We have made the concept of digital transformation an integral part of our mindset. Around the world, companies are largely digital in that our decision making is determined by the volume of data and information which we access in real time, at all locations, through mobile systems.
In this digital ecosystem based on the transmission of billions of zeros and ones, the networks that make this possible are just as important as the information conveyed. I am referring to the connectivity and integration of fixed and mobile networks that make it possible to convey bits of information from one point to another, through whatever medium: cable, optical fibre, terrestrial wireless networks, satellites, or perhaps all of these at some point, as networks become increasingly integrated and hybridized to form heterogeneous networks (“HetNets”) for reliable communications.
With this in mind, we need to create conditions conducive to the emergence of an innovative and competitive ecosystem at the service of people. As the foundation of this ecosystem, there is a manifest need for appropriate and resilient infrastructure capable of handling the data flows of today and tomorrow.
Some figures illustrate the trend. Some 25 years ago, before the advent of mobile connectivity, buildings were connected to the fledgling Internet via fixed telephone networks. By 2017, permanent access to the network wherever we happen to be had already become a basic necessity: there are now more mobile voice and data contracts than there are people in the world, and more smartphones than basic voice-only devices.
But objects – in the “Internet of Things” or via machine to machine communications – also interact among themselves. Nowadays we have all manner of sensors that improve society and enhance personal mobility. For example, they can improve the efficiency of industrial processes (“Industry 4.0”) in the preventive maintenance of aircraft engines, or enhance welfare by carrying out remote monitoring of patients. Such sensors are all based on permanent and resilient connectivity, and it is estimated that there will 50 billion of them by 2020. The data they generate will facilitate decision-making based on “big data” applications.
And we are still only in the initial stages of development of an ecosystem which, with the advent of 5G (IMT 2020), will undergo unprecedented development: more, better, faster and more secure connectivity, with the capacity to handle volumes of data that have never been seen before. The data associated with every connected person alone will grow four- or five-fold by 2020.
More data in a network that is broader, denser, expanded… and shared
The inexorable growth in data traffic – in the case of mobile communications, by an estimated 600 per cent in the next five years – presents us with a challenge: how do we make the major investments that are needed to ensure secure and reliable transmission based on short technology cycles?
This point is highlighted in a recent study by the consultancy firm EY, “Digital transformation for 2020 and beyond: A global telecommunications study.”
As the study suggests, “Operators will need to consider new ways of generating capex efficiency as they strive to meet growing demand for high-speed and low-latency data services.”
There are a number of specific questions which we must be able to address.
How will we ensure that the enormous number of simultaneous access operations will allow the speeds and latencies that are needed without compromising security ‑ for example, in autonomous vehicles? Are we going to densify networks according to the principle of ownership and deployment of networks by every voice and data access provider? Or will we opt for sharing of a network that is necessarily broader, better prepared, and denser, comprising “small cells” or small antennas deployed and administered by infrastructure operators which make that capacity available to the network access providers?
The need to harness models of network and infrastructure sharing was also raised by the Chairman of GSMA, Sunil Bahrti Mittal, at the Mobile World Congress 17 in Barcelona. In his view, the current model, based on proprietary networks deployed by each operator, cannot be sustained, and companies that are purely network and infrastructure operators (“Netcos”) should have a more important role – that is, companies which, independently of network access providers, apply a model of value creation that maximizes the use of existing networks and capacities to facilitate resource sharing and thus help their clients (the network access providers) to be more competitive.
The key word in the “geo-economics” of the digital economy is “sharing”, not “ownership”.
For example, in the future – and to some extent even now – a car will no longer be just a car but rather, a software platform that will make real-time decisions based on dynamic information gathered from the vehicle itself and its interaction with other external systems (other vehicles, GPS, and so on). For this to happen, it will be necessary to establish and “share” the networks and infrastructure needed to accelerate the introduction of new mobile broadband services and applications. If we really wish to boost competition among service providers (unleashing innovation) and reduce the “time to market” of new products and services, entry costs must be cut to a minimum. Sharing also reduces CAPEX allocation to redundant (overlay) networks by service providers (such as mobile network operators), which releases available resources for the development of innovative broadband-based content, services, applications, and so on, which in turn stimulates digital transformation.
An adequate response will be possible only if all the players – public administrations, network access providers and infrastructure administrators – act in a coordinated way. The densification of networks in response to the growth in data traffic, and the need to ensure virtually universal coverage, will determine the criteria we apply in planning and deploying equipment and infrastructure, and it is reasonable to apply criteria that focus on efficiency and rationalization.
In an economy in which broadband connectivity will need to be taken for granted (like access to mains water, electricity and gas), as well as being a factor for “social inclusion” and overcoming the digital divide, competitiveness requires more rapid deployment of new value-added services and applications. It is essential to lower entry barriers by providing incentives for the development of services and content that will boost competition, differentiation and innovation, which in turn will enhance citizens’ well-being.