By 2030, the world will look very different, not in the least because of new technological innovations. Many will expect to see a proliferation of next-generation technological solutions from smart cities, to augmented reality, to autonomous cars, to the metaverse. Service providers have a role to play in ensuring that the underlying network that we have across the UK (and beyond) has the capacity and scalability to support these solutions.
These technological shifts will create new opportunities across a range of industries. Applications like cloud gaming and use cases such as video analytics will see a boom in innovation and demand as distributed compute infrastructure becomes commonplace, creating new services and driving revenue streams. We will investigate these opportunities in coming articles.
But for these and other applications to spark into life, network infrastructure will first need to evolve to support them. There are five major ways in which network infrastructure will need to change by 2030 to make this vision of a seamlessly interconnected world a reality:
1. Networks need to transition to the cloud in order to become more flexible and efficient
2. Openness and collaboration will be required to foster new innovation
3. The rise of edge computing will require a shift away from traditional hub-and-spoke network architectures
4. Shift in focus from fibre providers from fibre buildout to customers connected
5. Network-as-a-service models will allow on-demand adjustments of the network
By 2030, traditional networks will be run using cloud infrastructure and platforms, making them more flexible, efficient, and adaptable. Going cloud-native allows service providers to implement closed-loop automation and to scale their network resources more dynamically. This elasticity is crucial in handling varying workloads and accommodating traffic spikes efficiently. The transition to cloudified networks will have an impact on the points of presence that service providers need.
By 2030, Vodafone has committed that 30% of their mobile sites across Europe will be deployed using Open RAN technology. This is part of disruption we are seeing across the service provider landscape as the ecosystem of vendors and partners is opened up to include new players as well as the typical vendors of the past. Part of this is fuelled by the stance of the UK’s government which has called for all Huawei technology to removed from the UK’s 5G public networks by the end of 2027.
By 2030, we expect service providers will look to mix and match components from different vendors to create customised networks that align more precisely with their operational goals and customer demands. These best-of-breed deployments will increase integration complexity but should also ensure a more vibrant and innovative ecosystem with better end outcomes for customers.
Many next-generation solutions will require a network that can provide ultra-low latency and can handle applications that generate very large amounts of demanding network traffic (e.g. high quality video streaming). Meeting these requirements will mean two major changes: an increase in the overall number of data centres and the need for these datacentres to be more distributed across a market or region. Whereas today data centre infrastructure in Europe tends to be concentrated in the FLAP region (Frankfurt, London, Amsterdam and Paris), in the future we will see more datacentres being built to serve cities and towns beyond the capitals and traditional technology hubs. This aligns closely with Pulsant’s footprint and vision for the market – with twelve data centres in the country we are already providing edge resources that range far beyond the London market up into Scotland, the Northwest and East of England and beyond.
The rise of edge computing will cause problems for today’s hub and spoke model of network connectivity. By 2030, service providers will not be able to rely on one or two major internet exchanges in a market but instead will need to peer with each other on a more local basis. This will reduce the distance that data needs to travel along their networks and make for a more efficient architecture. The end result of this is minimal latency (or lag) experienced by end customers and reduced strain on the networks of carrying large amounts of data to their end destination.
In the fibre market, we expect that by 2030 an average household in the UK will have access to as many as six or more fibre connections. Government programme “Project Gigabit” has contributed to this rapid growth by promoting competition among incumbents like Openreach and Virgin Media and emerging alternative network providers (AltNets) like CityFibre and Community Fibre.
Due to the large number of players involved, the market is already reaching a state of overbuild. This congestion is leading to AltNets suffering from low customer levels and lower-than-expected revenue margins. As investors and executives look for ways to avoid being in possession of a fibre network that is considered a distressed asset, organisations will begin looking for ways to differentiate in a scalable manner. Therefore, we will see some providers selling off fibre in areas of competitor overbuild, as well as consolidating in situations where smaller providers’ business models become unsustainable. The most successful players will focus on more than just buildout (e.g. how many homes or buildings have we connected) but also on actual customer uptake (e.g. of those homes or buildings that we have connected, how many have actually chosen us as their provider).
The increasing demand for edge connectivity could be an option open to AltNets looking to boost their revenue streams. Rising volumes of data coming from an increase of edge connected devices is leading to a growing awareness of the need for edge infrastructure which, in turn, requires comprehensive fibre connectivity. AltNets looking to boost their proposition may look to the edge market as a viable route-to-money as their consumer customer numbers continue to falter.
One approach will see specialised fibre supporting small cells to offer enhanced coverage in high-usage public areas, crucial for edge and microdata centres. As 5G and open RAN models gain traction, this infrastructure's potential grows. Although dense urban areas present installation challenges due to high costs and complexities, the potential returns are significant, with fewer competitors in the "FTT-street furniture" niche. To capitalise on this, fibre companies will adopt a strategic approach, utilising neutral hosts or "open-access fibre" to cut costs. Thorough planning and leveraging existing infrastructures, along with collaboration with industry groups and monitoring 5G developments, are essential for success in this domain.
NaaS (network-as-a-service) models provide the essential infrastructure and technologies to enable smart applications to dynamically adjust their behaviour based on real-time network conditions and user requirements. By 2030, we expect that many service providers will have adopted this business model. For intense consumer applications such as cloud gaming, the ability to interface with a high performance network will have significant impact on the customer experience and drive increased customer satisfaction.
In order to do this, service providers will need to expose network APIs to developers to allow applications to gather real-time information about network conditions, such as latency, congestion, and available resources. Going forward, applications will both interact and potentially instruct networks based on their requirements.
The future of networking will be marked by a paradigm shift towards openness, collaboration, and innovation. Service providers who embrace these principles, as well as invest smartly in the required new infrastructure and architectures, will be in a strong position to support the next generation of digital solutions. In coming articles, we will explore in more detail how these changes will create opportunities in gaming and video analytics, analysing the specific characteristics of each area and the nature of the opportunity.