Tuesday, July 1, 2014

Mobile network 2030





It is summer, nice and warm. England and Italy are out of the world cup, France will beat Germany on Friday, then Brazil and Argentina in the coming weeks to obtain their second FIFA trophy. It sounds like a perfect time for a little daydreaming and telecom fiction...

The date is February 15, 2030

The mobile world congress is a couple of weeks away and has returned to Cannes, as the attendance and indeed the investments in what used to be mobile networks have reduced drastically over the last few years. Finished are the years of opulence and extravagant launches in Barcelona, the show now looks closer to a medium sized textile convention than the great mass of flashy technology and gadgets it used to be in its heyday. 

When did it start to devolve? What was the signal that killed what used to be a trillion dollar industry in the 90's and early 2000's. As usual, there is not one cause but a sort of convergence of events that took a momentum that few saw coming and fewer tried to stop. 

Net neutrality was certainly one of these events. If you remember, back in 2011, people started to realize the level of penetration fixed and wireless networks were exposed to from legal and illegal interception. Following the various NSA scandals, public pressure mounted to protect digital privacy. 
In North America, the battle was fierce between pro and con neutrality, eventually leading to a status quo of sorts, with many content providers and network operators in an uneasy collaborative dynamic. Originally, content providers unwilling to pay for traffic delivery in wireless networks attempted to secure superior user experience by implementing increasingly bandwidth hungry apps. When these started to come in contention for network resources, carriers started to step in and aggressively throttle, cap or otherwise "optimize" traffic. In reaction, premium content providers moved to an encrypted traffic model as a means to obfuscate traffic and prevent interception, mitigation and optimization by carriers. Soon enough, though, the encryption-added costs and latency proved impractical. Furthermore, some carriers started to throttle and cap all traffic equally, claiming to adhere to the letter of net neutrality, which ended up having a terrible effect on  user experience. In the end cooler heads prevailed and content providers and carriers created integrated video networks, where transport, encryption and ad insertion were performed at the edge, while targeting, recommendation, fulfillment ended up in the content provider's infrastructure. 

In Europe, content and service providers saw at the same time "net neutrality" as the perfect excuse to pressure political and regulatory organizations to force network providers to deliver digital content unfiltered, un-prioritized at best possible effort. The result ended up being quite disastrous, as we know, with content being produced mostly outside Europe and encrypted, operators became true utility service providers. They discovered overnight that their pipes could become even dumber than they were.

Of course, the free voice and texting services launched by some of the 5G licensees new entrants in the 2020's accelerated the trend and nationalization of many of the pan European network operator groups.

The transition was relatively easy, since many had transcended to full virtual networks and contracted ALUSSON the last "european" Telecom Equipment Manufacturer to manage their networks. After they had spent collectively over 100 billion euros to virtualize it in the first place, ALUSSON emerged as the only clear winner of the cost benefits brought by virtualization. 
Indeed, virtualization was attractive and very cost effective on paper but proved very complex and organizationally intensive to implement in the end. Operators had miscalculated their capacity to shift their workforce from telecom engineering to IT when they found out that the skill-set to manage their networks always had been in the vendors' hands. Few groups were able to massively retool their workforce, if you remember the great telco strikes of 2021-2022.
In the end, most ended up contracting and transitioning their assets to their network vendor. Obviously, liberated from the task of managing their network, most were eager to launch new services, which was one of the initial rationale for virtualization. Unfortunately, they found out that service creation was much better implemented by small, agile, young entrepreneurial structures than large, unionized, middle aged ones... With a couple of notable exceptions, broadband networks were written off as broadband access was written in the European countries' constitutions and networks aggregated at the pan European level to become pure utilities when they were not downright nationalized.

Outside Europe and North America, Goopple and HuaTE dominate, after voraciously acquiring licenses in emerging countries, ill-equipped to negotiate the long term values of these licenses versus the free network infrastructures these companies provided. The launch of their proprietary SATERR (Satellite Aerial Terrestrial Relay) technology proved instrumental to creating the first fully vertical service /network/ content / device conglomerates.  

Few were the operators who have been able to discern the importance of evolving their core asset "enabling communication" into a dominant position in their market. Those who have succeeded share a few common attributes:

They realized first that their business was not about counting calls, bites or texts but enabling communication. They first started to think in term of services and not technology and understood that the key was in service enablement. Understating that services come and go and die in a matter of months in the new economy, they strove not to provide the services but to create the platform to enable them.

In some cases, they transitioned to full advertising, personal digital management agency, harnessing big data and analytics to enrich digital services with presence, location, preference, privacy, corporate awareness. This required much changes organizationally, but as it turned out, marketing analyst were much easier and cost effective to recruit than network and telecom engineers. Network management became the toolset, not the vocation. 

In other cases, operators became abstraction layers, enabling content and service providers to better target, advertise, aggregate, obfuscate, disambiguate, contextualize, physical and virtual communication between people and machines.

In all cases they understood that the "value chain" as they used to know it and the consumer need for communication services was better served by an ever changing ecosystem, where there was no "position of strength" and where coopetition was the rule, rather than the exception. 

3 comments:

Dean Bubley said...

All that's missing is "Once upon a time" and "They all lived happily ever after".

Unfortunately, the real world is not a fairy story. I notice the absence of the word "lawyer" in your story - so perhaps by 2030, they're all safely buried in the Marianas Trench?

More seriously, the main problem I see is that the post is very content-centric, rather than application-centric. While that might be true for fixed broadband, where IPTV and Netflix tend to dominate volumes, usage and revenues, that doesn't really apply in mobile (or in enterprise fixed broadband).

"integrated video networks, where transport, encryption and ad insertion are performed at the edge" might be OK for movies - but almost certainly not for social networks, enterprise apps, cloud services, e-commerce websites and the like.

If in 2030, I use my iPhone 19 with its 6G connection & 3D contact-lens display, to buy a toaster, then I'd expect the app or browser to be encrypted end-to-end, including the two-way video and neural interface with the AI-based sales assistant. I'd expect it to arbitrage between cellular, "super-WiFi" and local P2P connections, and for the software to adapt the codecs or brain-interlacing rate accordingly.

I might use a telco API to send an SMS notification to the old GSM Nokia I keep under my bed for zombie-attack emergencies. It may be that the website is hosted in a telco-run data centre, or using an MNO's cloud-based voice and video recognition service to authenticate me to the agent and vice-versa. A telco with a big NFV farm of media processors might encrypt and record the video "for customer service monitoring", or run the multi-way video-chat plaform itself. But I struggle to see much scope for neuraltoaster.com to be paying anything for broadband QoS or other in-network data manipulation.

Or am I missing something obvious?

Dean Bubley
@disruptivedean

Patrick Lopez said...

Hi Dean,
If the post is your idea of a fairy tale, I tremble to think the bedtime stories you would read to children at night.
More seriously, I tried to make the post more service-centric than application or content centric. If video dominates today's and near future traffic, tomorrow will be dominated by M2M. Our industry is not well equipped to understand and manage billions of discrete elements who communicate at varying interval, purpose, speed, latency...
In any case, it is a dystopian view and the main tenet is to prepare for a world where charging for voice, texts or data services might become irrelevant. Connected devices will come with a wireless connection and wont be charged per transaction. Most probably a lifetime one time fee.
Operators who think in term of us vs. them will loose in that market.

Stefan said...

I agree with Patrick that operators continuing to use the access to the data/service consumer as a tollbridge (in any disguise) will fail. The hypothetical regulatory (European) and Vertical approaches to preserve the current TelCo state, as Patrick describes them, are futile attempts to delay the inevitable and causing much harm to the affected regions.
The asset operators have is the location(s) at the edge and the connection to the vast majority data/service consumer and given the increasing demand for bandwidth (I can get 8 HD feeds of every socker game in the world-cup incl. feeds that just show each coach) to deliver the same basic event (1 HD stream was sufficient 4 years ago), the distribution model will have to change and the edge location will become a major asset, but only as part of a shared cloud/service. The current OTT players can't easily replace the current TelCo infrastructure this and will eventually cooperate, because rolling out bandwidth into the field and creating new edge locations is slow like nearly all changes in the physical world.

How we'll use that bandwidth in 2030 I don't know, but that we'll need a lot more is a save projection based on today's technology.

To prevent the nightmare scenarios Patrick showed for Europe and Asia, I think we have to paoy close attention to the upcoming regulations and standards and make sure they focus on open access to this services, not just the underlying communication networks.