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How 2 Meta-Trends Will Drive Telecom in 2015

Danny Dicks
Heavy Lifting Analyst Notes
Danny Dicks
1/30/2015
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Long Term Evolution (LTE) investment and virtualization/cloudification are the two meta-trends that will drive the telecom industry in 2015. Even wireline networks are being affected by LTE as the access and backhaul networks converge. Tech vendors, service providers and network operators are all having to change the ways they have traditionally done things to ensure they remain agile enough to match competitors that are designing products and services from the ground up as virtualized or cloud-based offers.

When we thought about the topics we'd identified as hot for 2015, we realized that most of them were strongly related to one or both of these two broad areas. We chose LTE investment as a topic to watch in its own right (with small cell deployment as a closely related area), and software-defined networking (SDN) and network functions virtualization (NFV) as two topics clearly related to operators' own virtualization efforts, designed to increase their agility and minimize their costs.

But there are links between the two meta-trends and our other hot topic selections. For instance:

  • The reasons the metro network is being modernized is to support business requirements for better cloud services and to support greater data volumes generated by LTE subscribers.

  • Use of cloud services and LTE have stimulated new interest in voice services, as well as new investment in the means of delivering them.

  • Cloud service provision and standardized infrastructure running open source software means new security vulnerabilities in places that operators previously felt secure.

  • The needs of LTE networks to have many remote radio head sites distributed close to where people live and work mean that existing copper access infrastructure is being reassessed for its suitability for mobile fronthaul and backhaul.

Many have observed and written about these big trends for some time, but it is only when one starts picking them apart that one understands quite how profoundly they will affect the industry. Failure to properly follow through all the consequences of these two big trends means a company risks being caught out -- whatever its role in the telecom industry.

On the flipside, understanding how these trends will evolve also means a company is best placed to take advantage of the many opportunities that are emerging for vendors and service providers.

The latest Heavy Reading Insider report, "Hot Market Sectors to Watch in 2015," identifies 10 telecom sectors that will show strong revenue growth for established or nascent markets, or where there will be large amounts of experimentation and investment even if significant revenue has yet to emerge. It gives the recent context to the developments in these 10 sectors, assesses the impact of them in 2015 on network operators, service providers and technology vendors and provides guidance about what to watch out for in 2015.

— Danny Dicks, Analyst, Heavy Reading Insider


Hot Market Sectors to Watch in 2015, a 25-page report, is available as part of an annual subscription (12 monthly issues) to Heavy Reading Insider, priced at $1,499. This report is available for $595. To subscribe, please visit: www.heavyreading.com/insider.

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thebulk
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thebulk,
User Rank: Light Sabre
1/31/2015 | 4:34:55 PM
Re: Nail on head
That is an interesting point on taxing the resources as a whole. 
smkinoshita
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smkinoshita,
User Rank: Light Sabre
1/31/2015 | 4:30:16 PM
Re: Nail on head
@thebulk -- It used to be that my hard drives wouldn't be this full (I had to delete some old stuff to make room; I haven't needed to do that in years) and there's a lot of data out in the cloud these days.  I haven't done some hard-and-fast measurements but I know I personally have a lot more to track these days than I did five years ago.  

Even a small increase in a per-user situation puts a considerable strain on resources required by the whole.
thebulk
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thebulk,
User Rank: Light Sabre
1/31/2015 | 2:34:15 PM
Re: Nail on head
@smkinoshita, how much do you see your personal data growing by? 

 
smkinoshita
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smkinoshita,
User Rank: Light Sabre
1/31/2015 | 1:06:34 PM
Re: Nail on head
"The reasons the metro network is being modernized is to support business requirements for better cloud services and to support greater data volumes generated by LTE subscribers."


Personally I think the greater data volume issue is going to be the big influencer of 2015.  Data volume is just going to continual to snowball!  I'm even finding my own personal volume of data is getting bigger than I expected.
thebulk
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thebulk,
User Rank: Light Sabre
1/30/2015 | 10:11:59 AM
Nail on head
I think you are getting it right with this. backhaul and cloud are going to be the big drivers this year, they have to be because for providers there is not much else left for them to tap into. 
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