Cloud computing in telecom: stats, benefits, best practices

When we think of a telecom company, we are used to imagining heavy infrastructure consisting of many towers, transmitters, data centers, cables, and wires, etc. It’s true, but now, more and more telcos decide to transform some of their physical infrastructures into digital, cloud-based applications. You may have heard about Vodafone, Rakuten, Deutsche Telecom moving parts of their infrastructure to the public cloud. This trend is going to evolve into 2022 and beyond. Cloud computing in telecom has great potential and as the results of the 2020 Annual Industry Survey by Telecoms.com Intelligence state, 5G, cloud, and digital transformation will be among top priorities for telecom companies in 2021. 

How are telcos using cloud? What benefits does cloud bring to them? How to adopt cloud computing in the telecom industry? Let’s take a closer look at how cloud helps telecom operators improve operational efficiency, lower total cost of ownership, and generate new revenue streams.

Cloud as a key enabler of large-scale transformation in telecom

The success of a telecommunication business depends directly on the number of its active customers. So the main challenge for telcos is to attract and support a large customer base. Today, telecom companies are competing with cloud-based communication solutions like WhatsApp, Skype, etc. for market share. But legacy telecom IT infrastructures can not stand up to this competition in terms of scalability, agility, and cost-efficiency. Thus, more and more telcos today are deciding to undergo digital transformation and move to cloud-based infrastructures. With cloud, single-product telcos can grow their service portfolio and expand overseas at the speed today’s market requires. And this is exactly what Lebara started doing back in 2014.

Cloud computing in telecom: A success story

Lebara is one of the fastest-growing mobile virtual network operators that offers Pay As You Go mobile SIM cards and other related products and services for migrant communities. In terms of its digital transformation, the company cut its London-based data center and decided to adopt a multi-cloud approach combining AWS and Azure. N-iX has been leading Lebara’s cloud transformation and development of scalable, easy to maintain, and cost-efficient cloud solutions. For Lebara, like any other telecom, time to market and on-demand scalability are crucial. Implementation of 80+ AWS and Azure microservices allowed consolidating 6 applications for all countries and channels and enabled Lebara to further expand its markets and business operations fast and efficiently. Thanks to the introduction of DevOps best practices, all new changes are released through the CI/CD process with automated deployment. 

Another strategic stream Lebara delegated to us was business intelligence development, which covered performance optimization, support, and development of the existing enterprise BI solution previously supported by IBM. Our team has optimized the workflow, removed delays in reporting, and helped to reduce the supporting team by two times, which allowed decreasing the overheads.

Also, we have helped Lebara to ensure the reports come with no delay as the previous system lacked performance and scalability and reports came with an average delay of 3-4 hours. Therefore, Lebara decided to replace the existing solution with an Azure-based data lake, which enables almost real-time data streaming and timely reports for multiple departments.

“I don’t think there has been a single technology project within Lebara that N-iX hasn’t been involved with, in the past one or two years,” - Lars Hoogweg, CTO at Lebara

Using the cloud has allowed the company to reduce time to market and lower the cost of entry into the new markets.

Lebara has transformed from a single-product company with a European focus into a multi-product company with a global reach.

Lebara is among many telcos that benefited from adopting the cloud. Let’s discover what advantages cloud computing brings to telecom operators.

Benefits of cloud computing in the telecom industry

Telecom companies play a crucial role in connecting people and enhancing the lives of millions. The importance of telecom services has become clear especially in the time of the COVID-19 crisis. Telecom operators have facilitated remote work and studying and helped people around the world stay connected. They have stepped up their support for national healthcare systems, national and local governments, and corporate customers to keep vital processes going.

Imagine if this crisis had happened 10 years ago. No wi-fi, no video streaming apps, no possibility to harness the location data of individuals. With сloud computing, the telecom industry has become more digital and now can reach more customers, offer more stable internet connections, provide valuable insights, and deliver its services via a number of devices (not only via a mobile or TV, but also via a laptop or tablet), etc.

Here is how cloud computing help telecom companies thrive and provide better services:

• Ensure high scalability: telcos who have made their journey to the cloud can easily scale up for today and scale back down once the demand for telecommunication services returns to its normal.
• Guarantee resilience: cloud computing helps telecom companies quickly recover from stressful situations such as sporadic high loads, hacker attacks, hardware failures, etc. It is based on a well-architected approach that allows the self-healing of a system in time. Anomaly detection, automation, and adaptiveness are the key concepts of it.
• Offer quick disaster recovery: anything from a power outage at a data center to a security breach may cause data loss. If you have backups of databases stored in the cloud, you can quickly restore all the data.
• Improve time-to-market: with cloud computing, telecom companies can deliver their products and services faster, because they no longer have to procure individual pieces of hardware for each function in the network. They can now develop network functions from the outset as software and run them on servers hosted in a cloud environment.
• Cut expenses: in terms of cost economics, cloud reduces the operating expense of a company setting up and managing its own data center. This includes various costs associated with hardware, software, servers, energy bills, IT experts, etc. With cloud infrastructure, a telecom company simply pays only for services it uses.
• Enhance customer experience: cloud computing helps telecom operators minimize latency, strengthen security, provide automated customer support, predict customer preferences, and offer new omnichannel digital experiences.
• Enable network automation: cloud helps automate today’s manual processes regarding designing and testing new network components; deploying, orchestrating, and monitoring networks. This becomes possible thanks to continuous integration, continuous testing, and continuous deployment. Modern networks are able to analyze their performance and respond to issues in real-time that only boosts customer satisfaction.
• Make use of data: telecom companies process huge volumes of customer data. And cloud enables operators to drive valuable insights from this data with the help of data science and data analytics. As a result, telcos can use these insights to further improve their operations. For example, during the pandemic, telecom operators provide data to monitor how people and crowds are spreading the virus.
• Generate new revenue streams: telecom operators can monetize their physical infrastructures by partnering with cloud service providers. Until recently, operators and hyperscalers were seen as competitors. But partnerships between telecommunications companies and cloud providers will only support further market growth. Telcos can offer their infrastructures to cloud providers to help them get closer to customers at the edge by launching platform solutions dedicated to telecoms infrastructure and integrate directly with 5G networks. The latest of such solutions include Wavelength from AWS, Azure Edge Zones from Microsoft and Anthos for Telecom from Google Cloud. Recently, Google Cloud and AT&T have announced a collaboration to help enterprises take advantage of Google Cloud’s technologies and capabilities using AT&T network connectivity at the edge, including 5G. Additionally, AT&T and Google Cloud intend to deliver a portfolio of 5G edge computing solutions that bring together AT&T’s network, Google Cloud’s leading technologies, and edge computing to help enterprises address real business challenges.

The trends of cloud computing in the telecom industry

It’s true, the telecom industry was moving slowly with the cloud. Telcos used to rely on high-cost proprietary hardware to provide a chain of networks. But the last few years have changed a lot. The rise of the cloud-native 5G technology, unexpected spike in data traffic due to the global pandemic, surge in broadband services, increasing customer demands have made telcos modernize their networks and shift to virtualized and cloud architectures. The telecom cloud market was valued at $25.33B in 2020 and is projected to reach $74.36B by 2026, according to the Mordor Intelligence report. So in the next few years, we are all going to witness a massive shift of communication service providers (CSPs) to the cloud. 

The journey of telecom companies to virtualization started when software-defined networking (SDN) replaced traditional networking which is hardware-based and uses routers and switches to control network traffic. SDN uses software-based controllers or application programming interfaces (APIs) to communicate with underlying hardware infrastructure and direct traffic on a network. 

The next big move towards cloud computing in telecom happened back in 2012, when major telecom operators such as AT&T, Deutsche Telekom, Orange, Telecom Italia, Telefónica, and others introduced a concept of Network Function Virtualization (NFV). Telecom companies started transitioning from purely physical networking to virtual network functions (VNFs). Examples of VNFs include routing, firewalling, load balancing, WAN acceleration, and encryption. By virtualizing these network services, providers can offer customers these services dynamically, with the ability to spin them up and down on demand. With VNFs, many operators have already automated portions of their infrastructures. But to satisfy new performance demands and meet the needs of modern customers, telcos now need to migrate to fully cloud-native infrastructures. 

In comparison to VNFs, Cloud-native network functions (CNFs) are a new way of providing a required network functionality using containers. CNFs are dynamic, flexible, and easily scaled, making them a favored solution in the transition to 5G. While a VM with its own operating system may consume several gigabytes of storage space, a container might only be tens of megabytes in size. Therefore, a single server can host more containers than VMs, significantly boosting data-center efficiency while reducing equipment, maintenance, power, and other costs. But in the near future, it is expected that many of the deployments on the road to 5G will consist of a mix of CNFs and VNFs as we are now at the transition stage of moving to fully cloud-native architectures.

How to implement cloud in the telecom industry?

Cloud is a key element of the modernization of telecom networks and services. But to succeed with cloud computing in telecom, operators should know several tips. These are best practices our experts in telecom and cloud have been building for years:

1. Clarify your business need: specify your goal you want to achieve as a result of implementing cloud computing in your telecom company: reduce costs, enter new markets, improve customer experience, improve time-to market, etc.
2. Gather a team of skilled experts: when you have a clearly defined goal, you need to find a team of skilled experts who will help you achieve it. The best option is to partner with a reliable tech partner who has experience in cloud migration and cloud-native development in telecom.
3. Conduct a Discovery Phase: shape business requirements, create a work breakdown structure, design a product backlog, estimate TCO and the profitability you will gain in the short term and in the long run.
4. Decide on the cloud strategy: choose the best deployment model: public, private, or hybrid clouds, select the most suitable approach: single cloud or multicloud, settle on the cloud provider (s).
5. Create a clear migration plan: it should include your goals, costs estimates, timelines, services and technology to use, etc. 
6. Choose a VNF migration strategy: define which network functions need to remain as VMs and which can be re-architected as cloud-native microservices. 
7. Assess and prioritize your apps, processes, and operations: understand app dependencies; categorize your apps into mission-critical applications, business-critical applications, customer-facing applications, and other non-critical apps; define operations that can be automated; simplify processes so that they consist of fewer steps.
8. Adopt microservices architecture: transform your monolith architecture into a number of loosely coupled microservices to be able to quickly develop, test, and deploy new features and fixes without impacting other components of the application.
9. Make use of containers: Containers make it easy to move applications between environments while retaining full functionality. They also make it possible to build and run scalable applications across public, private, and hybrid clouds.
10. Leverage edge computing: edge computing is among the top telecom trends. Telcos should make use of edge networks to reduce latency and improve network performance by bringing workloads closer to the users who need to access them. As opposed to the content delivery network (CDN), which is considered to be the predecessor of edge computing and only stores cached data, edge networks, by contrast, can accommodate a wider array of functionality (they can store and process data in real-time) and device types. 
11. Choose the right application migration method: re-host (lift and shift), re-platform (lift, tinker and shift), modernize, rewrite, drop and shop, retain.
12. Take care of your data: move your data to the cloud carefully, protecting the personal information of your customers; make use of your structured and unstructured data; apply statistical models as well as ML&AI to help businesses identify patterns, predict outcomes, enable fraud prevention, prevent equipment failures, etc.
13. Ensure high-level security of your apps in the cloud: adopt DevSecOps approach, make necessary configurations, train others on how to maintain security in the cloud;
14. Make use of DevOps best practices: CI/CD, rolling updates, monitoring, alerting, unified logging, IaC, network load balancing, etc.
15. Monitor the results and optimize costs: apply metrics and KPIs defined on the planning stage to see the benefits of the cloud, maintain and support cloud to gain better results.

How N-iX can help you make the most of cloud computing in telecom

N-iX has provided software development services for over 17 years and has over 1400 experts on board. We have partnered with Lebara, MASMOVIL, Top Connect, Gogo, and other telecom leaders, scaling their development capabilities and providing unique domain and tech expertise. Whether you need to develop a cloud solution or migrate an existing product to the cloud, our experts have the skills and experience to support you in your cloud journey: 

• N-iX is a certified AWS Advanced Consulting Partner, a Microsoft gold certified partner, a Google Cloud Platform Partner, an Opentext Services silver partner, and a SAP partner.
• N-ix has a pool of 300+ cloud engineers;
• N-iX is compliant with PCI DSS, ISO 9001, ISO 27001, and GDPR standards;
• Our expertise in cloud computing includes cloud-native services, on-premise-to-cloud migration, cloud-to-cloud migration, as well as multicloud and hybrid cloud management;
• We offer professional DevOps services, including Cloud adoption (infrastructure set up, migration, optimization), building and streamlining CI/CD processes, security issues detection/prevention (DDOS & intrusion), firewall-as-a-service, and more;
• N-iX has broad data expertise to design different kinds of data solutions: Big Data / Data Warehouse / Data lake development, Business Intelligence, Data Science, Artificial Intelligence & Machine Learning, etc.
• N-iX is trusted in the global tech market: the company has been listed among the top software development providers by Clutch, in the Global Outsourcing 100 by IAOP for 5 consecutive years, recognized by GSA UK 2019 Awards, included in top software development companies by GoodFirms.co, and others.

If you have any questions on how to adopt cloud computing in telecom, please drop us a line. We'll be happy to help you.