Technology is changing so fast today, there’s no such thing as fully matured or fully deployed. This is as true for network operators trying to decide whether to go virtual as it is for consumers trying to decide whether they should splurge on a new curved-screen television. Yes, prices will probably come down – but by the time they do, the next big thing will already be on the market.
In some ways, mobile carriers pioneered this kind of tech acceleration. I saw this first-hand when I was with a major carrier – when cellphones first became popular, landline carriers thought they would be an adjunct to traditional wireline phones in users’ homes and offices. This started out true, since mobile availability was limited and spotty. But cell towers were erected everywhere, signals got stronger, and cellphones began to change how people used the Internet, disrupting not only the telecommunications industry but the entire culture. Work patterns, home and social lives, everything is different when users want to be connected 24/7.
Network providers are faced with CapEx and OpEx decisions every day: Stay with what we’ve got, add to it, layer virtualization over it? Vendors certainly encourage them to move to virtualization, offering to provide services that host core components. As the technology continues to change, operators are dealing with more and more heterogeneous networks, adding to their operational pressures and potentially holding them behind the technological 8-ball.
But those same network operators have another dilemma related to the rapidity of technological advancement. There are technological developments needed to “fill in the picture” that have been overlooked or neglected. For instance, the concepts may be there, such as cloud RAN and virtualized base stations, but it’s still cost prohibitive to provide connectivity to the end nodes. There are solutions on the radio side, but the economics on the backhaul side can still skew most business cases.
Meanwhile, Wi-Fi is enabling a whole new class of competitors. The next disrupter aiming for network operators are the “Googles” of the world, which is likely to change the whole business model again. After all, what happens when a company’s business model is not based on charging per megabyte? These alternative systems start off with Wi-Fi-based, i.e., virtualized, service, with none of the sunk costs of hardware and software.
From the consumer perspective, these developments are a good thing. Users want technology to be transparent, allowing them to use whatever they want wherever and whenever they choose.
Operators, though, are left with the challenge of optimizing their existing assets while gambling they can anticipate where the technology is going, and placing their investment bets accordingly.
— Mathew Dooley
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