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Next Generation Telco Architecture

How to bridge the gap with Over-the-top (OTT) internet providers and survive in the digital age

The paper describes why this new architectural model will support business needs and defines a possible high level transition towards it.

The advent of the digital age is disrupting the Telco industry.

Traditional telecommunications companies are losing revenues as the competition from Over-the-top (OTT) internet providers grows.

Telco business units are demanding new services and products from their IT departments. Services must be brought to the market more quickly and cost-effectively.

The industry is reacting. All major Telco players are making huge investments in their Business Support Systems and Operational Support Systems (BSS/OSS) as they try to tackle lack of automation, redundant functions and rigidity. And yet there remains a risk that they are underestimating the extent of the disruption they face and the need for a quantum leap in their entire IT model.

The objective of this paper is to focus the attention of IT executives on the need for a deeper change in IT architecture. The adoption of new technologies and the development of new capabilities risks being unsuccessful unless the way in which IT applications are implemented is changed.

This paper presents avision of a possible future Telco architecture based on an “API Fabric” model that relies on microservices, “softwarized” infrastructures, and big data capabilities. These architectural paradigms are currently one of the key enablers of digital companies’ expansion and could be used to create an IT Telco architecture capable of ensuring resilience and flexibility.

The paper describes why this new architectural model will support business needs and defines a possible high level transition towards it.

We hope you will find this paper of interest and that the vision presented enables you to develop your IT architecture strategy

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The disrupted Telco business model

Consumers are demanding high quality telecommunications services and data consumption is growing exponentially. To try to compete Telco operators have made huge investments in networks, customer care and new offerings. Despite this they are facing a general decline in revenues (especially in Europe), while competition from OTTs is growing.

To survive, Telco shave started to create additional revenue streams from new digital services: the Internet of Things (IoT), mobile payments, on-demand TV, e-health, cloud services, etc. In the next five years, the Telco business model is likely to shift to a “Digital Services Provider” model, whereby telecommunication services will no longer be the core business but instead a means of providing a new digital offering.

Impacts and current constraints

The evolution of the Telco business model means more is being demanded from IT in terms of applications, data and infrastructures. Telcos’ current IT architectures are the result of multiple merger & acquisition processes, technological waves and system integration initiatives undertaken under severe time pressure to the detriment of architectural consistency.

As a result, IT architectures are quite insufficient to support today’s business needs, let alone meet the needs of tomorrow, in terms of flexibility, rapidity and costeffectiveness.

BSS/OSS initiatives and their limitations

Operators are undertaking big IT initiatives to evolve their BSS/OSS ecosystems. The main areas being tackled are fixed/mobile convergence, service configurability, reduction in functional redundancies, and the creation of new customer engagement capabilities.

Although these BSS/OSS initiatives will lead to a higher level of flexibility and effectiveness, IT will not be able to support the new business environment without a change in the architectural pattern and a shift in the entire IT model that goes beyond technological change. The problem is not only identifying what kind of functional evolutions are needed, but also how to evolve the IT ecosystem into an open, flexible and cost-effective model capable of quickly adapting to new business needs and easily integrating innovative solutions.

An architectural vision: the BSS/OSS API fabric

An IT reference model that Telco operators could adopt is the one developed by OTTs. Native digital players are able to provide reliable services to a huge number of users and implement innovations in parallel at a very fast rate. To achieve this OTTs have developed new IT paradigms based on the wide use of microservice architectures, application programming interfaces (APIs), big data and cloud platforms.

Adapting these paradigms to the Telco IT environment implies breaking down current monolithic applications into smaller, modular services to maximise responsiveness, resilience, flexibility, interoperability, reuse, and openness.

A possible migration strategy

Evolution towards the BSS/OSS API Fabric architecture has a wide impact on the entire IT ecosystem: its technologies, processes, organisation and people.

A smooth transition is the most suitable strategy. A big-bang approach could be too risky and complex.

The migration strategy begins with the introduction of software based on Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) –as tools to develop and integrate the microservices of new applications with the development and operations (DevOps) approach.

Once the organisation reaches a good understanding ofther new model, IT can start to migrate legacy applications to the new environment.

How Deloitte can help

Deloitte is recognized as a global leader in IT Consulting and Services and is able to offer unique assistance thanks to its independence, business vision and knowledge of architectural models and trends. Deloitte’s professionals can provided a variety of tailored services, covering all organisational needs and requirements, from IT strategy & architecture to vertical implementation.

Deloitte is currently supporting all major Telco operators and has been involved in a large number of complex IT transformation initiatives worldwide.