At the end of 2015, we made predictions on the ten events and themes that will shape the communications industry over the next 12 months. Here we give a mid-2016 update on developments relating to a few of these predictions.
Industry Analysis: 2016 Predictions Update for Q2
By Michael Tomasini
Prediction: SDN will continue to gain traction with more enterprise services being developed around the technology.
In 2016, we have seen further launches of software-defined WAN services (SD-WAN) by network operators serving the enterprise market. In June, CenturyLink joined others – such as AT&T and Level 3 – with the launch of a new SD-WAN service for multi-site enterprises, offering IT managers the ability to monitor and control WAN performance themselves. These solutions typically ship with software-based CPE, enabling greater flexibility than traditional solutions have offered.
The other side of the enterprise-SDN coin is internal consumption of SDN by IT departments. Here we are also seeing progress, although less widespread than with the telcos. In a recent industry survey by ZDnet, 13% of respondents said they had implemented SDN while 32% were planning to do so. Meanwhile, the Open Network User Group of IT business leaders launched a set of industry initiatives in May to support the transition to open software-defined infrastructure.
Prediction: Following the successes of industry frontrunners, more network operators get serious about decommissioning their legacy voice switches and moving to IP.
In the US, operators are continuing to make progress in migrating customers to next-generation platforms, whereas other countries appear to be moving more slowly. After a year of migrating legacy voice customers to fiber, Verizon petitioned the FCC in January to permit the termination of postpaid calling cards and personal 800 services.
In April, AT&T requested permission to retire 13 legacy bridging and multiplexing services, stating that it aims to have less than 10% of its wireline customers on TDM-based voice services by the end of 2016.
In June, Level 3 asked the FCC for permission to shift legacy voice customers in Portland, Oregon to an IP-based cloud service, which it aims to implement in the Fall. Also, in France, Arcep has launched a public consultation on copper access rates, seeking to encourage and incentivize the transition from legacy copper services to fiber.
Prediction: Global interest in the shutdown of 2G (GSM) networks grows as we approach the end of 2016 when the first networks are due to close
So far, we have seen major operators such as Telstra and AT&T target GSM network closure by the end of the year. Similarly, major operators in Asia-Pacific (e.g. Optus, M1, Singtel) have announced 2G closures for 2017 as a result of license expirations and government action to reassign 2G spectrum for LTE. In the US, the FCC will consider this July whether to repurpose large amounts of higher-frequency spectrum for 5G, driving operators to abandon legacy networks.
Many operators have continued to face a dilemma over network closure, with revenue from M2M and GSM roaming still running strong. Instead, operators have begun discussing the potential for 3G closure prior to 2G, in light of 3G data services migrating to 4G and a recent report by Ericsson finding that 78% of 3G terminals rely on 2G for voice carriage. In April, the three major Turkish operators (Turkcell, Vodafone and Turk Telecom) facilitated the rapid migration of six million 3G customers onto the newly-launched LTE-Advanced Pro services, also known as 4.5G, within one week of launch. Such successes may drive 3G closure ahead of 2G. Also quickly gaining traction is the deployment of single RAN networks to allow operators to maintain GSM service with less spectrum and without sacrificing 2G revenue streams. One recent example is Airtel India’s network initiative “Project Leap” which has been upgrading base stations to a single RAN network since 2015.<>