1、 Executive Briefing UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK AND AUTOMATION INVESTMENT Operators are transforming their networks to provide advanced services and tackle network complexity.However,progress is uneven as operators develop various capabilities at different stages.We outline fo

2、ur common pathways and provide recommendations for operator peer groups.Executive Briefing Service Ela Eren,Consultant|February 2024 Kindly supported by:UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 2 Executive Summary Operator

3、s must invest in network transformation to stay competitive.They must drive their own costs down(to free up resource for service innovation and keep margins stable as connectivity gets commoditised)and“unlock”new revenues from differentiated services(which they have struggled to do at scale).STL Par

4、tners,in collaboration with Amdocs,has undertaken a two-phase project to clarify operators transformation progress and provide actionable recommendations to accelerate transformation and unlock value sooner.Phase 1 In the first phase of the research programme,STL Partners interviewed 23 operators an

5、d five vendors globally.The insights were used to produce an evidence-based“next-generation network maturity framework”.See Figure 1 for a high-level overview and the Appendix for more detail.The framework details the maturity milestones for operators on their network transformation journey across f

6、our key pillars:Data&AI Cloudification&programmability Automation API exposure The output is a set of normalised industry benchmarks that operators can use to qualify and quantify their transformation progress.Figure 1:The four pillars of network transformation and automation Source:STL Partners New

7、LegacyExposureData centricityCloudification&programmabilityAutomationTelephony,mobile,fixed,cloud ServicesPre-paid,post-paidMonetisation modelVertically integrated,offline vs online channelsGTM modelLegacy plus edge,private networks,APIs,IoT,x/r apps,vertical solutionsServicesLegacy plus XaaS(NaaS,P

8、aaS,SaaS),platform business modelMonetisation modelB2B2x,integrated omnichannel,marketplaceGTM modelUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 3 There is no clear pathway from legacy to next-generation network.Consequently,o

9、perators have evolved various capabilities at different paces depending on their strategic priorities,market conditions,consumer expectations,and other factors.The outcome is a broad spectrum of transformation journeys.This can make it difficult for operators to identify and enact strategic recommen

10、dations that apply to their specific transformation journey.This is partly because there has been extensive research on the“end state”for the telco rather than the steps for where and how to start.To be practical and actionable,recommendations must consider an operators current transformation state

11、and the immediate priority for investment.Phase 2 In this report,we outline the second phase of research.The phase leverages cluster analysis of 3,500 data points on the data&AI,cloudification,automation and API-exposure capabilities of 100operator stakeholders,to identify the four most prevalent pa

12、thways that operators have pursued in their network transformation journey so far and their anticipated future roadmap.The purpose of these profiles is to enable operators to find their transformation peer group and answer the most pressing question for each of these four groups.See Figure 1.Figure

13、1:Share of operators falling into each transformation profile Source:STL Partners analysis of 100 telco stakeholder survey respondents 46%22%17%15%Share of operators falling in each transformation profileEarly stageData firstCloud firstFast movingUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AU

14、TOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 4 Early-stage transformers:Active in growth markets or challengers elsewhere that are focused on reducing costs while scaling.Progressing towards virtualisation and basic automation but lack a common data model.Transformation has larg

15、ely been outsourced to vendors.These operators ask,“where should I prioritise my network transformation resource to help accelerate my journey and compete effectively in the wider ecosystem as more than just a pipe?”Recommendation:Implement a common data model,invest in rearchitecting network for vi

16、rtualised infrastructure,and automate simple workflows.Data-first transformers:Largely composed of leading operators in growth markets.Characterised by heavy investment in data skills,they see these as the foundation for further transformation.Strongly focused on revenue generation.These operators a

17、sk,“how can I accelerate network transformation to feed our strong data practice and make the most out of those skills?Recommendation:Think about virtualisation as a gateway to disaggregation,use their data skills to leapfrog on automation and transform data monetisation skills into services.Cloud-f

18、irst transformers:Predominantly Tier 1 operators who have invested heavily in the network.Early adopters of virtualisation,they are pushing towards disaggregation to build a programmable,modular network of microservices.Data skills are comparatively weaker.These operators ask,“how can I build out my

19、 data capabilities to understand my customers better and enable me to innovate services that they need?”Recommendation:Let data drive their decision making,make themselves attractive to data talent and establish a data culture from the top down.Fast-moving transformers:Operators falling into this gr

20、oup are either,global Tier 1 innovators with large R&D budgets or agile challengers.Driving differentiated enterprise services is clear focus for transformation as is improving performance in the financial markets.These operators ask,“how can I leverage the network as a platform to change customer a

21、nd market perceptions,enabling me to compete and differentiate in the space beyond connectivity?”Recommendation:Invest in organisational transformation,particularly building an automation first culture and developing software skill,and build a platform mindset by innovating around the commercial mod

22、el for APIs and monetising data.UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 5 Table of Contents Executive Summary.2 Phase 1.2 Phase 2.3 Introduction to the operator profiles.7 Early-stage transformers.8 Data-first transformer

23、s.10 Cloud-first transformers.12 Fast-moving transformers.14 Conclusions and recommendations.17 Appendix.19 A.The next-generation maturity framework.19 B.Transformation milestones.20 C.The scores.21 UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners E

24、XECUTIVE BRIEFING 6 Table of Figures Figure 1:The four pillars of network transformation and automation.2 Figure 2:Share of operators falling into each transformation profile.3 Figure 3:A guide for reading transformation profiles.8 Figure 4:Early-stage transformers current scoring on our maturity fr

25、amework.8 Figure 5:Early-stage transformers predicted 2026 scoring on our maturity framework.9 Figure 6:Data-first transformers current scoring on our maturity framework.10 Figure 7:Data-first transformers predicted 2026 scoring on our maturity framework.11 Figure 8:Cloud-first transformers current

26、scoring on our maturity framework.12 Figure 9:Cloud-first transformers predicted 2026 scoring on our maturity framework.13 Figure 10:Fast-moving transformers current scoring on our maturity framework.14 Figure 11:Fast-moving transformers predicted 2026 scoring on our maturity framework.15 Figure 12:

27、Multiple phases of an operators transformation within each pillar.19 Figure 13:The transformation milestones to value creation.20 Figure 14:Scoring of operator capabilities across the four pillars of transformation.21 Figure 15:Detailed scoring of operator capabilities across the four pillars of tra

28、nsformation.21 UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 7 Introduction to the operator profiles Categorising operators into groups based on their maturity across the four pillars of transformation makes it possible to crea

29、te data-driven strategic recommendations for transformation that are cognisant of an operators existing capabilities and reflect where operationally similar peers have found success.This report looks at the four transformation peer groups and provides:An overview of each groups current situation,inc

30、luding transformation maturity,market and strategic priorities and any challenges they may face.A benchmark of their current technological transformation see Figure 3 for an example.An outline of their transformation roadmap,including their key transformation question.Tailored recommendations to acc

31、elerate the transformations that will allow them to achieve their strategic objectives sooner.An estimate of their technological maturity in 2026,if the suggested recommendations are pursued.Figure 2 is a guide for interpreting the profiles.UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATI

32、ON INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 8 Figure 2:A guide for reading transformation profiles Source:STL Partners UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 9 Figure 4:Early-stage transformers current sc

33、oring on our maturity frameworkBasicIntermediateAdvanced132179113486101250CloudificationSome of the network(excluding RAN/UPF)is virtualised.3Data&AIWorking towards observability with a common data model.3AutomationSome simple decision-to-action algorithms in place.3API ExposureInternal APIs are bei

34、ng developed.3These operators are recognised by their initial progress towards virtualisation and basic automation within specific,discrete domains.Operators in this profile are likely to either be active in growth markets,or challenger operators within advanced markets.Their overall imperative is r

35、educing costs of operations while scaling either through churn reduction or increasing their subscriber base.Network transformation is largely outsourced to international vendors to derisk deployments and the high upfront costs of network integration.They rely more heavily on the experience gained b

36、y vendors in supporting more mature operators with network deployments to help them to accelerate or“leapfrog”in their transformation.Most operators in this group said that cost saving was their primary strategic objective with regards to network transformation.This proportion is significantly highe

37、r than other profiles and reflects that they are looking at new technologies primarily for efficiency gains.SituationCombatting commoditisation:Many operators in this segment lack the scale and brand of global Tier 1s and therefore have an uphill battle trying to own the end customer petitors(includ

38、ing hyperscalers HCPs,systems integrators SIs,and industry solution providers).They risk becoming squeezed in terms of the value they are adding and getting pushed further down the value chain,competing only on price and facing increasing cost pressures.Balancing speed with in-house skills:Operators

39、 in this segment will rely more heavily on single vendor,pre-integrated stacks to help accelerate their transformation journey.However,outsourcing cloud,automation,and data capabilities to vendors could limit the telcos ability to build in-house skills and thus their ability to take control of innov

40、ation pipelines,move towards best-of-breed,and avoid lock into specific vendors/SIs.Complicationof operators fit this profile 46%of this group said that cost reduction is the primary driver for network transformation while the other 50%cited growing revenues50%1 Early-stage transformers1.1 Current t

41、ransformation stateUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 10 1 Early-stage transformers1.2 Future roadmapFigure 5:Early-stage transformers predicted 2026 score on our maturity frameworkBasicIntermediateAdvanced1321791134

42、86101250CloudificationEarly org.changes are underway to prepare for cloud-native6Data&AICommon data model in place and giving access to dashboards.6AutomationTactical automation is driving efficiencies within teams.4API ExposureInternal API strategy has matured.42.Invest in rearchitecting networks f

43、or virtualised infrastructureMost operators did not realise the promised cost savings of virtualisation primarily due to the limited rearchitecting of VNFs to be“cloud native”,the use of performance enhancers like SR-IOV that can recouple applications to underlying hardware,and heavy testing and int

44、egration costs.Early-stage transformers should learn from the mistakes of those that have gone before and embrace cloud native as both a technical and organisational change.Where possible,look to work with vendors to leapfrog to disaggregated architectures to accelerate automation journeys.3.Underst

45、and the value of tactical automationDo not undervalue automation of simple workflows within a specific domain.Focus on identifying manual processes within teams(e.g.,bill presentment and processing)and automate this to drive efficiencies only once data and network infrastructures are more advanced,s

46、tart to develop intelligent,cross domain automation.This is,however,largely dependent on individual circumstances comparatively low labour costs in some markets for instance reduce the potential ROI of capital labour substitution.“Where should I prioritise my network transformation resource to help

47、accelerate my journey and compete effectively in the wider ecosystem as more than just a pipe?”Operators in this group ask the following key question:Ensure the organisation takes a strategic approach to data,such that data and insights can be derived across multiple teams and domains.This involves

48、maturing data cataloguing,storage(balancing data warehousing and edge processing),secure governance and visualisation.Unlocking network,OSS,and BSS data for internal use will enable operators in this segment to more carefully plan network roll out,effectively target niche customer groups where there

49、 is less competition,add value to partners beyond connectivity,enhance their customer experience.1.Implement a refined common data model to support business intelligenceRecommendationsUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFI

50、NG 11 Figure 6:Data-first transformers current scoring on our maturity frameworkBasicIntermediateAdvanced132179113486101250CloudificationThe network is still comprised of single vendor stacks.3Data&AIAble to access data with AI/ML10AutomationIs intelligent,but within single domains.5API ExposureInte

51、rnal APIs are being developed.3The group of data-first transformers is mostly comprised of leading operators in emerging markets.As they often operate in markets with less stringent data regulation,building data skills promises these operators new revenue streams through the monetisation of rich,fir

52、st party,telco data(e.g.,advertising,loyalty schemes,super apps).They understand the value of customer data for enabling AI/ML solutions that improve customer experience leveraging this to create stickier,higher ARPU subscribers.This is reflected by the clear focus this group has on revenue generati

53、on over cost reduction.Their data skills act as a foundation to accelerate automation and drive margin growth.Over 90%of operators in this group said that revenue growth is their primary driver for network transformation.While just 6%cited cost reduction as the most important motivator.SituationAuto

54、mating a legacy network:The limited adoption of cloud native networks in this group frustrates further progress on automation it makes no sense to invest in automating a legacy network end-to-end.In turn,this means the hungry data practice is not being fed in real-time by a softwarised and disaggreg

55、ated network.Therefore,data is not as rich as it could be hampering monetisation of strong data and analytics skills.Difficulty moving to NaaS models:Limited progress in cloudification also reduces these operators ability to adopt“cloud like”models for networking and monetisation(APIs,NaaS)the netwo

56、rk is not yet programmable.This impedes agile service innovation,along with the fact that these operators may be tied to the innovation cycles of their network vendors through lock-in likely also driving up costs.Complicationof operators fit this profile 22%of this group said that revenue growth is

57、the primary driver for network transformation94%2 Data-first transformers2.1 Current transformation stateUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 12 2 Data-first transformers2.2 Future roadmapFigure 7:Data-first transforme

58、rs predicted 2026 score on our maturity frameworkBasicIntermediateAdvanced132179113486101250CloudificationDisaggregation and rearchitecting are underway.6Data&AIAble to monetise the capabilities that have been invested in.13AutomationData learnings are being applied to automate quickly.8API Exposure

59、Offering a handful of simple APIs with“aaS”to test model.62.Leapfrog on automationLeverage leading AI/ML skills and apply these to identify opportunities for intelligent automation in the new,disaggregated network.Use expertise in cross-domain data exploitation to enable more efficient scaling of au

60、tomation solutions focus on how to take intelligent solutions from within a domain and apply end-to-end across networks,OSS,and BSS.Focus on automation from the perspective of the customer prioritise solutions that automate their journey for differentiated customer experience.3.Servitise data moneti

61、sationSeize the opportunity to monetise your data where operational territories may have relatively less stringent external data governance requirements.Consider new revenue models related to your leading data capabilities,exploring how you can provide a service to enterprise customers that are atte

62、mpting to make better use of their own data,internally or externally.Explore professional services around this,including workforce empowerment through analytics of your customers and their data.“How can I accelerate network transformation to feed our strong data practice and make the most out of tho

63、se skills?Operators in this group ask the following key question:These operators must think about virtualisation as a gateway to disaggregation laying the foundation for further automation.Engage partners to begin moving core networking(including 5G SA)workloads towards“cloud native”consider working

64、 with multiple vendors for best-of-breed but invest in building internal cloud and software skills to limit future reliance on external support.This should not be a lift-and-shift exercise,network functions must be re-architected for a cloud hosting environment ensure new network architecture feeds

65、seamlessly into data practice.1.Plan for disaggregationRecommendationsUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 13 Figure 8:Cloud-first transformers current scoring on our maturity frameworkBasicIntermediateAdvanced13217911

66、3486101250CloudificationInfrastructure across core,RAN and IT is software based.9Data&AIThere is a common data model enabling observability.4AutomationIntelligent automation is common.Work has begun on AI/ML tools.9API ExposureTeams are working on northbound exposure.8Cloud-first telcos are predomin

67、antly Tier 1 operators who have invested heavily in building a next-generation network.They are pushing towards disaggregation and building a more programmable,modular,and dynamic network of microservices that can be stitched together in different configurations to build new services for customers.T

68、his group have managed to leverage their achievements in programmability early on to make progress in intelligent cross-domain automation and exposure of network assets.Their goal is to use these capabilities to build new enterprise and consumer services,as well as building a strong role for themsel

69、ves in the value chain.Most operators that have invested heavily in network cloudification did not see the promised cost savings and are now looking at how to build new revenues to justify the investment.SituationDifficulty scaling a platform play:However,data capabilities lag other domains(as shown

70、 in Figure 8 below),without a solid foundation in data exploitation,it is difficult to scale next-generation services in a platform way and take a new role with customers/partners there is limited value-add of the telco“platform”beyond billing and difficult,low margin,integration work if data is not

71、 being exchanged between suppliers and orchestrator.Lack of customer centricity:Strong progress in cloud-native and automated networking offers a solid infraco play.However,weaker data skills limits understanding of customer needs and thus the ability to both innovate products and services that cust

72、omers want,as well as contextualise the customer experience across different teams.This hinders progress towards the servco model and slows building a strong brand beyond connectivity,especially with enterprise customers.Complicationof operators fit this profile 17%of this group said that revenue gr

73、owth is the primary driver for network transformation71%3 Cloud-first transformers3.1 Current transformation stateUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 14 3 Cloud-first transformers3.2 Future roadmapFigure 9:Cloud-first

74、 transformers predicted 2026 score on our maturity frameworkBasicIntermediateAdvanced132179113486101250CloudificationInfrastructure planned to move to microservices.10Data&AIAccelerated progression to data-driven decision-making.9AutomationAdvanced AI/ML tools are being rolled out.10API ExposureTeam

75、s are working on northbound exposure.92.Retain data talent with better data engineeringMinimise the data engineering tasks involved in their roles tasks like cleaning and preparing data for analysis.Work with vendors/partners to accelerate the data engineering effort required(which currently account

76、s for around 70%of a data analysts time).This frees up data analysts time to focus on higher-value strategic activities such as data interpretation,analysis,and actionable insights generation.This is a better outcome for the operator and will boost analyst job satisfaction and retention.3.Establish

77、data culture from the topInstitute a CDO role to advocate for a data-centric culture,ensuring that a holistic data strategy is pursued and aligning all departments towards common data objectives and best practices.The CDO can introduce incentives to improve the data culture,e.g.rewarding teams who m

78、aintain high-quality data and introducing new cross-domain data projects.They can help overcome regulatory barriers to data monetisation unlocking the potential in the rich,first party,data a softwarised network will produce.“How can I build out my data capabilities to understand my customers better

79、 and enable me to innovate services that they need?”Operators in this group ask the following key question:Implement a common data model so that data from various BUs can be inputted and accessed by all and used to drive customer centric decisions.This does not mean build a centralised data warehous

80、e where all data is stored,instead define where which types of data should be stored,who should have access,and implement proper governance for access and language to contextualise across teams.Develop accessible data tools and train teams to use customer data to improve existing products and devise

81、 new solutions.1.Let data drive your decision makingRecommendationsUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 15 Figure 10:Fast-moving transformers current scoring on our maturity frameworkBasicIntermediateAdvanced1321791134

82、86101250CloudificationCTIO possibly in-post.Likely using multiple cloud platforms.10Data&AIData culture is embedded and early monetisation underway.12AutomationIntelligent,analytics-based automation drives move to“zero touch”.9API ExposureTesting of northbound“aaS”model.8This group is mostly compose

83、d of global Tier 1 innovators,differentiated from the market by their comparatively large investment in next-generation technologies(e.g.,DT and AT&T).This group also comprises smaller greenfield operators who have entered the market as agile challengers(e.g.,Rakuten).All operators in this group sha

84、re the same goal to leverage significant investments in network transformation to drive differentiated enterprise services.They want to stay ahead of the curve as innovators,building a stronger brand with customers,as well as with the financial markets that still view them as a yield stock.70%of ope

85、rators in this group said that revenue growth is their primary driver for network transformation.Of those 70%,63%said that they were focused on enterprise revenue growth over consumer.SituationCoopetition with technology players:While this group hold the innovator title in the telco sphere,their des

86、ire to move beyond connectivity requires both partnering and competing with a wider pool of industry leaders telcos must define their roles against hyperscalers,systems integrators,and industry solution providers to understand in which scenarios they can own the customer relationship and drive the g

87、o-to-market.Industry perception:But telcos are hampered by the perception of legacy thinking and are not viewed as service innovators or agile business partners.The impact of this is two-fold.First,difficulty attracting an ecosystem of developers for co-innovation of network-driven solutions(includi

88、ng 5G and edge).And second,limited commercial model innovation vs.“techcos”since shareholders expect earnings through routine dividends and not growth.Complicationof operators fit this profile 15%of this group said that revenue growth is the primary driver for network transformation70%4 Fast-moving

89、transformers4.1 Current transformation stateUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 16 4 Fast-moving transformers4.2 Future roadmapFigure 11:Fast-moving transformers predicted 2026 score on our maturity frameworkBasicInte

90、rmediateAdvanced132179113486101250CloudificationInvestments in microservices pay off for service innovation.11Data&AIMonetising data through multiple models.13AutomationNew servitisation models are being explored.11API ExposureEmbedded in the developer community and a leader in the telco API economy

91、.112.Build a platform mindset2.1 Innovate the commercial model around APIsFast-moving transformers are investing on the technology side of API exposure,but more must be done on the commercial side.Engage developer ecosystems to define end-customer demands,go-to-market options,and revenue models to c

92、hange perception of“legacy.”Think of APIs as raw materials,not products innovate services around them to create stickier propositions and indirect monetisation of the API.2.2 Monetise data as part of the platform playLeverage network and industry leadership(including trusted brand and skills in data

93、 exploitation)to build platform play(e.g.,API aggregator role).Ensure seamless transfer(and monetisation)of telco data(network,BSS,OSS,location)to add value to platform participants/suppliers and help scale on both sides.“How can I leverage the network as a platform to change customer and market per

94、ceptions,enabling me to compete and differentiate in the space beyond connectivity?”Operators in this group ask the following key question:1.1 Build an automation-first cultureIncentivise(e.g.,KPIs,bonuses)engineers to automate tasks before they do it manually even if manual first is faster.Leverage

95、 increasingly microservice-based infrastructure to automate end-to-end,starting from the perspective of the customer journey.Unlock potential opportunities to monetise(e.g.,with other telcos)as Elisa Polystar and Rakuten Symphony have done.1.2 Develop software skills and cultureTelcos lack software

96、skills(including UI/UX)compared to“techcos”.This limits both their ability to drive agile service innovation(without reliance on vendor pipelines),and their ability to build customer-facing platforms.Adopt software-driven KPIs(e.g.,DORA)and set goals around these to push the shift towards a software

97、/cloud-native organisation.1.Invest in culture and skillsRecommendationsUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 17 Conclusions and recommendations The focus of research on network transformation to date has been primarily

98、 on the singular“end state”and the new services(for example,dynamic 5G slicing)and the cost savings it will enable.This report complements the existing research,providing a step-by-step guide for operators to consider and the potential value to be uncovered along the transformation journey.Through i

99、nvestigation of the routes to transformation,STL Partners has defined a set of realistic and actionable recommendations for operator peer groups,based on their market experience,historic investment in network transformation and current transformation state.This is crucial for an industry which,as a

100、whole,is approaching network transformation in extremely diverse ways due to the various strategic priorities,legacy environments,budgets,and regulatory circumstances of different operator groups.Our strategic recommendations by profile capture this nuance.Operators looking to operationalise the rec

101、ommendations in this report should:Adopt a holistic approach to transformation:The four pillars of network transformation data&AI,cloudification&programmability,automation,and API-exposure are intrinsically linked.Focusing solely on building the“end state”may inadvertently deepen siloes between doma

102、ins and exacerbate the disconnect between technical and business teams.A more effective strategy would consider how connecting different teams across the technology and business domains from the get-go can enable the organisation to unlock value along the journey.It is not all about dynamic slicing,

103、as much value can be achieved incrementally through small service enhancements and cost reductions.Ensure customer-centricity trumps technology-first thinking:One of the major barriers to unlocking the value from network innovation has been a“technology first”strategy that invested in technology wit

104、hout understanding the business problems it could be used to solve.At the same time well-timed,calculated risks are essential for capturing new revenues and this means that operators should not have an entire business case set up before they invest.Align business and technology teams under a common

105、customer-centric vision and integrate them into a common group with shared management,incentives,methods and R&D resource this could be one way to bridge this gap and ensure commercial feasibility is as well-researched as the technology.Take a balanced approach to vendor partnerships:A successful tr

106、ansformation is underpinned by a selective partnership strategy.If there is a strategic imperative to accelerate progress towards specific transformation milestones,for example implementing a common data platform and create the data foundation for other transformations,it is probably the right momen

107、t to call on international vendors who have experience with previous deployments.But,getting the balance with vendor support is essential,and many of the data and software competencies that vendors UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EX

108、ECUTIVE BRIEFING 18 can offer,are something you should be building in-house,or in co-opetition with the HCPs.This balanced approach ensures long-term operational independence and resilience,while also ensuring that vendor expertise can be harnessed where needed to unlock value quickly.Drive organisa

109、tional change forward:Network transformation is essential for the move from telco to techco,but it is not sufficient.Many of the recommendations in this report refer to the organisational changes that must accompany technical transformation.Specifically,becoming organisationally agile in business pr

110、ocesses,planning and decision making.This creates an environment that is resilient and adaptable to market and customer demands.Hiring and retaining software and data talent will be essential for telcos if they are to achieve technical and organisational agility.As a next step,operators should look

111、at how their organisational structure compares to telco industry leaders,and the techcos they seek to emulate.STL Partners Future Skills Tracker can be used to compare the current penetration of future skills at specific telcos and techcos.UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATIO

112、N INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 19 Appendix A.The next-generation maturity framework To help operators become a next-generation operator,STL Partners has created a network transformation framework.Comprising four key pillars of network transformation and automation,each pi

113、llar is intertwined and interdependent on the others,which,when combined,can elevate a telcos network to a key differentiator in the range of scale of differentiated services which it can offer.The next-generation network maturity framework(see Figure 3)has been designed following a survey programme

114、 consisting of 100 operator interviews and an interview programme with 22 telco executives and a select group of vendors.It captures the key pillars of network transformation,as well as the transformation journey an operator must take to achieve maturity within each pillar.Figure 3:Multiple phases o

115、f an operators transformation within each pillar Source:STL Partners The four pillars cover the fundamental infrastructure within the network and the network operations which underpin this infrastructure.The pillars are:Data exploitation.Viewing,analysing and generating advanced insights from data o

116、riginated from heterogenous sources across an operator.Cloudification and programmability.Capturing the virtualisation and disaggregation of the network(and IT)stack,and beyond that the move towards a modular,microservices-based architecture hosted on a private(or public)cloud.Automation.Reducing or

117、 avoiding the number of human touchpoints within processes across an operator,through the introduction of simple,and later more intelligent,automation.NewLegacyTelephony,mobile,fixed,cloud ServicesPre-paid,post-paidMonetisation modelVertically integrated,offline vs.online channelsGTM modelLegacy plu

118、s edge,private networks,APIs,IoT,x/r apps,vertical solutionsServicesLegacy plus XaaS(NaaS,PaaS,SaaS),platform business modelMonetisation modelB2B2x,integrated omnichannel,marketplaceGTM modelRoadmapData exploitationCloudification&program.AutomationExposureVirtualisationDisaggregation andopen interfa

119、cesModular technology andagile operationsCommon data modelCross-domain insightAI&monetisationIntra-domain basic automationIntra-domain intelligent automationCross-domain intelligent automationInternal API maturityNorthbound API discoveryAPI monetisationUNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETW

120、ORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 20 API exposure.Exposing data and network services,enabling third parties to interact with the network in a simple and standardised manner.This applies to both internal and external customers,culminating in the ability to moneti

121、se this external exposure.One key finding is that there are significant dependencies which sit within and between each of the four transformation pillars,mandating operators take a holistic approach to this transformation.It is not enough for operators to approach each pillar as its own siloed trans

122、formation programme.Dedicated resources,proactively architecting both the technology and associated business processes across these four pillars,is crucial to enabling a successful transformation.B.Transformation milestones Operators cannot expect to realise significant value through transforming in

123、 just one of the four pillars.Each pillar has significant dependencies and overlaps with other pillars,and the points at which value is unlocked for operators relies upon milestones being reached across multiple transformation pillars.See Figure 4.Figure 4:The transformation milestones to value crea

124、tion Source:STL Partners UNLOCKING VALUE:STRATEGIC PRIORTISATION OF NETWORK&AUTOMATION INVESTMENT|FEBRUARY 2024 STL Partners EXECUTIVE BRIEFING 21 C.The scores Figure 5:Scoring of operator capabilities across the four pillars of transformation Source:STL Partners Figure 6:Detailed scoring of operato

125、r capabilities across the four pillars of transformation Source:STL Partners API ExposureAutomationCloudificationData&AIEast-and westbound(internal)APIs are commonplaceSouthbound APIs in early-stage maturity to facilitate component optimization with vendorsBasic automation(e.g.,RPA)of processesGener

126、ally for pain points within specific teams/domainsSimple decisions to action algorithmsSignificant portion of network(excluding RAN/UPF)and/or IT infrastructure is on virtualised infra.Majority of planned deployments involved virtualised componentsData from other departments is observableData can be

127、 exploited for basic BI within a teamGovernance allows secure and timely accessData under a common data modelScores between 1-4Mature internal API strategySiloed teams working on northbound exposureHandful of simple APIs offered“aaS”to test modelStandards driven and early central approachIntelligent

128、,analytics-based automation drives move to“zero touch”Still primarily in processes in specific domainsSome organization-wide initiatives may existInfrastructure across core,RAN,IT is software-basedWorkloads are running on common hardware(COTS)Disaggregation in majority of planned deploymentsBegin to

129、 think more agile/cross domain(e.g.,CTIO)Cross-domain insights available across teamsData accessed through automated dashboardsSecure and real-time access to(raw)dataData under a refined common data modelScores between 5-9A diverse portfolio of northbound API aaS offeringsMature monetisation model f

130、or scaling external APIsDecentralised innovation as well as central strategySome APIs differentiated from,or setting,standardsAdvanced tools(e.g.,AI/ML)are prevalent in your automation strategy and routinely exploitedIntelligent automation is cross-domain/E2E to automate from the customer journeyNet

131、work and IT infrastructure is microservice basedMicroservices can be flexibly pieced together across product portfolios Leveraging multiple cloud platforms and HCPsCross-domain insights leverage AI/ML toolsData analysts/scientists are commonplaceData embedded in the culture and skills codifiedData c

132、an be successfully monetised externallyScores between 10-13All statements apply3+statements apply across most departments3+statements apply,but only for specific departments1-2 of thesestatements apply4321Basic8765Intermediate1211109Advanced13MaturingThe table below classifies the assigned scores that measure progression across the four transformation Research Consulting Events