Historically, the telecom industry hasn’t embraced the concept of openness. With a legacy of strong regulation spanning almost a century and a half, communication service providers (CSPs) have operated closed and proprietary networks, with limited partner ecosystems.
However, in recent years, the industry has started to embrace open principles across multiple dimensions— from interfaces to ecosystems— all with the goal of enabling faster and more market-responsive innovation while driving sustainable business growth in a hyper-connected world.
“With a surge in innovative startups and new technologies, it’s nearly impossible for providers to do everything,” writes telecom editor Erik Linask. “This has driven a surge in partnerships and ecosystems to increase not only access to technology, but customers and revenue streams as well.”
Openness gives CSPs the power to leverage the full potential of their investment in next-generation networks, enabling faster innovation, reduced costs and greater customer choice.
“The underpinning of this idea is that all of us know more than any one of us,” says Henry Chesbrough, Professor and Faculty Director at University of California Berkeley in a recent podcast. “If we embrace this more open model, we can get a lot more done, and we can often get it done faster.”
The Linux Foundation’s Arpit Joshipura cites the example of the Open Network Automation Platform (ONAP), a comprehensive orchestration platform for managing and delivering 5G services. “ONAP is about 10 to 15 million lines of code,” Joshipura says. “Imagine a single vendor, or three or four, trying to complete and create the stack. It would have taken years and years.”
An open approach leads to 5G innovation
5G is set to change the CSP landscape dramatically, creating opportunities to deliver a huge variety of new, value-added services to industry and society – from providing smart city infrastructure to enabling predictive maintenance of energy grids.
Analyst firm ABI Research forecasts that the 5G market will reach 2.6 billion subscriptions in 2026, making a significant contribution to mobile operator revenue of $942 billion.
CSPs can generate new value for themselves, their partners and their customers by adopting an open approach to 5G innovation and monetization. As 5G paves the way for new Internet of Things (IoT) and edge applications, a vast landscape of opportunity is available for telecom industry players.
Nokia’s Elana Crowne, director of product marketing, monetization lead, and Olivier Guéret, cross-portfolio ecosystem and marketing, explain, “CSPs need to evolve from being a ‘network provider’ to a ‘network-based enabler.’ CSPs will need to embrace openness, both internally to break down the silos and make the best usage of the goldmine of data but also externally by opening up their network APIs to partners in order to spur innovation, create value and deliver in a timely manner.”
Without an open approach, CSPs may lose their competitive edge in the broader IT industry, which generally has a much faster pace than telecom and in which innovation is much more reliant on openness.
Innovation at scale requires the right business model
Developing new and better business models is key for CSPs to effectively commercialize great technologies that can scale. This requires the transition from a vertical model – one where development and innovation is tightly controlled and limited to the organization’s four walls – to a more open model.
Consider how the iPhone achieved widespread adoption, only when Apple invited third parties to develop apps for the iOS platform. This resulted in a “win-win-win” scenario: Apps created value for their developers (through the mass distribution capabilities of the App Store), for Apple (through App Store fees) and for iPhone users (who suddenly had access to a kaleidoscope of useful and entertaining stuff on one portable device).
The decision to give most of the revenue to developers was enough to stimulate a lot of interest and a lot of creation. By opening up their platforms to third-party app developers, smartphone OS vendors unleashed an extraordinary wave of innovation, transforming mobiles from communication devices into all-encompassing lifestyle enablers. App stores completely revolutionized the way software is distributed and sold—with such success that it’s now the dominant software distribution model for PCs, TVs and other smart devices.
Embracing change on a cultural level
Embracing new models like the example above is one part of enabling innovation for CSPs. But perhaps the larger challenge of fostering more open innovation is implementing a cultural shift throughout the organization to use the new models successfully.
An organizational culture built on internal governance structures, tools and processes that foster collaboration enables faster information sharing and communication.
Joshipura cites AT&T, Orange and Deutsche Telekom as examples of operators who have successfully brought internal technology groups together to work on open-source projects and have seen business growth as a result. “We’ve seen that operators who participate in Linux Foundation Networking and open source gain subscribers six times more than their competitors locally within the region,” he says.
There’s no better time for the industry to embrace openness than now, as 5G starts to lay the groundwork for new applications, services and business models. For Ulf Theobald, Partner and Executive Innovation and Technology Director of X-Cite, it’s an opportunity not to be missed. “If the networks stay as closed as they are now, the applications running on top of the network will not meet customer demand,” he says. “A lot of workarounds will be implemented, and the promise of 5G won’t be realized.”
Register for Real Talk: The Power of Openness
To discover the key principles CSPs can’t afford to ignore, please register for Real Talk: The Power of Openness on Feb. 8. This virtual event will feature a host of experts including “father of open innovation“ Henry Chesbrough, TM Forum’s CTO George Glass and Deutsche Telekom’s VP of Incubation and Venturing Axel Menneking.
The editorial staff had no role in this post's creation.