Network based systems

2022 Telco Carrier Strategies and Cost Optimization Report: Network Slicing, Web-Scale Cloud Provider Partnerships, Automation, Open RAN/vRAN, and Network Sharing Agreements – ResearchAndMarkets.com

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DUBLIN–(BUSINESS WIRE)–The “Telecommunications operators rely on new technologies and partnerships to generate significant cost savings” report has been added to from ResearchAndMarkets.com offer.

Telecom operators around the world are finally boarding the 5G bus, delivering high speeds with low latency and a seamless experience to businesses and consumers.

The latest connectivity standard presents growth and monetization opportunities for telecom operators with new services targeting a wide range of vertical markets. However, the inability of telecom operators to convert these opportunities into major new revenue streams has so far held back the industry’s growth.

One of the biggest concerns for telecom operators today is maintaining profitability amid the immense investment burden, stagnating revenues, macroeconomic pressures compounded by Russia’s invasion of Ukraine and fierce competition from new era operators. The success of telecom operators in the 5G era will depend on creating value and efficiency through cost optimization measures, thus ensuring a continuous flow of investment and profitability.

This is nothing new for telcos, as they have been able to deliver steady profit margins in steady to mild revenue growth environments over the past few years. They have done this through traditional means of cost reduction in past mitigation cycles, efforts that have been limited and tactical in nature. These included asset disposals, rationalization of real estate, outsourcing of repair and maintenance, shared service models, etc.

With uncertain macro factors in play, telcos will find it much harder to optimize costs through traditional tactics alone. To drive radical change in the future, telecommunications operators will need to implement dramatic strategic measures to optimize their cost structure in order to increase and maintain their profitability.

These strategic moves will be a mix of technology-based solutions and collaborations, some of which will transform the telecommunications business model. Each of the cost optimization measures targets several cost centers to generate savings.

Below are five key strategic cost optimization actions that telcos will implement over the next 2-3 years:

  • Automating: Automation will be a key factor in achieving savings in areas such as networks (through automated fault detection and self-optimization systems, for example), energy (dynamic shutdown of unused network elements during periods of inactivity), sales and marketing (virtual assistants for support and customer experience) and G&A (automation of administrative tasks).
  • Open RAN/vRAN: Telecom operators could consider reducing several cost bases by using open interface based technology solutions such as Open RAN and vRAN. These can offer reduced network related costs such as infrastructure rental, RAN power consumption, repair and maintenance, etc.
  • Network Sharing Agreements: For many years, telecom operators have turned to sharing network elements among themselves primarily to reduce costs. The most common form of network sharing has been the joint use of cell sites, towers, backhaul networks, etc., referred to as passive infrastructure sharing. This has evolved into sharing active network components over the past few years, including RAN components and spectrum. To achieve further cost savings in the 5G era, telecom operators are exploring sharing core network components and functionality (referred to as “core network sharing”).
  • Partnerships with web-scale cloud providers: Through partnerships with cloud providers, telcos reduce network costs by moving critical network functions and workloads to the cloud, saving on energy costs by deploying energy-efficient hardware and architectures designed tailored and developed by cloud providers, and driving personalized marketing and customer experience by turning customer data into insights through cloud data and analytics.
  • Network slicing: By segmenting parts of the network to meet different customer types and use cases, network slicing will allow telecom operators to reduce operating costs through improved operations resulting from fewer cross-dependencies between network functions. network. It should also reduce maintenance costs due to the deployment of isolated slices, which protect against disturbances in other parts of the network.

While the publisher expects these relatively new approaches to drive change in the future, mitigating telecommunications costs will require a mix of traditional and general strategic measures. The heart of any strategy will be to integrate or bring different business functions together, rather than silos them, to drive maximum cost savings across the entire telecommunications organization.

Main topics covered:

1. Summary

2. Telcos struggle to control costs despite stalled growth and macroeconomic pressures

3. Effectively managing opex requires further dissecting them into standardized cost categories

4. For telecom operators, network-related costs alone account for approximately 50% of total operating expenses

5. Group-wide efficiencies will depend on controlling overhead beyond the networks

6. Telecom Labor Costs Are Rising Despite Industry Downsizing

7. New technologies and partnerships are key principles of telecom cost savings in the 5G era

8. Traditional cost-cutting measures continue

9. The combination of newer, more strategic cost reduction efforts and traditional approaches will vary depending on the operating climate

Companies cited

  • 1&1 SA

  • Amazon

  • AT&T

  • Bharti Airtel

  • Bouygues Telecom

  • BT

  • Charter Communications

  • China Telecom

  • China Unicom

  • Comcast

  • Deutsche Telekom

  • Dish Network

  • From

  • Ericsson

  • Etisalat

  • Globe Telecom

  • KDDIName

  • kt

  • Microsoft

  • MTN

  • netflix

  • nokia

  • Ooredoo

  • Orange

  • Rakuten Mobile

  • Addiction Jio

  • ServiceNow

  • SK Telecom

  • Telecom Italy

  • Telefonica

  • Telenor

  • Telie

  • Indonesia

  • Telus

  • Turkcell

  • Verizon

  • Vodafone

For more information on this report, visit https://www.researchandmarkets.com/r/ghkntp

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