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Industry insights for 5G evolution and transforming digital experience.

  • 5G
    October 13, 2020

Why do operators need converged policy to generate revenue in 5G?

Stephanie Gibbons
Principal Analyst, Network Infrastructure and Software

Converged policy will be critical to monetizing 5G services

Operators continue to face an uphill battle to 5G, as the hyperscalers have caused disruptive change by building software-based networks from the ground up. This means they can deliver services to customers over these greenfield deployments much faster than the operators can. Not to mention, they can customize and scale these services more efficiently and hence generate revenues much more rapidly.

The reality is that hyperscalers are more prepared to compete in 5G with new services, so operators need to catch up as their relationships with large cloud providers move toward coopetition. Through technologies like SDN/NFV, network analytics, and cloud, operators are modernizing existing infrastructures to offer services in next generation networking. Simultaneous to that evolution, operators have to make sure converged policy also evolves so they can deliver services without disruption, even as they migrate services to new core platforms. They cannot miss the mark on agreed upon SLAs. If they do, they risk customer churn – something they cannot afford right now.

An independent, cloud-native converged policy can help telcos keep the lights on by meeting service levels while investing in 5G. When it comes to 5G, a converged policy needs to be cloud-native so it can support both traditional and next-gen networking functions. For example, it should be able to govern network behavior and drive QoS control, while also supporting network slicing and enablement of differentiated services.

In the long run, there will be many benefits of cloud-native, including support for continuous integration/continuous delivery (CI/CD) and DevOps workflows, automation, analytics, and the ability to run services in VMs or containers.

That said, achieving those benefits will be heavily dependent on the architecture on top of which the policy management system runs. Operators for the most part are taking a stepwise approach to platform migration. A recent Omdia report found that 87 percent of operators plan to progress from 4G to 4GLTE/5G non-standalone (NSA) to 5G standalone (SA) core, as opposed to leapfrogging straight to SA.

Having a cloud-native policy management solution will support seamless 4G/5G interworking so that operators can migrate 4G-enabled policy use cases to 5G platforms ensuring a consistent user experience for both 4G and 5G subscribers. That interworking will also ensure they can run services over whatever access network is most efficient for specific workloads. As that happens, the gap will start to narrow between what operators and what hyperscalers offer in terms of service delivery optimization.  

Cloud-native, converged policy solutions will also be important for future proofing. While operators work to maximize current policy assets to save costs, they need to also move forward with monetizing 5G services. Policy has to be viewed as a way to empower them to make policy modifications that align with their architecture migration plans.

As the market moves further into 5G networking, and as the hyperscalers continue to poach service revenues from operators, it will be important to seek policy management partners that can help save costs while also investing in future 5G service delivery systems. They should seek solutions that meet the criteria shown in the figure below:

Cloud-native converged policy management in 5G

Source: Omdia

Oracle understands these requirements. Its converged policy management system is cloud-native and independent in that it can be integrated with operators’ existing charging and business process management (BPM) systems. This protects current policy investments while operators upgrade to 5G in a way that is consistent with their cloud maturity. It can help operators reduce the complexity in platform migration, improve time to market by consolidating decision making in a single policy framework, and preserve current policy investments be evolving from 4G to 5G incrementally.

To learn more about how an independent, cloud-native converged policy system will address market demands, read our report “Converged Policy in 5G.”

Also read the eBook “The Critical Role of Policy in the 5G Ecosystem,” and the solution brief “Cloud Native Converged Policy Solution for 4G and 5G.”

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