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Disruptive forces are reshaping the global telecommunications market and changing how mobile network providers operate. New networking technologies are offering telecoms the opportunity to expand their partnerships with large enterprises and dive into entirely new services.
Rising competition from over-the-top (OTT) platforms is compelling operators to find new avenues to compensate for revenue losses in traditional services. Meanwhile, the line that once distinguished mobile networks and home broadband and video is fading — and it will only continue to fade. As these forces converge, the role of the mobile carrier is evolving: from providing only wireless connections, to offering a comprehensive array of consumer and enterprise connectivity services.
For global telecoms, adapting to the new, disruptive forces means embracing digital transformation. Nearly two-thirds (61%) of global telecoms from a 2019 Forbes Insights survey reported plans to devote more than 10% of revenue to digital transformation in the next two years and almost half (46%) reported plans to increase their digital transformation budgets by 10% or more. Digital transformation unlocks opportunities for telecoms to grow business through increased efficiency, reduced costs, and agility when introducing new services.
Business Insider Intelligence recently interviewed Verizon’s Adam Koeppe, Senior Vice President of Technology and Planning, to explore how his team is approaching digital transformation. Koeppe is responsible for the strategic technology evolution and capital planning for Verizon’s wireless and wireline networks. In the interview, Koeppe offers insight into the steps his team has taken on the path to digitization, his team’s priorities, how the convergence of wireless and wireline informs their transformation strategy, and the role of future networking technologies in its business.
Business Insider Intelligence (BII): As you continue to transform your network and capabilities — whether that’s through the use of AI, automation, cloud computing, etc. — how do you decide what to prioritize, and as a result of this process, what are some areas that have been at the top of your transformation strategy?
Adam Koeppe (AK): All of our network technology development has been focused on three things – first and foremost, giving our customers the best possible network experience in the industry every time they need us. Second, we drive revenue growth with new technology like FiOS, 4G, 5G, our IoT network, our virtual managed network services for enterprise, and a long list of other solutions. Third, we drive costs out of the business through the use of technology. Virtualization of network functions on our cloud platform for network, deep network, task automation, as well as emerging uses for AI and machine learning have reduced our cost per bit served while preserving the quality of our networks. As long as we focus on these three things, the prioritization gets pretty easy.
BII: What are some of the challenges you’ve come across when trying to integrate digital systems with legacy platforms, and how are you approaching them?
AK: We’ve been working for years to migrate services off of legacy equipment and special use hardware and decommission that equipment to enable greater virtualization and standardization within our network. These moves will lead to greater flexibility and speed to deployment of products and services. This migration, decommissioning, and virtualization also lowers the barrier of entry for others in the ecosystem resulting in an acceleration of innovation, reduction in operating costs, and it has laid the groundwork for flexible infrastructure closer to the customer on the network. We always have to strike a balance between the customer needs and our infrastructure plans – ensuring that we give our customers a clear path forward when legacy systems reach end of life.
BII: How will the convergence of wireless and wireline impact network planning and strategies within the next five years?
AK: We have been working to develop our Intelligent Edge Network (iEN) for several years. This network is a convergence of wireline and wireless services built on a vast fiber footprint and infused with intelligence through virtualization and automation. This singular network brings with it numerous advantages and efficiencies. Not only will we be able to continue decommissioning older equipment and running a more efficient operation, but we will be able to offer services to customers much more quickly and have seamless integration between wireline, 4G, and 5G services. The intelligence built into this converged network will allow us to dynamically allocate resources to a vast array of customer solutions based on the changing needs of those solutions in real time. And building these advanced services on a strong fiber backbone and strong spectrum portfolio allows us to offer extremely fast, low-latency, scalable solutions not seen before.
BII: What impact will 5G have on cloud and edge computing and is this something that has been of interest to enterprises?
AK: There are three components in next gen technology that, when combined, will unleash massive innovation and enable new, disruptive technologies:
- A shift in where application processing occurs, otherwise known as Mobile Edge Compute;
- The inherent capabilities of 5G to move data more efficiently; and
- Our use of millimeter wave spectrum.
The combination of these technologies is critical to reach the eight currencies we’ve been talking about in the market, including massive-scale IoT device deployment, single-digit latency, low-power consumption, and gigabit speeds.
This is of great interest to enterprises. Whereas innovation and use cases in 4G LTE were very much driven by the consumer, 5G and MEC use cases have been and will continue to be driven by enterprises. We’ve already talked publicly about numerous enterprise customers who are using 5G technology to transform their businesses, and we are working with countless more who are seeing the value of the new capabilities we are bringing to market.
BII: What are the most lucrative enterprise- and consumer-facing use cases for edge cloud computing right now, and how have you been able to identify those?
AK: We are not disclosing any business models or disclosing anything forward-looking in terms of revenue opportunities, but I can share a few exciting and promising use cases for different verticals.
In November of last year, we were the first in the world to introduce a MEC platform, so the technology is very new; however, the possibilities this technology will enable are limitless. There are countless use cases for Edge technology. A few examples include:
- Real time enterprise empowers people, devices, and systems to interact efficiently and safely in a highly automated environment.
- Retail stores will be able to deploy real-time product tracking and immersive experiences, driving greater customer engagement.
- Distribution facilities will be able to take advantage of massive IoT tracking with automated robotic processes integrated into real-time workflows. Manufacturing facilities can benefit from predictive maintenance, robotic control, remote equipment configuration, intelligent video, AR job aids, assembly inspection, and massive IoT tracking.
The leading video game publisher Bethesda Softworks is using Verizon 5G Edge computing to deliver frictionless, ultra-low-latency streaming experiences for millions of gamers.
We expect to see many more developments on MEC technology in industries including mixed reality, gaming, sports entertainment, manufacturing, healthcare, autonomous vehicles, retail and more.
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