October 27, 2020
This year sees 20 years of the Capacity Europe event, one of the most important telecoms events on the calendar. For the first time, the 2020 edition was held as a virtual event but there was still a lot of top quality discussion.
Back to the dawn of the new millennium
If we wind the clock back 20 years, the world had just entered a new millennium and seemingly endless possibilities. It was indeed an exciting time but also a period of some uncertainty. The late 90’s saw a huge growth in the value of tech stocks around the world. Between 1995 and 2000 the Nasdaq composite rose by more than 400% thanks to the emergence of these exciting new companies.
Remember the Millennium Bug/Y2K scare? We all know now that this didn’t see planes falling from the sky or your VCR packing up, but it did help to fuel more than $500bn worth of investment by telcos in replacing kit that may be vulnerable and it also helped to drive consumer spending on technology as more and more of the worlds population was getting online.
Fast forward just a few years though and the Dot Com bubble well and truly burst, stocks plummeted in value as the market realised no one was making any money and despite promise of success many of these companies were hugely over-valued and tainted with poor financial management. Many familiar names disappeared during this time, then there were scandals like Enron, Worldcom and Adelphi. All of which damaged the industry for many years to come.
By October 2002 the Nasdaq was down 78% from its peak.
Sounds like it was a pretty bad time to be in telecoms, but actually this period has taught the industry some valuable lessons that are still applicable today.
What did we learn?
Technology is continuing to change; new players are emerging, and investment is still needed to improve networks. Perhaps the biggest lesson learnt from the big tech crash is that the telecoms and financial industries now have a much better understanding of each other. Telcos for their part realise that they will only succeed if they deliver growth and value to investors, rather than simply promising a better tomorrow. Success is measured not on promises but by achievements, which in turn encourage financial investment. There’s still a promise of tomorrow but now companies understand the technology better and how it can be used to deliver better value. Signs are certainly positive that tech companies are more financially savvy than they were 20 years ago, and with rates so low, investors are willing to provide funding for big infrastructure projects once again.
What does the future hold?
We’re already seeing an accelerated future take shape, through the development of more sophisticated software defined networking (SDN) which promises to deliver real value to the customer.
However, with the growth of SDN there will be more need for greater interoperability between providers with much more driven by software and automation. For example, a customer going onto a portal and acquiring an end to end connection which involves another provider, one that you’ve partnered with that previously would lead to complex and time-consuming contracts with each one. Then there’s the billing and settlement automation such as CBAN which has been developed through the GLF, taking a common reference architecture to not only allow the connectivity but also the automated financial settlement through distributed ledger or Blockchain that goes with it.
Today’s telcos are now part of the ICT community, not just a carrier community. Therefore, they have to think and operate like an ICT company with a focus on software and product development whilst continuing to focus on delivering great customer service. Automation doesn’t mean to ignore the relationship with the end user, it’s still critical to success.
Rise of the cloud
20 years ago, the Cloud didn’t exist. Today and into the future, it’s very much the replacement for traditional infrastructure. Enterprises today are still interested in connectivity, but they are much more interested in Applications and access to them via the Cloud. The technology will continue to evolve to make this access quicker, easier and more flexible than ever before.
One thing that hasn’t changed in 100 years – interoperability between telecommunication companies. It’s just that now it is becoming even more important and to do so within the rules and regulations that enterprises expect.
Increased focus on Corporate Social Responsibility
A big future trend for the industry is going to be how it helps to manage our shift to a lower carbon economy.
The move to more software platforms is reducing the need for costly rack equipment, new equipment is using less power and the move to more software means actually we need less equipment to do the same job. For example, more data centres are looking at sustainable power supplies such as wind or solar, locating in cooler climates and Microsoft has even experimented with putting a data centre in the sea off of Scotland to reduce the need for cooling power usage.
The industry will also continue to do more to connect un-connected and under-connected people and businesses. Much of the focus over the last 20 years has been improving access to those living and working in major cities but there’s huge numbers of people in more rural areas of Asia or Africa who will benefit from the increased roll out of 5G.
The last 20 years have been a real rollercoaster for the telecoms industry and many lessons have been learnt. With exciting developments starting to emerge, the next 20 years will be really very exciting.