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Q&A: Telecom in 2020: Views from Oracle on top CSP challenges and opportunities

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In this exclusive Q&A, Chris King, Senior Director, Communication Service Provider (CSP) Products at Oracle discusses the trends driving the communications industry in the next several years. From 5G and IoT, to security and NFV, King shares his thoughts on the topics that are most pressing across Oracle’s diverse customer base. He also shares his thoughts in the evolving CSP landscape and how they innovating in new areas, such as content and unique programming, to compete for customer mindshare and loyalty.  

There are a number of trends that will drive the industry over the next several years, including cloud, IoT, NFV, real-time communications and 5G. An additional underlying trend as the network evolves in all of these different directions, of course, will be an emphasis on maintaining and even increasing security. Key trends will include:

  • IoT becoming a major new source of service revenue.
  • Communications Service Providers (CSPs) continuing to diversify into new adjacent industries.
  • Network security concerns remaining paramount with the move to the cloud and push toward the intelligent edge.
  • The NFV architecture will see further evolution towards standardised cloud technologies and away from “telco specific” technologies.
  • The use of virtualisation technologies in compute, storage, and networking will lead a different functional decomposition of the network functions and a very different architecture of the mobile core network, leading to a more cost effective and efficient way of doing business.

One of the biggest topics at MWC was 5G - will we ever see a killer app for it? What do you think will be the catalyst to accelerate adoption?

5G represents the next big change in telecom networks – these come along every 10-15 years and often times take as long as a decade to fully realise their potential. With 5G, there are a number of enhancements that are anticipated – we believe that the first wave of deployments will focus on capacity and speed improvements, while other areas like latency and peer-to-peer are a few more years out. In that time frame, we will also see increasingly substantial changes in network flexibility due to 5G and network slicing.

In terms of “killer apps,” one area to watch is that 5G will have far, more Enterprise usage than has traditionally been the case for network rollouts in the past, which have tended to be more consumer focused. IoT is a very real thing for enterprises today, and we see this as driving a lot of interesting use cases. Not all of these use cases require 5G at the beginning, but the volume of transactions will drive the CSPs to want to move these transactions to 5G over time – taking advantage of the increased capacity. Also, we think the unlicensed spectrum that is a part of 5G will also cause a push toward enterprise as they take advantage of that connectivity.

What's your opinion on the impact of Brexit on the European telco market?

Political change is happening, not only in Europe, but here in the U.S. and around the world. It’s likely too early for anyone to tell at this point what all of this change will mean for specific markets. What it does underscore is the need for businesses to remain cutting edge in their technology and offerings so they have the ability to be agile in the face of changing market dynamics. This need to be nimble has been a big driving factor in companies’ digital transformation journey and move to the cloud.  

What are the options currently available to technology/telco firms who want to improve their margins and diversify revenue streams?

For CSPs, the penetration of consumer mobile devices is already pretty high – particularly in North America and Europe. So the search for new subscribers is pretty much a zero sum game. So what we are seeing is CSPs looking to diversify their revenue streams through adjacent markets such as Satellite TV, along with IoT and other new connected devices. Vertical integration into content is another example of this shift. 

This is something the CSPs have been working on for years. Verizon, for example, has been investing in Telematics for several years now – starting with their investment in Hughes Telematics in 2012 and then more recently this year with Telogis and FleetMatics. They have making investments in Smart Cities as well (Sensity Systems). AT&T has been active as well – first with expansions internationally into Mexico with Iusacell and Nextel Mexico – then with the Direct TV deal that gave them a new delivery channel. And we can’t leave out their investment in Time Warner, which is a vertical integration towards content to deliver across all of their various communications platforms.

But that’s all in organic movement. Just as interesting has been both company’s direction and the general industry direction towards adopting cloud technology, both into their networks as well as into their IT organisations. This adoption is intended to allow them to be more agile – adapting more quickly to changes in customer requirements and competitive pressures.

In fact, a recent survey we conducted with CSPs, "The Communications Cloud: CSPs Take on Tomorrow," CSPs noted that their top challenge is improving customer experiences, followed closely by keeping up with technological advancements. Many are looking to cloud technologies to transform their networks and create more compelling experiences for their customers, partners, and employees.

A few of your clients have been investing in content, in the U.S. - Do you see that trend becoming widespread? Why do you think that is the case?

As noted prior, the diversification in revenue goes well beyond content alone, but we do see this trend continuing. The success of companies like Netflix and Amazon Prime has shown consumers appetite for new, unique programming and content. This also allows CSPs to offer unique bundles to customers to make their offerings more compelling – such as offering content without impacting data limits. The big hurdle will be ensuring they can match bandwidth to demand to ensure a positive customer experience – we have seen a bit of a rocky start to this in a few places.   

Chris King, Senior Director Product Marketing, Oracle Communications
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Chris King
Chris King is the Senior Director Product Marketing for Oracle Communications. He leads Oracle's marketing efforts for the full range of products from Network Products through OSS/BSS solutions.