NTT Docomo’s announcement last month of plans to follow rival Rakuten Mobile’s model to create a new revenue stream from its open RAN experience reminded me of a surprisingly similar move a decade ago by a major UK-based managed services provider looking to share its new-found expertise in back-office transformation.
In December 2011, BT formed BT Advise to sell consultancy services to other operators around transforming their OSS/BSS stack, explaining at the time the unit combined BT Global Services experts delivering consulting, SI and managed services “around the world under one team and one name”.
BT touted customer benefits “from engaging with a team comprising 4,500 highly skilled professionals” delivering “industry-leading processes and methodologies with improved consistency”.
The idea was take the lessons learnings and best practices in overhauling the incumbent’s outdated and cumbersome back-office systems to support other operators as they moved on high-profile transformation journeys.
BT’s initiative was short-lived, with the unit absorbed into other parts of the company around two years later.
What went wrong?
Karl Whitelock, research VP for communications service provider operations and monetisation at IDC, told Mobile World Live BT focused on OSS/BSS, but those systems were embedded in unique internal processes.
In theory those same processes are conducted the same way at other operators, but the devil is in the detail.
“BT failed because it got bogged down in the exceptions to the generalised theoretical processes at other CSPs by not fully engaging the uniqueness of the processes that others used in their course of doing business.”
The operator tried to force its standardised approach on the others, and “we know how that type of action is received by the working teams”.
Today, NTT Docomo spots a business opportunity using open RAN experience honed over four years to support other operators’ move to virtualised networks, something Rakuten Mobile first identified two years ago.
In October 2021, the fourth major mobile operator in Japan created Rakuten Symphony to market and distribute its mobile unit’s software and cloud-based mobile network platform.
Rakuten Mobile chairman and CEO Mickey Mikitani stated in February the new unit started to contribute to its parent’s top-line during Q4 2021.
The e-commerce giant’s mobile arm revealed it was working with partners to develop a standalone network in mid-2020, with distribution to third parties through the Rakuten Communications Platform (RCP), a marketplace designed to aid other operators in deploying fully virtualised cloud-native networks.
Rakuten Mobile estimates the open RAN market has the potential to be worth $150 billion in 2025 and aims to take a chunk of it.
Its work on 5G radio equipment started in early 2020 under a development partnership with NEC.
Docomo was an early open RAN advocate and is a founder of the O-RAN Alliance.
Marc Einstein, chief analyst at Japan-based research company ITR, reckons there is a sizeable opportunity, but noted Docomo and Rakuten are somewhat unique because they conduct a significant amount of in-house R&D which they aim to export.
He acknowledged they offer considerable value to other operators in areas including network testing, planning and operations, and are often viewed as a more independent party compared with a larger vendor.
While no company can deliver a full end-to-end offering without partners, Einstein sees niche areas where they can add support. For example, Rakuten Mobile spent many years working on network automation software for its RCP, and Docomo introduced a virtual open RAN testing centre and developed an O-RAN Alliance-compliant RAN intelligent controller, which could be interesting to operators lacking the resources to develop such products internally.
Another key factor is operators worldwide are desperate to bring down costs, something which wasn’t as urgent a decade ago, creating added interest in the overall ecosystem combining open RAN and virtualised cloud-native networks.
The path forward
Whitelock stressed the importance of processes, noting many of the same issues BT faced continue to prevail. He explained if the expected change around core processes that define how a CSP provisions and launches services fails to materialise from within, “then you have the same problems that BT ran into”.
“Culture is a big thing for operators globally. The people factor is the hardest thing to deal with in any transformation.”
He sees the Docomo and Rakuten Mobile teams as important for offering moral support to internal staff deciding to make the digital transformation needed to support a new way of doing business through cloud-based networks.
Einstein emphasised it will be challenging to immediately start competing with a global tier-one vendor with extensive sales and marketing infrastructure in place. “And, as we all know, operators which try to do non-telco things often struggle in terms of corporate and organisational culture.”
Docomo and Rakuten Mobile have already confirmed business outside of Japan. It will certainly be an interesting market to follow as 5G networks spout up in more countries and open RAN gains traction globally. We’re all watching to see if the duo can avoid the same fate as BT Advise.
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.