Blog written by James Crawshaw, Senior Analyst - OSS/BSS Transformation, Heavy Reading, and published on Light Reading on 14/12/2017
Back in 2014 the regulatory winds were favorable in European telecoms with consolidation in both the German and Austrian markets taking the number of mobile network operators from four to three. "Market repair" was the buzzword of the day and operators were keen to see if they could achieve similar consolidation in other countries. In the UK, there were four MNOs: EE (itself a merger of Orange and T-Mobile's UK arms), O2 (part of the Telefonica Group, Vodafone and Three UK (part of Asian conglomerate CK Hutchison). With EE being snapped up by BT, Three made an audacious offer for O2 that would have created the largest mobile operator in the UK with over 40% share of mobile subscribers and a strong portfolio of spectrum. However, after a year of deliberations, in May 2016 the deal was blocked by the EU commission on competition grounds, leaving Three UK in a quandary.
Data traffic growth forecasts required network architecture rethink
Three is the smallest of the UK's MNOs with subscriber market share around 14% according to our estimates, behind EE, O2 and Vodafone. However, given Three's generous plans (some of which include all-you-can-eat data) it carries around 36% of mobile data traffic in the UK, according to Enders Analysis. If Three was to close the market share gap with its competitors organically it was going to have to gear up for even more mobile data traffic. Mobile data had already been growing at around 40% each year since the roll out of 4G. If that continued, as demand for VoLTE, high-definition video and other digital services grew, there would be a 30-fold increase in network traffic over the next ten years.
Historically, Three UK , like many other operators, would launch a new project every six months or so to build out more network capacity using traditional physical appliances. However, that approach would no longer work as the forecast increase in network capacity would be prohibitively expensive and difficult to even physically house in its footprint of network nodes. Three UK needed a more scalable technology and it needed to distribute it more widely across the country, closer to customers.
NFV the solution for scalable, elastic and reliable networking
According to Bryn Jones, chief technical officer of Three UK, network functions virtualization (NFV) provided the solution to these problems as it would allow the network to be distributed on common IT infrastructure providing scalability, elasticity and reliability. The foundation for this new NFV strategy was to be a new core network and associated data centers. In addition to solving the near-term challenge of core network congestion, Three UK also saw NFV as a way to improve agility to respond more rapidly to customer service demands while preparing for IoT and 5G.
Three UK chose Nokia Corp. (NYSE: NOK) as its main supplier for the core network transformation spanning mobile packet core, transport, IP and value-added services. Nokia described the project as "the world's first fully integrated cloud native core network." The deployment includes Nokia's AirFrame data center solution, IP routing, CloudBand NFV MANO, Nuage software-defined networking, evolved packet core, IMS, TAS, and SBC. Although other operators are implementing NFV, Three UK's complete replacement of its core network is a world first, according to Nokia.
Assuring the new virtualized core
After a detailed investigation of the market Three UK chose MYCOM OSI 's Experience Assurance and Analytics suite (EAA) for the service assurance of the new core network as they saw a good strategic fit with their architectural approach. MYCOM OSI's solution is completely cloud based and can be deployed on private or public cloud. Three UK's CTO, Bryn Jones, noted that "MYCOM OSI were the best fit for our strategy of delivering a quality and reliable network experience for all of our customers." In our discussion with Jones he noted that MYCOM OSI's solution was ahead of the pack functionality-wise and that it was easily configured as an out-of-the-box solution. MYCOM OSI appears to be ahead of the game in making its service assurance software cloud-deployable.
MYCOM OSI provides an integrated suite approach to service assurance, whereby performance management, fault management, and service quality management are deployed together rather than as point solutions. This integrated approach is key to enabling the real-time capability of the system. By being natively integrated they share one common unified inventory and topology using one data model which facilitates correlation analysis.
MYCOM OSI's EAA will assure both new, virtualized and existing, physical networks, and provide closed-loop assurance-driven orchestration based on end-to-end network and service quality. The solution monitors the various components of the virtual environment which Three UK's CTO notes is more complex than traditional networks as virtual functions might be spun up in any number of locations. The workflow engine takes data from the VIM, VNFs and physical network functions, NFVi and the services layer. The solution has automated diagnostics which can make scale up/down requests to the northbound orchestration system (NFVO) via APIs.
Virtual probes for customer view of performance
Three UK also selected Astellia to provide a customer experience management solution for its new virtualized core network. The solution is based on virtual probes that monitor traffic within Three UK's virtualized core network, raise alarms for performance degradation and troubleshoot issues. Astellia's solution will support CEM use cases that will be used by multiple teams from across the business including customer service and marketing. According to Astellia, these use cases will address topics such as churn prediction, usage-based segmentation and customer experience for voice services (VoLTE, VoWiFi, etc.), video streaming and web browsing.
Three UK's CTO notes that combining the customer view which Astellia provides with the service and network view from MYCOM OSI gives the operator a complete service assurance solution for its new telco core.
Core network virtualization part of a larger transformation program
As the smallest mobile network operator in the UK by customer base, Three focuses on providing outstanding customer experience in order to grow its market share organically. The approach appears to be paying off as Three UK's active customer base rose 9% year on year to 10.0m in the six months ending June 2017.
Arguably, Three UK's size is an advantage when it comes to transformation. Mounir Ladki, CTO of MYCOM OSI, believes Three UK is able to take a more radical approach to network virtualization as they are small enough to be nimble while larger operators are forced to proceed more cautiously.
Three UK's transformation is not limited to its core network. The company will also employ virtualization within the RAN and undertake a transformation of their IT infrastructure. In its most recent results statement Three UK's parent company talked about the transformation underway in its UK business referring to an "IT transformation and network enhancement phase to better position itself for future growth." Three UK's Jones believes the investments in NFV and associated service assurance tools will enable the company to continue delivering great customer experience despite the significant increase in network traffic he expects over the next several years.