Summary: Building a telco based on ‘free’ open source software is theoretically highly attractive to telcos, particularly those looking to increase their control over innovation and differentiation, and/or where cost reduction is critical. This report looks at how to address the challenges, identifies practical options and choices, and how, when and why to go about open source transformation in the real world. (Executive Briefing Service, July 2017)
Below is a short extract from this 33 page Telco 2.0 Report that can be downloaded in full in PDF format by subscribers to the Executive Briefing Service here. To find out more about how to join or access this report please see here or call +44 (0) 207 247 5003.
For telcos in many markets, declining revenues is a harsh reality. Price competition is placing telcos under pressure to reduce capital spending and operating costs.
At the same time, from a technological point of view, the rise of cloud-based solutions has raised the possibility of re-engineering telco operations to be run with virtualised and open sourced software on low cost, general purpose hardware.
Indeed, rather than pursuing the traditional technological model, i.e. licensing proprietary solutions from the mainstream telecoms vendors (e.g. Ericsson, Huawei, Amdocs, etc.), telcos can increasingly:
The second option promises to enable telcos to achieve their long-standing goals of decreasing the time-to-market of new solutions, while further reducing their dependence on vendors.
Greater adoption of general IT-based tools and solutions also:
In an increasingly squeezed commercial context, the licensing fees applied by traditional vendors for telecommunication solutions start to seem unrealistic, and the lack of flexibility poses serious issues for operators looking to push towards a more modern infrastructure. Moreover, the potential availability of competitive open source solutions provides an alternative that challenges the traditional model of making large investments in proprietary software, and dependence on a small number of vendors.
Established telecommunications vendors and/or new aggressive ones may also propose new business models (e.g., share of investments, partnership and the like), which could be attractive for some telcos.
In any case, operators should explore and evaluate the possibility of moving forward with a new approach based on the extensive usage of open source software.
This report builds on STL Partners’ 2015 report, The Open Source Telco: Taking Control of Destiny which looked at how widespread use of open source software is an important enabler of agility and innovation in many of the world’s leading internet and IT players. Yet while many telcos then said they crave agility, only a minority use open source to best effect.
In that 2015 report, we examined the barriers and drivers, and outlined six steps for telcos to safely embrace this key enabler of transformation and innovation:
This report goes beyond those recommendations to explore the changing models of IT delivery open to telcos and how they could go about adopting open source solutions. In particular, it outlines the different implementation phases required to build an open source telco, before considering two scenarios - the greenfield model and the brownfield model. The final section of the report draws conclusions and makes recommendations.
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...Members of the Executive Briefing Service can download the full 33 page report in PDF format here. For non-members, to find out more about how to join or access this report please see here or call +44 (0) 207 247 5003.
Technologies and industry terms referenced include: Open source, software, cloud, virtualisation, hardware, programming, infrastructure, innovation, differentiation, transformation, cost reduction, competition, telco strategy.