Inside telecommunications Issue 11


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Riding a new wave of operator data center investments

Data centers remain a pivotal part of operators’ moves into hosted services for enterprises.

  • Many operators serving multinational corporates (MNCs) have established a solid footprint of data center facilities, at the same time striking new partnerships to ensure greater flexibility for their customers’ fast-changing needs.
  • Data center initiatives are now becoming commonplace among smaller operators, or those from emerging regions serving a less-mature base of enterprise clients.
  • Operators of all sizes have shifted their focus to serving enterprise needs better, with greater demands for latency shaping extra capacity requirements.

In terms of growth:

  • Data center IP traffic growth is growing at an impressive rate in years to come, reaching 7.7 zettabytes in 2017.
  • Cloud applications will account for 69% of the total, up from 46% in 2012.

EY - Forecast for global data center IP traffic

While the democratization of data center capabilities is a welcome development across the carrier landscape, a number of challenges present themselves, especially for operators in emerging regions that are making their first forays into the market.

  • Data center construction presents its own unique set of considerations, from a lack of local expertise to ill-defined contracts.
  • Embedding the right kind of technical and legal expertise can be time consuming.
  • Changes are needed in terms of finance, sales and customer departments, given that data center capabilities enable the creation of new service bundles, while technical sales teams will co-exist with traditional account managers.
  • Long-term customer trust will pivot on operators’ enhanced understanding of the data center landscape.
  • The green agenda in ICT will require operators to make long-term judgments on efficient data center architecture design to support more effective ratios of power usage and effectiveness.

Going forward, operator data center strategies at large will remain fluid for a number of reasons:

  • Availability of capital
  • Depth of existing enterprise offers
  • Willingness to partner with third-party providers

Mobile operators prepare for explosive LTE signaling growth

LTE network rollouts continue to dominate the global wireless landscape:

  • The Global mobile Suppliers Association (GSA) expects 260 commercial networks to be available in 93 countries by the end of 2013.
  • Subscriber migration to 4G services is fueling exponential growth in mobile data traffic generated by smart devices alongside skyrocketing signaling volumes.

The two signaling protocols driving IMS networks are designed to perform separate but complementary functions:

  • Session initiation protocol (SIP) is the standard for message signaling, such as voice over internet protocol (VoIP) and videoconferencing.
  • Diameter signaling is the protocol for data signaling from smart devices.

The diameter protocol is more complex than prior standards, leading to more signaling activity per application and per subscriber.

  • Worldwide diameter signaling is expected to reach nearly 99 million messages per second (MPS) by 2017, up from just 1.25 million in 2012.
  • The compound annual growth rate (CAGR) of 140% is more than double the rate of mobile data traffic by itself.

EY - LTE diameter signaling growth by region

Understanding the implications of signaling traffic growth will fundamentally support operators’ accurate planning of network architecture. At the same time, understanding new use cases in terms of customer behaviors and third-party relationships will become more important.