Will Access Networks Lose Value in Mobile Business?
Two decades is a very long time in the communications and application ecosystem. That is long enough to make a transition from “no Internet” to “dial up Internet.” A couple decades is enough time for Internet access to move from dial up to broadband, or from video-constrained to video-capable.
Two decades is long enough for new business models to be created, as from “streaming is very difficult” to “streaming is commonplace or dominant.”
Two decades also is sufficient time for value in the networks ecosystem to undergo huge change. Precisely what changes might occur remains to be seen. But it is not unreasonable for some to suggest that the relative value of core and access networks could change.
Historically, both access and core networks were scarce. In the 1980s, core networks became less scarce, as firms such as MCI, Sprint and others built their own long haul networks.
In the 1990s, access networks become less scarce. as mobile networks became more commonly-used assets. In the first decade of the 21st century, fixed networks became more common, and less scarce, as cable TV networks became communications networks and specialized metro fiber networks proliferated.
In another couple of decades, might the value of access and core networks change again? Almost certainly, “yes.” The only issue is which changes will be most crucial for service provider business cases.
What will the network of 2030 look like? More outsourced, more virtualized, more reliant on the value of spectrum as a “core competence” or source of value.
At the same time, say analysts at iGR, it might be possible for competitors to pick and choose their underlying network resources choices further. Perhaps mobile virtual network operators will own their own core networks (long haul assets and application servers) while “renting” radio access.
Think Google, Apple, Amazon or others with their own data centers, long haul transport and app servers. Each could rent radio access from a third party to provide the “last mile connection” to device users. That would something of a reversal of historic patterns, where many service providers owned their access facilities, and leased long haul facilities.
That approach--owning the core network and leasing radio access, might also have other implications. As voice service providers often select termination facilities based on “best quality now” or “best cost now,” the future network could well employ dynamic access selection.
When one radio access network gets congested, new style mobile virtual network operators might automatically shift traffic to different terminating networks, based on cost or quality parameters, much as long distance voice providers often do.
In such a scenario, the “scarcity value” of an access network is lessened, with more value shifting the core network provider. The reason, in part, is further outsourcing of the actual radio network, not simply the tower sites, where mobile access becomes a purchased service, not an owned part of a network.
That of course will prove financially beneficial for service providers of all types, but might be especially attractive to brands with core network capabilities that could be leveraged to create a new mobile service capability by renting wholesale access, especially on a dynamic basis.
The extent to which that is possible will hinge on the degree of wholesale access to spectrum. Where today mobile virtual network operators rent “complete circuits and capabilities” from underlying network owners, in the future other possibilities might arise.
Where today an MVNO might buy turnkey capabilities (voice, messaging, Internet access as complete wholesale offers) from an underlying carrier, in the future, it is possible that more virtualized networks would allow some brands with their own data centers, feature servers, billing and networks could simply buy radio access to create a full end to end service.
Conceivably, that would allow a tier-one mobile service provider in one country to create a new network in another country by purchasing radio access services from a third party. Likewise, some firms with popular brands, end user scale and data center and backbone network assets (think Google, Apple, Microsoft, Ford, Mercedes, Amazon) also could become MVNOs in a new way.wi