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POWER SHIFT 2 Cloud Services New Partnership Deals This Year Marked a Shift in Power in Mobile

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POWER SHIFT 2 Cloud Services New Partnership Deals This Year Marked a Shift in Power in Mobile BUSINESS ANALYSIS For TELECOMS proFESSioNALS DEC 2010–JAN 2011 LEADER CONTENTS NETWORK STRATEGIES POWER SHIFT 2 Cloud services New partnership deals This year marked a shift in power in mobile. We look at 2010 show telcos are raising the stakes to provide cloud highlights as well as cloud services and fibre business models services to enterprises. TECHnoLogY TRENDS his has been the year when September it sold its 3.2% stake in merger and acquisition China Mobile for £4.3 billion and 6 Policy Tactivity sprung back to life with barely a whisper in November management in the telecoms and ICT sectors. offloaded its interests in Japan’s Mobile operators needing M&A activity accelerated as the Softbank for £3.1 billion. to better manage data year drew to a close as we showed in In mobile, at least, the global traffic flow and improve the last issue of Total Telecom Plus. balance of power is shifting towards service quality are looking to policy management. It is in the mobile sector where the BRIC countries and the Middle Ian Kemp Editor the biggest upheaval is playing out. East. That is sure to be reflected in OPerator RANKING Total Telecom Plus Bharti Airtel in April moved up to Total Telecom’s Global 100 ranking of 8 Global 100 the number five spot among global fixed and mobile network operators An extract from Total mobile operators by subscribers going forward. This year’s Global Telecom’s ranking of the when it bought the African assets of 100 marks the fall of Zain and world’s biggest network Kuwait mobile operator Zain for charts the major risers and fallers, operators, plus figures on US$10.7 billion. But Bharti could as we show in our extract on p.8. the latest revenue and itself be surpassed by Russia’s Mobile M&A has been matched capex trends. Vimpelcom if its deal, announced by LTE activity this year (TT Plus BUSINESS AND FINANCE in October, to buy the telecoms July/August). That is shown in the assets of Weather Investments— weight of coverage in our Timeline 11 Fibre economics Review of the Year on p.19 which Two experts reveal their rounds up many of the critical studies into the cost of In mobile, at least, building next-generation events in telecoms in 2010. access fibre networks the balance of As well as being the year that LTE rollouts began, operators and TIMELINE power is shifting governments have been grappling 16 Reviewing 2010 with business models for next- A look back at some of the including Italy’s Wind and a generation fibre networks. On p.11 key business, network and majority stake in Egypt’s Orascom two fibre experts set out the typical people events this year as Telecom—is approved. United Arab costs for NGA architectures based documented in our Emirates operator Etisalat also on their detailed studies. monthly Timelines continues to move up the ranks, in Of course, new fixed and mobile statistiCS October agreeing to buy a 46% stake architectures will be crucial to in Zain for $11.7 billion. Wireless support new services. Many of them 27 Prime numbers Intelligence says that will propel will be delivered in the cloud, but A breakdown of IPTV Etisalat into a regional superpower, operators are not necessarily best subscribers worldwide in Q3, network equipment with 150 million connections in the placed despite their network assets growth, new LTE revenue Middle East, Africa and Asia. (story p.2). And our Technology and subscriber forecasts, All the while Europe’s biggest Trends this month shows just how and mobile handset sales mobile operator, Vodafone, is vital policy management will be to offloading non-core assets: in delivering mobile data services. n NETWORK STRATEGIES CLOUD SERVICES JOINING FORCES New partnership deals show telcos are raising the stakes to provide cloud services to enterprises, but so too are aggregators and Internet powerhouses. By Ingrid Lunden elcos hoping their infrastructure services. Unisys will implement cloud Capgemini in Cloud Computing: The will give them an advantage in computing technology in six new Colt Telco Opportunity, singles out other areas Tcloud computing face a threat data centres to enable both companies to of operator expertise including on-demand from upstarts building or aggregating deliver cloud-based services to their hosting; SaaS enablement; on-demand their own network assets. Virtual network customers across Europe. computing and storage; security; unified operators and IT and Internet power- And in the same month, in Spain communications ; billing; and delivering houses are muscling in and aim to Telefonica announced a “virtual desktop” wholesale capacity for regional cloud compete with operators both on cost and offering for fixed and mobile terminals operators. “Enterprises and governments service levels. using cloud technology from NEC. The spend nearly US$2.4 trillion worldwide on But those same companies could also two have already been working together IT products and services, many of which give telcos a boost in providing cloud for a year on Telefonica’s software-as-a- can be delivered from the cloud,” says the services to their enterprise customers. service (SaaS) offering Aplicateca, aimed report. “Within the enterprise segment Indeed a spate of partnership announce- at SMEs and large enterprises. Jaime telcos are aggressively targeting SMEs ments in October and November indicates Serrano, CEO of NEC Iberica, says the due to the growing interest in this segment that operators are raising the stakes in Spanish operator is looking to extend the for cloud-delivered software. SME share the enterprise market. product to the rest of its European and in overall cloud services revenue is Cloud -based services for enterprises Latin American footprint. expected to increase from 25% to 40% will generate revenues of US$35.6 billion “I think that we are still in the earliest between 2009 and 2015.” globally by 2015, up from $12.1 billion in stage of this market,” says Serrano . “We Certainly, telcos should be a perfect fit 2010, forecasts Analysys Mason. But mass are in phase zero/one of deployment. It’s for cloud services : they have both the adoption of cloud computing by enter- very cost effective, easier and cheaper for network and the existing customer rela- prise customers is still a long way off. customers, but phase two/three will be tionships delivering data connectivity to Telcos hope their early entry into enter- much more. Cloud will help society do businesses. But telcos that do not own prise cloud services will help them to reap more than just IT; it can help with admin- network are also eyeing the opportunity, the benefits. Indeed, now could be the istration, traffic and many other things.” claiming they can provide greater flexi- time to step up offerings: 2011 will mark a Analysts say there is a growing oppor- bility and lower pricing: virtual network jump in the growth of enterprise cloud tunity for telcos to act as “cloud operator Virtela since June has been service revenues, of 43%, says Analysys brokers”—intermediaries between end offering cloud infrastructure services— Mason, but that growth will fall dramati- users and cloud providers, delivering ranging from application acceleration to cally in subsequent years (see chart p.4). services ranging from SLAs with multi- security solutions—that it claims can Already telcos are turning to global IT ple vendors to compliance and security. provide a cost reduction of up to 80% on providers to help speed cloud service Gartner predicts 20% of all cloud services companies’ premises-based services. launches. IBM in October launched Cloud will be handled by brokers by 2015 , with That competition is set to intensify: Service Provider, a carrier-grade set of total global cloud services revenue reach- Gartner estimates that by 2015 20% of hardware, software and services based on ing $148.8 billion a year earlier. non-IT Global 500 companies will its Service Delivery Manager platform and designed to help operators deliver Cloud offerings from telecoms operators cloud services to business customers. IBM Telco SaaS IaaS PaaS claims it can help telcos reduce the time BT ✓ ✓ ✗ Orange Business Services ✓ ✓ ✗ to launch new cloud services—such as Deutsche Telekom/T-Systems ✓ ✓ ✓ virtual desktop management, storage, TeliaSonera ✗ ✓ ✗ hosting or applications-as-a-service— Belgacom ✗ ✓ ✗ Telefonica ✓ ✓ ✗ typically from six months to six weeks. AT&T ✓ ✓ ✓ (planned) Orange and SK Telecom are among oper- Verizon Business ✓ ✓ ✗ ators testing the service, with the former Telstra ✓ ✓ ✓ (planned) SK Telecom ✗ ✓ ✓ using it to trial infrastructure-as-a-serv- NTT ✗ ✓ ✗ ice offerings for enterprise customers. Bharti Airtel ✗ ✓ ✗ Also in October, Colt announced a Tata Communications ✗ ✓ ✗ partnership with Unisys to deliver cloud Source: Capgemini TME Strategy Lab 2 www.totaltele.com December 2010/January 2011 NETWORK STRATEGIES themselves be cloud service providers, as risk. Those providers don’t want to sign focusing this around uptime,” says Ron they deliver their core services via the up to the kind of SLA offerings that telcos Haigh, VP for cloud services and archi- cloud and move into the value chain. always have offered for their traditional tecture at Virtela. “It’s important and we The good news for network operators: services,” says Craig Wilson, VP of global still have SLAs for this, but now the bar is cloud-based infrastructure services are telecommunications at IBM. “Is there a higher: It’s not just ‘will it perform better’, growing in importance. Analysys Mason demand for committed, differentiated but ‘will it have a meaningful impact?’” says the majority of cloud services today are SLAs? Yes, definitely.” Virtela says IBM is one of its big partners based around software-as-a-service (SaaS), Reflecting that, a new survey conducted using its platform to provide cloud serv- accounting for 70% of the market; infra- by IDG Research for managed service ices, packaging them with its own SLAs.
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