The public cloud is amazing tech for telco. Today, the three biggest hyperscalers Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP) account for more than half of the data centres. Between them, that’s almost 89 regions, with hundreds more availability zones spanning the globe. They allow organisations of all sizes to hand over the labor-intensive responsibility of managing their own infrastructure to deep experts, with unrivalled investment capability. What it is doing for enterprises regardless of size and industry is democratising access to the compute, storage, and software to scale and access the same applications, APIs and innovations previously reserved only for the organisations available at a pay-as-you-grow price, says Danielle Royston, acting CEO, Totogi and CEO of TelcoDR.
For telcos, the public cloud isn’t just a place to host IT applications and store data, it’s also the ideal location for hosting mission-critical workloads. And no CSP is in a better position to leverage this opportunity than the MVNO. As low-asset, software-centric businesses, they are unburdened by having to manage the network nor are they buried under mounds of tech debt. While MVNOs need carrier-grade software to handle scale and compete with the tier-one providers, they also need affordable, flexible options. The enabling technology of public cloud is finally giving these MVNOs access to the carrier-grade software they need, at a price they can afford.
No capex, all business
There are three reasons why the public cloud is perfect for MVNOs.
No hardware. The public cloud completely eliminates the need for any hardware investment. MVNOs of all sizes can gain access to the best chips, servers and databases in the world, but in a way that suits their budgets and size. They can save what used to be invested in undifferentiated hardware and focus their investments on building their brand and their business.
Scale as you grow. The public cloud allows MVNOs to only purchase the capacity they need today, and then scale in line with the growth of their businesses. All of the services available with AWS, Azure and GCP are delivered on a pay-as-you-grow model, meaning MVNOs now have access to carrier-grade technology, without the need for carrier-grade investment.
Dramatically lower TCO. Solutions that are native to the public cloud are 80% cheaper to deploy and maintain than on-premise offerings. With on-prem solutions, technical teams can spend huge amounts of time and money deploying and maintaining hardware and paying vendor professional service fees. By using services of the public cloud, IT teams no longer need to deal with hardware upgrades or the application stack. They can hand over this responsibility to their designated public cloud provider or SaaS vendor, enabling them to redeploy their investment dollars to support the business more efficiently and quickly.
Accelerate software innovation
The key advantage here is how the public cloud accelerates the pace of innovation for MVNOs.
Unburdened by network maintenance, MVNOs are in prime position to drive service innovation and focus on ways to expand their average revenues per user (ARPU) through a better subscriber experience. By using the public cloud, MVNOs can integrate new SaaS offerings, such as charging, BSS or OSS systems, with simple API integrations.
MVNOs can now purchase services directly from public cloud marketplaces in just a few clicks, with no procurement headaches, and be up and running in days. Speed is incredibly important for MVNOs who want to compete with the tier-ones that have bigger teams and bigger budgets, and now they can with telco SaaS offerings that offer turnkey solutions. Instead of wrestling with hardware, they can focus on their business.
Giffgaff a shining light for MVNOs
For example, let’s take British MVNO giffgaff. This MVNO that has reaped the benefits of the public cloud. It started out with a traditional, on-premises infrastructure, but the need for ongoing maintenance made this model overwhelming for its technical teams. It would often take up to two weeks to provision a new server, according to Steve MacDonald, COO and CTO at the company. By going all in on AWS, it has turbocharged giffgaff’s development lifecycle by focusing on innovation rather than wasting time on infrastructure management. And with access to easy-to-use APIs, it can integrate the latest software developments into its stack at the click of a button, too.
According to Steve, the real reason giffgaff went all in on AWS was to eliminate its wasted effort on IT so it could focus all of its attention on its subscribers. By using AWS, giffgaff has unleashed the company’s potential to deliver services to its customers. And it’s worked: they’ve risen to the top of the customer satisfaction charts in the UK. In 2021, following the integration, giffgaff led Ofcom’s customer satisfaction survey, even topping the largest MNOs in the country.
What and where next?
The business case for the public cloud in telecommunications has never been clearer. Service-led innovation is now available to all manner of telcos at the touch of a button, through an API, and often with a free tier. Digitally-minded MVNOs could be the driving force for better customer experience and expanded ARPUs by leaning into the public cloud to give them the opportunity to gain rapid market share through differentiated customer experiences. The public cloud is a key lever and MVNOs are likely to be some of the first telcos that move from an on-premises/public cloud mix to fully-fledged public cloud throughout the next 10 years. I can’t wait!
The author is Danielle Royston, acting CEO, Totogi and CEO of TelcoDR.
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