Operator Cloud Infrastructure and Innovation Strategy

When I wrote about Docomo's Open Innovation Cloud, there was some discussion about what exactly is meant by the cloud, whether it has to be public or private (there is hybrid as well) and if service providers (SPs) are embracing it or not.

So before we jump into the mobile operator's strategies, I thought it would be good to do a quick introduction / recap on what is meant by cloud. Embedded below is a slightly long presentation, which goes in some detail but for most people the first 7 minutes is more than enough.



GSMA's 'The 5G Guide' which was produced last year has a lot of valuable information for the operators and everyone else willing to learn from that. Section 3.11 deals with '5G Value Enablers: Operator Cloud'. The key takeaways from that section are:

• The Operator Cloud will combine the best of both cloud and edge to enable the 5G ‘Service Delivery Model’.
• Edge computing in 5G networks will be delivered as Multi-access Edge Computing to reduce latency.
• An Operator Cloud can help operators to save up to 2% of capex by improving operational efficiency and customer experience.
• If operators can create competitive global platforms for edge/cloud services, this could unlock a new revenue opportunity of up to $100bn.

The GSMA whitepaper details the importance of operator cloud and the case for MEC, which is suited in what scenario. I am not detailing them here except for the final section below:

Value creation and capture with the Operator Cloud is firstly about an ‘infrastructure strategy’

A common refrain in the industry about the Operator Cloud, edge computing and MEC is that they present a chicken and egg dilemma. Operators seek a robust business case with clearly identified revenue sources and sizes before embarking on the journey to deploy the distributed edge/cloud infrastructure. While this may look like the prudent thing to do, it creates inertia for action and can lead to operators foregoing the opportunity completely.

An alternative approach is to consider the Operator Cloud, firstly as part of the infrastructure strategy of an operator. Under this approach, the Operator Cloud is progressively rolled out together with 5G network build out. Operators also begin to use it for backhaul relief and to improve the QoE for customers.

Under this approach, operators can satisfy their own operational and customer experience needs, and then address new opportunities without needing to impose an unachievable ROI hurdle. Figure 3.11.3 shows the contrast between the infrastructure strategy vs. the innovation strategy.

With new 5G services and applications being defined in more mature markets, operators are keeping their options open as to when is the right time to change their strategy from infrastructure centric to innovation centric.


Related Posts:

• Telecoms Infrastructure Blog: Docomo 5G Open Innovation Cloud
• Telecoms Infrastructure Blog: Rakuten details how Cloud will make Telecommunications Industry Irrelevant