Trends driving telecom cloud adoption to ensure cost savings

Operators will spend $26.6 billion on telecommunications cloud in 2024, rising to $64.9 billion in 2028, Juniper Research in a report said.
Telstra broadbandJuniper Research forecasts the total data generated over operator networks to increase from 1,929 EB in 2024 to 5,347 EB in 2028. The growth in total data is due to both increasing average data consumed per user, and a rise in the total number of users.

The 177 percent growth in data travelling over operator networks in the next four years will place more pressure on the cost of ownership for wireless cellular networks. As a result, operators will increasingly invest in cost savings technologies to mitigate this threat to profit margins.

Telecommunications Cloud will be one of the key technologies, with operators able to more precisely and efficiently distribute network resources, scaling back or up where necessary. This prevents unnecessary expenditure on operating costs such as energy, reducing the total cost of ownership.

Moreover, operators can limit the capital expenditure for the network infrastructure required to support these greater volumes of data. For example, cloud RAN is less than two thirds of the cost of distributed RAN. This will further enable operators to restrict the impact of data consumption on the total cost of ownership for wireless cellular networks, with the virtualisation and pooling of BBUs (Base Band Units) offering considerable cost savings.

The costs savings offered by telecommunications cloud deployments will enable operators to reduce basic expenditure on 5G network capital, thus enabling further innovation in new services and network quality. In turn, this will improve operator capacity to secure return on investment in 5G networks.

Juniper Research anticipates that cloud RAN in particular will be essential for operators moving forward, especially in 6G networks. 6G will utilize higher frequencies, increasing interference and limiting transmission length. For example, the longest transmission of 6G terahertz data as of April 2024 is just over 500 meters.

Juniper Research anticipates the development of 6G RAN to be complex and costly for operators, with vast numbers of base stations and small cells being required to provide coverage.

As of 2023, there were 296 commercial 5G networks worldwide, with Juniper Research forecasting the total number of 5G connections to increase from 2.2 billion in 2024 to 5.9 billion in 2028. This represents a growth of 172 percent over the next four years.

The deployment of 5G networks will drive the adoption of cloud technologies in operator networks as its architecture increases the necessity and opportunity for cloudification. The 5G system architecture, as per 3GPP Release 15, is service based, meaning that viable architecture elements are defined as network functions that offer their services via interfaces of a common framework to any network functions that are permitted to make use of these provided services.

This allows for greater virtualisation within operator networks, which can then be leveraged to further cloudify the network. The service-based architecture is enabled by NRFs (Network Repository Functions) every network function can discover the services offered by other network functions.

Network functions can subscribe to and register for services from other network functions using HTTP.2 as a baseline communication protocol. This enables operators to more effectively manage their 5G core network and eliminate the need for network configuration every time a new network function is added to the network. The 5G core also decouples the user plane from the control and user plane separation.

The user plane carries network user traffic, whilst the control plane determines how data is forwarded. As a result, the 5G architecture allows the dynamic scaling of the control plane functions during periods of traffic peak. This is achieved without endangering user plane operations, granting operators greater control over their network operations.

Operators can also dynamically scale their computing resources with network functions by operating network functions on cloud infrastructure, further improving network efficiency. In turn, this encourages the cloudification of operator networks.

In 2023, 39 percent of operators, representing 43 percent of global telecommunications revenue, had committed to net zero. Operators such as Telefonica, and T-Mobile have also agreed to have their net zero targets reviewed and verified against the new Net Zero Corporate Standard, and operators now purchase 24 percent of their electricity directly from renewable resources.

As part of these sustainability goals, operators have made the development of energy efficiency a significant focus, with energy expenses ranging from 15 percent to 40 percent of total operator operating expenditure and 2 percent to 3 percent of global energy consumption.

According to the GSMA, 92 percent of operators place sustainability and energy efficiency as a leading focus of their network transformation strategy. Consequentially, these goals will receive significant investment over the next four years.

Virtualisation has been a critical component of these strategies, as through capabilities such as capacity aggregation operators can significantly improve the energy efficiency of network operations. This has enabled operators to cut energy consumption and carbon emissions over the last few years.

However, despite improvements in energy efficiency, the telecom industry continued to account for 2 percent-3 percent of global energy consumption in 2023, and energy consumption is expected to remain in this range in 2024.

To pursue their sustainability goals and increase energy efficiency, operators must expand the ways in which they leverage their telecommunication cloud deployments to improve energy efficiency. A key area operators must focus on is the Kubernetes Power Management Operator, which offers power management and energy optimisation capabilities for Kubernetes nodes.

Operators must leverage these capabilities to turn off idle CPU cores, which are unnecessary for current workloads. Operators can also reduce CPU frequency to lower power consumption. This will enable operators to dynamically adjust the power consumption of their cloud infrastructure, thus increasing energy efficiency.

Operators will invest $26 billion in cloud services in 2024, with expenditure growing to $65 billion in 2028. To maximise the impact of this investment in telecommunications cloud operators must leverage the cloud’s centralisation to develop automated network management.

The growth in 5G network usage over the next four years will result in a corresponding 110 percent growth in cellular data over the next four years. This growth in cellular data will be driven by the rising adoption of data intensive IoT use cases, such as automated manufacturing and vehicle infotainment systems.

To manage this substantial growth in cellular data, operators must leverage cloud-based network management systems to automate the management of network resources in real-time and at a local level.

Critical to this automation will be machine learning, which will enable real-time traffic analysis, enabling automatic changes to network resources in response to unexpected traffic patterns. This will prevent congestion from sudden increases in cellular data on operator networks, protecting quality of service.

Additionally, investment in cloud technologies will be instrumental in enabling operators to achieve sustainability targets. Operators will use machine learning to automate network management, reducing power to network elements when user demand is low. However, operators must also insulate mission-critical traffic when reducing power, to guarantee quality of service for enterprises.

Latest

More like this
Related

Huawei unveils strategies for talent development in the age of industrial intelligence

As the world evolves into a fully digital era...

Telecom and tech policy after Donald Trump’s 2024 election win

Strand Consult has released a research note on Donald...

Nokia signs 5G network contract extension with Taiwan Mobile

Nokia will extend its partnership with Taiwan Mobile through...

Huawei revenue surges 23% to $82 bn in 9-months

Tech giant Huawei reported that its revenue rose 22.8...