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Sponsored by:

FUTURE NETWORKINGSURVEY REPORTA CUSTOM HEAVY READING REPORT SPONSOREDBY INTERDIGITAL, NOKIA, AND ORACLEAuthor: James Crawshaw, Senior Analyst, Heavy Reading

In partnership with

Contents

05Building the Next-Generation Internet

10Beyond 5G - Challenges and Priorities

15Re-inventing the CSP

20Network Evolution And IndustryCollaboration Structures

03Introduction

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Future Networking Survey Report

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IntroductionLight Reading, Heavy Reading, and ATIS are excitedto present the results of a study we executed incollaboration with our sponsors. We joined forces toexplore the key factors that will empower the futurenetwork-enabled communications and cloudmarkets. Our survey examined the critical factors,both technological and market-related (newbusiness models and market structures), driving theindustry into the next decade. It covered the coretechnologies underpinning the future roadmap ofthe communications industry that communicationsservice provider (CSP) decision makers are mostinterested in understanding, such as artificialintelligence (AI) and 5/6G mobile.

Heavy Reading worked closely with the project’ssponsors to develop a survey to glean insightful,intelligent, and meaningful information. In earlyJanuary 2019, email invitations were sent tocontacts in the Light Reading database. We talliedjust over 100 valid responses from 61 differentCSPs worldwide. Slightly less than 60% ofrespondents said they worked for a convergednetwork operator (fixed and mobile), a quarterworked for mobile-only operators, 12% for fixed-only, and the rest for cable or satellite operators.Half of the respondents said their organization’sheadquarters is in the U.S., 17% in Asia Pacific, 13%in Europe, 10% in Latin America, 8% in Canada, and3% in the Middle East and Africa. Around a quarterof respondents said they work in networkengineering, 22% in R&D technical strategy, 13% innetwork planning, and 13% in IT operations.

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The key findings of this survey are as follows:The top challenge in building the next-generation Internet is the erodingprofitability of the CSP business itself.This makes it difficult to sustain muchneeded investment.

Service providers are looking for ways toavoid becoming the proverbial “dumbpipe.” 68% of respondents expect theirorganizations will add value to basicconnectivity in the future throughpersonalization and hosting on-netcompute and storage services. 58% thinkthey will add value with “clean pipe”services, and 56% plan to offer managedservice-level agreements (SLAs) forbandwidth, latency, reliability, and security.

Protecting Internet services againstdistributed denial-of-service (DDoS)attacks and other cyber threats is a keychallenge for service providers. 67% ofrespondents protect their services withmanaged L2-L7 firewall services. 57%deploy basic countermeasures such asanti-spoofing and 5-tuple access controllists (ACLs), and 56% deploy embeddedDDoS protection in peering routers.

The survey reaffirms the importance ofNFV, DevOps and cloud-native servicearchitectures for more agile, nextgeneration OSS infrastructures. Big dataanalytics, AI and machine learning werealmost equally important to improvenetwork visibility, closely followed by SDNand cross-domain orchestration forautomated process control.

Over 80% of respondents identified 5Gas the technology having the greatestimpact on future network investments.Not quite as popular, though still selectedby almost 60% of respondents, wasInternet of Things (IoT).

5G is seen as a game changer thatbrings new opportunities as well as newchallenges to existing mobile networkoperators. 43% of respondents think 5Gwill allow new entrants (e.g., verticalmarket players) to challenge theincumbent providers. Nearly a third ofrespondents thought that operatorswould need to forge new relationshipsand work together with industryspecialists to capitalize on 5G.

Nonetheless, CSPs are confident thatthey can provide own-brand, industryvertical IoT solutions. They also believethis model will prevail over more marginalroles such as a channel partner for otherIoT solutions providers or simply aconnectivity provider.

Learnings from the initial deploymentsof 5G are being fed back to thestandards and vendor community toidentify areas for improvement. Thesurvey identified core networktransformation as the top 5G industrypriority beyond 2019, closely followed byimprovements in speed and latency.

5G is not just about revamping radioaccess network (RAN) and mobile core;business support system (BSS)modernization is key too. Approximatelytwo-thirds of respondents see a multi-channel, digital experience as the keymonetization capability to ensure their 5Gtransformation is successful.

Delivering a joined-up digital experiencewill be key to customer retention,regardless of 5G. 41% of respondentsindicated that the biggest impact on theirbusiness strategy over the next 5-10 yearswould stem from the demands of digitallysavvy millennials who require them tomake their service offerings morepersonalized, intelligent, and intuitive.

While it is too soon to talk of 6G, mobiletechnology and services will inevitablyevolve beyond 5G. Nearly half (46%) ofthe survey respondents think the industryfocus beyond 5G should be on a wholenew set of use cases such as verticalapplications beyond autonomous carsand Industry 4.0. A further 26% ofrespondents suggested the focus shouldbe on using unlicensed spectrum toboost capacity.

Open application programminginterfaces (APIs) and industrystandards are seen as the keytechnologies for enabling aninteroperable cloud ecosystem. Opensource software was the least popularchoice among respondents (39% rankedit last out of four options).

Future Networking Survey Report

Key Findings

Report Author

Senior Analyst James Crawshawleads Heavy Reading’s IntelligentNetworks & Automationresearch service, which coversthe software and IT systems thatenable CSPs to plan, design,build, and operate their networksfor maximum operationalefficiency, reliability, and agility.This includes orchestration andclosed-loop assurance systemsthat come under the umbrellaterm of operations supportsystem (OSS), as well asmonetization platforms that fallwithin the scope of BSS. It alsoincludes the application ofhorizontal technologies, such asanalytics, AI, and blockchain, thatcut across both high level ITsystems and lower levelnetworking domains with acommon goal of increased

Key takeaways:• 68% of respondents expect their organizations will add

value to basic connectivity in the future throughpersonalization and hosting on-net compute andstorage services. 58% think they will add value withclean pipe services, and 56% plan to offer managedSLAs for bandwidth, latency, reliability, and security.

• 67% of respondents protect their Internet service againstDDoS attacks and other cyber threats with managed L2-L7 firewall services. 57% deploy basic countermeasuressuch as anti-spoofing and 5-tuple ACLs, and 56% deployembedded DDoS protection in peering routers.

• In the wide-area network (WAN), 69% of respondentshave implemented, or are considering implementing,software-defined WAN (SD-WAN). 54% said the samefor segment routing and 52% for data center SDN.

• The top challenge respondents identified in buildingthe next-generation Internet was the erodingprofitability of their businesses, which makes it difficultto sustain investments.

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Adding Value and Ensuring Profitability inNext-Generation Internet ServicesThe telecom industry has been instrumental in bringingaccess to the Internet and its most popular application – theworldwide web – to billions of people around the planet. Butwith fixed and mobile broadband Internet access increasinglyubiquitous, what role will telecom operators play as theInternet evolves to support new consumer applications, suchas virtual reality (VR) entertainment and new business needssupporting Industry 4.0?

Survey respondents were generally optimistic about theprospects for their companies in the “Internet of the future,”with almost 70% seeing scope for them to add value on topof basic connectivity through personalization and by hostingon-net compute and storage services in their edge cloud.Personalization could include the ability for a residentialgateway to manage quality of service or bandwidth on a per-user or per-device basis (e.g., so the game console or smart

TV is not affected by other devices in the home). Anotherexample of personalization is parental controls, again on aper-user or per-device basis. CSP-hosted edge cloud servicesare one of the applications of the Broadband Forum’sNetwork Enhanced Residential Gateway (TR-317) initiative.

Almost 60% of respondents also saw a role as a clean pipeprovider with added protection such as cybersecurity. Whilebusinesses, as well as consumers, deploy security tools suchas firewalls, these do not afford any protection from DDoSattacks. Internet clean pipe services use network-basedDDoS mitigation that performs macro-level (IP flow) analysisand real-time monitoring. Potential DDoS attack traffic can bererouted to scrubbing centers where it is filtered andprocessed, leaving only legitimate traffic and transactions tobe forwarded back to the customer. Alternatively, serviceproviders could have inline DDoS filtering in their peeringedge routers and provider edge routers if their infrastructuresupports these capabilities.

Building the Next-Generation InternetThis section of the report examines what technology choices network operators are making to supportInternet services today and into the future. How will they address the ever increasing cyber threats? What arethe greatest challenges they face: operational, financial, or regulatory? Where is the greatest scope for themto add value on top of basic connectivity? Heavy Reading explores these and other questions below.

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Figure 1: What role do you expect your company to play in the internet of the future?

Network-enhanced Internet – we will add value to basic connectivity through personalization and

hosting on-net compute and storage services in our edge cloud

Clean pipe Internet service - high speed Internet with added user protection e.g. cyber security

Industrial Internet services - we will offer business class Internet with managed SLAs for bandwidth,

latency, reliability and security

More of the same - best effort Internet butoffering more capacity and lower price per bit

Limited to wholesale access - fixed wireline and wireless local loop unbundling

17%

51%

56%

58%

68%

Figure 2: Which technologies have you, or are considering, implementing to enhance your data center andwide-area network architectures?

SD-WAN

Segment routing, running on MPLS orIPv6 data plane

Datacenter SDN

Seamless connectivity between WAN and DC domains and across physical and virtualized

netqwork functions

CUPS (control and user plane separation) of EPC and or BNG as part Fixed Mobile Convergence

69%

54%

52%

48%

38%

N=103 Source: Heavy Reading

N=103 Source: Heavy Reading

The most talked about “new” technology in enterprisetelecoms in recent years is SD-WAN. This was the mostpopular response to the survey question concerning newWAN technologies. Heavy Reading put new in quotationmarks, as arguably SD-WAN it is simply a way of tunneling IPtraffic between sites – not particularly new per se. What isnew perhaps is the increased reliability of basic Internetaccess. Since this is typically much cheaper than aMultiprotocol Label Switching (MPLS) service, enterprisesare naturally interested in exploiting this price differential forconnecting smaller sites or for offloading low priority traffic(such as web browsing).

Segment routing, the next most popular choice, is a modernvariant of source routing or path addressing that is beingdeveloped within Internet Engineering Task Force (IETF)working groups. Segment routing can be used to send voicepackets over lower latency paths. It ignores the shortest orlowest cost path preference of Interior Gateway Protocol,which might be congested. Unlike traditional trafficengineering, segment routing does not require any pathsignaling; hence, the per-flow state only needs to bemaintained at the ingress node of the domain, whichincreases flexibility and reduces cost.

Around half of respondents have already implemented, or areconsidering, data center SDN characterized by policy-basedautomation for streamlined operations that support rapidservice instantiation, changing business requirements,massive scalability, and hybrid models. Webscale operatorshave been the trailblazers of data center SDN, and now CSPsare adopting the SDN paradigm more aggressively in theirdata centers to increase service agility and drive newsoftware-based IT services while reducing costs throughautomation.

Control and user plane separation (CUPS) was the leastpopular choice, although at 38%, a significant number ofrespondents had or were considering implementing it. CUPSenables the separation of functionality in various EvolvedPacket Core (EPC) nodes (servicing gateway, packet gateway,and traffic detection function), which enables more flexiblenetwork deployment and operation. For example, the controlplane could be centralized while the user plane can be placedcloser to the application it is supporting.

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DDoS attacks continue to grow in number (businesses willoften see multiple attacks per day) and intensity (thoughtypically still below 5 Gbit/s). Although DDoS attacks areusually short-lived, even a website outage of 10 minutes canhave a significant impact on a consumer brand’s reputation.When Heavy Reading asked survey participants how theyprotect against DDoS attacks and other cyber threats, themost popular response was firewall services. While a firewallis clearly an important protection against many cyberthreats, it is ineffective against volumetric DDoS attacks, asarticles such as this explain: “Why a Firewall Can’t ProtectAgainst a Memcache DDoS Attack.”

The next most popular response was that CSPs are preventingDDoS attacks using anti-spoofing and 5-tuple ACLs. Anti-spoofing is a technique used in routers, firewalls, and networkgateways for identifying and dropping packets that have afalse source address. However, it is only effective to the extentthat the rules correctly identify falsified addresses. 5-tuplerefers to the five items that each rule in a firewall policy uses todefine whether to block or allow traffic: source and destinationIP, source and destination port, and protocol.

To combat volumetric DDoS attacks such as Domain NameSystem (DNS) or Network Time Protocol (NTP)amplification/reflection or direct User Datagram Protocol(UDP) flooding by IoT botnets, service providers need to lookfurther up the network. This is indicated by the third mostpopular response: embedded protection in peering routers.These devices contain an important source of informationfor discovering traffic patterns, detecting traffic anomalies,and detecting security issues such as DDoS attacks.

Less popular options were quarantining users that appear tobe a security risk (bad actors) and deploying scrubbingcenters. Webscale operators will often manage their ownscrubbing centers. For example, Akamai’s global DDoSmitigation network consists of six scrubbing centers locatedstrategically around the world to protect Internet-facinginfrastructures against all known types of DDoS attacks at thenetwork, transport, and application layers. However, forregional Internet service providers (ISPs), scrubbing centerscan be expensive to staff and operate and evidently are lesspopular than other DDoS mitigation techniques.

When Heavy Reading asked about next-generation OSStechnologies, we were somewhat surprised that the topresponse was network functions virtualization (NFV),DevOps, and cloud-native architectures. NFV is about turningnetwork infrastructure into software that can be run oncommodity servers – well below the OSS layer. DevOps is anorganizational approach rather than a technology per se. Thethird aspect (cloud-native) is the consensus approach formodern software development, though whether it will helpunravel the complexities of OSS remains to be seen.

The next most popular response was using big dataanalytics, AI, and machine learning (ML) to get better insightinto the network and services. There is significant scope forthese technologies, particularly in the areas of serviceassurance and predictive maintenance.

SDN and orchestration to automate service provisioning wasthe third most popular choice. While operators are embracingcross-domain orchestration, it remains just one element in abroader automation journey.

Streaming telemetry was surprisingly low down the list.Telemetry is key to gathering data in near real time to feedthe analytics engines and orchestration tools, whichrespondents identified as important to their next-generationOSS. Open APIs and model-based programmability (basedon languages such as YANG) are critical to enabling cross-domain orchestration and SDN. Arguably, streamingtelemetry and model-driven APIs are now table stakes andoperators are moving on to the next problem of how toextract meaningful insights from the petabytes of telemetrydata at their disposal.

Figure 3: How do you protect your Internet service against DDoS attacks and other cyber threats?

We offer managed L2-L7 firewall services for end point protection of high value business users

We deploy basic counter measures such asanti-spoofing and 5-tuple ACLs to prevent DDoS

attacks on our IP infrastructure

We quarantine or suspend users that pose a security risk - security is an end-user responsibility

We deploy embedded DDoS protectionin our peering routers to mitigate Internet-sourced

DDoS attacks

We deploy a DDoS scrubbing center to mitigate any DDoS attacks on our infrastructure or users

67%

57%

56%

37%

34%

N=103 Source: Heavy Reading

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Figure 4: Which technologies have you, or are considering, implementing for your next-generation OSS?

NFV, DevOps and cloud-native service architec-tures to create more agile services

Big data analytics, AI and machine learning to gain better insight into your network and services

Streaming telemetry based on NETCONF/YANG models to get real-time network data

SDN and cross-domain orchestration to automate service provisioning end-to-end

Open interfaces supporting model-basedprogrammability and management control

74%

68%

66%

45%

43%

N=103 Source: Heavy Reading

Figure 5: As a CSP, what do you consider to be your most significant challenge in building the next-generation Internet?

Eroding profitability - increasingly difficult to keep investment levels up

Coverage and reach - increasingly difficult to deliver higher capacity to all users

Operational challenges - lack of visibility and control to manage and assure the service

Security threats - lack of tools to protect users and ourselves against cyber attacks

Regulatory uncertainty - makes it hardto plan future investments

361

311

300

254

230

N=103 Score is a weighted calculation; items ranked first are valued higher Source: Heavy Reading

The top challenge respondents identified was the erodingprofitability of their businesses, which makes it difficult tosustain the investments needed to build the next-generationInternet. A related concern was the difficulty in delivering highcapacity coverage and reach, as these generally require heftycapital expenditure.

Security, which is often highlighted as the top concern insurveys, was the next greatest challenge. Given the priorquestions on DDoS, we were surprised security did notfeature more strongly in the responses to this question.

Regulatory uncertainty was deemed the least importantchallenge, according to the survey. Although we thoughtregulation might be a greater concern for respondentsheadquartered outside the U.S. (given our perception of arelatively dovish U.S. telco regulator), the order of challengeswas the same for the U.S. and non-U.S. headquarteredrespondents.

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The Next EvolutionThe global economy and public safety increasingly dependon interconnected digital systems. Communicationsnetworks play a crucial role in enabling humans andmachines to interact instantaneously, intuitively, and securely.The cloud has become an indispensable application resourceand content repository, with massive amounts of computeand storage capacity hosted in countless interconnecteddata centers all over the world.

The stage is set for the next evolution phase, with 5Gcommunications technology as the key enabler for a digitaltransformation that is rearchitecting communicationsinfrastructures, revolutionizing industries, shaping the digitalsociety, and powering smart cities. 5G represents anenormous potential for new applications, experiences, andbusiness opportunities, but it also exposes new securitythreats and digital trust issues that must be addressed.

This survey shows that CSPs are keenly aware of both theopportunities and challenges that are facing them. A majoritysees their current role expanding from basic Internet accessto offering secure, industry-grade Internet services withnetwork-based service features to add value to basicconnectivity services through personalization and hostingon-net computer and storage services in the edge cloud.DDoS security is also high on their radar, and a majority ofCSPs deploy a variety of solutions to address theseconcerns. IP routers already play a dominant role inpreventing and mitigating DDoS attacks that are hitting thenetwork. This supports Nokia’s view that the IP network

needs to be an integral part of the security solution and thefirst level of defense against (volumetric) DDoS attacks.

Adding value to basic Internet services will alleviateincreasing concerns about eroding profitability, which wasreported as the most significant challenge to maintaininvestment levels. These investments are needed to expandcoverage and reach for higher capacity access services andbetter tools to secure the infrastructure and improve visibilityand control over managed services. 5G technology will helpaddress some of these challenges, and 90% of respondentsis generally satisfied with the innovations brought by 5Gtechnologies. 5G radio access can be used to addresscoverage and reach issues in existing wireline and 4Gwireless deployments and to enhance broadband capacityand reliability by bonding fixed and fixed wireless accessservices. Almost a third of respondents already recognize thepotential of 5G to enable new business models, besidesoffering incremental improvements to existing business.

The survey reaffirms the importance of NFV, DevOps, andcloud-native service architectures for more agile, next-generation OSS infrastructures. Big Data analytics, AI, and MLwere almost equally important to improve network visibility,closely followed by SDN and cross-domain orchestrationtechnologies to automate control processes. SD-WAN is theleading technology to build out data centers and WANinfrastructure, followed by segment routing, SDN for datacenters, and seamless connectivity between networkfunctions in distributed data centers across the WAN. Thesetrends align well with Nokia’s approach to insight-drivenautomation based on a smart network fabric.

Key takeaways:• A significant majority, 91% of respondents, were

satisfied with 5G technologies under development.While 9% had no strong opinion, no respondentsexpressed dissatisfaction with the promise of 5G,compared with what they can evolve their 4G networksto support.

• Core network transformation was identified as the top5G industry priority beyond 2019, closely followed byimprovements in speed and latency. Energy efficiencyand air interface technology were much lower priority,according to respondents.

• 43% of respondents see 5G as a game changer thatwill allow new entrants (e.g., vertical market players) tochallenge incumbent providers. Nearly a third ofrespondents thought that operators would need toforge new relationships and work together withindustry specialists to achieve the promise and fullpotential of 5G, beyond faster consumer broadband todeliver more industry use cases.

• When asked what the industry should focus on beyond5G, 46% said a whole new set of use cases such asvertical applications beyond autonomous cars andIndustry 4.0. A further 26% of respondents suggestedthe focus should be on using unlicensed spectrum toboost capacity.

New B2B Use Cases to be the Focus Beyond 5GWith significant hype around the launch of commercial 5Gservices, it will be important that the technology lives up toexpectations and delivers something more than anincremental improvement on current 4G technology. Thebenefits could be tangible to the end user, such as significantlyfaster data rates, or more oriented toward the operationalefficiency of the network itself, such as new core networkarchitectures. Much of the business case for 5G rests on theopportunity from IoT and various industrial use cases. Whatremains to be seen is whether mobile operators can placethemselves at the center of these new value chains or if theywill be relegated to connectivity providers.

Ninety-one percent of respondents were satisfied (todiffering degrees) with 5G technologies under development.Around 10% had no strong opinion and none expresseddissatisfaction. The results were similar for U.S.-headquartered respondents, with none dissatisfied and only10% with no strong opinion. However, the remaining 90% wassplit more positively, with 37% very satisfied, another 37%satisfied, and only 17% somewhat satisfied. The stronglypositive perception of 5G contrasts with comments frommore cautious industry observers who have noted thesignificant potential that can be obtained by the latestgeneration of LTE-Advanced (Release 13 and 14 – Pro),which promises a user data rate over 3 Gbit/s (not far off5G’s 10 Gbit/s promise) and latency around 2 ms (comparedto 5G’s 1 ms).

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Beyond 5G – Challengesand PrioritiesThis section of the report examines whether 5G is meeting expectations as a generational improvementbeyond 4G. It looks at current industry attitudes and areas of opportunity for improvement as 5G standardscontinue to develop. How will mobile operators and industry vertical specialists carve up the new 5Gopportunities between themselves? Where will AI be brought to bear in 5G wireless systems? As the initiallessons are learned from early 5G deployments, what should the mobile industry focus on as it evolvesbeyond 5G? Heavy Reading explore these and other questions below.

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Figure 6: The first phases of 5G standardization and rollout will be complete by the end of 2019. How satisfied areyou with the technologies you see being developed?

No strong opinion on this subject

Very satisfied - 5G represents a vast improvement over 4G that will enable new business models

Somewhat satisfied - There are some unique features we must have but we are approaching it

Satisfied - We see 5G as a significant technology but not yet convinced it enables anything new for us

28%

31%

32%

10%

2

N=105 Source: Heavy Reading

Core network transformation was seen as the top 5Gindustry priority beyond 2019, closely followed byimprovements in speed and latency. Energy efficiency was amuch less popular choice, though still ahead of new userequipment form factors and new air interfaces. Respondentsfrom U.S.-headquartered companies were even more positiveon core network transformation (71% picking that option)and even less interested in energy efficiency (just 16% madethat choice).

One of the key architectural differences between the 5G corenetwork and prior generations is the concept of service-based architecture (SBA). Traditional core networks haveused a point-to-point architecture to deliver functions such asmobility management, session management, andauthentication. In a peer-to-peer (P2P) architecture, networkelements providing these functions are connected overpurpose-based interfaces typically defined between twonetwork elements (e.g., mobility management entity [MME]and packet data network gateway [PGW]). Althoughstandardized and by definition multi-vendor, these interfacesare usually intended to enable communications across twonetwork entities and cannot be easily adapted toaccommodate communications with other network entitieswith similar needs. This makes it difficult to introduce newfeatures and services in the network. The solution with SBAis to decouple network services from the underlying networkentities and platform infrastructure that run them, enabling

access to services exposed by a network function through astandard API that can be used by any other network function.Routing of messages across SBA-enabled network functionfollows regular Internet based message forwarding andcloud principles. SBA incorporates principles such asmodularity, reusability, and self-containment of networkfunction services, enabling deployments to take advantage ofvirtualization. It uses the cloud model with different end-to-end service using standard APIs. This makes it easier for theoperator to add, remove, or modify features composed ofindependent network function services. SBA also facilitatesnetwork slicing by allowing deployments of reusable networkfunction services than can be enabled logically orgeographically across the network based on end-user needs.

While core network modernization and speed/latency areclearly important, Heavy Reading wonders if the priority ofrespondents will shift over time to place more emphasis onenergy efficiency as live 5G RANs prove to be very powerhungry. We also wonder if respondents are underplaying theimportance of air interface technology, in particular thesupport for millimeter wave (mmWave) – frequencies above24 GHz that have hitherto not been used for mobilecommunications. With large amounts of spectrum availableat these frequencies and techniques such as beamformingenabling operators to overcome the traditional shortcomingsof mmWave, this could add significant potential capacity forthe industry.

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Figure 7: What should the 5G industry focus on improving beyond 2019?

Core network transformation (NFV/SDN, Edge)

Speed and lower latency

New capabilities to reshape the connected device (e.g. wearables, AR glasses and other “screens”)

to excite consumer demand

Energy and cost-efficiency ofnetwork components

Air interface technologies

59%

50%

28%

27%

23%

N=103 Source: Heavy Reading

Figure 8: Involving new players and vertical markets was an early theme of 5G. Which statement best characterizedhow important you believe that theme will be moving forward?

The absence of any new players in 5G spectrum auctions thus far suggests 5G remains an MNO game only

Delivering an enhanced mobile broadband experience remains the strongest use case for 5G and nothing else looks very promising

Success beyond Enhanced Mobile Broadband will require new relationships between mobile network operators and industry vertical specialists

5G is a game changer that will allow new entrants to challenge traditional service providers

16%

31%

43%

11%

N=103 Source: Heavy Reading

Just over 40% of respondents see 5G as a game changer thatwill allow new entrants to challenge incumbent providers.While the question did not specify, Heavy Reading used theterm “new entrants” as a reference to vertical market playerssuch as industrial companies or even cities, while incumbentsreferred to mobile operators. As such, this response wasmeant to indicate a challenge to the status quo.

Nearly a third of respondents thought that operators wouldneed to forge new relationships with industry specialists tomake a success of 5G beyond faster consumer broadband.This is a more positive view than the “game changer” option,as it suggests operators can partner with vertical specialistsand not be disintermediated or relegated to a bit pipe.

Around 15% of respondents were quite pessimistic, seeing5G as offering little more than enhanced mobile broadband.This pessimism was equally marginal (just 15%) amongrespondents headquartered in the U.S. and elsewhere.

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The next question asked about the role of AI in wirelesssystems. Around a third of respondents indicated itsinfluence will be widespread, not limited to one particulararea. This enthusiastic view was less pervasive amongrespondents from U.S.-headquartered companies (just 23%).

Of the remainder who did choose a specific category, arounda third indicated cloud and data centers. Another third saidRAN, a fifth said orchestration of virtualization and slicing,and another fifth said mobile devices.

In Heavy Reading’s view, AI-based solutions for mobilesystems are still in their infancy. However, we see significantscope for AI to solve planning and optimization challenges inwireless networks, particularly as 5G is deployed. We believeAI-driven solutions will be necessary to achieve the goal ofautonomous networking.

There was a clear preference among respondents that theindustry focus beyond 5G should be around new industryvertical use cases. Nearly half of respondents chose thatoption. 5G investment plans have partly been based on thepotential for new revenue from industrial IoT andautonomous vehicles. As 5G is deployed, the potentialapplications are only limited by users’ imagination. Serviceproviders themselves might not have the necessary vision todream up new applications for connectivity based on 5G orfuture mobile generations. However, if they can make theseservices available cost-effectively, industrial entrepreneurswill take advantage of them to cut costs and increaseefficiencies in their own businesses.

Around a quarter of respondents suggested the focus shouldbe on using unlicensed spectrum, in addition to licensedspectrum, to boost capacity. Unlicensed 4G LTE networks arejust starting to materialize with Licensed Assisted Access(LAA – 5 GHz) and 3.5 GHz Citizens Broadband RadioService (CBRS) network equipment. In December 2018, the3GPP announced that it will enable the use of unlicensedspectrum in the 5G New Radio (NR) specification (Release16), allowing companies to create their own 5G networks oncampus.

Figure 9: What will be the most important role of artificial intelligence (AI) in wireless systems as we look beyond theinitial phases of 5G rollout?

AI’s main role will continue to be in mobile devices powering even more novel experiences

AI techniques will aid in the orchestration of virtualization and slicing technologies

AI management methods will enable the Radio Access Network to better support increasing complexity of 5G connectivity

AI is best placed in the cloud and data centers where dedicated AI resources can be most efficiently leveraged

AI and its influence will be so pervasive across every element of wireless, it’s too difficult to point to just one area

14%

19%22%

32%13%

I

N=105 Source: Heavy Reading

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Figure 10: What should the industry most focus on beyond 5G?

How the Internet works with wireless

Wireless video applications that can appear on various display terminals beyond the phone (e.g. car dashboard, TV, etc.)

It is too soon to think beyond 5G

Using both licensed and unlicensed spectrum for increased capacity

A whole new set of use cases – vertical applications beyond autonomous cars, Industry 4.0

11%

14%26%

46%4%

W

N=103 Source: Heavy Reading

Preparing for the Beyond 5G EraIn 2019, the first deployments of 5G technologies that havebeen under development in research and standardization fora decade will emerge. This early excitement may distractstakeholders from the perhaps more mundane reality thatthe initial standardization job is only about half done. There ismuch work that remains, most notably in the realization of allthe use case objectives laid out in the early 5G requirementsdefinition. 2019 will see the completion of the first full set ofspecifications to be submitted to the InternationalTelecommunication Union (ITU) for formal approval as a 5Gstandard. This is an important milestone, but it begs thequestion: What comes next? The answer to this question isnot an immediate jump to start talking about 6G. Rather, theanswer likely lies in factors that are influencing what is still tocome in 5G point releases that will continue into the beyond5G era.

This survey explores the question of what is importantbeyond 5G. One of the key takeaways is the high priority ofcore network transformation. This aligns with InterDigital’sview that much work remains to be done in this area. One ofthe early ambitions of 5G was to deliver a new openecosystem in both the RAN and core network areas. Theindustry appetite for such a move in the former area remainsevident in forums like the Facebook-led Telecom Infra Project(TIP) and the Linux Foundation-hosted O-RAN Alliance.Similarly, on the core network side, there has been somegood progress made on the cloud-native roadmap in theadoption of the SBA in the 3GPP. However, muchstandardization work remains before carriers will beempowered to a new level of flexibility and economic savingsare enabled by a truly open equipment ecosystem.

The importance of new relationships highlighted in thesurvey also supports the InterDigital view that 5G needs newplayers and partnerships to be successful. 5G is manythings, but perhaps may be most simply described as aconvergence of telecom and IT. This trend will open 5G to awhole new set of industrial players. The cloud-nativeroadmap may provide this meeting point through featuressuch as 5GLAN, currently being defined in the 3GPP.mmWave technology is another area of opportunity that isperhaps undervalued in the survey for its yet untappedpotential to provide another point of convergence. This newair interface technology will come with new deploymentchallenges that may well be best served via newrelationships between enterprises and carriers.

The survey also highlights the importance of AI and confirmsInterDigital’s belief that in the near term, AI will be important inenabling numerous point solutions in many different areas. Italso validates InterDigital’s longer-term view that thistechnology will become so pervasive that it will be difficult topoint a finger at one specific area that is more important thananother. This aligns well with InterDigital’s view that AI is bothan important technology and a key trend that will serve toreshape the nature of networks and supporting protocols inthe future. It may drive much overdue changes to theoperation of the Internet. As defined today, the Internet will beunable to support the very low latency requirements of afuture pervasive, AI-driven beyond 5G network.

Re-Inventing The CSPThis section of the report examines what roles CSPs will play in building smart ecosystems (smart cities,smart home, etc.) and monetizing network slicing. It explores the key technologies for interoperable cloudecosystems and the key benefits of cloud security. Heavy Reading explores these and other questions below.

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Key takeaways:• CSPs are confident that they can provide own-brand,

industry vertical IoT solutions and that this model willprevail over more marginal roles such as a channelpartner for other IoT solutions providers or simply aconnectivity provider.

• Open APIs and industry standards are seen as the keytechnologies for enabling an interoperable cloudecosystem. Open source software was the least popularchoice among respondents (39% ranked it last out offour options).

• Slightly more than half of respondents expect thatCSPs will operate network slices internally, thesoftware for which might be pre-integrated by asystems integrator or assembled by the CSPthemselves from best-of-breed components. Nearlyhalf of respondents thought the slice should beoperated by a third party as a managed service or assoftware as a service (SaaS).

• Approximately two-thirds of respondents see a multi-channel, digital experience as the key monetizationcapability to ensure their 5G transformation is successful.

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Own-Brand IoT Services and Multi-ChannelMonetization Key to CSP TransformationCSPs have seen a dramatic transformation over the last 20years – transformation of their business models, their growthprospects, and their competitive environment. The need totransform never stops, and the pace of change continues toaccelerate. Cloud computing, industrial IoT, and 5G networkslicing will be some of the key building blocks of CSPtransformation over the coming years.

Heavy Reading asked survey participants what role theyexpected their companies to play in building smartecosystems. The most popular response was that CSPswould offer industry-specific, own-brand solutions thatcombined connectivity, applications, and devices. This is anencouraging response, though it remains to be seen if CSPshave sufficient industry vertical expertise to understand theneeds of each industry. Many operators have tried to buildtheir IoT businesses to date through acquisitions in therelatively mature telematics industry. That has not been easyto translate into success in other industrial applications.

The next most popular response was that CSPs would be avalue-added channel partner for smart ecosystemspecialists. The CSP could provide connectivity as well asservices such as billing as part of a managed service. Thiscould be attractive for third parties looking to reach newcustomers given the operators’ existing relationships withenterprise customers.

There was understandably less interest in the CSP beingrelegated to a pure connectivity provider either as awholesaler to specialist virtual network operators or inpartnership with systems integrators. Another option thatranked poorly was as a two-sided marketplace for industry-specific SaaS. While the concept of a two-sided marketplace(where a platform company makes money from two usergroups, typically sellers and buyers of a service) is highlyattractive, the survey results suggest that the industry is notyet ready for such an approach.

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Figure 11: What role(s) do you expect your company to play in building a smart ecosystem for your nexttransformative business opportunity?

As a provider of integrated, industry-vertical solutions consisting of connectivity, platform, applications and

devices directly to enterprises, as a branded service

As a value-added channel for partner products through inclusion of connectivity and supplementary

services in a managed Service

As a destination for the brokering of cloud SaaS services in a two-sided marketplace for

industry-vertical solutions

As a wholesale provider of tailored connectivity and supplementary services to a Virtual Operator that

specializes in industry-vertical solutions

As a partner to a specialized Systems Integrator that packages your connectivity and supplementary

services into an industry-vertical solution

414

346

262

246

240

N=103 Score is a weighted calculation; items ranked first are valued higher Source: Heavy Reading

Figure 12: What are the most critical technologies in enabling an interoperable cloud ecosystem?

Open APIs for functions like procurement, settlement, support and assurance between

cloud services

Industry standards for the servicefunctionality and capabilities

Cloud brokering platforms that enable the rapid integration of SaaS services across multiple

cloud infrastructures

Open Source software to build the underlying cloud platform or services themselves

290

282

228

218

N=103 Score is a weighted calculation; items ranked first are valued higher Source: Heavy Reading

Open APIs and industry standards were seen as the mostimportant technologies for enabling an interoperable cloudecosystem. The Linux Foundation’s OpenAPI Initiativeprovides a common approach to APIs based on the wellaccepted concepts of representational state transfer (REST).Most cloud service providers offer a catalog of machine-readable open APIs for various SaaS and platform as aservice (PaaS) applications. These APIs can be used togenerate code stubs and facilitate integration between acompany’s internal applications and others in the publiccloud. The TM Forum’s Open API Program is a higher leveltype of API designed for operational functions that would befamiliar to CSPs (e.g., creating a trouble ticket or collectingservice usage data).

Numerous organizations are working on industry standardsto promote public cloud interoperability. The ObjectManagement Group’s Cloud Working Group (formerly theCloud Standards Customer Council) has published a guide

to interoperability and portability for cloud computing.Other standards groups that have produced relevant work inthis area include the National Institute of Standards andTechnology (NIST) and the Organization for theAdvancement of Structured Information Standards (OASIS).The 3GPP has adopted service-oriented principles with theSBA in 5G, bringing the next-generation core into a moreinteroperable cloud paradigm.

The least popular response to this question was open sourcesoftware. This is surprising given the importance of projectssuch as Kubernetes (hosted by the Cloud Native ComputingFoundation) that enable cloud interoperability. A similarly lesspopular response was cloud brokering platforms. Suchbrokers provide value-added services (such as identity oraccess management) on top of existing cloud platforms andaggregate multiple cloud platforms or services into holistic,end-to-end services, providing a more streamlinedconsumption model for the enterprise.

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Network slicing uses the principles of modern cloudarchitecture to run multiple logical networks as virtuallyindependent business operations on a common physicalinfrastructure. Each logical “slice” meets service-specificrequirements for network priority, latency, data rates, qualityof service, and other key performance indicators. Theindustry hopes that this ability to provide customizednetwork slices will lead to new revenue opportunities.Because the 5G next-generation core has been designed witha SBA based on cloud-native principles, many more cloudoperational models are available for deployment.

When Heavy Reading asked survey participants about theirprocurement models for deploying slice-based networktransformation, there was no clear winner. Just over 30%

preferred to have slices pre-integrated by a systemsintegrator but operated internally by the CSP. A further 24%also thought the slice should be operated by the CSP but thatthey would assemble it themselves from best-of-breedcomponents rather than rely on a systems integrator.

Just under 30% thought that the slice should be provided as amanaged service by a single vendor or systems integrator, notthe CSP. A further 17% indicated it would be provided as SaaS,again not by the CSP but by a vendor or systems integrator.By using a third party for the network slicing software (eitheras a managed service or on a SaaS basis) operators can reapoperating expense savings and achieve greater businessagility. They can try new service ideas and pivot quickly if theydo not succeed.

The new network-slicing-based business models of 5G willbring many new revenue opportunities for CSPs, includingfixed wireless access, augmented reality/virtual reality(AR/VR) broadcasting, and industrial IoT, to name a few. Toprepare for these opportunities, CSPs are working in tandemon their monetization capabilities.

According to the survey, the key capability CSPs are lookingto enable is a multi-channel, digital experience. The multi-channel or omni-channel concept has been a popularbuzzword in the retail industry for several years. It involvessharing information across the various channels throughwhich CSPs engage with customers (call center, store, socialmedia, website, mobile app, etc.) to provide a more cohesiveexperience. For example, many consumers start theirshopping journey in digital channels (website or app) butoften transition to assisted channels (call center or store) tocomplete their purchase. If the assisted channel is aware ofthe consumer's digital channel history, they can be betterprepared to make the right offer to the customer.

Other monetization capabilities that were deemed not quiteas important were support for B2B2X (key to exploiting newindustrial IoT type opportunities), advanced rating anddiscounting, and support for multi-play offers (e.g., bundlesof fixed broadband, mobile and TV).

The least popular response was converged online-offlinecharging. The new charging function (CHF) introduced in the5G system architecture allows charging services to beoffered to authorized network functions as part of 5G’s SBA.The architecture also has a converged set of APIs for onlineand offline charging. The convergence of online and offlinecharging does not appear to figure highly in respondents’priorities. However, a modernization of real-time chargingcapabilities is likely to be necessary to cope with the largenumber of connected devices that IoT will bring and toenable differential pricing on services with differentiatedquality of experience between slices.

Figure 13: What procurement models will be most important in achieving your business objectives for a slice-basednetwork transformation?

The slice provided as a SaaS, cloud-based service by either a single vendor or a system integrator

Assembling a slice from best-of-breed components; operated internally by the CSP

The slice provided as a managed service by either a single vendor or a system integrator

A pre-integrated slice from a System Integrator; operated internally by the CSP

24%

28%

31%17%

N=103 Source: Heavy Reading

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Figure 14: What monetization capabilities are you implementing to ensure your 5G transformation is successful?

A multi-channel, digital experience

Support for B2B2X capabilities like partnersettlement and channel management

Advanced, policy driven rating and discounting

Support for multi-play offers

Converged online-offline charging

69%

42%

42%

41%

30%

Figure 15: What benefits of cloud security services and practices do you expect will be most importantin your transformation?

A combined security and operations team

DevOps with the added empowerment that “everyone is responsible for security"

Use of Artificial Intelligence and MachineLearning security applications in the cloud and edge

Security baked into a common cloud platform used throughout the CSP’s business

Dedicated security products from cloud providers

338

322

301

288

244

N=103 Source: Heavy Reading

N=103 Source: Heavy Reading

Security was once an inhibitor to cloud adoption, withenterprises concerned that they could be opening up a newattack vector. However, IT departments increasingly seecloud as an opportunity to de-risk operations by takingadvantage of the latest defense-in-depth security designs,cloud security experts, identity management, and more. Thetop benefit of cloud security services and practices identifiedby survey participants is the move to a combined securityand operations team. In the past, security was managed as astandalone activity that was poorly integrated withoperations leading. With security operations (SecOps),security is built into operational workflows and processesfrom the start rather than added at the end as an (oftenfrustrating) afterthought. The second most popular responseis a similar concept whereby everyone is responsible forsecurity all the way from development through to operations.

The next most popular response was AI, a potential tool tohelp automate security operations, as outlined in this blog.The least popular response was dedicated security productsfrom cloud providers. While it is important to see security asa core competency rather than something a CSP can justbuy, at the same time most modern enterprises augmenttheir security posture with third-party SaaS solutions. This issomething CSPs should likewise consider taking advantageof to maintain the strongest cyber defenses.

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Network and Business ReinventionService providers realize that to drive growth, they mustbecome more than connectivity providers. Consequently, theyare looking to provide more of what enterprises need toeffectively manage their businesses and take advantage ofgrowing industry trends. The communications industry isstarting to see further development toward application-specific networks or slices. Such networks enable aconnected, secure, and smart end-to-end ecosystem byoffering tailored and dedicated solutions for various usecases and industry verticals. This is a huge undertaking forservice providers, which will need to reinvent themselves tobecome attuned to the specific needs and regulations of theindustries where enterprise customers operate.

The industry is starting to see a convergence between someof the core networking standards, such as 3GPP, with ITprinciples. This has become a fundamental enabler to donetwork slicing in a much more effective way by trulyleveraging the flexibility, agility, and security of the cloud.Although open source serves foundational technology well, italone has not been enough to promote the interoperablecloud ecosystem the industry needs. Efforts around openAPIs, like the ones promoted by the TM Forum and the LinuxFoundation, will become increasingly important for serviceproviders to realize this vision.

Monetizing a new service has not always been a foregoneconclusion. With the new business models enabled by 5G andIoT, the issue has become even more paramount. Serviceproviders will need to ensure that they have a rich and engaging

customer experience in the digital channels in which the newservices will be expected to operate. The technologicalimprovements in 5G around low latency and massive devicesupport will further drive the demand for charging solutionsthat efficiently scale in addition to supporting innovations inpricing beyond the traditional subscription.

Oracle has a deep security and privacy pedigree, with anactive participation and advisory role in security councils andindustry committees around the world. As such, it isencouraging to see that service providers realize that securityis everyone’s problem and not just an operational detail.However, security is a difficult and complex problem toresolve, requiring extensive resources with cybersecurityexpertise. At Oracle, security is intrinsic in day-to-day activitiesas well as in the design of solutions. This is demonstrated byits Software Security Assurance methodology, which includessecure coding standards and vulnerability handling with morethan 2,000 Oracle security personnel. Oracle’s solutions aresecurely architected, securely deployed, securely maintained,and independently verified.

Finally, the industry is starting to see more traction towardnetwork slice as a service, enabling service providers tounleash new revenue streams by operating in an industry-specific vertical such as construction engineering, forinstance, where they traditionally do not have a strongpresence. Given Oracle’s strong IT expertise, networkpedigree, and the overall Oracle Enterprise reach, it is excitingtimes for Oracle to help service providers reinvent theirnetwork and business, whether via best-of-breedcomponents or end-to-end industry-specific network slices.

Key takeaways:• 41% of respondents indicated that the biggest impact

on their business strategy over the next 5-10 yearswould stem from the demands of digitally savvymillennials who require them to make their serviceofferings more personalized, intelligent, and intuitive.27% saw the biggest impact coming from theapplication of behavioral analytics, AI, and blockchainto cybersecurity.

• 82% of respondents identified 5G as the technology theysee having the greatest impact on future networkinvestments. This was followed (59%) by IoT services andsystems for both consumer and enterprise customers.

• Around half of respondents identified intent-based,content-centric, and P2P as the most likely evolution ofnetworking over the next 5-10 years. Only 29% thoughtthat client-server IP networks will continue to dominatethe Internet.

• 61% of respondents thought that CSPs and verticalindustries should work together to develop new trustframeworks. However, 50% of respondents thoughtthat key vertical industries would also independentlydevelop their own trust frameworks.

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New Networking Architectures and NewCollaboration Models for the Millennial GenerationThe communications industry has gone through tremendouschange over the last 20 years, with mobility and broadbandbecoming affordable and widespread on a global basis.Consumer expectations have also changed significantly, andservice providers are increasingly stretched to meet thedemands of fickle customers. To adapt, CSPs may need toconsider new business and payment models and even changethe basic architecture of their networks to ensure security andcost efficiency. New models for industry collaboration will alsobe required that strike a balance between the agiledevelopment of open source and the more structuredapproach of traditional standards.

Heavy Reading asked participants to choose which of anumber of factors was likely to have the greatest impact ontheir business strategy over the next 5-10 years. Just over40% indicated that the demands of digitally savvy millennialswould require them to make their service offerings morepersonalized, intelligent, and intuitive. Born between the early1980s and the early 2000s, there are around 2 billionmillennials globally. In 2015, they became the largestgeneration in the workforce, and in 2017, they representedthe greatest spending power of any generation. Personalizedservices that might appeal to millennials include contentrecommendations (film, music, etc.) based on prior usage.

The next most popular response (around a quarter of thetotal) was related to cybersecurity. These respondents feltthat behavioral analytics, AI, and blockchain could becomemore critical in this domain. According to Heavy Reading's Telecom Security Market Tracker, AI techniques such asneural networks and ML have already been used for manyyears to improve the detection of malicious code and otherthreats within telecom traffic. AI has the potential to gofurther, such as automatically taking remediation actions orpresenting a human security analyst with the right type ofdata on which to base a decision and perhaps arecommendation. Network security is a potentiallyinteresting application for blockchain. For example,blockchain might be used to certify that infrastructure hasnot been tampered with and ensure that only entities with theappropriate authorization are allowed to make changes tonetwork devices.

Growth in online content consumption was the key factorchosen by a quarter of respondents. Video already representsover 75% of global IP traffic (both business and consumer)and is growing around 30% each year as more and moreconsumers take up video streaming services on their smartTVs and mobile devices. This growth rate could acceleratefurther if VR streaming services take off in the future.

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Future Networking Survey Report

Network Evolution and IndustryCollaboration StructuresThis section of the report examines factors affecting the business strategy of CSPs over the next 5-10 years,which technology areas will have the greatest impact on future network investment, how trust frameworksare likely to evolve, and what collaboration models will ensure the future success of the information andcommunications technology (ICT) industry. Heavy Reading explores these and other questions below.

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Figure 16: What will have the most impact on your business strategy over the next 5-10 years?

Other 1%

Stronger privacy regulations

Growth in online content consumption

Behavioral analytics, AI and Blockchain become more critical to cyber security

Service offerings becoming more personalized, intelligent and intuitive to cater to increasingly dominant subscriber base of digitally savvy millennials

6%

25%

28%

41%

W

N=104 Source: Heavy Reading

When Heavy Reading asked about future payment models,the most popular response was subscription-based postpaid,which is the current dominant model for consumer mobileand fixed communications services in the developed worldtoday. The next most popular response was a reference tothe typical enterprise telecom business model, which isbased on contracts that cover multiple service types (voice,virtual private network [VPN], SD-WAN, etc.). The fourth mostpopular response, pre-paid services, is the predominantpayment model today in developing countries, particularlythose where a low percentage of the population has bankaccounts (and hence good systems for checking creditquality are scarce).

The only option that would represent a break from thecurrent norm was the third most popular response – pay peruse via micropayments or cryptocurrencies. The problemwith pay per use is that each payment (e.g., a 20-cent phonecall or 5-cent text message) represents a discrete financialtransaction. The transaction fees might represent a relativelylarge proportion of revenue and hence could be a materialdrag on profit. In contrast, the top-up transactions associatedwith pre-paid mobile services might be set to a minimum of$10, in which case the payment processor (Visa, Mastercard,etc.) fee is a very small percentage of revenue (generally lessthan 1% for large operators).

However, emerging transaction-based payment models maybe increasingly attractive in the future network. For example,the end user may not have a subscription with the serviceprovider but may have a subscription with a third party. Inthese cases, the third party could pay the service provider onbehalf of the end user. These third-party arrangements can beattractive since they allow a user to receive a service from aservice provider, even though no subscription exists with theservice provider. Instead, the third party is billed by the serviceprovider and the third party then manages the billingrelationship with the end user. The service provider canperform bulk billing to the third party to achieve low overheadeven when individual transactions may be small.

This is the business model for cellular roaming, thoughexpanded to include third parties and services outside theexisting closed set of cellular companies and services. Moredetail on subscriptionless business models can be found inthe ATIS report, Subscriptionless Devices and Services.

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Figure 17: Which payment models will be most important to your future network business model?

Subscription-based postpaid services

Contracted service models for enterprises or other service providers covering a wide range of

services (e.g. the enterprise or other service provider buys the service)

Subscription-less service offerings (pay per use) using micropayments or crypto-currencies

Pre-paid services

Other (specify)

65%

55%

47%

41%

2%

N=105 Source: Heavy Reading

Figure 18: Which technology areas do you see as having the biggest impact on future network investments?

5G high bandwidth, low latency andhigh-performance infrastructure

IoT services and systems (both consumer as well as industrial/enterprise)

Migration of the network infrastructure toward cloud virtualization and NFV

Artificial intelligence

Technologies to distribute more functionalityand content towards the edge

82%

59%

47%

46%

34%

N=103 Source: Heavy Reading

Over 80% of respondents identified 5G as the technologythey see as having the greatest impact on future networkinvestments. This is unsurprising given the amount of mediaattention around 5G, though it remains to be seen whetherconsumers will be prepared to pay more for the higher datarates and lower latency that 5G promises.

Not quite as popular, though still selected by almost 60% ofrespondents, was IoT. This was followed by cloud/NFV, AI,and edge computing. Although IoT does not need 5G (andcan be enabled using older mobile technologies or even non-mobile technologies such as LoRa), the massive machine-type communications (mMTC) use case of 5G is clearlyoriented at the IoT opportunity.

The promise of NFV is that operators will be able to runnetwork functions on commodity servers, leading to anoverall reduction in capital expenditure requirements as wellas greater agility in responding to fluctuating network loads.It is less clear how AI will relate to future networkinvestments. AI should not require any significant CAPEXitself or forklift upgrades of network infrastructure. Instead,the AI opportunity is likely to be based on gleaning newinsights from analytics systems to spot patterns and makepredictions. To learn about network-related use cases of AI,check out the Evolution to an Artificial Intelligence-EnabledNetwork report produced by ATIS.

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Around half of respondents identified intent-based, content-centric, and P2P as the most likely evolution of networkingover the next 5-10 years. Intent is an interface betweennetwork service-consuming systems (applications) andnetwork service-delivery systems (composed of controllersand underlying infrastructure). By separating the applicationplane from the control plane in this way, the operator hasgreater freedom over the choice of applications andcontrollers, thereby reducing vendor lock-in.

With content-centric networking, endpoints communicatebased on named data (e.g., a portion of a video file) insteadof IP addresses. Named content is delivered to the userfrom the nearest cache, traversing fewer network hops,eliminating redundant requests, and consuming lessresources overall than an equivalent IP network. A morecomplete description is provided in the ATIS report Evolutionto Content Optimized Networks.

P2P networking is a distributed architecture that partitionsworkloads between network peers (nodes). In contrast withthe client-server model, P2P nodes can be both suppliers andconsumers of resources (processing power, disk storage,and network bandwidth). P2P was popularized by (mainlypirate) file-sharing services in the early 2000s. It is alsointeresting to note that P2P technologies are commonly usedin IoT systems to enable a variety of clients (e.g., smartphoneclients) to communicate with peer IoT devices.

The least popular response was that client-server IPnetworks will continue to dominate the Internet – over 70%of respondents did not think that would be the case.

According to the Open Identity Exchange’s white paper,Trust Frameworks for Identity Systems, "a trust framework isa legally enforceable set of specifications, rules andagreements regulating an identity system." Trust frameworksare needed in distributed systems so endpoints can beconfident that requests are not malicious or applications canensure that an individual making a request is a genuine user.Trust frameworks usually entail a combination ofauthentication, authorization, role management, identityprovisioning, and governance functions. An example of a trustframework in a telecom context is the subscriber identitymodule (SIM)-card-based mobile authentication system. Thetrusted role of telecom networks also enables two-factorauthentication using short message service (SMS), which iswidely used in disparate existing trust frameworks. Trustframeworks can be an important structure for collaborationand federation in authentication and authorization operationsthat leverage context and/or span different domains. The ATISreport Context-Aware Identity Management Frameworkassesses how the emerging market for context-awareinformation can be applied to solve future identitymanagement needs.

Half of respondents thought that vertical industries woulddevelop their own trust frameworks, while half thought thatCSP-led trust frameworks (such as the SHAKENspecification for mitigating robocalls and caller ID spoofing)would be widely adopted. However, the most popularresponse (selected by over 60% of respondents) was thatCSPs and vertical industry players should work together todevelop trust frameworks. A minority (34%) thought thatapplication-specific trust solutions defined by individualcompanies (e.g., Google sign-in for third-party sites and appsusing OAuth, an open standard for token-basedauthentication and authorization on the Internet) woulddominate. Even fewer (29%) thought that existing SIM-basedsolutions would meet future industry needs.

Figure 19: Which network evolution and Internet trends do you see as most likely over the next 5-10 years?

Intent based networking will become a major factor in improving network availability and

performance for enterprise services

Client-server IP networks will coexist with the introduction of content-centric network protocols

Client-server IP networks will coexist with peer-to-peer networking

Networks will incorporate contingency-based solutions for continuity of Internet-based

services and critical communications

Client-server IP networks will continue to bepervasive and the basis for further enhancements

51%

51%

50%

43%

29%

N=103 Source: Heavy Reading

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Figure 20: There are a variety of trust frameworks to help secure transactions and information by verifying theidentities of the parties involved. Which of these statements about trust frameworks do you agree with?

Communication Server Providers (CSPs) and vertical industries must work together to

develop trust solutions across industry domains

Key vertical industries (e.g. healthcare,automotive) will independently develop and optimize industry-specific trust frameworks

Emerging communications service provider (CSP) certificate/PKI based trust frameworks (e.g. SHAKEN/STIR for verification of calling line

identification services) will be widely adoptedApplication-specific trust solutions defined by

individual vendors and OTTs will dominate over shared trust frameworks

Existing Mobile Network Operator (MNO) SIM-based user identification and inter-operator agreements

are sufficient for future industry needs

61%

50%

50%

34%

29%

Figure 21: The collaboration model for the ICT industry is an important factor in bringing new services andapplicationsto market. Which statement best defines the future collaborative model?

A completely new collaborative approach will be needed to meet the market demands of the next 5-10 years

An increased dependence on open source to meet specific functional requirements

An increasing need for industry organizations to act as integrators of open source and standards into complete solutions

A continued balance of interoperable standards, partnership projects and open source development will be needed

A greater focus on collaboration across network domains and vertical industries

14%

16%

25%

25%20%

N=103 Source: Heavy Reading

N=103 Source: Heavy Reading

Most industries depend on the principle of competition todrive innovation, efficiency, and fair pricing. At the same time,most industries allow some collaboration between industryparticipants, usually in the form of regional or globalstandards bodies. This collaboration enables interoperabilitybetween participants and leads to economies of scale inglobal supply chains.

Heavy Reading asked survey participants how they saw thefuture of collaboration in the ICT industry. Around a quarterexpect a continued balance of interoperable standards (e.g.,5G), partnership projects (e.g., undersea cable consortia), andopen source developments (e.g., OpenStack) will be needed.

Another quarter anticipate greater collaboration betweennetwork domains and vertical industries, presumably as partof industrial IoT initiatives. The third most popular response,with a fifth of responses, was that industry organizationswould increasingly need to act as integrators of open sourceand standards. An example of this would be the combinationof open source (e.g., Open Source MANO [OSM]) andstandards work (e.g., NFV) undertaken within the EuropeanTelecommunications Standards Institute (ETSI).

A minority (16%) foresaw an increased dependence on opensource. The least popular response (14%) held the even moreradical view that a completely new collaborative approach willbe needed to meet the market demands of the next 5-10 years.

ABOUT ATISIN A RAPIDLY CHANGING INDUSTRY, INNOVATION NEEDS A HOME.

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ATIS is where companies in the ICT industrycome together to address common, criticalpriorities. Whether it is aligning on how toaddress challenges and progress newbusiness opportunities, taking the long-term,strategic view on how to advance industrytransformation, or creating a platform forcollaboration with other industries, ATISdrives innovation.

In any emerging technology area critical tothe industry’s future, ATIS is at work. Ourvalue-driven mission identifies how andwhere to collaborate as well as shareresources, effort, and cost to develop large-scale, interoperable solutions for thecommon industry good.

Our initiatives are as diverse as thechallenges they address. They encompasstechnology assessments for strategicindustry planning, business use caseformulation, open source projects,requirements, specifications, standards,interoperability testing, software toolkits,industry best practices, user guidelines,industry-supported testbeds, and more. Whiletechnical in nature and addressing members’business priorities, the work often integratesa policy component, which contributes to itssuccess. Current priorities include:

• Advancing the 5G network, with a focus onNorth American requirements contributingto a global 5G standard

• Mitigating the problem of unwantedrobocalling

• Leveraging AI to advance ICT industryobjectives and innovation

• Generating new business opportunitiesthrough a Smart Cities Data Exchange

• Developing solutions and an overallindustry framework for addressingcybersecurity threats

• Advancing next-generation emergencycommunications

ATIS is accredited by the American NationalStandards Institute (ANSI). The organizationis the North American Organizational Partnerfor the 3GPP, a founding Partner of theoneM2M global initiative, a member of theITU, and a member of the Inter-AmericanTelecommunication Commission (CITEL).

www.atis.org