Nokia tempts telcos to automate with promise of big financial reward

Nokia is really pushing telecoms operators to embrace automation, promising them huge financial rewards through cost-savings and the generation of additional revenues.

Mary Lennighan

March 31, 2021

3 Min Read

Nokia is really pushing telecoms operators to embrace automation, promising them huge financial rewards through cost-savings and the generation of additional revenues.

The Finnish vendor shared that figure on the back of research carried out with STL partners. The headline finding from that study is that large communications service providers (CSPs), that it, those with average annual revenues of $15 billion, can generate the equivalent of 5.7% in annual value – or $849 million – by implementing intelligent automation into network and services operations. And there is further value to be realised elsewhere in their organisations, including customer care, sales and marketing, and fraud prevention.

“Value” means cost-savings, on both the capex and opex sides, and revenue uplift.

To add a bit of broader context, we’re talking about probably the top 20 to 25 operators in the world with that kind of revenue profile. The likes of AT&T and Verizon; the big three telcos in both China and Japan; European giants Deutsche Telekom, Telefonica, Vodafone and Orange; and Mexico’s America Movil all consistently post revenues that are well above that $15 billion figure, in some cases many times greater. And there are a handful of others hovering around and a few billion above that threshold.

“Network and service operations are the critical domains for operators to consider automation, as the payoff for being highly automated in these areas will be game-changing,” the report, Prioritising automation: Creating a successful building block strategy, reads. “We predict implementing automation technologies in network and service operations can deliver greater financial value than all other domains combined.” (see chart)

All operators have made progress in adopting automation within the network and service operations domains over the past decade, particularly in operational areas in which they can leverage mature, pre-existing vendor solutions, such as network fault detection and root cause analysis. In areas where vendor solutions are still nascent – network function lifecycle management, for example – there is much less automation.

The industry “still has a long way to go” before it achieves full automation, Nokia notes, with operators automating individual functional units at different speeds, depending on their geography, network focus and maturity. “In fact, for most operators, the network and service domains are lagging behind, and higher levels of automation are being seen in domains like HR and sales and marketing.”

Nokia’s survey of 100 CSP executives worldwide, well over half of whom were located in Europe and North America, showed that fewer than 10% of operators are fully automated in any single network or service domain, with the majority reporting having a mixture of automated and manual processes.  On average operators have achieved around 40% of intra-process automation – automating processes within a single domain, that is – while “very few” can claim inter-process automation linking across different domains.

Nokia wants to change all that. It reminds operators that they need a highly-automated, efficient network to support agile service innovation and delivery in order to meeting changing customer demands.

The vendor calls upon CSPs to “get on with intra-process automation now,” to prove ROI and see the near-term benefits, and to plan for inter-process automation by using those self-contained automated processes as building blocks.

It’s almost as though Nokia is trying to sell them something by dangling that $850 million carrot…but it’s a compelling argument.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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