Telecoms in 2020: network infrastructure
Ovum’s core Telecoms 2020 scenario has implications for the owners and suppliers of network infrastructure. Scaling, from transactions to terabits, will require silicon, software, and systems innovation in a climate where investment is constrained by traffic growth outstripping revenue growth. Telcos must develop charging models that tie resources to revenues. Vendors will divide into two camps — full-service and specialized — to more effectively support their customers’ evolution.
Executive summary
In a nutshell
Scope
Ovum view
Everyone wants to use it, but how it will be paid for remains unclear: What’s a poor network to do?
Key messages
Competitive forces narrow the options: Full-service vendors/system integrators and specialized vendors
Software enables open networks and leads to business model redefinitions and security concerns; but hardware still matters
Meeting the “multi-terabit challenge” will require significant industry R&D and cooperation on standards
The network demarcation point is very likely to move into the connected home and office
Networks will become more intelligent as they track presence, location, and authentication and optimize and manage terabits and transactions
Recommendations for telcos and network infrastructure vendors
Telcos
Infrastructure vendors
Telecoms network infrastructure in 2020 — the broad view
Network infrastructure industry overview
The SMART, the LEAN, and the in-between
Drivers of change in network infrastructure
Application bandwidth requirements, fueled by IP video, will increase the role of fiber
The mismatch between resources and revenues will make network investments increasingly challenging
Opportunities and risks derived from open networks
Network infrastructure industry structure and player positioning
Structural changes
Network infrastructure vendors split into “full service” and “specialized”
Vendors with full-service aspirations include Alcatel-Lucent and Ericsson
Customer partnership pitfalls
Distinctions between “hardware” and “software” vendors blur
A rise, or at least not a decline, in captive component capabilities within system vendors is likely
Managed service providers / outsourcers / SIs will have specialized roles
Opportunities and threats
Opportunities
Threats
Network infrastructure development timeline — vendors
Network infrastructure customers and markets
The world of 2020
Fixed and mobile operators become increasingly indistinguishable
Network infrastructure development timeline — customers
2009–2012
2013–2016
2017–2020
Network infrastructure services and revenues
The world of 2020
Network infrastructure development timeline — services and revenues
Network infrastructure services and technologies
The world of 2020
Network technology life cycle stage
Network infrastructure development timeline — technologies
Investment considerations
In a nutshell
Scope
Ovum view
Everyone wants to use it, but how it will be paid for remains unclear: What’s a poor network to do?
Key messages
Competitive forces narrow the options: Full-service vendors/system integrators and specialized vendors
Software enables open networks and leads to business model redefinitions and security concerns; but hardware still matters
Meeting the “multi-terabit challenge” will require significant industry R&D and cooperation on standards
The network demarcation point is very likely to move into the connected home and office
Networks will become more intelligent as they track presence, location, and authentication and optimize and manage terabits and transactions
Recommendations for telcos and network infrastructure vendors
Telcos
Infrastructure vendors
Telecoms network infrastructure in 2020 — the broad view
Network infrastructure industry overview
The SMART, the LEAN, and the in-between
Drivers of change in network infrastructure
Application bandwidth requirements, fueled by IP video, will increase the role of fiber
The mismatch between resources and revenues will make network investments increasingly challenging
Opportunities and risks derived from open networks
Network infrastructure industry structure and player positioning
Structural changes
Network infrastructure vendors split into “full service” and “specialized”
Vendors with full-service aspirations include Alcatel-Lucent and Ericsson
Customer partnership pitfalls
Distinctions between “hardware” and “software” vendors blur
A rise, or at least not a decline, in captive component capabilities within system vendors is likely
Managed service providers / outsourcers / SIs will have specialized roles
Opportunities and threats
Opportunities
Threats
Network infrastructure development timeline — vendors
Network infrastructure customers and markets
The world of 2020
Fixed and mobile operators become increasingly indistinguishable
Network infrastructure development timeline — customers
2009–2012
2013–2016
2017–2020
Network infrastructure services and revenues
The world of 2020
Network infrastructure development timeline — services and revenues
Network infrastructure services and technologies
The world of 2020
Network technology life cycle stage
Network infrastructure development timeline — technologies
Investment considerations
LIST OF TABLES
Table 1: Drivers of change and their impact — network infrastructure
Table 2: Network infrastructure vendor positioning
Table 3: Key events and drivers summary — network infrastructure vendors
Table 4: Customers needs and drivers and their impact on network infrastructure requirements
Table 5: Business models and revenues, network infrastructure vendors
Table 6: Network infrastructure technology development timelines
Table 1: Drivers of change and their impact — network infrastructure
Table 2: Network infrastructure vendor positioning
Table 3: Key events and drivers summary — network infrastructure vendors
Table 4: Customers needs and drivers and their impact on network infrastructure requirements
Table 5: Business models and revenues, network infrastructure vendors
Table 6: Network infrastructure technology development timelines
LIST OF FIGURES
Figure 1: DWDM’s ability to keep backbone costs down through capacity increases is leveling off
Figure 2: Infrastructure vendors’ changing models
Figure 1: DWDM’s ability to keep backbone costs down through capacity increases is leveling off
Figure 2: Infrastructure vendors’ changing models
