Deutsche Telekom and Swisscom have emerged as the clear frontrunners in the race to an all-IP and virtualized future.
According to research carried out by Light Reading, both operators are aiming to complete their transition to all-IP networks at least several years ahead of BT Group plc (NYSE: BT; London: BTA) and Orange (NYSE: FTE), their UK and French peers. (See DT Completes All-IP Move in Croatia.)
In the meantime, major service providers including Telefónica , Telecom Italia (TIM) , KPN Telecom NV (NYSE: KPN) and Telekom Austria Group have not even disclosed targets for all-IP migration.
This matters because that process is not just about shutting down legacy technologies. As Deutsche Telekom AG (NYSE: DT) sees it, all-IP migration is just the first step towards becoming a more efficient and agile organization. Unless the all-IP foundations are firmly in place, an operator may struggle to take full advantage of other next-generation network technologies.
Timotheus Höttges, Deutsche Telekom's CEO, put it eloquently when he described IP as the "lingua franca" of the digital age at this year's Mobile World Congress.
Flipping the Switch
Hottges and Nemat pulling the switch on the pan-European network launch at Mobile World Congress 2015.
Deutsche Telekom's grand plan is to build a joined-up pan-European network that relies on a small number of centralized production facilities, instead of distinct resources for each country.
"We need a common IP language in the network so that we can then do the consolidation and the centralization in our pan-net project," says a spokesperson for the operator.
Having completed the all-IP migration in several European markets, Deutsche Telekom is now making investments in areas such as SDN and NFV and running pilots of New IP-based services.
Peers undoubtedly have a close eye on what the German incumbent is doing and will hope to learn from its early experiences. But can they really afford to hang back given the challenges the entire industry is facing?
Nobody wants to slip up, of course. But if IP really is the lingua franca of the digital age, the laggards may be incommunicado in a few years' time.
Traditional service providers face something of an existential threat from web-scale players like Google (Nasdaq: GOOG) and Amazon.com Inc. (Nasdaq: AMZN). Without a platform from which they can launch services across multiple territories in a fraction of the time it currently takes, their prospects will not look promising.
Operators at the vanguard of NFV and SDN have previously urged the entire industry to pull together to prevent this from happening. But if players like Deutsche Telekom and Swisscom AG (NYSE: SCM) can establish a lead in this area, others could soon find themselves in trouble.
"In Croatia, it currently takes two weeks to set up a VPN and four if it's especially complicated," said Claudia Nemat, Deutsche Telekom's head of Europe and technology, during this year's Mobile World Congress. "With the cloud product, it takes just 15 minutes to set up a VPN of medium complexity." (See Deutsche Telekom Turns On Pan-European IP.)
Once Deutsche Telekom has introduced that kind of capability more widely, how will its straggling rivals compete?
— Iain Morris, , News Editor, Light Reading