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Oracle 2023 Predictions: Business And Technology Priorities Shaping Telecommunications in 2023

vmblog-predictions-2023 

Industry executives and experts share their predictions for 2023.  Read them in this 15th annual VMblog.com series exclusive.

Business And Technology Priorities Shaping Telecommunications in 2023

By Anil Rao, Senior Director, Product Marketing and Strategy, Oracle Communications

Communications Service Providers (CSPs) face a rapidly changing set of internal and external business drivers that are influencing the way they run their business. Telco cloud, programmable networks and AI are gaining mainstream traction, 5G and edge are driving new complexity and opportunities in Industry 4.0 and Metaverse, consumer and enterprise customers are demanding on-demand self-service experiences, and business models to monetize networks are in flux.

Success in this market will depend on CSPs' ability to effectively overcome these challenges and exploit opportunities. Furthermore, the rising inflation and energy prices will present a whole other dimension of economic challenges. To succeed in 2023 and beyond, CSPs should work to monetize new business models, automate everything that can be automated, and deliver superior digital experiences. The following technology trends are evolving realities that the telecoms ecosystem should examine closely as CSPs continue building, and executing on, their unique paths to success.

1.      More CSPs will develop strategies to become a platform company, or Techco, as a way to monetize their networks in new innovative ways.

5G, cloud and programmable networks are transforming the way CSPs build and operate networks and services. When these networks are layered on top with modern business and operations systems, CSPs will finally have a powerful telco cloud and application stack that truly enables them to offer on-demand network services. For example, Vodafone is already working on their Network as a Platform vision, and T-Mobile has launched IoT Developer Kit, leveraging Network as Platform for Innovation. As a platform company CSPs can offer network services on-demand enabling enterprises to consume network services much in the same way the infrastructure, platform and software applications are offered and consumed as a service and paid for on a consumption basis. Most critically, the success of this transition can only be achieved with a modern automated orchestration and operations solution, and charging and billing capabilities to monetize those services.

2.      Costs will increasingly come under the scanner as CSPs maneuver through the economic headwinds.

The expected economic uncertainty, geo-political issues, rising energy prices and high inflation will cause consumers and enterprises to rein in expenses and cut costs. Consequently, the overall telco ecosystem is likely to experience topline and cost pressures, with the increased likelihood of CSPs increasing prices of services and deferring major new investment decisions. However, many CSPs are also likely to accelerate existing transformation projects that deliver long-term operational efficiencies and cost savings to safeguard them against the current and future economic events.

3.      More CSPs will reassess their strategy to align for a Metaverse future.

It will take years for the vision of Metaverse to fully materialize, but some CSPs are already jostling for the lucrative revenue opportunities. For example, SKTelecom has already launched Metaverse based experiences, ifland. On 29th, September, Telefonica conducted their first Metaverse Day, where the CSP presented their strategy for the journey to Metaverse. McKinsey estimates that the total economic impact of Metaverse will reach approximately $5 trillion by 2030, with the related investments in reaching $12 billion of VC and PE funding in 2021 and the first six months of 2022 seeing an investment of $120 billion. It is in this context that more CSPs will assess their strategic plans both from the perspective of network investments and platform play, and more importantly, the potential to play an expanded role in bringing Metaverse-based services and solutions to consumers and enterprises.

4.      The big cloud migration will accelerate, especially in the private cloud realm, as CSPs look for ways to balance competing priorities.

CSPs are in the midst of a significant journey to the cloud and all indicators point to an acceleration of this journey in the coming years. However, CSPs are facing an interesting conundrum when it comes to choosing the right type of cloud - public, private or hybrid. The public cloud has been a very popular model for many IT workloads, and hybrid clouds and homegrown private clouds have addressed a niche set of requirements. In 2023, CSPs will increasingly consider the private cloud option (like the Oracle Cloud@Customer) for OSS/BSS workloads as they try to balance the need to achieve the same high level of agility, performance and scale, autonomous operations and reduced infrastructure TCO of a public cloud while addressing the pressing requirements of data sovereignty, residency and connectivity concerns.

5.      Transformation programs that enable the journey to autonomous operations will particularly see an acceleration of activity.

Higher levels of operations automation are going to be essential to not only transform the economics of operations, but also as a critical part of the success of strategic goals such as the transition to platform company, increasing service and business agility, and delivering superior customer experiences. The ultimate goal to achieve zero-touch, lights out, autonomous operations provides a north star for the direction of travel, and any programs that facilitate and accelerate this journey will see increased traction. Oracle Unified Operations has been conceived to precisely enable this vision, bringing together key solution pillars, Unified Orchestration, Unified Assurance and Unified Inventory and Topology.

6.      Network digital twins enabled by near real-time topology will start to become a reality in order to drive automation and efficiencies across the business.

Digital twins have been employed in other industries such as automotive and manufacturing to great effect. CSPs have a semblance of a network digital twin in its inventory systems, but the sheer number of systems, siloed data, poor data quality and frequency of updates have given them a bad reputation. However, with the emergence of technologies such as network telemetry, advanced data analytics based on ML and AI, and cloud based data platforms, there is now a real opportunity to create a more unified and accurate, near real-time network and service topology of the dynamic network and the services that ride on top of those networks. With this capability, CSPs will be able to create a true network digital twin, which will supercharge a whole plethora of use cases such as intelligent network investments, efficient network design and planning, advanced service impact analysis and automated operations.

7.      CSPs will get creative with 5G pricing to improve ARPU.

Now that CSPs have launched 5G (with many more planning 5G SA commercial launches over the next year), CSPs will likely employ charging as an innovation platform to pioneer new pricing strategies for 5G in efforts to drive ARPU growth. In some regions (e.g.: mature markets of JPAC), the initial 5G ARPU bump has begun to wane as network penetration has increased. As a result, CSPs in the region have begun to embrace new 5G pricing strategies, such as speed tiers, to improve ARPU. This trend is likely to become more widespread, with 5G SA and modern converged charging systems (CCS) enabling new pricing levers enabling pricing based on 5G speeds and quality of service or experience.

8.      CSPs will reassess their billing solution roadmaps as they look to capitalize on 5G B2B monetization opportunities. 

CSPs will increasingly come to grips with the fact that the existing billing solutions and B2B customer experience are not entirely fit for purpose for the complex requirements of enterprise customers and are therefore a hindrance to 5G monetization. To mitigate these challenges, CSPs will put in place plans to transform their billing systems. Key areas of investment will include: supporting new and more flexible pricing and billing capabilities for B2B; improving partner settlement to enable B2B2X business models; supporting complex B2B account hierarchies; and moving to a cloud native architecture to improve scalability while improving operational efficiency.

9.      CSPs will accelerate partnerships with vertical industry players on use cases that go beyond connectivity, creating a springboard to take the leap towards becoming Industry Service Providers.

Enterprises have always been a lucrative market for CSPs, with most or all of the Fortune 500 companies procuring connectivity services from leading CSPs. Some of those CSPs have made good progress enhancing their relationships by providing additional services with IoT, managed connectivity and security services, and more recently with mobile private networks. However, in most cases, these value-added services have still been connectivity oriented, although, providing good revenue growth and margins. In 2023, CSPs will look to further expand their relationships to truly go beyond connectivity and assess how they can offer industry-specific solutions. Innovative CSPs will take initial steps towards becoming Industry Service Providers, by combining the Telco cloud, communications networking and monetization and operations applications, and industry applications.

Without question, 5G implementations will expand and gain critical depth in 2023. To succeed, CSPs must get many things right, from decisions on cloud-based platforms and billing roadmaps to automation strategies to new business models and pricing strategies and vertical industry partnerships. CSPs that effectively tackle these challenges and embrace new opportunities may find a faster path to achieving business success around profitability, revenue growth, customer and employee satisfaction, and many other priority KPIs.

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ABOUT THE AUTHOR

Anil-Rao 

Anil Rao is the Senior Director of Product Marketing and Strategy at Oracle. He leads product marketing for the Communications Applications business and is based in the UK. Prior to joining Oracle, Anil was a Research Director at Analysys Mason responsible for driving market research and advisory for telecoms business and operational software applications.  

Published Monday, January 23, 2023 7:37 AM by David Marshall
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