SaaS model put to the test for 5G SA project in Finland

Telcos are no strangers to software-as-a-service (SaaS) licensing models when it comes to buying IT services. They are also providers of consumption-based software products for enterprise customers. But for the network functions that underpin their core telecoms business, deploying in public clouds and buying on a SaaS basis has been too big of a leap, even for the more modern-minded communications service providers (CSPs).

This could change with the implementation of 5G standalone (SA) core networks, as operators consider deployment options. Just 40 operators have rolled out the 5G core in commercial networks, according to Analysys Mason.

Telia Finland has taken a pioneering first step in exploring the SaaS model and a public cloud environment for 5G SA with an innovation network, called Sirius, in partnership with Nokia and backed by European Union research funding. The Sirius project will build a 5G SA network along cross-border highways and seaways with a dedicated 5G core and mobile edge computing (MEC).

The network will use Nokia’s 5G SA core delivered in a SaaS model as well as the vendor’s Network as Code platform for application development. The idea is to provide an innovation environment where third party service providers and developers can use the latest 5G network features to create new applications for industrial and transportation use cases.

For Telia, it is also a test of SaaS-delivered network functions.

“The first thing we want to explore is the quite interesting promise of easy and fast deployment of the [5G SA] core network,” said Janne Koistinen, 5G Program Director at Telia Finland. “We have seen this within cloud environments when it comes to IT workloads … Can telco workloads be deployed in such an easy and fast fashion with an SaaS model?”

Telia is also interested in whether the SaaS model can remove some of the burden of running the 5G SA platform as Nokia takes more responsibility for operations, he explained.

“In addition, we are researching how suitable the cloud platforms are for running telco workloads and how well this environment fits into our ways of operating our networks,” he said.

Koistinen explained that the operator has been using traditional private clouds for years and that deploying in this type of environment is “nothing new”. But public clouds need further study.

“What we’d like to understand and learn is could we actually utilise public cloud platforms for our operations and under which conditions, and then to find where the limits are,” he said.

For the Sirius program, Telia does not work directly with cloud providers as Nokia and its partners are delivering all the components for the network. It has not been confirmed which cloud provider is involved in the project.

Koistinen emphasized the exploratory nature of the 5G SA core SaaS deployment for Sirius and did not take a position on whether the model would be suitable for the operator’s public network along with dedicated private network installations. However, he noted that there are regulatory challenges related to data sovereignty with using public clouds in production telco networks.

“The way I like to do things is take a step forward and see what comes with that step. I look forward to gaining experience and understanding better how cloud platforms or core networks purchased as SaaS fit with how we operate the networks,” he said.

Telia Finland’s Sirius project is similar to Telia Sweden’s EU-funded NorthStar program launched in February 2023 with Ericsson. Together, the two innovation networks create the largest cross-border 5G corridor in the EU.

In Finland, the Sirius project will also help to expand Telia’s 5G SA use cases. The operator has deployed 5G SA in private networks as well as in its production network for Fixed Wireless Access services since December 2021.

Elisa has also partnered with Nokia to demonstrate the SaaS 5G SA core solution at the Nokia Arena in Tampere, Finland, in late 2022, soon after the Finnish vendor launched the product.

Will telcos buy network functions like IT services?

According to Ruth Brown, Principal Analyst, Mobile Networks, at Heavy Reading, Nokia has been “pioneering” with its SaaS solution for the 5G core. It can be deployed in private as well as public network scenarios, but the first rollouts are likely to be small-scale as operators get used to the concept, in her view.

“5G core SaaS significantly changes the implementation model, moving away from operator highly controlled in-house 5G core telco platforms. For this reason, I suspect many operators will initially begin with smaller implementations while they decide on the best scenarios and build their confidence on use cases best fitting this new model,” she said.

The advantages of SaaS for networks include agility, flexibility, less complexity in managing cloud-native core functions and lower capital expenditure as the subscription model would shift spending to operating expenditure.

“This ‘pay-as-you-go-and-grow’ approach could benefit operators juggling the costs of transitioning to 5G SA. SaaS also allows operators to be more dynamic in their usage for short-term projects, services or trials,” said Brown.

But there are challenges for telcos, starting with a general lack of understanding of what the model is, according to a CSP survey conducted by Omdia for a Nokia-sponsored ebook. The survey found the top-ranked concerns among CSPs about mobile core SaaS included the risk of reducing control or security, conflict with national data sovereignty and data protection rules, unknown costs, and that the model runs counter to established internal procurement practices.