What affect do millennials have on global network operators? How do they affect planning for continued capacity growth?
Millennials will represent the lion’s share of purchasing power in a few years and, since they prioritise smart devices and access to fast internet, they are expected to continue to put high levels of spend towards connectivity – and with that comes high expectations.
However, they need to be served differently than previous generations in order to meet their expectations. Global network operators should plan for continued capacity growth, greater flexibility and a larger array of services and corresponding billing models to address societal changes brought on by the millennial generation.
What new threats are coming out of such millennial pressure for operators?
Our new research – which quizzed millennials across the globe – revealed that more than 85% of millennials have smart phones, and more than three quarters (77%) expect to be able to stream video wherever they are.
This immediately poses a challenge for operators to deliver wireless networks with a faster speed and larger capacity – and with an additional focus on cutting response time (or latency). Advances in and adoption of technology such as cloud RAN, virtualisation and, eventually, 5G technologies will likely assist in this mission, but it will require time and commitment from operators.
How do millennials’ demands for greater flexibility and a larger array of services affect corresponding billing models?
Operators have traditionally been used to delivering fixed-rate services over a long period of time, locking consumers into 12 and 24-month contracts, for example. This has allowed them to forecast necessary capacity growth and investments well in time, ensuring they maintain the level of service their customers have purchased.
However, the tide is shifting. Today, millennials are calling for on-demand services, delivered when and how they want them. For example, our research found around three-quarters of millennials said they would like to adjust the speed of their internet services depending on their activities at the time – and pay accordingly. Put simply, millennials no longer expect to sign a contract with an operator and be fixed to its terms.
Operators can deliver this flexibility by leveraging technology such as software-defined networking (SDN) and network functions virtualisation (NFV). In doing so, they will improve efficiency, and drive capacity where – and when – it is needed, improving their overall network agility and ability to deliver services on-demand.
How can fibre play a role in enabling companies to cope with this pressure?
It all starts with the growing business demand for content delivered faster – and the need for more bandwidth. The amount of data being consumed in the home, in business, and on the go continues to rise at impressive rates. Fibre is the most efficient technology to transport large amounts of data very quickly and reliably – and we see it as the best technology to meet today’s and tomorrow’s expanding bandwidth demands.
As fibre is driven deeper toward the edge of the network, it will play a growing role in helping to meet business – and consumer – demands for higher bandwidth and improved latency.
What does the data centre of 2020, or even further ahead, look like?
The future of data centre design is about moving digital information and resources to the edge of a network. The reasons for this are twofold, the reduction of latency for cloud-based services, and the reduction in bandwidth for content delivery networks.
The increased use of cloud-based applications, online gaming and the advent of the Internet of Things is giving rise to latency challenges which, if unresolved, will certainly limit performance. To resolve the latency and bandwidth challenges, operators are still building mega data centres but are also now building smaller edge data centres to provide local, or near local, processing and data caching. These edge data centres can range in size from a single rack, consuming 10 kW to over 100 racks consuming more than 1 MW.