The 2020 network: How our communications infrastructure will evolve

[Commentary] In the year 2020, what will the network look like? In order to answer these questions, we need to examine some likely truths about the telecommunications industry, and understand what current realities are shaping decisions about the future.

The first likely truth is the emergence of the $1 ARPU (average revenue per user) economy. The shift from mobile telephony to mobile compute has irreversibly shifted our attentions and our wallets away from undifferentiated voice, text and data services to the billions of individual apps encompassing all user needs. This “few” to “many” application economy drives pricing pressure, resulting in a $1-ARPU-per-service revenue foundation. That service unit could take the form of a Nike wellness application or it could be a production-line sensor connected to a General Electric industrial control system. Whether serving human or machine, the value of a service is being driving down to a dollar. The mobile industry is undergoing a dramatic rethinking of business foundations and supporting technologies. In many ways, technologies such as cloud, software-defined networking and 5G result in a “software is eating the network” end game. This in turn will promote opportunities that are much larger than just selling voice and data access. There is a possibility of vibrant ecosystems of users and experiences that can match the strong network effects enjoyed by over-the-top providers. The 2020 telecom network will enable service providers to create a network marketplace of services, and deliver the vision of a networked society.

[Vish Nandlall is CTO at Ericsson]