Sandberg: Telenor Leans Into Software

While service providers of all stripes are drawing up their various virtualization blueprints, Telenor is banking on an internal, software-centric approach, along with some open source ingredients.

Some service providers -- AT&T Inc. (NYSE: T) comes to mind -- are keen on developing their own virtualization implementations of SDN and NFV while others are using system integration partners, open source ecosystem partners or some combination of all three approaches.

As far as open source goes, Telenor Group (Nasdaq: TELN) is using Red Hat Inc. (NYSE: RHT)'s OpenStack Platform 10 in its virtualization lab and it's also active in ETSI's Open Source MANO Community (OSM) , but the Norwegian carrier has developed some of its own digital services as well.

In Part II of this Q&A, Bjørn-Taale Sandberg, head of Telenor Research, talks about Telenor's virtualization game plan, as well as several services it has developed internally. Sandberg discussed Telenor's digitization efforts in Part I, which included virtualizing parts of the telco stack with its One Asia and One Europe projects. (See Telenor’s Sandberg Discusses Virtualization.)

Telco Transformation: What is Telenor's approach to using open source versus using vendors for its digital transformation?

Bjørn-Taale Sandberg: We are working with several open source communities, and we believe that that is a very viable way to go, but we're not certain that we want to do it all ourselves. For example just taking the open source and then building the solution ourselves. We will be working with vendors to integrate this for us, but we believe that the open source should be part of the stack in order not to be locked in. Obviously, open source is where the innovation is happening now.

BST: That's a significant risk. This is a classic IT buyer problem, right? The vendor will always try to put extras on top of the standard [offering] to lock you in to that vendor, and those extras are often attractive. That's why they build them. So it's a classic problem. The only way we can avoid being locked into one vendor, and then give away the value creation to that vendor over time, is to make sure that we have enough insight, skill and understanding ourselves. And perhaps build some parts of it ourselves in order to avoid that lock-in.

TT: We ran a story last year where Deutsche Telekom said that software development wasn't one its core competencies so it was looking towards partner ecosystems. (See Paving the Way for a Digital World.) What is Telenor's take?

BST: We are going to be a software company in the sense that in some areas of the business we will have some customer-facing services that we develop ourselves. We do have some today, such as our video conferencing service, which we make ourselves. We have a service called WowBox in Bangladesh, which is pretty successful there, that we built ourselves. So there will be examples of customer-facing digital services that we will be developing and in doing that we need to be a software company. We need to have the right way of working. We need to have control over the code because we'll be building the systems ourselves.

In other areas it's more a question of doing sourcing right. Maybe being part of an integration team, or some bits you may be integrating yourself. We don't have the ambition to necessarily build the stack ourselves at the moment, but with that said we do have a project going were we are doing that. That project is more for exploring the opportunities of when you use open source for everything, when you buy as little as possible, how cheaply can you put together the core? What does it take to harden that? What does it take to make it something you can actually deploy with millions and millions of customers? We're doing a project to really understand that, and we are running that with customers in Norway and in Sweden.

TT: Does that project have a name?

BST: We call it Software Telco internally. It's more of a R&D project. It's a mix between our customers and friendly users. I have one of those SIM cards so I'm a friendly user.

TT: So it better work well if you're using it?

BST: Exactly. It has to work, and it does work. It's an attempt to sort of try to be disruptive with ourselves and the core of our business to really understand what is possible. We're not ready to deploy that with hundreds of millions of customers at the moment. That's were the One Asia and One Europe projects come in, where we are virtualizing parts of the operation. We'll be doing that in a very controlled way.

— Mike Robuck, Editor, Telco Transformation