This blog is part of the ongoing “I&O Perspectives” series, which features insights from industry experts about the impact of current threats, networking, and other cybersecurity trends.
In the previous blogs of this series, we explored how the internet has evolved into a primary channel for corporate business traffic and how secure access service edge (SASE) has become the foundational security pillar of this new framework.
Private backbones and infrastructures, in general, have partially lost their capacity to capture customers in the long term. Investments in internet networks are now viewed as part of a commoditized business model This article will look into telecom providers’ strategies as they transform and create high-value offerings in this new landscape.
Over The Top (OTT)–The elephant in the room
Telecommunications operators face significant challenges in the consumer market, with user loyalty becoming increasingly unpredictable. Firstly, in many countries, markets have liberalized after being regulated with prices set by the governments and, in many countries, a single provider with no competition. Secondly, users are gravitating toward over-the-top (OTT) content platforms delivered over the internet, with no dependence on the underlying network provider. While telcos used to offer content and took their share of revenue, they are now often reduced to providing low-cost internet access.
But that’s where the comparison ends. Enterprise needs and use cases have very little in common with consumers. The security requirements that were met by private backbones remain critical for business, as they cannot risk compromising customer data or business operations. The sensitivity of consumer applications is much lower. And the impact of a virus, for example, on a consumer device, is minimal compared to a ransomware attack in a factory or a bank. Moreover consumers do not operate their own applications, while corporations have made IT not only a means but, more often, a way to develop new business models and differentiate from their competitors. Additionally, enterprises must meet these operational needs with compliance requirements, further shaping service design and delivery.
Beyond the pipe
Besides the long-haul networks, telecom providers have helped their corporate customers with various value-added services. They propelled their telecom business higher in the value chain by developing their own capabilities or acquiring network integrators that design, deploy, and manage local area networks, Wi-Fi infrastructures, and perimeter security like firewalls and intrusion detection systems.
They also helped their customers get closer to the application, in the data centers, with load balancers, applications firewalls, proxies, storage, or embrace better user experience with telepresence. When private backbones started to be replaced with SD-WAN, firewalls/proxies with SSE, and VPNs with ZTNA, service providers also naturally adapted, continuing to support the same customers who deploy and operate these technologies.
Over time, telcos have acquired unique capabilities in the operations, orchestration, and optimization of aggregated networks and security building blocks. These include asset management, automation, monitoring, log management, and genuine expertise in threat management with shared 24/7 security operations centers, and obviously artificial intelligence integration now.
So, similar to the shift from voice networks to IP and mobile, some of the value was lost when wide area networks transitioned to SASE, but most of that value remained under their control.
Service providers have a long history of managing customers’ projects, entertaining service proximity, and turning their customers’ business needs into service and technology solutions.
The new power of cellular networks
There have been different strategies for mobile business. Some telcos got rid of their mobile business and focused on other areas. Some acquired and deployed networks, licenses, and users at astounding prices. At that time, it was unclear whether that latter strategy was rational. However, it has become clear that mobile networks are critical in today’s ecosystems. 5G now delivers enough bandwidth for business applications and has become a backup service for fiber services. 6G is just around the corner, and more IoT use cases will also require billions of cellular services.
While landline networks may be considered a commodity, mobile networks offer greater usage and create new revenue opportunities. There, mobile operators hold a solid asset. Some competition might come from Low Earth orbit (LEO) satellites, but it faces deployment constraints, and it’s unlikely to be more cost-effective, and will always suffer from higher round-trip delays.
High-quality internet
Even if the internet has demonstrated excellent abilities to cope with high expectations regarding availability and performance, there are still opportunities for differentiation. Losing connection for a day or two because of link failure, Customer premises equipment (CPE) failure, or poor access quality is something you don’t want for your business. Making the service resilient and having the ability to restore it fast is something that enterprises value. Bundling it with a 5G backup is an option.
On the backbone side, there is also a need to rely on providers with quality and diversified connectivity with the SASE platforms and third-party providers where remote SD-WAN sites stand. That means investment in the backbone, internet exchange locations, traffic-engineering tools, and routing optimization that not all providers have. Internet services are not all the same. WAN providers have the backbones and sometimes the high-density last mile to provide these high-quality internet services.
At Netskope, we also invest significant effort into expanding our peering relationships and implementing near real-time traffic engineering, utilizing direct connections with multiple transport providers to deliver exceptional resiliency and performance. Netskope peers directly with 4K+ networks, including 700+ unique ASNs and ranks among the top 15 internet exchange participants globally.
Reliable internet connectivity demands proper investment. Cheaper internet service is not the right choice for running a business effectively.
Embedding SASE
Carrier-class internet connections are a must for SASE. With direct peerings and, in some cases, private network interconnects ensuring the shortest possible end-to-end path
A low-latency network not only guarantees a premiu