CBNL: John Naylon's 2015 Trends

All around the world, the mobile landscape is changing. Mobile subscriptions are expected to reach nearly 7 billion by the end of 2014, whilst mobile broadband subscribers will reach 2.3 billion.

As mobile penetration reaches saturation in many regions and grows exponentially in others, operators across the globe are recognising the need to drastically change their business models. In 2014, we’ve seen dramatic developments that look set to disrupt the market next year.

Demand for connectivity to drive economic growth in emerging markets

The convergence of fixed and mobile networks has become evident in emerging markets. Here, the demand for enterprise access is challenging operators to upgrade capacity and roll out new connectivity to SMEs in previously under-served areas. In Africa, for example, the continent’s economy is predicted to accelerate from an average four percent growth rate in 2013 to between five and six percent in 2015, with much of that being driven by SMEs. As these findings highlight, SMEs will present a big opportunity for operators in 2015, and being able to cost-effectively expand connectivity in these growing areas represents a competitive edge. Thanks to the relative absence of major ISPs in emerging markets, mobile operators are extremely well placed to capitalise on the growing demand for connectivity and fill this void.

To meet the growing demand for connectivity, operators in emerging markets are looking more and more towards flexible and high capacity backhaul solutions, such as point –to-multipoint (PMP) microwave. Wireless technologies such as PMP enable operators to support both mobile backhaul and enterprise access over the same infrastructure, allowing them to quickly meet the market demands for a fraction of the cost of traditional fixed infrastructure. In 2015, it seems likely this will accelerate operator’s time to market for new services, create new revenue streams and help bridge the digital divide through providing connectivity to under-served areas.

The rise of SDN

The shift towards converged networks has been enabled by the growth of Software Defined Networking (SDN). SDN gained steady momentum in 2014 and we witnessed a shift in its applications from the network core, to wider applications like backhaul. After initial skepticism, operators now understand the benefits of SDN, and how it can help them re-shape their business models. Strategy Analytics, for example, recently documented that the use of SDN to boost the efficiency of data traffic on backhaul could save mobile operators $32 billion in annual CAPEX investments by 2020.

SDN, particularly when combined with Network Functions Virtualisation (NFV), grants operators far greater flexibility and allows operators to customise virtual networks and roll out services which can quickly meet the changing demands from customers. By efficiently managing resources in this way, operators can run mobile backhaul at a much lower cost and achieve a quicker return on investment.

Need to adapt

Thanks to the growth in the number of mobile users, mobile broadband penetration and need for low-cost enterprise access to support economic progress, the landscape has undoubtedly changed for operators in recent years. With these recent developments, 2015 looks set to be the year that really tests operators’ ability to adapt to a changing market, while also seeing many new and innovative entrants.

John Naylon is the CTO and founder of CBNL.