Telecom Industry Trends in 2023 and beyond

Here I am wrapping up 2022 with my perspective on trends for Telecom Industry for 2023 and beyond. I strongly believe these are prominent and will be pursued actively in the industry at different adoption levels with different strategies as relevant to the given market, geography and business conditions.

Rational Public Cloud Adoption for IT Workloads

Public Cloud adoption will be the mainstream for BSS Applications and for certain OSS applications which is poised to transform CSPs into leaders of public cloud adoption from laggards compared to other industries. Hybrid Cloud scenarios are inevitable but whether it is single or multi public cloud is something that the CSPs have to rationally select and consider as per the business case and technology needs and don’t ignore the complexity of multi cloud management. Worldwide end user spending on public cloud services is forecast to grow 20.7% to total $591.8 Billion in 2023 from 2022 according to Gartner.
It’s absolutely beneficial to adopt public cloud for IT workloads for tapping fast innovation, high security standards, agile and flexible services and efficient operating model that comes with it. Don’t be nervous of the cost aspects that becomes highly visible with public cloud operating model while it can’t be compared against the CapEx investment and OpEx expenses that are invisible, unknown and unmeasured in the existing onpremise datacenter operations. Ofcourse, it’s a new operating model that requires steep learning curve for the workforce to efficiently and effectively use the public cloud services aligned to the business plan and outcomes which requries continuous monitoring, agile delivery, dynamic adaptation and continuous vigilance. Towards this, Cloud FinOps Governance is a new capability that is must to be acquired or built inhouse in order to continuously monitor and effectively manage the resource utilization and introduce changes quickly in workloads in Agile fashion to optimize the cloud spend appropriately. Cost efficiency & Management is an architecture practice altogether that has to be inbuilt in every stage of CI/CD from coding till operations like Security.
At the same time, Public Cloud adoption for Core & Access Networks will be minimal considering the sovereignty, regulatory aspects and to be future proof without hyperscaler lock-in for laying out the communication networks that are often treated as nationally critical infrastructure and services. Unless it is a green field communications startup, established CSPs will not want to adopt public cloud for Networks (I doubt DISH type full scale public cloud adoption cases for Core & Access Networks will be seen in future). Saying that, CSPs partnerships with hyperscalers for Networks will continue to rise especially for deploying edge networks and platforms for various end user applications leveraging the public cloud edge locations and global reach rapidly.

Private Cloud Adoption for Networks

Full Spree on Telco Private Cloud adoption in 2023 for Networks. Cloud Native Private Core & Access networks will transform the Telco operations drastically and pave the way forward for the promising future to manage the networks more efficiently, cost effectively and flexibly. In my view, it is better for CSPs to prioritize investments for building Cloud Native and Converged Core and access networks as pre-requisite for deploying 5G SA in future years. Gartner predicts that cloud-native platforms will serve as the foundation for more than 95% of new digital initiatives by 2025 — up from less than 40% in 2021.
As 5G deployments grow in 2023, CSPs will start creating the edge sites to meet the edge computing demands that will start emerging with different smart X usecases and IoT applications. In line with that CSPs have to start working on orchestrating the distributed networks and compute infrastructure that will be deployed at the cell sites, exchanges, street curb cabinets, edge locations, regional data centers and upto the core and cloud.

xRAN

Virtual and Open RAN will transform the transport network from traditional proprietary and hardware based network to software defined and commodity based networks that are cost effective, interoperable, open, flexible and eliminate the vendor lock-in.
Virtual RAN/Cloud RAN will be matured in fast pace as that will be the Segway by the established vendors to secure the market and beat the upcoming competition from Open RAN ventures. Open RAN has bright future for sure and many new players & ISVs will emerge to tap the new market opportunities with it eventually in future years beyond 2023. Overall TCO with Open RAN will come down compared to vendor proprietary RAN but Open RAN has to mature yet especially in wide practical implementations, simplified management, interoperability, assurance of QoS & performance and reduced complexity overall.
As per Dell’Oro Group report, near term open RAN and virtual RAN market is projected to reach $20 billion by 2027.

5G Monetization

It still takes few more years for real B2C usecases to emerge in mainstream that definitely need 5G capabilities (uRLLC, eMBB, mMTC). When there are revenue losses and margin hits, Telcos who have strategized 5G Non-SA in 2021/2022 are best placed compared to Telcos that have taken 5G SA strategy. CSPs can utilize 2023 to transform their core and access networks and lay the foundations for 5G SA to roll-out fast in 2024/25. Fixed Wireless Access (FWA) will be a promising monetization of 5G in 2023 to provide broadband services to homes, offices and small businesses in rural and remote areas cost effectively and quickly. As per Ericsson Mobility report, by 2028, 5G subscriptions are expected to pass 5 Billion and 5G FWA connections will reach 240 million globally. Media Broadcasting and Streaming applications, Gaming, eSport and Sport Betting usecases and applications will emerge as the driving force of rapid 5G monetization in 2023 where few CSPs have completed the trials of live broadcasting of events from stadiums using 5G infrastructure successfully.
Smart’X’ and xR (VR/AR/MR) applications have not picked up pace in 2022 as per the hype and it would be the same scene in 2023 as well where the research, experiments and trials will increase drastically in 2023 around the usecases related to smart cities, smart logistics, smart health, smart factories, smart transport, smart retail, Drone Delivery, AI Computer Vision based applications, Drone based emergency services, Smart Agriculture, etc. Its quite possible that those smart usecases will be in mainstream implementation across the sectors in 2024 and hence CSPs should accelerate the wide stream 5G deployments in 2023 and be ready to satisfy the surge in demand in 2024 and beyond for the capabilities that 5G enables.
The recent Ericsson Mobility report states that 77% of Service Providers surveyed are offering FWA and it is very clear more and more providers are planning to offer FWA using 5G.
5G SA deployments will also increase as they enable network slicing, network as a service and better customer experiences for enterprises and as well as businesses and retail customers.

Private Networks

Hyperscalers with managed service partnerships are poised and capable to lead the market quickly in 2023 for SD-WAN, SASE, Private LTE/5G networks, Cloud Integrations, Remote Work, Remote Operations, Remote School, etc. Telcos have to come up with innovative G2M solutions & partnerships that will reduce the cost of Deployment of those private networks. Also CSPs have to come up with better business models to address the needs of the enterprises and reduce the cost of Operations & Management for wider adoption of private cellular networks with better ROI. Enterprises don’t want to buy the “networks” anymore but want to buy the “connectivity” that is simple, reliable, flexible, dynamic and performant with assurance on QoS and QoE. Future Connectivity solutions for the enterprises will require hybrid and heterogenous networks to integrate both IT & OT workloads efficiently and cost effectively and CSPs should not just focus on 5G based private networks.
As per ABI reasearch report, the total Private network deployments across enterprise verticals will reach to $109 Billion by 2030. Manufacturing remains the most significant sector for private networks while the demand in education, mining, ports, stadiums and oil rigs is increasing.

Heterogenous Networks

With emerging Industry 4.0 and IoT usecases, seamless and cost effective integration of IT & OT requires different connectivity technologies to be integrated and managed effectively and efficiently beyond FTTx and Cellular. NB IoT, LPWAN, etc will also co-exist alongside LTE/5G private networks as they are suitable for the most constrained environments (eg. IoT sensors with low battery life) that can be seen in many industries. LEO Satellite Broadband will also get traction especially for the challenging physical environments and even commercial enterprise usecases if they become cost effective to deploy and operate. eSIM will gain popularity especially for certain IoT usecases such as smart transport & smart logistics for having seamless roaming and cost effective cellular coverage.

Connectivity as a Service & Digital Service Provider

CSPs have to start new business models to create new products and services that will enable the customers (B2C, B2B, B2B2X) to consume the Connectivity like a utility service that is affordable, flexible and personalized to the respective needs. Going forward CSPs will have different entities that will consume the networks but not just humans, phones and computers. There will be devices, machines, things, robots, drones, home appliances, autonomous cars, AI assistants, autonomous guided vehicles, sensors, gateways, advanced bots, etc. which will need different connectivity needs that will be dynamic, agile, ondemand, adhoc, diverse and they will have wide range of constraints, limitations, physical environment challenges, etc. Gartner expects that by 2023, 75% of organizations that exploit distributed enterprise benefits will realize revenue growth 25% faster than competitors. So, CSPs have to accelerate their innovation in 2023 to productize Connectivity as a Service and create new business models (billing, service offerings, product management, customer engagement, onboarding, sales channels, partnerships, etc) and transform into holistic Digital Service Provider from mere flat telecom infrastructure provider.

Decentralized and Multi Tenant Networks

Decentralizing and Sharing of Networks (as a service) will be more economical and viable business option going forward where CSPs have to open their networks, supply chain integrations, venture into new partnerships, invite new players and leverage government investments and grants for sustaining and scaling business revenues. Especially for public digital services such as Smart Cities, Smart Transport, Smart Citizen Supplies, Smart Utilities, Smart Health, etc where the telecom networks infrastructure associated with them need to be shared across the partners, applications, sectors and usecases so that sustainable business models can be created by the players in the ecosystem. That will also welcome the new players and new partnerships into the market ecosystem to innovate faster and build new connectivity products and services that are cost effective, flexible, efficient and affordable for everyone in cities and rural areas.

Automation & AI

CSPs will accelerate the adoption of Automation and AI in 2023 to create next generation Network Operations and Services that are cost effective, efficient and agile. Closed loop Automation of Network Services and Operations is top most priority for CSPs and a must have investment in 2023 so that the efficient and flexible networks can be built rapidly. AI will be used in network operations so that QoS and QoE will be assured and also the faults and service issues will be predicted in proactively and reduce the radius of impact and recover quickly.
AI will be used by CSPs in business processes and applications heavily to consolidate the data silos in the organization and mine the immense value from the enormous data they have from networks to applications to customer channels in order to create personalized products and services for the customers while enhancing the sales and customer experiences. As per Gartner, by 2025, the 10% of enterprises that establish AI engineering best practices will generate at least three times more value from their AI efforts than the 90% of enterprises that do not.
A flexible and seamless integration of data across the platforms and businesses will enable CSPs to dynamically improve data usage with analytics and at the same time reduce the data management efforts and cost drastically.
ResearchAndMarkets indicate that the global AI market in telecommunications will increase by $8.6 billion by 2026 which is driven by the need for efficient and predictive maintenance of the telco networks and as well as enhanced customer experiences.

Standard APIs

As the industry is advancing, more and more communities and standard forums are evolving. It is very clear that more and more CSPs will adopt tmforum Open APIs, MEF LSO APIs, CAMARA APIs, GSMA Operator Platform APIs, etc. to create the Networks that are interoperable, flexible and enables seamless integration across the operators and partner service providers. It is good for the industry that standard APIs are evolving with various players in the ecosystem collaborating actively using different standard organization bodies but they need to be aligned to bridge easily and avoid redundancy otherwise too much fragmentation will create confusion and adversely impact on the adoption of the APIs in the industry.

Security

While the advancements in the Communication technology is happening in rapid pace the risk horizon with Security is also expanding in same pace. CSPs have to focus on Security as a top priority in 2023 and beyond to ensure and assure that the data, assets and privacy are protected and secured all the time. Also recover immediately in case of unforeseen security incident so that the loss for business, impact on brand and impact for the customers will be minimal or avoided. Going forward, assets, users, devices, things, etc will be highly distributed in nature which means the traditional security perimeter is gone. Hence it requires a cybersecurity mesh architecture (CSMA). As per Gartner, by 2024, organizations adopting a CSMA to integrate security tools to work as a cooperative ecosystem will reduce the financial impact of individual security incidents by an average of 90%.

Sustainability

With the increasing the cellular coverage and as well as increasing the footprint of FTTx alongside increasing the capacity of Core and Access networks and edge locations, CSPs are geared up to contribute for the sustainable future by adopting more and more renewable energy in their infrastructure in 2023 and beyond.

I am sure there will be other trends that executives and business leadership will be considering and laying out the strategies but in my personal view these trends will be the most prominent and relevant in general for the telecom industry for 2023 based on what I have learnt & explored in 2022.