Collaboration is essential for mobile to reach its transformational potential

The global thirst for mobile data shows no signs of stopping. Since the first commercial 5G networks were switched on in 2019, mobile internet traffic has grown steadily as subscribers consume streaming media in ever-increasing amounts. As data-hungry AI services for consumers and enterprises proliferate, Nokia’s forecasts show that data traffic could increase between four to nine times 2022 levels by 2030.

This paints a healthy picture of long-term demand for mobile services.

Yet, the commercial realities today tell a different story. CSP revenues are mostly flattish and high interest rates pose a considerable challenge. 

At the same time, 5G midband coverage has been deployed at only about 30% of all base station sites globally, excluding China. In other words, a large part of 5G capacity is yet to be built. Urgent investment in networks is required to unlock this extra spectral capacity to accommodate increased traffic and evolving subscriber preferences. CSPs recognize this work is essential as they serve a critical role: providing connectivity and services for an increasingly digitized society.

This means CSPs have two major priorities. Firstly, and right now, CSPs have to find greater efficiencies and do more with less. Secondly, they are trying to reinvent themselves as digital champions to maximize new growth opportunities and create a more attractive investment prospect. On the network side, in their money-making machine, this requires future-proofing all investments, transitioning to cloud-based open networks to prepare for a smooth evolution to 6G, while also ensuring all ESG commitments are met.

Doing more with less and finding new ways of monetizing networks

Crowded subscriber mobile markets and a squeeze on prices mean that margins are under pressure. However, innovations in cloud, AI, API exposure, and other advanced technologies are offering CSPs some respite both by enabling new revenue streams and reducing costs.

Measures such as implementing automation, improving network efficiency, and monetizing new services are helping CSPs to improve profitability and lower total cost of ownership of their networks. Constraints mean that CSPs will have to be smart with investments, prioritizing those that will have the biggest impact.

Network slicing is a powerful example of how CSPs can monetize new network capabilities and offer enterprises tailor-made applications and services. Combining 5G Standalone’s ultra-low latency and robust data security with edge computing power, network slicing creates revenue opportunities with a host of industries and even emerging consumer use cases like extended reality and wearables. The emerging API economy is another opportunity for CSPs to open new revenue streams, foster new innovations and increase returns on network investments. By building a network monetization platform with Network-as-Code technology, operators can expose network APIs in a controlled and monetizable fashion to application developers and applications on top of the network.

Necessity is the mother of reinvention

CSP leaders are acutely aware of the pressures to redefine their organizations in a changing economic context. Moving beyond their roots as telecoms operators to become technology companies and digital champions, they are helping to drive digital transformation across businesses and society.

Encouragingly, many CSPs are already well advanced on this journey. But the route they are taking is unique to each company. Each has its own vision, built around a specific set of circumstances: historical investments, established strengths, geographical footprint and commercial opportunities.

Therefore, what each of these CSPs will need from its network in five years will be distinct from its competitors. Network deployments have always been bespoke to a degree, but forthcoming 5G Standalone and 5G Advanced networks will take customization to a new level. No single implementation will be like another.

Network architectures will be designed to align with each CSP’s strategic objectives. Most CSP CEOs and CTOs I speak to believe that to do this it is necessary to evolve their networks to cloud-based, open solutions. They are also conscious that resources are limited – new hardware and software must sit alongside existing infrastructure as they extract maximum value from prior investments.

Commitment to collaboration

No single vendor alone can support CSPs on this mission. They are creating new business models to drive sustainable growth and require the backing of an entire ecosystem – network vendors, hyperscalers, chipset manufacturers, software and application developers and more. This means an openness from all parties and close collaboration right across the industry.

Pragmatism is the order of the day. The transition to an open, cloud-based and API-exposed future will take time, and Open RAN and Cloud RAN solutions will sit beside older generation radios in multi-vendor hybrid network environments. It will require engineering excellence and teamwork to help CSPs to manage this complexity. 

Sustainability demands

While the growing use of AI, cloud and edge functions are opportunities for CSPs they also pose some challenges. As well as providing connectivity, increased compute demands are being placed on the network infrastructure itself. Simultaneously, Net-Zero targets and volatile energy costs mean that the massive processing requirements of future networks need to be balanced with reduced energy consumption.

This puts greater emphasis on choices regarding base station hardware, such as the System-on-Chip (SoC) and how they handle workloads, as well as software and network management solutions. Performance can’t afford to suffer in the name of efficiency if CSPs want to establish a foothold in enterprise and industrial markets. More advanced designs of telecom-specific special purpose processors with hardware accelerators are vitally needed, and collaborative semiconductor vendors continue to make progress here.

Future-proof foundations

Acting together, the ecosystem has enough technical expertise and R&D capacity to tackle the biggest challenges facing the industry. Nokia believes that cross industry partnerships are vital for this.

The direction of travel for the industry is clear, and CSPs need the reassurance that the choices they make today offer maximum flexibility and longevity. Together we are building the foundation on which society will digitally transform itself. It’s essential that this foundation is robust, adaptable, and future-proof.

Tommi Uitto is the President of Mobile Networks at Nokia and also serves as the Country Senior Officer of Nokia Finland. He joined the company in 1996, dividing his over 25 years between senior roles in sales, product management and R&D. He’s a passionate, charismatic leader, who loves winning deals and seeing customers thrive. Tommi has an M.Sc. from Helsinki University of Technology and Michigan Technological University. He is a keen wine collector and is often to be seen showcasing his impressive skills on the barbecue.

Connect with Tommi on LinkedIn. Tweet him at @tommiuitto.