, and fixed-mobile convergence (a converged IP bearer) that enables ultrareliable low-latency communications.

“Unlocking a next-generation end-to-end (E2E) intelligent IP network is imperative for success in the 5.5G era,” said Omdia.

The white paper’s authors added that by using “E2E IPv6 Enhanced technology [such as E2E SRv6] as the fundamental innovation, Net5.5G realizes the deployment of WiFi 7, E2E 800GE, deterministic networking and application/computing-aware network, building an intelligent network infrastructure that connects the physical and digital spaces toward 2030.”

How to grow B2B revenue with Net5.5G

Crucially, by adopting Net5.5G network characteristics, carriers will be in a better position to grow revenue from the enterprise segment as they embark on cloud-based digital transformation.

It was a point forcefully underlined by Kevin Hu, President of Huawei’s Data Communication Product Line.

In a keynote speech delivered at the recent UBBF 2022 event in Bangkok, Thailand, Hu outlined four Huawei solutions that he said will allow carriers to upsell MPLS VPN leased line services to their enterprise customers and boost B2B revenue.

“MPLS VPN is a very good business and has been sold to enterprise customers for many years but it’s using old technologies,” Hu said.

To match evolving requirements of enterprises, Hu highlighted four ‘MPLS VPN plus’ services developed through Net5.5G innovation: managed LAN/Wi-Fi; security; SD-WAN; and a premium service offering dedicated VPN links.

Cloud‑based network management systems, automation tools, software‑defined networking, speedy service deployments and upgraded DCNs are common themes across Huawei’s ‘leased line plus’ offerings.

The leased line + LAN/Wi-Fi managed service, says Huawei, extends carriers’ DICT capabilities from WANs to LANs to meet enterprise requirements, implementing cloud-managed network services with WAN-LAN convergence (and supporting future Wi‑Fi 7 deployments with a peak air interface of 30Gbit/s).

“Carriers have often been afraid of providing a managed service, because of the need for many field engineers to support it, but technologies have changed,” said Hu, “They can leverage new, software-based technologies and cloud-based management systems.”

When enterprises migrate IT workloads the cloud, added Hu, the question of secure connectivity inevitably comes into sharper focus. “In almost all carriers, the lack of security practice, in my view, means there are very few people who know how to handle a ‘professional’ network-as-a-security service. The question then is how we can empower carriers to develop this business?”

Huawei believes it has an answer with its leased line + managed security service, which is contained in a ‘smart box’ and offers closed-loop automation and real-time threat detection across a Net5.5G architecture. Hu maintained this upsell product was easy to use and not just for security experts.

Carriers in the 5.5G era need to cater too for growing enterprise demand for SD-WANs. “Many [carriers] fear it might affect their MPLS VPN service, which is high profit and very stable,” Hu said, “but they can be wrong.”

Enterprises, explained Hu, need automated technologies to manage their branch offices – which can be counted in their thousands, especially in the financial sector – and monitor user experience by providing visibility of app performance, such as videoconferencing. “If you simply provide MPLS VPN it looks like a dark fiber service,” Hu asserted. Huawei’s leased Line + SD-WAN purports to provide enterprises with “continuous service experience optimization,” handling up to 20,000 branches.

A key Net5.5G attribute is that it can support old and new technologies over a single network, making it more cost efficient, and is a characteristic that underpins Huawei’s ‘leased line + premium’ upsell.

“When carriers build a converged access, metro service and transport network, customers, especially in fintech and the public sector, don’t want to share bandwidth with others,” Hu said. “They want dedicated VPN service links, which MPLS VPN can’t provide.”

By using SRv6 technology, however, Net5.5G supports network slicing (and still offer basic MPLS VPN services).

Sponsored by Huawei