Kathy Gibson reports from Ericsson Business Innovation Forum in Stockholm – Exciting new user trends in Africa are driving digitalisation, and making it a region with huge opportunities.
The growth in smartphone usage is helping to put Internet access into the hands of African users, says Ericsson’s chief technology officer Ulf Ewaldsson, particularly among younger people.
This, in turn, is helping the emergence of new business models around media and video as millions of users have their first television experience along with an Internet connection on their mobile devices.
Ewaldsson believes the media industry will rank alongside banking and payment services as the main drivers of the digitalised economy in Africa. “We think the prepaid model is a huge opportunity for Africa’s citizens,” he says.
While the current ARPU (average revenue per user) in Africa is sometimes thought to be too law for video apps to thrive, Ewaldsson says this is both a challenge and an opportunity for vendors like Ericsson. By recoding and presenting video in new and less network-intensive ways, he says, the cost can be reduced drastically, making the medium affordable for African consumers.
“We can help to make the television experience possible, and can open up a big market opportunity,” he says. “There is no secret that every user in Africa wants it – the market demand is there. And anything that is hard to do in networks is a good opportunity for us to sole.”
Around the world, as industries and geographies go through the disruption of digitalisation, the networks of tomorrow have to evolve to support the new business models.
Ewaldsson says this transformation has already started but it’s expected to peak by 2020. “By then we are expecting 20 Exabytes of traffic across the network – up from just 2 Exabytes today and 100 Petabytes in 2010.”
“Digital transformation is happening,” he says. “There is a new demand paradigm and this means that the network value will be enhanced.”
This means that the value of spectrum is going to be increased, with industry tasked with finding more efficient ways of managing this spectrum.
In addition, says Ewaldsson, throughput is set to will become less important than the customer experience. “Plus, the fully-enabled mobile enterprise will become a reality – and the ability to do this in a secure way is going to be important.”
All of this creates some implications on the network side, he adds. “Data in these amounts creates more data – data about usage, data about networks. So technology like analytics becomes extremely important: if we can make sense of data we can automate operations and address the end user experience. And so we are seeing orchestration processes across the network.”
At the same time, the model of nodes and domains will give way to end-to-end networked systems. “This is a new way of building networks: they are being transformed into a layered architecture where hardware and software are separated. We can have network function virtualisation, where functions that are currently tied to nodes can be spread across networks,” Ewaldsson says. “This gives us opportunities to build networks in a new way.”
These networks are going to be vital in the new world of digitalisation – and there is no stopping the move to digitalisation across all industries, Ewaldsson adds. Even motor cars are not being software-centric.
“It all ties back to the customer experience, and the car actually becomes the device. These devices can focus on the customer, business or enterprise experience. And the connectivity and network becomes a very important piece to allowing us to realise these things.”
While the networks of today are not bad, Ewaldsson says, the networks of tomorrow are going to have to be a lot better. “If we are going to move into the networked society, we need to evolve the networks even further.”
The new network will have to manage interaction between devices and the people using them, as well as understanding the changing software opportunity – and this will largely be driven by usage patterns in an outside-in model.
“Currently the limitation of many of these services is the networks, so we need to ensure that we build them into high-performing vehicles,” Ewaldsson says.
The new high-performance network will be able to move between various industry clouds, taking a service path through the network into the devices they will be using – be they cars or industrial robots or any other type of device that can benefit from being connected.
“The performance of the network will decide how these services develop and what they can do,” Ewaldsson says, “So it is important for us to tie them together.”
Operators will have to change their business models to meet these needs, he adds, as the value of their networks will be measured on their relevance to the services that the other industries require.
