1、#GetTheFutureYouWant“A mobile-telecoms revolution is under way one reminiscent of the way personal computers replaced mainframes in the 1980s,and cloud-based apps are replacing traditional software today,”wrote Tareq Amin,CEO of Rakuten Mobile,in 2021.1 Amin was referring to the telco cloud transfor

2、mation the transition to hosting network functions in software form and in the cloud,as opposed to physical storage in vast server farms.In 2020,Amin had led the rollout of the worlds first fully cloud-native mobile network for Rakuten Mobile.2 Since then,several telcos have stepped up to the plate

3、with plans to build and operate their own cloud-based networks:In April 2021,Dish the 4th-largest mobile network operator(MNO)in the US announced its partnership with Amazon Web Services(AWS)to host its radio access network(RAN)and mobile core on AWS Cloud.3 Dish plans to spend$10 billion overall,in

4、cluding on the deployment of its cloud-native network,on realizing its 5G network ambitions by 2025.4 In June 2021,AT&T announced that it will move its 5G mobile network to Microsoft cloud.By 2020,AT&T had already virtualized 75%of its network,and it aims to shift its network resources to Microsofts

5、 Azure for Operators platform over the next three years.5Spanish operator O2 Telefnica recently announced that it is working with Google Cloud and Ericsson to transition its 5G core network in Germany to cloud;6 given that the core network currently processes the mobile data and voice traffic of aro

6、und 47 million mobile subscribers in Germany,this is a significant operation.The transferal of mobile networks to cloud particularly,5G network core,which can be deployed in a cloud-native form has been a key driver of telco cloud transformation.Having already made a start on transitioning their net

7、work core,many telcos are now looking at transitioning other network functions in their edge,radio,and transport networks.Industry-specific use cases for enterprises and end-consumers include:Highly automated smart factories involving remote control,video surveillance,and robotic production lines,dr

8、iving seamless and low-cost operations Private 5G networks at distribution centers,ports,oil fields,mines,chemical storage,and processing units,etc.,enabling real-time process analysis and modification Predictive/preventive maintenance facilitated by large-scale sensor networks Augmented reality/vir

9、tual reality(AR/VR)or metaverse-enabled remote operations,monitoring,and training,leading to more efficient,safety-conscious employee onboarding Remote surgeries carried out via low-latency wireless networksIntroduction2Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEHOW TELCO NE

10、TWORKS ARE MOVING TO THE CLOUDIndustry progress to January 2023AUTONOMYHighLowNetwork 1.0Physical networksSeparate physical boxes for each network equipmentProprietary network hardwareVendor lock-inNetwork 2.0Virtualized networksPhysical network equipment converted to virtualized network functions M

11、ulti-vendor solutionsHardware and software disaggregationNetwork 3.0Cloud-native networksContainerized and cloud-native implementations of network functionsHighly available,auto-scaled,network-aware network functions and applicationsNetwork 4.0AI-based networksAI/data-driven optimization of networks

12、Self-healing networksSustainable networks1990s2010s20030Source:Capgemini Research Institute analysis.The term“Network 1.0/2.0/3.0”does not correspond to any standard industry terminology and is solely for representative purposes.See the glossary for definitions of the various technical te

13、rms used in this chart.Introduction5Gs combination of high-bandwidth and low-latency which powers many of the applications above can help unlock the full potential of cloud-native networks,replacing legacy physical systems(see Figure 1).The 5G technology architecture itself allows for cloud-native d

14、eployment of the core,called 5G Standalone core making it the default choice for new deployments and technology refreshes at the end of life of previous-generation technology.This is a key driver for telcos striving for transforming their networks to cloud,in addition to rising network capital expen

15、diture(CAPEX)and operational expenditure(OPEX)requirements.Figure.1Telco networks are rapidly evolving from virtualized to cloud-native3Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEIntroductionThe virtualization of network functions implementing network functions in software f

16、orm,as opposed to via dedicated physical equipment which serves as a starting point for telco cloud transformation,has been ongoing for several years.Virtualized network functions(VNFs)facilitate the programmability of telco networks and promote the efficient use of computing resources.Cloud-native

17、deployment of network functions promises to take these benefits to the next level,and will also offer additional benefits:Containerized network functions CNFs are network functions that can be packaged together with all the programs that they require to run on any infrastructure making network funct

18、ions truly hardware-agnostic.Moreover,CNFs facilitate the use of standardized cloud hardware and customized software,which can be developed by a wider range of vendors,circumventing vendor lock-in.They also make it possible to run a variety of services on the same cluster and more easily onboard alr

19、eady-decomposed applications reducing computing/storage requirements and the deployment time of various network functions.Cloud at the edge offers ultra-fast response times critical to time-sensitive applications such as emergency response,disaster recovery,and real-time alerts.Scaling of cloud reso

20、urces quickly ramps up network capacity to serve new regions or customers.It is crucial to greenfield operators in terms of capturing market share,as well as for brownfield ones to migrate their large customer base from legacy tech.Additionally,auto-scaling allowing idle network assets to be dynamic

21、ally shut off and brought online as required can enable more efficient use of networking resources,leading to lower energy use and thereby reducing the telco networks overall carbon footprint.Cloud-native deployment also employs microservices small,loosely coupled and independent services that make

22、up an application.These can be developed and deployed independently of other services,with any modifications to them easily isolated from the application as a whole.Use of microservices enables much more rapid development of new features and services,leading to a reduced time to market.Application p

23、rogramming interfaces(APIs),which can integrate with network functions,can offer seamless network access to third-parties such as partners and developers,in a manner far superior to what was possible via VNFs.These benefits are in addition to the inherent advantages of cloud infrastructure:CAPEX and

24、 OPEX savings,improved performance,resource utilization,resiliency,and scalability.4Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEIntroductionHowever,there are still some significant obstacles to overcome.Monetizing of 5G services to enterprises and end-consumers is still being

25、 worked out.Moreover,the reliability of running some network functions on cloud infrastructure is yet to be fully proven.To run ultra-reliable,low-latency communication(URLLC)applications may be so demanding that far-flung data centers cannot cope,with the network being obliged to deliver the servic

26、e from a location nearer to the customer.This will involve both technical transformation and adjustments in terms of business,operating,and recruitment models.Any transition to telco cloud,therefore,must be accompanied by a sensitive cultural transformation of the organization.Whichever challenges t

27、he transformation to cloud-native throws up,the potential benefits are too numerous and significant to ignore.If the decision to transform is a given,therefore,the outstanding questions for telcos are how they should go about their individual transformations and what will that mean for their people

28、and processes.This research will look for answers to the following questions:Why are telcos cloudifying their networks,how much are they investing,and how far have they come in their transformation journeys?Which benefits does the telco cloud offer and do they outweigh the costs?Are there examples o

29、f leading telcos realizing greater business and technological benefits from telco cloud?How can telcos harness the full potential of telco cloud?5Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEExecutive Summary Telco cloud is poised for 50%growth in the next five yearsTelco clou

30、d offers significant business and sustainability benefits Overall,the 31%of telco network capacity(globally,across 4G/5G networks)that is entirely serviced by cloud-based platforms today is expected to grow to 46%in the next five years(at a CAGR of 8%).Globally,29%of network functions have been virt

31、ualized a key first-step in transitioning to cloud in a brownfield transformation.Network scalability(52%),reduced network complexity(48%),and increased operational efficiency(39%)are the top three drivers of telco cloud transformation.Private cloud is the most preferred cloud deployment model,with

32、nine in ten telcos preferring private cloud deployments across network domains.Telcos plan to invest$206 million per year on average in telco cloud in the next five years(based on a typical operator in our study with average annual revenues of$21 billion).Telcos realize increased customer lifetime v

33、alue,risk sharing with partners,and improved customer experience using telco cloud.Financial benefits from telco cloud make a convincing business case for investment.A typical telco in our study with average annual revenues of$21 billion can:Expect to optimize network total cost of ownership(TCO)by

34、13%,resulting in cost savings to the tune of$260 million to$380 million per year.Expect to realize$110 million to$210 million in additional revenues from attaining early-mover status in markets enabled by cloud-based platforms.Besides business and operational benefits,telcos that have undertaken clo

35、ud transformation expect to reduce their greenhouse gas(GHG)emissions by 5%in the next 3-5 years.6Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEExecutive Summary Leading telcos are already reaping the benefits of telco cloudWe recommend that telcos who wish to harness the full

36、potential of telco cloud consider adopting our five-point plan:Early Adopters have focused investment priorities in R&D,cloud management,and innovation.Early Adopters are more ambitious in their expectations from telco cloud:they expect to recover almost half of their investment(47%)within the next

37、five years,whereas Laggards expect to recover only 34%.Devise a comprehensive telco cloud strategy.Aim to achieve rapid,efficient monetization of new services.Harness new talent and automation options to foster innovation and agility.Attempt to form strategic partnerships within their business ecosy

38、stem.Ensure that cultural transformation goes hand in hand with technological transformation.7Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEWhat do we mean by telco cloud?In this research report,we use the term telco cloud to refer to the transition of wireless network function

39、s(such as routers)and domains(RAN and core)to cloud-based infrastructure(see Figure 2).In this report,we are focusing solely on mobile networks transformation to cloud.RADIO ACCESS NETWORKCLOUD RAN/VIRTUAL RAN/O-RANCLOUD-NATIVE CORECLOUD FORTELCO ITBSSCRMAI/analyticsOther enterpriseIT appsOn-device4

40、G/5G PRIVATE NETWORK4G/5G ACCESS NETWORK4G/5G CORE NETWORKOut of scopeOut of scopeIn scopeOn-premises edgeFrom far edge to nearedgeDatacentersOSS and OrchestrationSource:Capgemini Research Institute analysis.Refer to the glossary for definitions of the various technical terms used in this chart.Figu

41、re.2Wireless/mobile network functions transitioning to cloud 8Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEDedicated physical boxes for each network equipmentTop-down,siloed orchestrationProprietary hardware platformVendor lock-inDeployment and upgrades take monthsPhysical box

42、es converted to Virtualized Network Functions(VNFs)running on open source(OpenStack)or proprietary virtual environmentsE2E horizontal orchestration3-5 months of VNF deploymentMulti-vendor environmentsHardware and software disaggregationContainers and cloud-native microservice-based implementations o

43、f network functionsNetwork functions deployment in hoursHighly-available,auto-scaled,network-aware network functions and applicationsNetwork 1.0Physical network equipmentNetwork function(NF)1ComputeNetworkNF2NF3StorageDedicated or proprietary hardwareVNF 1VNF 2VNFmVNFnVNF 3VNF 4Virtual machines/clou

44、d infraVirtualization layerVirtualization-container layerMS 1MS 2MSmCNFnCNF 1CNF 2Containers on any cloud platformMS=microserviceNetwork 2.0Virtualized network functions(VNFs)Network 3.0Containerized network functions(CNFs)ComputeNetworkStorageComputeNetworkStorageSource:Capgemini Research Institute

45、 analysis.The term“Network 1.0/2.0/3.0”does not correspond to any standard industry term and is solely for representative purposes.Refer to the glossary for definitions of the various technical terms used in this chart.Figure.3What is telco cloud transformation?In addition,for the purpose of this re

46、port,we refer to cloud-based or cloud-native networks as those composed of network functions in a containerized form and deployed directly on cloud infrastructure as“cloud-native”(see Figure 3).9Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGETHETELCO CLOUDECOSYSTEMEnterprise cus

47、tomersEnd consumersCommunicationservice providersNetworkequipment providersHyperscalers andlarge cloud platformprovidersSystem integratorsand independentsoftware vendorsNiche playersand startupsChip manufacturersSource:Capgemini Research Institute analysis.Figure.4The telco cloud ecosystem of player

48、s10Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGE“A mobile-telecoms revolution is under way one reminiscent of the way personal computers replaced mainframes in the 1980s,and cloud-based apps are replacing traditional software todayTareq Amin CEO of Rakuten Mobile11Capgemini Re

49、search Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGETelco cloud is poised for 50%growth in the next five years0112Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGENearly half of telco network capacity will be cloud-native in the next 3-5 yearsToday,31%of global telco network c

50、apacity(across 4G/5G networks)is entirely serviced by cloud-based or cloud-native platforms(see Figure 5).This figure is expected to grow to 46%in the next five years.Network capacity is the amount of traffic that a network can handle at any given time.7Scott Andersen,Distinguished Solution Architec

51、t at Verizon,comments:“For telecom networks,this is the decade of transformation.The largest tier-1 carriers with direct connectivity to the internet already host a majority of global network traffic on cloud-based systems.I expect most of the second-tier carriers to get there in the next three to f

52、ive years,and most of the smaller telcos in a slightly longer horizon.Cloud-native networks will be the norm by the end of this decade.”7%0%27%2%21%19%19%27%8%10%15%17%20%6%2%0%How much of your network capacity is serviced entirely by cloud(currently and in 35 years)?Currently serviced Expected to b

53、e serviced in next 3-5 years31%(2022)46%(2027)7180%6170%5160%4150%3140%2130%1120%610%Global averageGlobal averageSource:Capgemini Research Institute,Telco Cloud Executive Survey,November-December 2022,N=124 telco tech executives.*Network here encompasses core,multi-access edge,RAN/Open RAN,OSS and O

54、rchestration.Refer to Glossary at the end of the report for definitions of these terms.Figure.5The share of global network capacity that is serviced by cloud will grow by 50%in the next five years13Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEVirtualization of network function

55、s another indicator of telco cloud transformation is expected to proceed at a similar pace.Globally,the share of VNFs(VNFs are key to brownfield transformation to cloud-native networks)currently stands at 29%,and it is expected to grow to 47%by 2027(see Figure 6).More than 60%of core network functio

56、ns are already virtualized compared with less than 20%of RAN.There is a slight difference in the share of network capacity serviced by cloud vs.the share of VNFs as both are different measures,although they are correlated.Capacity measures the amount of traffic a network can handle while the share o

57、f VNFs measures network functions serving cloud-based traffic.RAN/Open RANOSS and OrchestrationMulti-access edgeCoreAlready fully cloud-native In process Not currently targeted for cloud-native transition65%35%50%32%60%8%18%79%3%36%14%29%(2022)47%(2027)Stage of various network functions in the proce

58、ss of becoming cloud-nativeGlobal averageSource:Capgemini Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=124 telco technology executives.Figure.6By 2027,the share of virtualized network functions(VNFs)is expected to grow 1.6x 14Capgemini Research Institute 2023NETWORKS ON CL

59、OUD:A CLEAR ADVANTAGETop 5 biggest drivers for transforming network to cloud52%48%39%38%34%Faster time to market fornew applicationsDelivering new servicesIncreased operational efficiencyReduced complexity ofmanaging the networkNetwork scalabilitySource:Capgemini Research Institute,Telco Cloud Execu

60、tive Survey,NovemberDecember 2022,N=170 telco executives.Greater scalability and reduced complexity are the biggest drivers for transition to telco cloudMaking networks scalable is the biggest factor driving telcos to transition their networks to cloud.It is possible to deploy and scale 5G standalon

61、e core rapidly in a cloud-native environment.Other top factors are reduced complexity of managing the network(e.g.,owing to reduced a number of physical infra and data centers that need to be deployed)and greater operational efficiency.Figure.7Top drivers of telco cloud transformation15Capgemini Res

62、earch Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEThe head of IT architecture and infrastructure strategy at a large French operator states:“Large parts of our legacy infrastructure are moving from physical to virtual servers.Additionally,infrastructure that is largely non-legacy is deployed on

63、 our own private cloud.There are only a few applications that we have started deploying directly on public cloud.We need to be really sure of what we can put on public cloud due to data sovereignty,security,and network-reliability requirements.”In relation to multi-cloud,he adds:“We are not using cl

64、oud services from multiple vendors for the same kinds of workload primarily due to challenges in interconnection and interoperability between different public-cloud vendors.”Telcos have traditionally imposed fairly stringent requirements around quality of service,network security,and capital and ope

65、rational expenses in relation to cloud.While those requirements remain strict,concerns around the use of external cloud providers are diminishing.For network core,telcos across geographies prefer proprietary,private-cloud deployment(see Figure 7).Further analysis of this data from our survey yields

66、some interesting observations:For RAN,European telcos prefer private cloud by network equipment providers(NEPs)more than those in other regions(70%vs.42%in the US and 39%in APAC).Edge sees the most preference for private cloud offered by hyperscalers 58%in Europe,50%in the US,and 44%in APAC compared

67、 to all other cloud deployment models.The head of supply chain(procurement)at a UK-based global telecom operator comments:“Telcos were hesitant to outsource to cloud providers in the past,owing to the criticality and sensitivity of data,voice,and applications.However,these concerns have reduced in t

68、he last 3-5 years.Today,NEPs and hyperscalers exhibit a lot of confidence in their cloud offerings in terms of security and reliability of service.There has been a lot of innovation around cybersecurity,in particular,and related concerns have fallen correspondingly,at least for the non-core parts of

69、 the network.”Private cloud is the preferred cloud-deployment model16Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEOne of the factors in deciding on a cloud deployment model is availability of the latest software releases.The VP and head of technology evolution and innovation a

70、t a large European operator,says,“The initial cloud-native deployments are likely to take place on proprietary,cloud-native infrastructure,largely in a private cloud model.The key reason for this is that the latest versions of containerized network functions provided by equipment vendors are usually

71、 available on their proprietary cloud platforms.There is usually some delay in getting the latest release for a different cloud infrastructure.”As Figure 8 shows,telcos are more comfortable deploying multi-access edge on non-proprietary cloud infrastructure.In the US,Verizon,in partnership with AWS,

72、has made significant strides in the mobile edge-computing space over the past three years.8 AWS Wavelength,a provider of cloud computing and storage services at the edge of telecom networks,is at the heart of this offering.It allows application developers to refine and deploy URLLC applications(for

73、example,those in healthcare,sports,and AR/VR gaming)at the network edge.By bringing the power of cloud computing at the edge,such services reduce the time required for data to travel through the network,resulting in faster response times;near-real-time access to data and analytics;enhanced customer

74、experience,and the creation of new sources of revenue.The service is already available in 19 US cities and covers 75%of the US population within its 150-mile zone.917Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGETelcos will invest$1 billion on average in telco cloud transformat

75、ion over the next 3-5 yearsTelcos are expected to invest$1.03 billion($206 million per year)in telco cloud,on average,over the next 3-5 years(see Figure 9).For large telcos(with$30 billion in annual revenue),telco cloud investment will be,on average,$348 million per year.Smaller telcos are investing

76、 on par with this in proportional terms(i.e.,share of revenue and network-transformation budget).Telcos of all sizes are investing 38-44%of their network-transformation budgets(the total budget set aside by telcos for various network transformation initiatives)in telco cloud.In revenue terms,this is

77、 0.9-1.2%of annual revenue per telco per year.Type of cloud architecture being implemented or planned82%16%2%3%35%45%11%44%22%10%52%15%59%3%Multi-accessedgeOSS andOrchestrationRAN/OpenRANCorePublic cloudPrivate cloud offered by hyperscalers and large cloud solution providers with end-to-end capabili

78、tiesPrivate cloud offered by NEPs Private cloud offered by your own organizationSource:Capgemini Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=124 telco technology executives.Figure.8Private cloud is by far the preferred telco cloud deployment model18Capgemini Research Inst

79、itute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEAverage annual investment in telco cloud transformation per year($million,by annual revenue)34830615590Telcos with revenue betweenUS$5 billion and US$10 billionTelcos with revenuebetween US$11billion and US$20 billionTelcos with revenuebetween US$21 billi

80、on andUS$30 billionTelcos with revenueover US$30 billion$206 mnAverage annual investmentin telco cloud per yearSource:Capgemini Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=170 telco executives.Note:The values in$million indicate average annual investment in telco cloud fo

81、r telcos.This network-transformation budget set aside by telcos includes investment in the following areas:Research&development Professional services/consulting(strategy,roadmap,vendor selection)Technology infrastructure(hardware,software,integration)Product/service innovation(e.g.,internet of thing

82、s,edge computing)Investment in the workforce Change managementThe largest share of investment is expected to be made in the following areaas(see Figure 10):i.Technology infrastructure(33%),including cloud hardware,software,deployment,and integrationii.Research&development(18%)iii.Workforce(8%),invol

83、ving upskilling,reskilling,and hiring for new skillsFigure.9Investment in telco cloud will top$1 billion on average over the next five years19Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEIn terms of global regions,APAC offers the largest share of telco cloud investment in tech

84、nology infrastructure(36%)ahead of Europe(29%)and the US(27%).How much does your organization invest in the top three priority areas as a part of overall telco cloud investment?33%18%8%5%4%3%Professionalservices/consulting(strategy,roadmap,vendor selection)ChangemanagementProduct/serviceinnovation(e

85、.g.,internet of things,edge computing)Investment inthe workforceR&DTechnologyinfrastructure(cloudhardware/software/integration)Source:Capgemini Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=114 telco executives.Note:Survey respondents were asked to estimate the share of inv

86、estment in each of their top three areas of the telco cloud value chain.Figure.10Technology infrastructure(cloud hardware,software,integration)will take the lions share of telco cloud investmentNearly 60%of telco cloud investment will be made in just three areas:technology infrastructure,R&D,and wor

87、kforce20Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGE“With the traditional approach,it used to take 6-9 months to deploy a new core network.However,with cloud-native deployment,it can be a matter of weeks/days.”JUAN CARLOS GARCIA LOPEZ SVP,TECHNOLOGY INNOVATION AND ECOSYSTEM,T

88、ELEFNICA 21Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGETelco cloud offers significant business and sustainability benefits0222Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGETelcos have realized increased customer lifetime value,shared risk,and improved cu

89、stomer experience using telco cloudImproved customer lifetime value the total amount of money a customer spends with a business during the lifetime of a typical transactional relationship emerges as the top benefit realized in the last 3-5 years from telco cloud initiatives(see Figure 11).Customer l

90、ifetime value can increase as a result of cross-selling and upselling more value-added services to existing customers,and increasing loyalty benefits to mitigate attrition,among other factors.Telcos also cite as top benefits the sharing of network transformation risk,improved customer experience,and

91、 optimized TCO.Henriette Haagaas,Head of Cloud&ICT at Telia says:“Besides transforming our Networks to cloud,we are leveraging cloud to move customers to new services beyond core connectivity services-Enabling SASE and ZTN,Cyber Security services,5G and services combining the Hyperscale Cloud servic

92、es and platforms.In this way we can build trust and value for our customers on a new modern level because only operators own the ability to E2E securely connect between cloud,edge,and users-hence securely orchestrate their Cloud adoption path.RankTop 5 business benefitsTop 5 operational benefitsIncr

93、eased customer lifetime value Risk shared with partners such NEPs,hyperscalers,etc.Improved customer experience(QoS/QoE)Optimized total cost of ownership(CAPEX+OPEX)Increase in average revenue per user(ARPU)0102030405Improved workload handling Greater scalability Improved network security Greater fl

94、exibility in working with different vendors(reduced vendor lock-in)Increased operational efficiencySource:Capgemini Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=170 telco executives.Figure.11Top benefits of telco cloud realized in the last 3-5 years measured by the extent

95、of improvement since transformation23Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEFinancial benefits from telco cloud make a convincing business case for investmentEXAMPLES OF TOP-LINE IMPROVEMENTEXAMPLES OF BOTTOM-LINE IMPROVEMENTPOTENTIAL TOP-LINEIMPROVEMENTLG U+Aggressive d

96、eployment of a 5G network and capturing the market early helped LG U+get a lead of 7%of market share vis-vis its peers KT and SK Telecom in Korea.NokiaNokias MX Industrial Edge(MXIE)platform,a cloud-native Industry 4.0 edge solution generated growth of 12.8%,year on year,driven by double-digit growt

97、h in core network sales and enterprise solutions.Chunghwa TelecomChunghwa Telecom,Taiwans largest integrated service provider,has been able to reduce CAPEX by 16%per year by moving to a microservices-based network automation enabled by cloud.RakutenRakuten estimated that cloud-native architecture co

98、uld bring it 40%CAPEX and 30%OPEX savings compared with a traditional LTE operator.$110210Per year per operatorMILLIONPOTENTIAL BOTTOM-LINE IMPROVEMENT$260380Per year per operatorMILLIONSource:Capgemini Research Institute analysis.These numbers represent the figures for an average-sized telco operat

99、or with revenues of US$21 billion.Our analysis of financial benefits from telco cloud indicates that telcos will,on average,gain$370590 million in yearly benefits,against an average investment of$206 million in telco cloud(see previous chapter).Of this,$260$380 million comes from optimized TCO;the r

100、emaining$110210 million is expected to be realized as additional revenue owing to greater market share achieved through early-mover rolling out of cloud-based services(see Figure 12).Figure.12Quantifying financial benefits of telco cloud transformation 24Capgemini Research Institute 2023NETWORKS ON

101、CLOUD:A CLEAR ADVANTAGETelco cloud TCO savingspotential1221.9798.31.59$380 million(1.97-1.59)98.31.71$260 million(1.97-1.71)Estimatedvalue($billion)for non-cloud deploymentOptimisticestimate($billion)forclouddeploymentConservative estimate($billion)forcloud deploymentA.Total network TCO for operator

102、s in our study B.Average expected TCO per operator using estimates from our research and secondary data to arrive at the optimistic and conservative scenarioC.TCO savings per year for an average operator in our study with revenues of$21 billionSource:Capgemini Research Institute analysis.Refer to th

103、e appendix for detailed calculation and assumptions.Survey estimates derived as average values reported by N=62 operators who took part in the study.The cost savings refer to average gain and will vary depending on the size/revenue of every telco.All numbers are estimates.Telcos expect to realize ov

104、er$260 million on average in TCO savings Most of the cost savings are expected to result from a networks optimized TCO,improved operational efficiency,and more efficient workload handling.TM Forum estimates 2021 telco CAPEX and OPEX at$163 billion and$104 billion,respectively.This data,combined with

105、 estimates from our research,suggests that,on average,an operator can expect to reduce the TCO by$260 million in a conservative scenario and$380 in an optimistic scenario(see Figure 13 and the appendix for details).Figure.13Telco cloud can help optimize network TCO by over$260 million25Capgemini Res

106、earch Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEThese benefits will be felt most readily by greenfield telcos,given their lower upfront CAPEX requirement and low OPEX on the latest and up-to-date network architecture.Notwithstanding,significant savings will also accrue in brownfield network t

107、ransformations that use 5G SA installations on a new stack and involve the migration of existing subscribers from old to new technology.The timing of these migrations is critical to maximizing the savings opportunity(for example,moving applications or functions to cloud when legacy platforms are rea

108、dy to be retired).i.On the CAPEX front,while there will be some initial increase for deployment of cloud infrastructure,over the lifecycle of the technology,telco cloud will result in markedly lower CAPEX.A significant portion of network CAPEX comes from RAN signaling the need to virtualize RAN comp

109、onents and further shift towards Open RAN deployments.Studies have suggested that the cost of building and operating virtual RAN(vRAN)can be 37%lower than for conventional RAN.Optimization and automation of the network drives further savings.ii.OPEX improvements are most visible at the initial stage

110、 of telco cloud deployment.There is an upfront reduction in deployment time.Juan Carlos Garcia Lopez,SVP,Technology Innovation and Ecosystem at Telefnica,told us how much quicker and more efficient it is to deploy network functions on the cloud:“With the traditional approach,it used to take 6-9 mont

111、hs to deploy a new core network.However,with cloud-native deployment,it can be a matter of weeks/days.”There are also cost savings and operational efficiencies:Rakuten Mobiles network operating costs are now 30%lower than those of other MNOs 10 Highlighting the savings in manual effort,Shinsaku Shim

112、izu,Software-Defined Network Section Manager,Cloud Platform,Rakuten Mobile says:“We are managing 48 fabrics with just 15 engineers Its a huge time and cost advantage for us.”11Telcos expect to optimize network Total Cost of Ownership(TCO)by 13%,resulting in cost savings of$260-$380 million per year

113、on average26Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGETelco cloud can yield an early-mover advantage of$110-210 million a year Our analysis shows that telcos can gain additional revenues of$110-210 million a year on average through a more efficient rolling out of cloud-enab

114、led services and by being an early entrant in the market(see Figure 14).We estimate this by using the market potential of top 5G services that telcos have been rolling out for consumers and enterprise customers.We then estimate the additional market share that an early-mover telco can generate over

115、and above its competitors by being first to roll out these services.We estimate this advantage to be 510%of additional market share(and thereby additional revenue)in a year,taking a cue from the following examples.It is worth noting that this is the value of an“early-mover advantage”to roll out thes

116、e services faster through cloud-based platforms,and not the overall revenue potential of these services,which is much higher.Also,this is just the advantage for the first year of operation and is likely to grow manyfold over the next few years as the telco consolidates its position in the market.In

117、April 2019 South Koreas three operators jointly launched 5G services.In the following six months,LG U+-the third-largest telco in the country managed to secure a market share of 29%by being more aggressive in launching 5G services.This was about 7 percentage points higher than its 4G market share at

118、 that point.12 In addition to its faster 5G rollout,LG U+also offered the fastest 5G speeds,low latency,and AR/VR-based content for consumer use cases,giving it an edge over its rivals,KT and SK Telecom.13 Reliance Jio launched its 4G services in India in 2016,attaining about 14%market share within

119、a couple of years.Although Jio was not the first mover to offer 4G services in India,unlike its peers,its entire network was future-ready(LTE-enabled),and it had a 4G presence across the country.Jio had also made large investments in fiber-optic cables,ensuring high quality data transmission.It was

120、also the only firm to offer Voice 27Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGESource:Capgemini Research Institute analysis.Refer Appendix for detailed calculation and assumptions.The advantage refers to an average amount of gain and will vary by individual telco.All numbers

121、 are estimates.5G services:potential early-mover advantage enabled by telco cloudEstimated value($billion)A.Global market potential for some of the top 5G services(e.g.,AR/VR for gaming,Multi-access Edge Computing,and Network-as-a-Service,among others)by 2024B.Market size of 14 surveyed countries in

122、 global telecom services market(The 14 markets in our study represent around two-thirds of global telecom revenues)C.Market potential for the selected 5G services in surveyed markets by 2024(A x B)D.Average market potential for the selected 5G services in one market(C/14)E.Potential market-share adv

123、antage that can be captured by an early-mover telco enabled by telco cloud(estimate based on research estimates and secondary data)F.Potential revenue advantage for an early-mover telco(for an average telco in our study with revenues of$21 billon)(D x E)45.166.2%29.92.15%(conservative)10%(optimistic

124、)0.11-0.21($110-$210 million)Figure.14 Telco cloud can help telcos accumulate over$100 million a year as early movers in cloud-based 5G servicesover LTE(VoLTE),leading to better call quality.14Jio also offered unlimited free voice calls;highly affordable data plans;and free access to video,music,and

125、 content for the first four months.We estimate that telcos launching 5G value-added services such as AR/VR gaming and Network-as-a-Service(NaaS)backed by a telco cloud platform for faster time-to-market,will potentially achieve a similar gain in market share(5-10%)in a years time.However,as Jios exa

126、mple shows,several other factors will contribute to providing this advantage,such as:1.Robust network infrastructure to support fast speeds,high reliability,and low latency.2.Ease of service provisioning and troubleshooting.3.Ability to manage increasing subscriber volume and scaling up of network(a

127、nd cloud)resources;this would require revised end-to-end processes from order to fulfilment,with tools and platforms to support the transition.28Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGETelcos will need to push new services aggressively to improve their top lines(e.g.,by r

128、olling out new services faster to gain market share,monetizing new services earlier,and increasing ARPU by upselling new services to existing customers).Deutsche Telekom(DT),in a move to front-load ROI,is focusing on new-revenue generation and creating B2B differentiation through industrial connecti

129、vity,edge cloud,internet of things(IoT),and new 5G SA core,with quality of service(QoS)and slicing.DT is targeting revenues of more than$100 million from 5G campus networks by 2024.15Scott Andersen,Distinguished Solution Architect at Verizon,comments:”As we seek to monetize 5G technology,we are exam

130、ining various use cases,such as utilizing private 5G networks to establish secure bubbles that protect sensitive information and equipment in hospitals.”He adds,“Were going beyond simply offering Edge cloud computing services to really enabling ultra-reliable and low-latency applications.For example

131、,automatic and real-time vehicle license-plate recognition for law enforcement.Applications like these have a variety of use cases that are only now becoming possible.”29Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGE“Were going beyond simply offering Edge cloud computing servic

132、es to really enabling ultra-reliable and low-latency applications.Applications like these have a variety of use cases that are only now becoming possible.”SCOTT ANDERSENDISTINGUISHED SOLUTION ARCHITECT AT VERIZON30Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEChunghwa Telecom h

133、as been able to reduce digital-service launch time from around four months to an astonishing nine days through network-operations automation enabled by cloud.16 A director of private 5G networks and edge computing at a leading global semiconductor manufacturer adds:“Telecoms have focused mainly on r

134、etail consumers and not enterprise customers.They do not have the Edge infrastructure and the applications to monetize it.”An AVP,5G products and use cases,at a large Indian operator says:”Container-based Architecture-as-a-Service has helped accelerate deployment,as we can set up a whole network wit

135、hin a month.The focus should be on finding new use cases.Enterprise use cases are building up in automation,AI/ML applications,and robotics.For instance,robotic surgery in healthcare would increase and,in such cases,cloudification and 5G use cases would rise.”Telco cloud is expected to reduce telco

136、GHG emissions by 5%Besides business and operational benefits,the sustainability benefits of telco cloud are increasingly in focus.For telcos,the current average share of GHG emissions from network assets stands at 42%(see Figure 15).In light of such high impact,organizations are working towards an a

137、verage reduction target of 5%in overall GHG emissions through telco cloud.Telco cloud can also yield sustainability benefits from lower emissions from facilities(e.g.,reduced physical hardware footprint,reduced power usage,auto-scaling of network on demand,and managing power consumption of mobile to

138、wers by using AI and machine learning).(See box:Telco cloud and sustainability).31Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEA notable initiative is Vodafones Net Zero Carbon Target,which aims to achieve net zero carbon emissions from Vodafones operations,and use of its prod

139、ucts and services,by 2040.Vodafone has also set a target of achieving a 50%reduction in the carbon intensity of its network by 2030,from a 2016 baseline.17 Reducing emissions by means of telco cloud may appear to be simply shifting emissions from direct(Scope 1 and 2)to indirect(Scope 3)sources by o

140、utsourcing them to cloud platform providers.However,a large share of these emissions will still originate from activities owned and controlled by telcos,owing to their strong preference for private cloud architecture(direct emissions)as opposed to public cloud(indirect emissions).Even network functi

141、ons that will be deployed on public cloud are likely to benefit from the various environmentally conscious emissions-reduction initiatives usually taken up by hyperscalers for improving their power-usage effectiveness(PUE)a measure of the energy efficiency of a data center.However,tweaking the categ

142、orization of emissions does not absolve telcos from the responsibility of reducing them.32Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGESource:Capgemini Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=170 telco executives.Expected share of networks GHGem

143、issions in the next 35 years in organizatonsoverall GHG emissions Current share of GHG emissionsof telco networks in organizations overallGHG emissionsExpected role of telco cloud in reducing GHG emissions of telco networks42%5%28%-14%Expected overall reductionin telecom network GHG emissions Expect

144、ed reductionin network emissionsby telco cloud Figure.15Telcos expect telco cloud to deliver more than one-third of their GHG emissions reduction from networksTelcos that have undertaken cloud transformation expect to reduce their greenhouse gas(GHG)emissions by 5%through telco cloud.33Capgemini Res

145、earch Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGETelco cloud and sustainabilitySustainability in telecom network cloud transformation refers to the integration of environmental,social,and economic considerations into the design,deployment,and operation of telecommunications networks that have

146、transformed from a traditional infrastructure to a cloud-based one.One of the main drivers of sustainability in telecom network cloud transformation is the increasing demand for data and the corresponding need to expand and upgrade telecom networks.This has led to the proliferation of large data cen

147、ters and new infrastructure,such as cell towers and submarine cables.However,these traditional infrastructure models are energy-intensive and can have a significant environmental impact.Telco cloud can promote sustainability in telcos in a number of ways:Lower emissions from facilities(e.g.,reduced

148、physical hardware footprint,reduced office-based power usage)Auto-scaling of cloud applications and network functions for more efficient,demand-triggered resource use Improved utilization of storage and compute power through bundling of these resources on the cloud Managing power consumption of mobi

149、le towers by using AI and machine learning to optimize network traffic and energy usageWhile many of the operators we spoke to are in the early stages of telco cloud,they are confident of its potential.Telecom operators can work with their cloud providers to ensure that the energy used to power thei

150、r data centers and other infrastructure comes from renewable sources.This can help reduce the environmental impact of telecom networks and contribute to the transition to a low-carbon economy.NETWORKS ON CLOUD:A CLEAR ADVANTAGE34Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEMar

151、tin Kurze,Research and innovation Director at Deutsche Telekom says:“Leading telcos are using cloud-based AI mechanisms;for instance,they can predict periods of low data traffic and turn off base stations accordingly,reducing energy consumption and,ultimately,emissions.They are also working towards

152、producing energy requirements locally(e.g.,at base stations)with solar panels and wind turbines.”Laurent Leboucher,Group CTO of Orange and SVP of Orange Innovation Networks,recently shared some of the work the operator is doing to meet its target of becoming net zero by 2040.18 Key measures include:

153、sharing network infrastructure;using energy-saving features in network and IT systems;supplying renewable energy to radio sites;and using data and AI to optimize network deployment and operations.35Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGELeading telcos are already reaping

154、 the benefits of telco cloud0336Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEWe analyzed the level of preparedness of telcos participating in our survey on the basis of the following criteria:Presence of a comprehensive telco cloud strategy with well-defined goals and timeline

155、s Proportion of network functions that have been virtualized When they expect a majority of their network capacity(50%)to be on the cloudWe found that 23%of telcos are Early Adopters,being among the most advanced on these three dimensions;67%are Telco-Cloud Followers,whose transformations are in pro

156、gress;and 10%are Laggards,who have the most ground to cover in terms of their transformations.Our analysis of these three categories of telco shows that Early Adopters are ahead,not only in terms of the state of their transformations,but also in terms of realizing larger benefits,focused investments

157、,and higher ambitions in relation to cloud.Early Adopters have realized greater benefits from their transformationsThe level of benefits that Early Adopters have realized is greater than those realized by Followers and much greater than those realized by Laggards(see Figure 16).For instance,Early Ad

158、opters believe that theyre able to share the risk of network transformation over 16%better with their partners through telco cloud whereas Laggards have experienced less than half of that so far.Henriette Haagaas,Head of Cloud&ICT at Telia adds:If we dont move fast enough,someone else will.There are

159、 no geographical boundaries anymore in the digital economy.Telcos have a lot of legacy,but Telco Cloud offers a way for telcos to break out of the constraints of legacy core systems and be faster to market with new services and features.To 23%of telcos in our study are Early Adopters having a compre

160、hensive telco cloud strategy,high virtualization,and a shorter timeline for transitioning to cloud really benefit,telcos must radically transform their business model at the same time,to utilize the scale,and generative innovation capacity that is inherent in the“cloud”.And if they do,I believe this

161、 is an efficient way to offer customers the quality of service and total solutions that will give them great benefits in their own industry and market.37Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEIn June 2021,Microsoft and AT&T announced an industry-first collaboration to ev

162、olve Microsofts hybrid cloud technology to support AT&Ts 5G core network workloads.Development teams from AT&Ts Network Cloud organization moved into Azure for Operators,directly integrating the intellectual property into a Microsoft offering and assuring a seamless transition.19This strategic allia

163、nce provides a path for all AT&Ts mobile network traffic to be managed using Microsoft Azure technologies.This collaboration puts AT&T in a position to deliver new services faster and more flexibly across Azure public cloud and on-premises by employing common tooling and services,reducing time to ma

164、rket for a cloud-native approach.Microsoft believes this will result in:greater resiliency across the network;cost advantages when it comes to scaling existing services;and more effective introduction of new services,resulting in continuous improvements to the customer experience.AT&T relies upon Mi

165、crosoft to scale compute and storage capabilities at the edge,while AT&T will retain control of its network stack and market offering.Source:Capgemini Research Institute,Telco Cloud Executive Survey,November December 2022,N=170 telco executives.Top benefits of telco cloud realized since transformati

166、on16.3%11.6%7.5%15%12.9%0.0%14.7%12.3%11.9%Early Adopters Followers LaggardsImproved customer experience(QoS/QoE)Increased customer lifetime valueRisk shared with its partners likeNEPs,Hyperscalers etc.Figure.16Early Adopters of telco cloud have realized more benefits from their transformations 38Ca

167、pgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGER&D,cloud management,and innovation are investment priorities for Early Adopters R&D,cloud management,and product/service innovation are the top three investment priorities for Early Adopters(see Figure 17).Rakuten Symphony(Rakutens n

168、ew business that brings together all of Rakutens telco products)acquired leading Silicon Valley-based cloud-technology startup Robin.io.The addition of Robin.ios multi-cloud mobility,hyper automation,and orchestration capabilities to the Rakuten Symphony portfolio has facilitated the creation of hig

169、hly efficient and consistent high-performance cloud infrastructure and operations,from edge to central data center.20No such clear priorities exist for Followers and Laggards,although Followers are leading in network-automation investment.Source:Capgemini Research Institute,Telco Cloud Executive Sur

170、vey,November-December 2022,N=114 telco executives.Percentages represent the share of executives selecting top three areas of investment across their telco cloud value chain.Where are you investing the most across the telco cloud value chain(by organization category)?100%44%9%65%43%45%38%10%9%27%22%1

171、8%27%36%0%Early Adopters Followers LaggardsNetworkautomationCloud infrastructure(public/private/hybrid)Product/serviceinnovation(e.g.,internetof things,edge computing)Cloud managementsoftware andtoolsR&DFigure.17Early Adopters have clear priorities across the top areas of investment in the telco clo

172、ud value chain39Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEEarly Adopters are more ambitious in their expectations of telco cloudEarly Adopters expect to recover almost half of their investment(47%)in telco cloud within the next five years,whereas Laggards expect to recover

173、only 34%.The VP head of strategy at a large,global network-equipment provider comments:“Its important that telcos see some kind of cost advantage to be able to recover the investment that they have to make in their networks.We still dont see mass adoption of applications like VR,AR and 5G networks,s

174、o it seems that there is still time to be on the other side of the challenge,but also because the applications and content are not there yet.Private 5G networks being rolled out is a big opportunity.However,the market has to be ready for adoption.”40Capgemini Research Institute 2023NETWORKS ON CLOUD

175、:A CLEAR ADVANTAGESource:Capgemini Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=170 telco executives.Global average is the average target set by telcos for reducing network GHG emissions by transforming to cloud.What percentage reduction of GHG emissions of your network ar

176、e you target-ing through transforming to cloud?43%34%26%36%Global averageEarly Adopters Followers LaggardsEarly Adopters have set a higher target in terms of reducing their network GHG emissions the by transforming to cloud(see Figure 18).While Early Adopters believe that 43%of the reduction will co

177、me from transformation to cloud,Followers have set a goal of only 34%and Laggards of 26%.The head of supply chain(procurement)at a large UK-based telecom operator confirms this:The most important aspect now for all of us,especially big telco players like Vodafone,Telefonica,AT&T,Verizon,is to work i

178、n a carbon-free environment and all interactions with partners/suppliers/customers are carried out with a consciousness of GHG/carbon footprint/sustainability.Through optimum usage of cloud infrastructure,we are consuming less energy and working towards our targets of reduced GHG emissions.Early Ado

179、pters believe that 43%of the network GHG emissions reduction will come from telco cloud,much more than Followers(34%)and Laggards(26%).Figure.18Early Adopters aim to reduce their network GHG footprint most from the cloud transformation41Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVA

180、NTAGEChallenges and opportunities in cloudifying RANAs the telecom sector moves away from hardware-driven models toward virtualization and software,open radio access network(RAN)technology offers hardware and software components that are not inextricably coupled.Todays networks use largely proprieta

181、ry RAN equipment,which means that hardware and software parts are typically bundled together or purchased from the same supplier to guarantee network effectiveness,security,and efficiency.An Open RAN network architecture offers an ecosystem-based approach,where network functions in RAN can be assemb

182、led from a variety of providers collaborating on a standard set of protocols and specifications.Open RAN has the potential to unlock innovation,lower TCO,and uncover new revenue opportunities.GSMA Intelligence survey data shows that 5G will be a significant driver,with 75%of operators planning to us

183、e 5G as the entry point for adding open networking,including Open RAN,into their networks(albeit this remains a negligible amount compared to the current range of mobile networks).21 In Germany,the Federal Ministry of Transport and Digital Infrastructure has said it will provide 300 million($326 mil

184、lion)over several years to support innovative development and testing of new,software-controlled network technologies(Open RAN)and the manufacturing industry in general in Germany.22 According to our research,79%of RANs are in the process of becoming cloud-native and,among these,about a third(32%)wi

185、ll be fully deployed in the cloud in 23 years(see Figure 19).Source:Capgemini Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=124 telco tech executives.Stage of RAN/Open RAN in the process of becoming cloud-native3%79%18%Already fully cloud-nativeIn the process of becoming cl

186、oud-nativeNot currently targeted to becomecloud-nativeFigure.19A majority of Open RAN will be cloud-native in the next 3-5 years42Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGERakuten Symphony has deployed the worlds largest Open RAN coverage,with over 275,000 cells managed by

187、a team of only 250 people(as of April 2022),indicating that Open RAN can be scaled and can provide high-density coverage in urban areas.23 Vodafone has switched on the UKs first 5G Open RAN site in Bath,Somerset.The new site is the first of 2,500 planned and marks the beginning of the first scaled O

188、pen RAN project in Europe.24 The main benefit of Open RAN is that it enables businesses to use as many ecosystem components as they like.By enabling the selection of best of breed network components from a multivendor ecosystem,Open RAN offers greater flexibility and potential,which results in a sig

189、nificant TCO reduction for operators.Juan Carlos Garcia Lopez,SVP,Technology Innovation and Ecosystem at Telefnica adds:“With Open RAN,we have been able to define a full RAN,a complete radio system,selecting the different components and using a pattern to integrate them.This is a flexibility we neve

190、r had before and helps us not only to create alternatives for supply chain but also to design and develop specific solutions for specific customers or verticals.”In an Open RAN deployment,telcos can modify the RAN hardware and software to give specialized functionality based on the enterprise use ca

191、se and deployment requirement.With open reference designs,the adoption of Open RAN in private networks also promises to simplify the implementation and management of private cellular networks.Alessandro Miranda,Director of Radio Access Network(RAN)Design and Optimization at ZTE Corporation says:”A v

192、ery useful part of Open RAN is that you can deploy private 5G networks on top of it,and so support the enterprise network services,such as network slicing,at short notice and reduce the cost of private 5G networks.”43Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGESource:Capgemin

193、i Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=124 telco tech executives.Level of maturity achieved to date12%0%72%15%Testing in labs or proof-of-concept stage Trial stage or pilot deployment in a community/cityImplemented at partial scale(across major cities/regions in a

194、country)for commercial useImplemented at full scale(across all regions in a country)for commercial use It is also important to understand that telcos face significant obstacles to deploying Open RAN solutions,slowing the adoption rate.The complexity of system integration is increased by Open RANs po

195、tentiation of multi-vendor setups that demand integration between various software modules or between software and hardware solutions.This setting may provide extra difficulties for a brownfield operator,as they would have to consider legacy technology already existing in the network.According to a

196、study by GSMA,RAN infrastructure will remain the most prominent MNO cost component,at 45-50%of network TCO.24 Operators do not have a strong understanding of how Open RAN will affect the TCO of the network because the technology is still in its early stages.According to our survey,the majority of RA

197、N/Open RAN(72%)is still at the trial stage(see Figure 20).Ajay Simha,Director solutions architecture at VMWare confirms this:”Open RAN adoption is happening right now and is still not very mature.So,for telcos to realize the cost savings,it will take three to five years where they can see year-over-

198、year cost savings in operating the network by doing a high amount of DevOps and automation.”Figure.20Open RAN is in the early stages of deployment44Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGE”Open RAN adoption is happening right now and is still not very mature.So,for telcos

199、 to realize the cost savings,it will take three to five years where they can see year-over-year cost savings in operating the network by doing a high amount of DevOps and automation.”AJAY SIMHADIRECTOR SOLUTIONS ARCHITECTURE AT VMWARE45Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVAN

200、TAGEHow can telcos harness the full potential of telco cloud?0446Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGESource:Capgemini Research Institute analysis.DEVISE ATELCO CLOUDSTRATEGYManageculturaltransformationAccelerate servicemonetizationLeveragetalent topowerinnovationSeek

201、to forge strategicpartnerships withinyour ecosystemOur experience of working with large global operators on their telco cloud journey,and extensive research into telco cloud,has allowed us to devise a five-point plan to help telcos harness the full potential of telco cloud(see Figure 21).I.Devise a

202、comprehensive telco cloud strategy In our survey results,nearly one in ten telco executives(9%)said their organization has a comprehensive telco cloud strategy;as many as half(52%)say that their firm has a few telco cloud initiatives but no comprehensive strategy(see Figure 21).Over a third of telco

203、 executives(37%)say their organization has no telco cloud initiative at all.This is concerning,as organizations that are delaying telco cloud transformation will find themselves falling further and further behind their peers.Martin Kurze,Research and innovation Director at Deutsche Telekom,says:“Tel

204、co cloud is a business transformation more than just a technological one.Moreover,it allows for a continuous innovation cycle.A leading telco strategy is designed to reflect that.Software and cloud will give telcos the flexibility to leverage as-a-Service modes.Thats a fundamental shift in terms of

205、business,operations,people,and processes.”Figure.21Harnessing the full potential of telco cloud requires a five-point plan47Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGESource:Capgemini Research Institute,Telco Cloud Executive Survey,November-December 2022,N=170 telco executiv

206、es.2%37%0%52%9%No current telco cloud plan,but mighthave one in futureWe have no telco cloud initiative,working on developing a network cloudtransformation strategyWe have taken multiple transformationinitiatives across the group and areworking on developing a comprehensivestrategyWe have a comprehe

207、nsive telco cloudstrategy with well-defined goals andtarget timelinesNo plans of telco cloud transformationDeutsche Telekom(DT)is taking advantage of its favorable market position to digitalize its operations systematically,taking it from leading European telco to leading digital telco globally.Prog

208、ress in terms of disaggregation and virtualization is facilitating the movement of more network functions to the cloud,and,in turn,enabling the creation of telco-as-a-platform.This will facilitate integration of the telcos own technical infrastructure with those of its chosen partners and vice versa

209、,allowing DT to access partner networks for its customers,orchestrating a network of networks,including third-party infrastructure.26A key aspect of the telco cloud transformation strategy is timing.Deployment of 5G SA core acts as a key trigger for implementation of telco cloud;however,not all telc

210、os start with 5G SA core deployment.Many telcos began their 5G journey with 5G NSA deployment that harnesses existing 4G LTE core.Large-scale technology transformations are usually planned as part of a technology refresh replacing legacy tech with state-of-the-art options and with subscribers/users

211、migrating over time.Figure.22Fewer than one in ten telcos has a comprehensive telco cloud strategy48Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEII.Aim to achieve rapid,efficient monetization of new servicesAs we saw in an earlier chapter,monetizing 5G services and at a quicke

212、r rate will be essential to recouping investment made in telco cloud,and in 5G technology in general.Telcos will need to include service monetization as a core component of the telco cloud strategy and establish leadership and governance approaches to pursue it.In broad terms,it will involve the fol

213、lowing stages:1.Devise a strategy and identifying core services to productize and monetize2.Assess the market a.Analyze market demand for various services b.Gauge enterprises and end-consumers technological readiness c.Assess customers willingness to spend3.Get the infrastructure ready to provide cl

214、oud-based services at scale a.Run proof-of-concepts and trials in a limited scope b.Firm up go-to-market partnerships c.Create a developer ecosystem to crowdsource services innovation d.Adopt a CI/CT/CD framework to test,develop,and launch new features and updates on an ongoing basisCapturing the ma

215、rket early with innovative services,and updating regularly in response to data-linked customer needs is key to successful monetization.For instance,Orange and Nokia have announced the deployment of a 4G/5G private network combined with network slicing at Schneider Electrics plant in Le Vaudreuil,Fra

216、nce.Network slicing is a key feature of the management of end-to-end 4G/5G quality-of-service and the security of industrial processes,operations,and applications in Industry 4.0.Nokias slicing solution supports existing LTE,5G SA and 5G NSA devices.The telecom vendor has also said that its solution

217、s include domain-controller software in RAN,core,and transport layers.This will also enable full slice connectivity.27Only about one in ten telco executives(9%)said their organization has a comprehensive telco cloud strategy49Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEIII.Le

218、verage new talent and automation to foster innovation and agilityMany skills required for successful cloud transformation are new and telcos do not necessarily have ready access to them.Naturally,significant investment is required either to build these skills internally(via upskilling and reskilling

219、 the workforce)or by hiring them.Our survey shows that telcos will invest 8%of their overall telco cloud transformation budget in workforce-related areas the third-largest investment area after technology infrastructure and R&D.Most of these investments are likely to be in ramping up talent in softw

220、are/technology-related areas,for instance:Kubernetes,containerization,microservices,and APIs DevOps,DevSecOps,and MLOps Cloud management(hardware and software)Continuous integration/testing/delivery(CI/CT/CD),and automation Network security Product/services innovation Data analytics and machine lear

221、ningA principal packet core and infrastructure architect at a UK-based mobile operator says:“A lot of the skills needed in telco cloud transformation are not easily found internally within telcos.This gap is either filled via hiring from outside or through technology partners,and the contract workfo

222、rce.”Acqui-hiring is another potential route,as demonstrated by Rakuten Symphony with the acquisition of Robin.io(see above).28 In 2021,when AT&T announced its 5G mobile network would be run on Microsoft cloud,the deal involved Microsoft acquiring AT&Ts Network Cloud engineering team.29 LabLabee a s

223、tartup tackling the gap in telco cloud trainings recently raised a 1.4 million($1.5 million)pre-seed round from a broad range of investors.30 The startups cloud-based platform,built on standard hardware and open source code,helps learners/clients experience practical use cases across 14 different ty

224、pes of lab platforms across 5G,Open RAN,and SDN,among others.The level of automation enabled by telco cloud will also be a significant dictating factor in terms of talent acquisition over the next few years.Our survey shows that,following the shift to telco cloud,around two-fifths(41%)of the work of

225、 network engineers,architects,and administrators has the potential to be automated.As cloud-based platforms and processes facilitate the automation of these tasks,the network workforce should be reskilled and upskilled to take up more complex and value-adding tasks such as cloud management,cloud adm

226、inistration,developing applications for enabling network-as-a-service,and managing enterprise clients private networks.Our survey also shows that close to one in four(23%)network engineers,architects,and 50Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEadministrators will need t

227、o be reskilled to allow them to work with newer technologies and processes,and undertake more value-adding jobs(see Figure 23).Santiago Tenorio,Fellow and Network Architecture Director at Vodafone told us:“As you transform your network to cloud,suddenly you have all these new components that require

228、 cloud architects and cloud engineering skills.A lot of these skills are scarce,some very expensive to hire,although not all require deep understanding of telco or network domain.As automation takes hold,some parts of network workforces time can be routed towards driving innovation and agility for n

229、etworks of the future.Juan Carlos Garcia Lopez,SVP,Technology Innovation and Ecosystem at Telefnica explained his organizations innovation priorities:“Our most important innovation initiative relevant to telco cloud is what we call the autonomous networks journey.Its focus is to make our networks mo

230、re automatic,better orchestrated,supported by artificial intelligence and machine learning.Its going to make our operations data-driven,efficient,sustainable,secure.”In addition to automation,agility in service delivery can also be driven using continuous integration(CI),continuous deployment(CD)and

231、 continuous testing(CT)a framework where software is continuously built,tested,deployed,and validated throughout its lifecycle.Of the Early Adopters in our study,9 in 10 are implementing the CI/CD/CT framework at a partial or full scale while less than half(45%)of Laggards are doing so.Source:Capgem

232、ini Research Institute,Telco Cloud Executive Survey,NovemberDecember 2022,N=170 telco executives.Percentages represent the share of in-house network workforce that needs to be reskilled.20.3%23.3%23%APACEuropeUS30252015105022%Global averageFigure.23Nearly a fifth of telcos in-house network workforce

233、s will need reskilling as part of the telco cloud transformation51Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEIV.Seek to forge strategic partnerships within your ecosystem Telco cloud transformation opens up the network side to multiple vendors and partners,which may be a sig

234、nificant change for some telcos.The success of the transformation will hinge on bringing diverse partners together in a symbiotic relationship and orchestrating their efforts for a seamless transition to cloud.Typically,a system integrator with experience in running large-scale transformation progra

235、ms involving multiple ecosystem entities can assist in setting up governance and program management.a.Orchestrate ecosystem partnerships and establish clear governance While involving one of the partners in program management will help,it is important to assign 23%Share of telcos in-house network wo

236、rkforces will need to be reskilled as part of the telco cloud transformationa leader responsible for driving end-to-end transformation,rather than delegating ownership to one of the vendors.The leader should also set up a body containing representatives from all partners to govern the transformation

237、 deciding on prioritization of initiatives and investments,and ensuring alignment of all parties on timelines and goals.52Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEA VP and head of technology evolution and innovation at a large European mobile operator says:“In many network

238、 domains,there is little choice of equipment vendors for telcos,so they tend to follow NEPs strategy for this part of the transformation.”He adds:“Telco cloud transformation offers a lot of flexibility and choice to a telco.Virtually speaking,a telco can pick ten different cloud-based systems for te

239、n different network functions or domains.However,the number of people,skills,and external support that would require far outweighs its advantages.It is always preferable to work with a small,consistent set of partners and involve a partner to help with governance and program management for smooth op

240、erations.”b.Set up terms of agreement with clarity on cloud costs and their evolution Lack of control and predictability of cloud costs is one of the top barriers hindering adoption(see Figure 25).Cloud platform providers must offer a level of cost predictability to telcos,providing some cushion for

241、 impact on OPEX and,by extension,margins.Offering a potential solution to this problem,a senior director of strategic partnerships at a large,US-based cloud and IT provider told us:“Often the KPI framework within telcos is fairly complex and not OPEX-friendly.It is not easy for telcos to move from a

242、 model of large,heavy investment up front to a pay-as-you-go model.”He adds,“To have a more smooth transition from a CAPEX-based to an OPEX-based model,it might be helpful to capitalize some of the OPEX,say for one or two years,as a one-time CAPEX investment to remove a large part of the uncertainty

243、 in cloud operational costs.”53Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEV.Manage a cultural transformation alongside the technological oneGeoff Hollingworth,CMO,Rakuten Symphony says:“It would help the telecom industry to view cloud not as something that you buy but as som

244、ething that you do.Its fundamental to the digital industrialization of infrastructure and your goals are to oversee how it performs around improving economics,resource utilization,security,governance,skills.”Clearly,it requires a fundamental rethink of the culture of telco organization to really do

245、cloud well.A majority of telco executives(52%)believe that cultural challenges(e.g.,changing employee mindsets to make the best of cloud opportunities)are the biggest barrier to telco cloud transformation(see Figure 24).A similar level of NEP executives agree(56%),as do a large majority of hyperscal

246、er executives(78%).Lack of control of cloud costs is another top barrier cited by all three players in the ecosystem.The head of IT architecture and infrastructure strategy at a France-based global operator says:“When you move network workloads from dedicated equipment or servers to cloud-based serv

247、ers,youre inherently shifting network CAPEX to OPEX.It is sometimes as easy as pushing a button and,without careful oversight,it can lead to soaring cloud operating costs.”A majority of telco executives(52%)believes that cultural challenges(e.g.,changing employee mindsets to make the best of cloud o

248、pportunities)is the biggest barrier to telco cloud transformation 54Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEPercentages represent the share of executives who selected a given challenge as a top barrier to telco cloud.Source:Capgemini Research Institute,Telco Cloud Executi

249、ve Survey,November-December 2022,N=270 telco executives,N=170 CSP,50 NEP,and 50 hyperscaler executives.54%52%40%32%31%56%66%54%52%48%46%42%42%According to telcosAccording to NEPsAccording to hyperscalersLack of reliability/quality of service interms of networkSLAsPerformance orability to handleworkl

250、oadsLack of control/predictability ofcloud costsCultural challengesin terms of employee mindsetData protectionregulations e.g.,GDPRLack of reliability/quality of servicein termsof network SLAsLack of datasecurityLack of talentand skill setsavailabilityControlling thecloud costsCulturalchallenges int

251、erms of employee mindset54%Complexity ofintegration ofmultiple vendorswith existingnetworkinfrastructureNew cybersecurityregulationsControlling thecloud costsLack of datasecurityCultural challengesin terms of employee mindset78%Regulatory issues,such as data protection,cloud sovereignty,and cybersec

252、urity are also among the top concerns.A VP and head of technology evolution and innovation at a large European mobile operator comments:“Owing to strict regulation,the choice of vendors for core and RAN is rather limited.However,specifically for private 5G network equipment or bare-metal cloud infra

253、,there are some good options available.From an R&D perspective,I have found some of them quite useful for co-innovation of products and services.”As telco cloud transformation fundamentally shifts network design,deployment,and management,the network workforce needs to undergo a step change in terms

254、of its approach towards telco network.The network workforce will be infused with software and IT(programming,security,containers)expertise,and will also initiate a much more agile environment,facilitating faster turnaround times,with less resources and effort devoted to installation and maintenance

255、and more to complex troubleshooting and client support.Figure.24Most ecosystem players agree that cultural challenges are top barriers to telco cloud55Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEThis perspective highlights that a strong focus is needed on change management to

256、 transform the organization smoothly while being mindful of the people and processes it affects.Yet,our survey found that only about 18%of executives believe that change management is a top-three telco cloud investment area.On average,telcos expect to spend just 6%of their overall telco cloud invest

257、ment on change management.Beatriz Ortega,Telco business development Manager at Red Hat,says:“Im sure telcos will invest adequately in technology,but Id advise them to invest sufficiently in people and processes as well.The transformation will not be successful unless the telco culture transforms alo

258、ng with it.”As processes and people undergo the transition,it might also require a reorganization of departmental/functional boundaries and fusing silos together.The principal packet core and infrastructure architect at a UK-based mobile operator says:“Some reorganization of talent becomes necessary

259、.In the initial stages of the transformation,we had the same team being responsible for everything from infrastructure to application.Now,we have a specific infrastructure team thats taking care of deployment,as we realized that the transformation requires extensive understanding of hardware infrast

260、ructure.”56Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEConclusion Telco networks are steadily evolving to accommodate a future in which the software used to implement and operate the network will also run it almost autonomously,with AI/machine learning optimizing systems and

261、directing traffic in real time.Network resources will be much more sustainable,and will be more energy-efficient,often powered by renewable energy.That future is taking shape today with the deployment of initial cloud-native network functions.It is a fundamental change in the evolution of the networ

262、k that has been dominated by physical devices and infrastructure.CAPEX investments are gradually shifting to OPEX,and fixed-price business models are being replaced by flexible as-a-service models.Leading telcos are already on board with this transformation and are reaping benefits.Being an early mo

263、ver is critical if your organization is to reap the largest rewards from this opportunity.57Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEAppendixTelco cloud TCO savings potentialEstimated value($billion)for non-clouddeploymentOptimistic estimate($billion)for clouddeploymentCon

264、servative estimate($billion)for clouddeploymentRemarks and assumptionsGlobal network CAPEX estimate(TM Forum,2021)31 Global network OPEX estimate(TM Forum,2021 and 2022)32Expected network TCO(a+b)Network TCO for operators in our study(0.66 x c)Average expected TCO per operator(d/total operators in o

265、ur study)TM Forum and Rakuten estimates above used to arrive at the optimistic scenarioTCO savings owing to telco at thecloud(Capgemini survey estimate,used to arrive at the conservative scenario)TCO for cloud-based network deploymentsTCO savings per operator per year 20%saving in a cloud-native dep

266、loyment as an average estimate considering Rakutens 40%savings15%saving in a cloud-native deployment as an average estimate considering Rakutens 30%savingsSum of a and bOperators in our study represent 66%of the global marketN=62 operators in our studyTelcos have reported a 13%TCO improvement on ave

267、rage in our survey$260$380 million per year for an average telco with revenues of$21 billon16321.8184.81221.97130.418.614998.31.591.59$380 million(1.971.59)130.418.614998.313%1.71$260 million (1.971.71)ABCDEFGHBusiness case calculationsI.Estimating TCO savings enabled by telco cloud58Capgemini Resea

268、rch Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEAppendix5G services:potential early-mover advantage enabled by telco cloudEstimated value($billion)A.Global market potential for some of the top 5G services by 2024I.AR/VR for gaming for end-consumers33 II.5G slicing for enterprise customers34 III

269、.Network-as-a-Service(NaaS)for enterprise customers35 IV.Multi-access edge computing for enterprise customers36 V.Private 5G network services for enterprise customers37 B.Total global market potential for top 5G services by 2024(sum of Ai to Av)C.Market size of the 14 surveyed countries in the globa

270、l telecom services market(The 14 markets in our study represent around two-thirds of global telecom revenues)D.Market potential for the selected 5G services in surveyed markets(B x C)E.Average market potential for the selected 5G services in one market(D/14)F.Potential market-share advantage that ca

271、n be captured by an early-mover telco enabled by telco cloud(estimate based on research estimates and secondary data)G.Potential revenue advantage for an early-mover telco(for an average telco in our study with revenues of$21 billon)(D x E)7.81.314.817.43.845.166%29.92.15%(conservative)|10%(optimist

272、ic)0.110.21($110$210 million)II.Estimating the potential early-mover advantage enabled by telco cloud We take a hypothetical scenario of a typical operator in our study(with an average annual revenue of$21 billion)that launches several 5G services for enterprises and consumers(faster time to market

273、enabled by telco cloud)in the next 6 to 9 months.The revenue advantage owing to telco cloud is estimated below:59Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEResearch methodologyWe surveyed 270 executives from large CSPs,network equipment providers(NEPs),niche equipment vendor

274、s(NEVs),hyperscalers,CaaS vendors,and large cloud providers.Of these,170 executives belong to CSPs,50 to NEPs,and 50 to hyperscalers.We also conducted in-depth interviews with more than 25 industry executives.33%10%10%9%7%6%6%4%4%3%2%2%2%1%MalaysiaSingaporeSpainAustraliaSouth KoreaSwedenItalyJapanIn

275、diaGermanyFranceChinaUKUSExecutives by country60Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGE18.5%63%18.5%Communication service providersNetwork Equipment Providers and niche equipment vendorsHyperscalers,CaaS vendors,or large cloud solution providers with end-to-end capabilit

276、ies,like Redhat,VMWare,etc10%62%28%Geographic distribution of telcos(overall)USEuropeAPACUS$5 10 billionUS$11 20 billion32%31%30%7%CSPs by latest annual revenue($billions)US$21 30 billionMore than US$30 billion Geographic distribution of telcos(overall)Organizations by sectorOrganizations by revenue

277、61Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGECorporate Strategy and Product Leads:Head of Strategy/Chief Strategy Officer,Chief Product Officer/Head of Product Strategy,Chief Planning Officer/Product Planning,and other equivalent strategy rolesEngineering/R&D:Chief Engineeri

278、ng/R&D Officer,Head of Engineering and R&D,and other equivalent rolesNetwork/Tech:Chief Technology Officer,Chief Network Officer,Network Management/Planning,Tech/Network StrategyOthers:CIO,CISO,and other equivalent roles36%11%27%25%CSP executives(N=170)Director/Senior Director/Principal VP/Senior VP

279、Executive VP/Corporate VPC-level executive34%28%31%7%All executives(N=270)Executives by title and functionThe study findings reflect the views of the people who responded to our online questionnaire for this research and are aimed at providing directional guidance.Please refer to the methodology for

280、 details about the respondents or contact a Capgemini expert to understand specific implications.62Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGE1.The Economist,“Tareq Amin on the open future of mobile telecoms,”November 2021.2.Rakuten,“Rakuten Mobile announces new representati

281、ve directors and new management structure,”February 2022.3.Fierce Wireless,“Dish makes a splash,picks AWS to host 5G RAN and core,”April 2021.4.SDX Central,“Dish 5G open RAN plan gains$2B boost,”November 2022.5.AT&T,“AT&T moves 5G mobile network to Microsoft Cloud,”June 2021.6.Ericsson,“O2 Telefnica

282、 lifts 5G core network into the cloud to unlock new opportunities,”December 2022.7.GSM Arena,“Network Capacity definition,”Accessed November 2022.8.Verizon,“AWS and Verizon team up to deliver 5G edge cloud computing,”December 2019.9.Verizon,“Verizon and AWS expand edge computing to 19 US metro areas

283、,“May 2022.10.TM Forum,“Rakuten Mobile:No ordinary telco,”June 2020.11.Cisco,“Rakuten Mobile Builds the Worlds First Cloud-native,Software-defined 5G Network,”October 2021.12.Huawei,“LG Uplus builds on early 5G lead,”January 2020.13.Developing Telecoms,“LG U+A Valuable Case Study for Global 5G Devel

284、opment,”July 2021.14.India Today,“Mukesh Ambanis Jio gamble:Telcos headache,consumers benefit,”September 2016.15.Deutsche Telekom,“Technology and Innovation,”May 202116.TM Forum,“Microservices:Paving CSPs path to cloud,”August 2022.17.Vodafone,“Vodafone commits to net zero carbon emissions by 2040,”

285、November 2020.18.TM Forum,“Oranges Group CTO calls for collective industry action on sustainability,”January 2023.19.Microsoft,“Improving the cloud for telcos:Updates of Microsofts acquisition of AT&Ts Network Cloud,”January 2022.20.Rakuten,“Rakuten Symphony agrees to acquire leading US-based cloud

286、technology company Robin.io to deliver highly integrated telco-cloud for mobile,”February 2022.21.GSMA,”Open RAN momentum continues:playing the long game,”December 2022.22.TM Forum,“Open RAN investments continue apace,”November 2021.23.Rakuten,”Open RAN,”April 2022.24.Vodafone,“Vodafone switches on

287、first 5G Open RAN site,”January 2022.25.GSMA,“5G-era mobile network cost evolution,”August 2019.26.Deutsche Telekom,“Becoming the leading Digital Telco:DT further develops its strategy,”February 2022.27.Orange,“Orange and Nokia deploy the first Industry 4.0 4G/5G private network with network slicing

288、 in French factory,”June 2021.28.TechCrunch,“Rakuten Symphony acquires Kubernetes platform Robin.io,”February 2022.29.Microsoft,“AT&T to run its mobility network on Microsofts Azure for Operators cloud,delivering cost-efficient 5G services at scale,”June 2021.30.Telecom TV,“Newly-funded startup tack

289、les telco cloud training,”September 2022.31.TM Forum,“Cloud&Automation:Changing CSPs OpEx Outlook,”2021.32.Ibid.TM Forum,“Telco to Techco:Capex and Opex Implications,”May 2022.33.IndustryARC,“Augmented Reality&Virtual Reality For Gaming Market Overview,”Accessed January 2023.34.Abi Research,“5G slic

290、ing revenue to grow from US$309 Million in 2022 to approximately US$24 billion in 2028,”August 2022.35.GSMA,“The Mobile Economy 2022,”February 2022.36.Grandview Research,“Multi-access Edge Computing market size,share&trends analysis,”August 2021.37.Straits Research,“Private 5G network market size wo

291、rth USD 28,429 million by 2030,”August 2022.References63Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGETERMDEFINITIONNetwork functionSoftware-defined networking(SDN)Network function virtualization(NFV)Containerized network functions(CNFs)Cloud-nativeMicroservicesKubernetesA buil

292、ding block of telecom networks that fulfils a specific function(e.g.,router,switch,firewall,load balancer).Use of software-based programs to control underlying network hardware and direct traffic on a network.The replacement of network appliance hardware with virtual machines.Network functions desig

293、ned and implemented to run inside containers.Containerization of network architecture components makes it possible to run a variety of services on the same cluster and more easily on-board already decomposed applications,while dynamically directing network traffic.Cloud-native technology is built in

294、 and for the cloud.It is optimized for this use and provides distinct benefits,including cost savings,improved performance,resiliency,and scalability.Small,loosely coupled,and independent services that make up an application.They can be developed and deployed independently of other services,and modi

295、fied without affecting the entire application.An open-source system for automating deployment,scaling,and management of containerized applications.Glossary64Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEDEFINITIONContainerizationNetwork slicingRadio access network(RAN)Network c

296、oreMulti-access edge computingOSS(Operations support systems)OrchestrationA software-deployment process that bundles an applications code with all the programs that it requires to run on any infrastructure.A method of creating multiple networks on top of shared,common physical infrastructure.A part

297、of the telecom network that connects end-user devices to the telecom network core through radio connections.Core is the heart of a mobile network.It establishes reliable,secure connectivity to the network for end users and provides access to its services.Network architecture that allows cloud comput

298、ing infrastructure at the edge of networks,enabling the network edge to analyze,process and store the data.Facilitates near-real-time analysis,reporting,and automation,reducing network response time and improving customer experience.Computer systems used by operators to manage their networks(e.g.,wi

299、th inventory,service provisioning,network configuration,and fault management).A series of tasks or actions to set up network devices,applications,and services to achieve specific objectives.TERMGlossary65Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEDarshil ShahAssociate Consul

300、tant,Capgemini Research IMonika GuptaVice President,Global 5G&Edge Lead,CShamik MishraVP and CTO,Connectivity,CJacques AssarafGlobal Head of Telco Industry,CSimon DumbletonSolution Director,Capgemini Engineering Sandeep AroraVP and Head of Telecom Industry PLuis Manuel DIAZ DE TERAN LOPEZVP,TMT Indu

301、stry Lead,Capgemini EKarl BjurstroemEVP,Global Head of Tech&Telecom Industries,Capgemini Invent Amol KhadikarProgram Manager,Capgemini Research IManisha DashSenior Consultant,Capgemini Research IJerome BuvatHead of Capgemini Research ISubrahmanyam KanakadandiSenior Director,Capgemini Research Instit

302、ute Key contributors66Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEThe key contributors would like to thank Hiral Shah,Arnab Das,Fotis Karonis,Nitin Arora,Kunal Khan,Nazirali Rajvani,Luca Quattropani,Derek Long,Sylvain Allard,Amit Joshi,Francisco Jess Viceira Alguacil,Lukas Ku

303、ckelkorn,David Peterson,Ashish Bhasin,Letizia Bacciardi,Ramon Armada Arnau,Finn Alkskog,Ben Pietrabella,Manish Aggarwal,Stuart Ball,Subhankar Pal,Arun P Santhanam,Jean Philippe Defrance,Punam Chavan,Rupali Chakraborty,Ashwani Kumar and Kristin Morris for their contribution to the report.About the Ca

304、pgemini Research InstituteThe Capgemini Research Institute is Capgeminis in-house think tank on all things digital.The Institute publishes research on the impact of digital technologies on large traditional businesses.The team draws on the worldwide network of Capgemini experts and works closely wit

305、h academic and technology partners.The Institute has dedicated research centers in India,Singapore,the United Kingdom,and the United States.It was recently ranked number one in the world for the quality of its research by independent analysts.Visit us at Assaraf Global Head of Telco Industry,CKarl B

306、jurstroem EVP,Global Head of Tech&Telecom Industries,Capgemini Invent Shamik Mishra VP and CTO,Connectivity,CFotis Karonis Executive Vice President,Group Leader for 5G and Edge Computing,Capgemini Arnab Das VP,Head Connectivity COE,Capgemini ENitin Arora Executive Vice President,Capgemini EGlobal co

307、ntactsOthersBen Pietrabella(NA)Alexandre ABBOUD(France)Luca Quattropani(Italy)Suresh Narasimhan(UK)Rohit Kumar(Nordics)Bruno Casadinho(APAC)Rogosch,Michael(Germany)Luis Manuel Diaz De Teran Lopez(Spain)For more information,please contact:67Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR A

308、DVANTAGEDiscover more about our researchA world in balance:why sustainability ambition is not translating to actionSustainability in Automotive:from ambition to actionCloud sovereignty:the road aheadRethink:why sustainable product design is the need of the hour5G in industrial operations-How Telcos

309、and industrial companies stand to benefitIntelligent products and services:Unlock the opportunity of a connected businessAccelerating the 5G industrial revolutionData for Net ZeroTotal immersion:how immersive experiences and the metaverse benefit customer experience and operations68Capgemini Researc

310、h Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGECapgemini Automation applied to Telco CloudDeploying containerized network functions on top of a Telco Cloud environment is a complex task,and current lifecycle is not quick enough to meet the releases and patches coming from the vendors.Usually the

311、re is lack of collaboration among various functional teams and significant time spent on manual testing which causes multiple human errors and delays in network management and operations.Relying on automation solutions seems to be the best choice,especially if this is based on open-source tools Inte

312、grated and available for Network Functions service deployments;this will allow bundled E2E Services with well-established CI/CD/CT Integration workflows with test equipment vendors,which can be executed in timebound manner for network functions and services Our Capgemini Advanced Network Automation

313、Toolset is an ideal approach adaptable to existing CSPs initiatives.Testing all these assets require managing all the test environment,ensuring the existing labs are used by the required teams in time and manner.Lab automation and rationalization will help CSPs to save time an effort as well as mini

314、mizing delays due to poor lab resources management.Our Capgemini Testing Services and Tools may help on this transformation journeyOperations is another area where automation takes an important role.Capgeminis NetAnticipate is an award winning,self-driving network platform for realizing zero-human t

315、ouch network operations:Predicting potential network anomalies Building autonomous decisions and taking preventive actions Providing an autonomous feedback loop that ensures the network self-learns to improve actions69Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGEDefine a netwo

316、rk transformation strategy with leveraging Capgemini solution blueprintsSERVICE ORCHESTRATIONECOSYSTEMORCHESTRATION&INTEGRATIONEND-TO-ENDINTELLIGENTOPERATIONAL SERVICESCI/CT/CDCapgemini ANACapgeminiNetanticipateLAB AUTOMATIONSERVICE ASSURANCE&OPTIMIZATIONAssemble&integrate solutions to form a cohere

317、nt,scalable,agile,software-driven and futureproof:Integrate with existing customer driven tools and open-source solutionsProvide E2E standalone network automation solutionTransform operations as a managed service towards excellent NPS,being agnostic to cloud and infrastructure ecosystem in a multi-d

318、omain environment-Multivendor Core,Transport,RAN,OSS,NFV,Edge Provide Smart Intelligence through data,analytics and closed loop automation Network functions(xNFs)in multidomain networks across any type of cloud or edge to achieve service agility and time to market Automated lab managementAutomated t

319、est execution Lab hosting services -adaptive R&D Infrastructure for testing,certification&industrialization Design&develop end-to-end service operations with smart intelligent and closed loop automation driven by AI&MLWe help our CSP clients accelerate their network automation journey,providing end-

320、to-end services and accelerators for strategizing,building&transforming their network services.We help our clients along their entire network automation journey.Arnab DasVP|Advanced Connectivity CoE,Capgemini EngineeringRamn ArmadaDirector&Automation offer co-leadCapgemini EngineeringSai Ramesh Asap

321、uDirector&Automation offer co-leadCapgemini EngineeringShamik MishraVP and CTO,Connectivity,CapgeminiSubhankar PalSenior Director&NETANTICIPATE leadCapgemini EngineeringPablo Alonso MartinWCC Delivery Director ANA Product manager Capgemini EngineeringTo discuss how Capgemini Automation can be applie

322、d to Telco Cloud,contact our experts:70Capgemini Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGESubscribe to latest research from Capgemini Research InstituteReceive copies of our reports by scanning the QR code or visitinghttps:/ Research Institute 2023NETWORKS ON CLOUD:A CLEAR ADVANTAGE

323、Copyright 2023 Capgemini.All rights reserved.About CapgeminiCapgemini is a global leader in partnering with companies to transform and manage their business by harnessing the power of technology.The Group is guided everyday by its purpose of unleashing human energy through technology for an inclusiv

324、e and sustainable future.It is a responsible and diverse organization of over 350,000 team members in more than 50 countries.With its strong 55-year heritage and deep industry expertise,Capgemini is trusted by its clients to address the entire breadth of their business needs,from strategy and design to operations,fueled by the fast evolving and innovative world of cloud,data,AI,connectivity,software,digital engineering and platforms.The Group reported in 2021 global revenues of 18 billion.Get the Future You Want|