Sweating your legacy network assets has been a popular strategy among providers of legacy voice and data services. The combination of low revenue growth and a desire to avoid additional investment has resulted in many transformation strategies ending up in a binder on a shelf, often together with their counterparts from previous years– but this is about to change.
In the late 1990s, Y2K transformation projects intended to prevent the disasters that might occur when computing systems made the transition from 1999 to 2000 were carried out in a frenzy. The business cases behind them were not based on revenue upsides; instead, these projects were intended as protection against the risk of a negative impact on society.
In the case of many 20th-century legacy network elements, it will soon no longer be an option for operators to sweat these assets further. The trigger for investments in transformation projects is likely to be a change in perspective about what that transformation should deliver.
It’s not only about the fantastic scalability that Internet Protocol version 6 (IPv6) will deliver, it’s also about avoiding the limitations of Internet Protocol version 4 (IPv4) and the high opex that will be generated if operators have to use a variety of migration solutions.
As had been feared, the world did run out of IPv4 addresses last year. Companies that needed them had to buy them secondhand. Few other industries buy vital parts for their products and services on the grey market. More aggressive IPv6 transformation strategies will simplify IP networks over time.
It’s not only about transforming Plain Old Telephony Services (POTS) into multimedia communications– it’s also about being able to deliver basic voice services in 2015. Old telephony systems are reaching the end of their physical lifetimes. The necessary support staff are about to reach retirement age.
However, high-quality communication services remain as relevant as ever and will remain vital for the business of any service provider–and they’ll be a fully functional part of the Networked Society.
Since the 1980s, fiber has been touted as the access method of the future, but the trend is moving more toward a copper phase-out than a fiber overbuild. Opex savings can only be realized when the copper network has been phased out. When the two technologies exist in parallel, operators face what’s known as the double-opex dilemma. Looking forward, fiber will replace copper wherever economically feasible, but when it isn’t, radio could be the technology that replaces copper in other parts of the network.
In the future, I expect to see the following trends:
• Transformation strategies will replace the strategy of sweating your assets as the mainstream approach for dealing with legacy voice and data networks
• Copper-network phaseouts will be required to bringabout the full financial and societal benefits ofadvanced fiber and radio builds
• Network transformation projects will take about five to seven years and will be implemented in multiple stages, similar to the process of renovating a house room by room over many years
• Building the foundation is a long-term vision; it’s important to take a holistic approach to network architecture and to use transformation strategies that can be easily replicated.