Telco cloud: empowering the edge on the road to network as a service

On 28-06-2024
Reading time : 5 minutes

Telco cloud has the potential to transform telecoms beyond recognition. Operators are shifting to exploring virtualized network functions (VNFs) en route to cloud-native network functions (CNFs) and network as a service (NaaS). What’s it all about?

We are entering the era of the telco cloud. It’s a crucial step forward in helping operators adapt to future market demands. Telco cloud can help operators enjoy more scalable service delivery, improved network performance, and reduced risk. It also helps them deploy network capabilities, functions, and services in software-defined spaces, on demand, closer to the edge, where end-users are.

What is telco cloud?

Telco cloud is a variety of cloud computing designed specifically for telecoms. It enables telcos to virtualize and manage network functions, and support the specialized requirements of network operations, such as high reliability, low latency, and the ability to handle large volumes of network traffic.

It differs from private cloud in fundamental ways, specifically the applications it focuses on and its architectural design: where private cloud concentrates on providing computing resources for enterprise applications, with data privacy and customizable resource allocation built in, telco cloud is engineered to optimize network functions like routing, switching, and data processing, and adding VNFs and software-defined networking (SDN) to the mix to enhance network flexibility and scalability.

How has telco cloud evolved?

Telco cloud emerged from the increasing need for telcos to do more with less and enhance network performance. In recent years, telcos have been under pressure to innovate in more significant ways. The shift from 4G to 5G networking, plus the demand for cloud-based services like software-defined wide area networking (SD-WAN), security service edge (SSE), and content delivery networks (CDN), have all meant telcos must deploy a new set of network functions and services.

At a basic level, telco cloud represents a shift towards a virtualized, more programmable network infrastructure for operators. It offers possibilities in terms of automation and AI to facilitate the deployment of network functions in a more customized way, detached from dedicated hardware. The main components of telco cloud are:

  1. Virtualized network functions (VNF). VNFs are about converting network functions from dedicated hardware appliances into software applications that run on virtual machines or containers, such as virtual routers, firewalls, and load balancers.
  2. Software-defined networking (SDN). SDN separates the network’s control and forwarding planes, enabling network management through software-based controllers, which enables more dynamic and flexible network management.
  3.  Cloud-RAN (C-RAN). In mobile networking, C-RAN moves processing from individual cell sites to centralized data centers, improving resource allocation and energy efficiency.

Cloud-native deployment models enable new efficiencies and greater reliability for telcos by running network functions in containers or using virtual machines. So, while the services that telcos need to deliver haven’t changed much from a customer perspective, how telcos deliver them has changed dramatically due to the cloud-native revolution.

Increased agility, scalability and flexibility with telco cloud

The benefits of telco cloud are agility, scalability and flexibility: it means telcos can deploy network functions in a local point of presence (PoP) within minutes, much faster than previously. In specific terms, telco cloud benefits include:

  1. Cost reductions. Telcos can benefit from a cloudified pay-as-you-go OPEX pricing model, which removes the need for upfront CAPEX investments in hardware. Optimized resource utilization can help telcos significantly reduce general operating expenses and enable significant cost savings.
  2. Increased operational efficiency. By streamlining network management and reducing administrative overheads, telcos can allocate resources more efficiently and optimize operations.
  3. Faster deployment of new services. Telco cloud can empower operators to deploy network services faster. Telco cloud means less time and effort is required to set up infrastructure closer to end-users, which frees up time to bring new offerings to market faster.
  4. Greater scalability. Telco cloud allows telcos to scale resources more dynamically based on demand. And its flexibility means operators can better manage changing customer requirements, adapt to market changes more quickly, and be more agile in an always-evolving market.
  5. Supporting innovative technologies. Telco cloud simplifies implementing innovative technologies like 5G, IoT, and edge computing, all of which require agile and scalable network infrastructures.

Setting the stage for network as a service

Telco cloud is a major step forward in making the network more agile, proactive, and efficient, and sets the stage for the evolution to network as a service (NaaS).

Combined with edge computing, NaaS offers a very attractive value proposition, as telco-specific network and connectivity services can be deployed in PoPs at the edge of the network. Telecom service providers can therefore source these functions from another telco, on-demand, and deliver them as close as possible to their end-users. This proximity to end-users guarantees low latency, something that is especially important to a service provider’s demanding B2B customers and their business-critical applications.

Using this model, telecom operators will enjoy similar benefits to telco cloud service providers:

  • Simple deployment and decommissioning of functions because they’re virtualized,
  • Using another telco’s PoPs ensures data security and can support data privacy imperatives more than public cloud
  •  Ability to offer carrier-grade network functions to customers with a more convenient cost model.

Orange Wholesale is ready for telco cloud and NaaS

At Orange Wholesale, we saw the change coming and so began to prepare for telco cloud and NaaS back in 2020, transforming our network from a rigid architecture to a simpler, more converged, fully software-defined and automated architecture. We now have an international network that combines the extensive footprint of a B2B network with the high bandwidth of a wholesale network. It enables customers to reduce the deployment time of new services from months to just a few clicks in any of our PoPs around the world.

It means that customers will be able to purchase network functions they may not have in-house from Orange Wholesale PoPs, either to deploy themselves or for their own end customers, functions like SD-WAN for B2B customers. The telco cloud model, delivering telco services via PoPs, combines the benefits of cloud and edge computing, including closer proximity to end-users, increased QoS and lower latency, reduced network transit costs, and compliance with local-level data privacy and sovereignty regulations.

Omdia forecasts the telco cloud network market will grow from $16.5 billion in 2023 to $22.3 billion in 2028 . It all adds up to a model whose time has come, one that enables operators to enhance service offerings and serve the evolving demands of their customers, leveraging the power of cloud and driving digital transformation in the industry.

If your company would be interested in the benefits of telco cloud and NaaS, please contact us to discuss further.

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