Innovation reduces risks for telcos: part 1

The thought of innovation reducing risk may seem counterintuitive. Here’s why telcos should embrace innovation to address a changing environment.
Prayson Pate
Light bulbs

Why embrace innovation and its apparent risks? The short answer is that staying with the status quo is not a way to reduce risk and could actually increase it. The world is rapidly changing, with new opportunities and new threats appearing every day. All companies must find new and innovative ways to advance. And that means using innovation to address both opportunities and threats. Let’s look at some specific threats to telcos and see how innovation can help.

What are the top risks for telcos?

EY just published an article How can risk foresight lead to fresh insight? It enumerates the top ten risks for telecommunications in 2021 as being the following:

  1. Failure to ensure infrastructure reach and resilience
  2. Underestimating changing imperatives in privacy, security and trust
  3. Failure to redesign workforce structure and skill sets
  4. Failure to mitigate supply chain disruption
  5. Poor management of the sustainability agenda
  6. Inability to scale internal digitisation initiatives
  7. Ineffective engagement with external ecosystems
  8. Failure to maximise value of infrastructure assets
  9. Failure to take advantage of new business models
  10. Inability to adapt to changing regulatory landscape

In part 1, we’ll take a closer look at how innovations from companies like ADVA can help address some aspects of risks 1-5. We’ll cover risks 6-10 in part 2.

Risk 1: Failure to ensure infrastructure reach and resilience
Innovation: Apply wireless technologies and edge compute

Fiber provides the highest bandwidth but can be time-consuming and expensive to deploy for some locations. Using current LTE technology and emerging 5G fixed wireless access (FWA) expands the addressable footprint for telcos. Wireless access can be combined with fiber to provide a resilient backup. Providing onsite hosting for end-user applications provides an additional level of resilience. It enables applications to run even when connectivity is lost. See Moving from hyperscale to hyper-localized for additional info. And our Edge Guardian feature set ensures protection for applications as well as rapid recovery from hardware failures.

Risk 2: Underestimating changing imperatives in privacy, security and trust
Innovation: Apply encryption and edge cloud

Security is a growing concern for end users, and telcos must have answers. One relevant innovation is quantum-safe encryption methods for data transport. These methods ensure that encrypted data captured today can’t be decrypted in the future using quantum computers. In addition, many governments are creating regulations on data sovereignty. Telcos must ensure that certain data does not cross international borders. The use of edge cloud for onsite hosting of applications can help address these new regulations. And capabilities such as TPM, secure boot and disk encryption ensure that edge cloud deployments are secure.

See Encryption remains top cyber defense for data-in-motion, How trusted networking is becoming a major theme and Security is a many-layered thing for more on this important topic.

Risk 3: Failure to redesign workforce structure and skill sets
Innovation: Move to new methods like agile development and DevOps

The IT world is moving to cloud-centric software, and that enables rapid changes to applications and where they are deployed. Telcos must change how they work, moving away from waterfall development. That’s where each step must pass an approval “gate” before the next step is started. This approach is slow and inflexible. New methods such as agile development can shorten the cycle and make them more responsive to customers and markets. And DevOps can eliminate the pain of upgrades. The blogs Working to get to the telco cloud and Service Providers are Changing for the Cloud provide more detail on this topic.

Risk 4: Failure to mitigate supply chain disruption
Innovation: Embrace disaggregated systems that enable substitution of suppliers

Traditional telco services have used closed networking appliances. A single supplier provides the hardware, software and support for these devices. That’s great from the standpoint of simplicity; you always know who to call. But what happens when your supplier can’t get the hardware platforms due to trade wars, disease, or component shortages? And what happens if the supplier is acquired, and the new owner jacks up the prices? An open and disaggregated approach is the answer. Selecting the best hardware, software and support in a multi-vendor fashion gives you a path forward in the face of supply chain disruptions. See Choice reduces risk for more details.

Risk 5: Poor management of the sustainability agenda
Innovation: Work with suppliers who are committed to sustainability

ADVA is committed to sustainability. We’ve been recognized as a leader in this area and have received awards for our accomplishments. One aspect of this is reduction of greenhouse gasses as defined by GHG Corporate Value Change Scope 3. Our biggest impact is energy, and we are continually improving the energy efficiency of our products and processes. What’s more, our products support “Greening-of-ICT” activities in other sectors, such as smart buildings, cities, transport, agriculture, etc.

Other activities include our investigation of new business models like product-service systems that better support circular economy. This is a part of the C-SERVEES project, and we expect the first practical results starting in 2022. For more information, please see Could a circular economy business model transform the telecoms industry?, ADVA launches sustainable supplier program to tackle CO2 emissions and our sustainability page.

Stay tuned for part 2!

In part 2, we’ll cover risks 6-10 and talk a bit about the value of a trusted supplier.

Related articles