Orange sizes up the network automation and monetization challenge

Laurent Leboucher, Orange Group CTO & Senior Vice President Orange Innovation Networks, is under no illusion that network automation is easy. Speaking at FutureNet World in London last week alongside peers from BT and Vodafone, he said Orange did not realize how difficult the transformation would be when it started the journey.

The European operators agreed that it is “tough” to change from their traditional way of operating networks and find new sources of revenue. The challenge is heightened by the current financial climate, in which operators need to invest in fiber and 5G at a time when they are under pressure to reduce costs and show quicker and healthier returns on those investments.

With the 6G development cycle gearing up, Howard Watson, Chief Security and Networks Officer at BT, repeated his plea to not rush into the next technology generation and allow operators time to make money from the investments they are making in 5G.

Andrea Dona, Chief Network Officer and Network Development Director at Vodafone UK, pointed out that operators cannot make money if their return on investment is lower than their cost of capital. Telcos need new business models that go beyond connectivity “to unlock to revenue streams” and “to survive,” he said.

Orange’s platform ambition

For Orange, Leboucher explained that the way forward for network monetization is to become a platform, which he described as “behaving in an ecosystem” like the big, cloud hyperscalers do. He was quick to assure he did not wish to give an impression of being “arrogant,” but that this is the way telcos can expose the capabilities of networks, via Network as a Service (NaaS), to stimulate new ways to monetize the assets.

He said the industry is at a “turning point” for this transition, citing progress in artificial intelligence and generative AI and with cloud native networks “becoming real.”

“We need to show all the rich attributes of the network for the business application…We are at a time where we can unleash those capabilities. But we shouldn't be naive. It's hard,” he said.

Leboucher said there are two aspects to Orange’s transformation that are like two sides of a coin. On one side is the work on network automation that is essential for the NaaS opportunity. The other side is developing the business models for generating revenue from the capabilities.

Progress towards autonomous networks

On network automation, he said Orange is at Level 2 on average, and higher in some areas, using TM Forum’s scale for Autonomous Networks (AN). Level 2 is defined as “partial autonomous network,” where closed-loop operations and maintenance is enabled for specific units in some environments. The operator is one of the five telcos that have committed to achieving TM Forum’s Level 4 AN by 2025.

Orange has several initiatives underway that underpin its platform transformation.

• The first is deploying a “horizontal” telco cloud platform across its geographic footprint that is based on the Linux Foundation Europe’s Project Sylva. The open-source project was launched in November 2022 by five European operators and two vendors (Deutsche Telekom, Ericsson, Orange, Nokia, Telecom Italia, Telefonica and Vodafone) to create a framework and reference for a production-grade telco cloud stack to run 5G and edge applications from the core to the RAN. The first release was announced in February 2024.
• The operator has also made “clear progress” to scale its network integration factory (NIF) across the its geographies. This initiative is designed “to bring DevSecOps to networks,” he said. This will help Orange to onboard and manage cloud-native network functions.
• The third area is the “smarter network,” which Leboucher said is “very challenging.” This encompasses Orange’s efforts to leverage data and GenAI in how it operates the network. Here, a recent example is the operator’s expanded relationship with Google Cloud to deploy AI and GenAI locally via Google Distributed Cloud.

Working backwards to monetize

On the other side of the transformation coin is how to capture the monetization opportunities “at scale.” For Leboucher, that means “working backwards with very concrete use cases, making sure we really get developer traction … [Also,] working in a different way with partners is absolutely essential.”

The concept of working backwards means starting with what end users need and developing for that, rather than pushing a service to them that they may or may not want.

“We like to bring technology and then try to find the use cases. We need to reverse completely and be very focused on the use cases, and then bring the capacity … and address real problems. It’s a very different mindset, and we need to change [our mindset] drastically. Even if I’m on the technical side, I need to be focused on value creation and monetization,” he said.

Teaming with peers and partners

Orange recognizes that partnerships are essential to its strategic vision, especially relationships with hyperscale cloud provider which have a “growing role.” As two examples, Orange Business offers 5G network functions via the Integrated Private Wireless on AWS portal, while Orange uses Google Distributed Cloud to deploy AI.

For its telco API program based on the GSMA’s Open Gateway initiative and TM Forum members' development of “Operate APIs”, Leboucher said he expects hyperscalers to help with getting network APIs to wider communities of developers in different vertical sectors than the telco can do on its own. "If we can bring our [capability] in their marketplace, that starts to become something very interesting,” he said.

More generally, partnerships are a key ingredient for the telco’s platform strategy for stimulating new revenues and business models.

“I believe that our future is how strongly we create an ecosystem with reach, where you can bring at the same time connectivity, cyber[security], compute, AI, and this means creating very strong partnerships,” he said.

Leboucher also stressed the importance of industry collaboration. He urged other operators to work together in industry groups such as Linux Foundation, Cloud Native Computing Foundation and TM Forum.

“We compete on the way we will monetize, but on the basics we need to be extremely aligned… and leverage all those excellent initiatives…There is a common foundation that we need to create together,” he said.