In this episode of the Futurum Tech Webcast, Futurum analysts Shelly Kramer and Ron Westfall discuss the digital divide and explore where the telco industry is in its journey to closing that divide. We explore how closing the digital divide is a top priority for government and society the world over, and how service providers can rise to meet the needs and challenges the digital divide presents.
In our conversation, we explored what the digital divide is and why closing the gap that exists between individuals who have access to modern information and communication technology and those who lack access is critically important.
Our conversation included an outline and discussion of the many resources that are available to service providers to help close the digital divide, especially in rural areas, including:
- The 2019 Rural Digital Opportunity Fund, with some $20.4 billion allocated for telco service providers over the next ten years, along with the 2020 5G Fund for Rural America, with $9 billion allocated for ten years.
- Facebook’s Internet.org providing a solution for individuals in Africa, Asia, and Latin America to access material related to health, local information, and job opportunities by way of an app.
- Linux4Africa’s work to bridge the digital divide between developed and developing countries.
- The Satellite and Advanced Multimedia Education (SAME) project, focusing on providing high quality education to all schools, including urban and rural in Karnataka (India).
Ron walked us through low Earth orbit (LEO) satellites and the role satellites are playing in making inroads related to bridging the digital divide.
We explored 5G technologies such as fixed wireless access (FWA) and the growth opportunities that exist for telcos within the next five years.
From both a technical and business consideration standpoint, telcos must focus on automation of the network operations lifecycle (including network service orchestration, network controller, and analytics capabilities), along with appropriate security protections that provide E2E security assurance (protecting against malware, DDoS, application protection and privacy, and threat analytics).
We explored whether service providers are up to the task of taking advantage of these new funds that have been made available as well as the capabilities we’ve identified as being critically important to effectively serving areas impacted by the digital divide.
Lastly, we talked about the importance of partnerships, which are, we believe vital to telco operator success in bringing the kind of support, innovation, infrastructure, and opportunity to the areas they serve. We highlighted the work of Cisco with its recently announced rural broadband push, along with other vendors like Ericsson, Nokia, and ADTRAN, who are also making key moves and building alliances and partnerships with telcos. We also explored some innovative things that vendors like Netcracker and Marvell are doing and the role those initiatives will play in this ecosphere moving forward.
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Shelly Kramer: Hello, and welcome to this week’s episode of The Futurum Tech Webcast. I’m your host Shelly Kramer, and I’m joined today by my colleague, Ron Westfall. And we are going to talk today about the digital divide, and where the telco industry is in its journey to the cloud. Before we get started on that conversation, however, I want to take a minute and remind you that this show is intended for informational purposes and educational purposes only. We bring our opinions, and we’ve got lots of them, to the conversation. Anything we say should not be construed as investment advice or anything else.
So, with that out of the way, we’re going to dive into our show. So, what is the digital divide and why is it so important to solve? I’ll admit that I was driving my 14-year-old high school freshman to school this morning, and we were talking about the digital divide. And I was giving her some examples about how I had been listening to a show on NPR. And I was giving her some examples about the differences that exists between people who live in cities. We live in a moderately sized city of a million six, Kansas City, Missouri. But I was explaining that, even in our own community, we have a digital divide between people who have good internet access, who can afford internet access. I was sharing with her how expensive that is for our family.
And I was also sharing with her the fact that some families don’t have computers, and they have to do their schoolwork on devices, or they’re in a situation where they have a family who shares a body of computer … a family shares one laptop. Another example that I was giving her is, and this was kind of what prompted my conversation with her this morning, that the show on NPR was talking about the fact that the workplace has shifted such that Ron, when you had an opportunity that might be in Denver, Colorado to work for a company it used to be that you had to pick up your family, and move to Denver, Colorado to do that job. What a global pandemic is showing us and showing employers is that you can live in a suburb of Houston, Texas, and do that job for that company just as well without living in that community.
So, part of the conversation on NPR was around how the onus is on cities across the United States to make sure that they are doing what they can to breach this digital divide, and to make it possible for people to work from anywhere, to do business from anywhere, to learn from anywhere. So, that’s really the crux of our conversation today. And, again, my timing was just perfect with my 14-year-old, because I happened to be listening to this topic without even … we had planned to have this conversation, you and I Ron, but it was kind of perfect timing for that.
So, talk with us a little bit. You are immersed in all things related to the telecom industry and 5G, and connectivity and everything else. So, I’m really interested to hear some of your thoughts on the importance of the telecom industry being able to shift and being able to develop the right kind of infrastructure, and that sort of thing, to be able to meet this demand. So, talk with us a little bit, Ron, about what you’re seeing in the market.
Ron Westfall: Well, great question, Shelly, and this is just a great way to kick it off because you’re right. The digital divide is a hot topic. And it’s only going to get hotter because, as you pointed out, the global COVID 19 pandemic has really put broadband access at the forefront because it’s become essential to our daily lives, especially in areas like work from home, workforces, distance learning, public safety and, likewise, public health. And, as a result, we’re seeing more resources being allocated to address this vital issue. In the US alone, the federal government has allocated $37 billion over the next 10 years just to see how we can close the digital divide. For example, the 2019 Rural Digital Opportunity Fund, or RDOF, has $20.4 billion set aside for the next 10 years. In addition, there’s the 2020 5G fund for rural America that has $9 billion for the next 10 years.
So, the funds are boosting the economic feasibility of pushing rural broadband and other hard to reach places. And it’s just a great time for service providers to take advantage of these funding opportunities here in the US. And if you look across the globe, it’s a really the same impetus, the same prioritization. So, for example, if you look at internet.org, which is the brainchild of Facebook, to provide solutions in order to access materials from the internet. And through this app, people can access webpages on health, local information on job opportunities. And, thankfully, this initiative is having an impact in places like Africa, Asia, and Latin America.
And, in addition, you look at another initiative such as Linux for Africa, which is working to specifically bridge the digital divide between developed nations and developing nations. And, naturally, the focus here is on Africa. And they’re doing this by ensuring access to information technology. They’re taking, for example, used and discarded computers from places like Germany, and using open source software, and programs such, as the Terminal Server Project. And this is quite simply allowing institutions like schools and hospitals to have this vital access.
And I think another great example is the Satellite & Advanced Multimedia Education project, or SANE. And, here, this is a satellite based approach to extend quality education, focusing on schools to be able to access high-quality educators in rural as well as urban areas throughout India. And so, what we’re seeing are schools are using SANE as a means to bring the educational expertise in the form of expert teachers, as well as content developers through the Indian Institute of Management. And so, this is really compelling. This is demonstrating this is something that decision makers in government and societies are really committed to solving. And so, this is pointing to that we can finally really make serious progress in this area. And I believe there are compelling reasons in terms of the technology side of this.
Shelly Kramer: Yeah, I agree. And I’m constantly going back to my conversation with my teenager. One of the things that I told her was that this pandemic that we’re living through, which gosh, wouldn’t it be great if this is a once in a lifetime thing? But I told her, I said that this pandemic that we’re living through together across the world is forcing us to pivot, and to do things more rapidly. And to do things that were kind of on our, well, wouldn’t it be nice, if there was equity as it related to internet access, and computers, and things like that? And we, certainly, haven’t solved that problem in its entirety. But the reality of it is, as you’ve mentioned with some of these programs, we’re certainly being forced in a way to adopt these things in a much more rapid fashion. I think that’s good for everybody.
Speaking of satellite, I know that we’ve written about this before. I know our colleagues, Sarah Wallace, has written about satellites, and low-earth satellites, and that sort of thing. I was watching a show the other day with one of my kids. And it was a kind of a throwback to the ’80s. And I was hearing the familiar dial up sounds when we used to access the internet by way of AOL, or some other dial up that was crazy slow. And satellite internet, it’s really cool. Right now, it already outperforms dial up, which that is a pretty low bar. But the thinking is that these emerging technologies could bring satellite internet up to par with cable, or fiber net internet capabilities. I think that’s pretty cool. You want to talk a little bit about satellite prospects, and what you see moving forward?
Ron Westfall: Naturally. And yes, satellite internet is a key piece of this. Already, we’ve seen the example in India. And you hit the nail on the head, and the fact that we now have new satellite technologies, particularly in the form of more advanced, low earth orbit satellites, or LEO satellites. And they are really designed to overcome the shortcomings of previous generation satellite internet technology, which was plagued by slow speeds, high latency, high pricing. And, thankfully, these are going to become annoyances of the past. I at least, certainly, believe that. And yeah, to your point, satellite internet technology is already better than legacy dial up, and DSL in most places. And is, in fact, now going to become on par with a cable and high-speed fiber access in many areas.
And so, for example, here in the US, cable internet covers about 89% of the population. Well, fiber is available to only about 41% of the population. So, this is according to the FCC, so this is a pretty good data. And so, this is automatically indicating that millions of Americans are underserved, quite simply, when it comes to broadband. And so, instead of satellite being a last resort technology for internet connections, it now could become a viable option that’s on par with the cable or fiber, let alone DSL.
And so, for example, as we’ve written, Starlink is a high profile company. That’s a name of the satellite network that SpaceX is developing to provide low-cost internet to remote locations, as well as more densely populated areas that could use more internet competition. And what SpaceX is, eventually, hoping to do is have as many as 12,000 satellites and it’s proposed to make a constellation. So, it’s like paralleling the same principle with 5G, the more cell sites they have, the more density have, quite simply, the better coverage you have. And the technology is better in terms of being able to transport all of those additional sites to enable high-quality internet access.
And so, with that, the performance now surpasses that the older satellite internet technology we touched on, but it’s also, what I was pointing to, the global network is unbounded by ground infrastructure limitations as well. And this is where we’re seeing breakthrough on the transport side of things, being able to back haul all of these connections in a far more efficient, high-quality way. And, as a result, I’m anticipating that Starlink, will have an impact as early as the end of this year. They’re looking to target service in the Northern part of the US and Canada, and looking to expand to a global basis during 2021, particularly as many of the restrictions related to the global pandemic start lifting. So, these are all very encouraging signs, and satellite is one key piece.
There are other key pieces that I think are important, but already satellite is queued up to make a difference.
Shelly Kramer: Yeah, I think that’s really interesting. Although, I do think a little bit about the clutter in the skies and how that will become a problem that we’ll have to address as well.
Ron Westfall: Exactly.
Shelly Kramer: So, let’s talk a little bit you hit on underserved households, underserved areas. And they are. And we talk a little bit about that in the United States and rural areas are definitely underserved. But there are also massively underserved areas across the globe. And I think, to me, that’s where 5G technology’s become really interesting, and things like fixed wireless access become a factor. Talk with us a little bit about what the growth in FWA connections is predicted to be and why that’s relevant.
Ron Westfall: Exactly. And so here is another breakthrough area. In fact, we know 5G is already delivering higher bandwidth, lower latencies just for mobile connections on mobile devices, such as smartphones and, likewise, any other device that has mobility. And, as a result, it’s also enabling fixed wireless access capabilities. And what is different now is that we have tried to use, what were called, local loop alternatives using wireless technology in the past. However, that really hit a brick wall because there were severely limiting considerations. For example, with the WiMAX deployments of the past, the technology had some intriguing possibilities but it was, first of all, plagued by the fact that it was a proprietary approach.
And so, what 5G is different about is that it is a standardized approach that has the imprimatur of the 3GPP backing. And so, this automatically allows for more assurances in terms of having interoperability out-of-the-box, assuring that multi-vendor implementations aren’t going to be a stumbling block in terms of simply getting access technology out there. Not to mention there were other limiting factors in terms of using something like WiMAX. And that’s, even though there was the ability to avoid fiber trenching, it simply wasn’t performing as effectively as advertised.
And so, we’ve already seen FWA make significant progress. And, in fact, what we’re seeing is the fact that FWA connections are actually expected to become up to 160 million by the end of 2025. And that would account for 25% of all mobile network data traffic globally. And so, this is indicating that what we’re seeing already is the fact that FWA is reaching, for example, business parks that are cut off by bodies of water, rural areas, and so forth. And this has become an actual viable alternative to fiber connections and to DSL connections, is that we can anticipate they’ll have even broader impact, not just in developing regions, but even in some other places that we wouldn’t expect from before. And that includes urban areas and so forth.
And so, this information, I think, is valid, and I think is another key piece of the puzzle as to how we’re going to get internet access quite simply to a universal basis using satellite, FWA, as well as simply more fiber builds, as the regulatory bodies enable more of this capability. This is all pointing to, quite simply, making dramatic progress in terms of closing the digital divide.
Shelly Kramer: Yeah, absolutely. And I think that this is a nice sort of lead in to service providers, and where they are in terms of what the technical considerations, and the business considerations that exist for being able to play a role here. And they do play, telcos play, and internet service providers play a key role here in things like automation of the network operations. And security, of course, is a fundamental piece. And things like network service orchestration, and analytics and network controllers, like all of those things play a role. But what do you see on the landscape in terms of service providers, and where they are in terms of being able to take on the task, and the responsibility of these new capabilities? Where are they on that spectrum of being ready, and knowledgeable enough, and innovative enough to be able to take that on? What do you see there?
Ron Westfall: Exactly. I think going back to the example of the US funding, the $37 billion that’s been allocated, we’ve already seen some local rural operators, not only be able to take advantage of the progress in the access technologies, but really looking at this from a strategic and fundamental level, i.e. it’s one thing to have improved FWA connections to reach a broader area of coverage, but it also has to be synced up with network intelligence. As you pointed out, it’s also about ensuring from the launch of these new services to have automated lifecycle orchestration, to enable that when you have something like an upgrade that’s required. Or to assure efficiency in all parts of the network, it’s already built in. You just can’t glue this on after the fact, otherwise, you’re just going to have unhappy customers and, quite simply, very limited progress in closing the digital divide.
And I think, security is definitely vital. I think we’ve seen from our own research that when it comes to 5G deployments, it consistently ranked as the number one concern at least, certainly, when it came to operators targeting the business side of coverage. And so, what we can anticipate is that along with these built-in capabilities with automation, as well as SDN transport capabilities that are far more efficient than legacy transport capabilities. And, also, the fact that this will link into end-to-end security assurances. So, we’re not having to troubleshoot security as these new services are deployed. It already is factored in, and it will be a lot easier to solve the security challenges that are already out there. I mean, this is not going to change because we’re getting more broadband access out there to the hard to reach areas.
But that includes malware protection, it includes application specific security. It includes protection against distributed denial service attacks, which I think everybody has had to bear the brunt of in some form recently. Like if you go to your favorite web service site, and suddenly you can’t reach it that was probably because of that. And so, what this is all pointing to is that the operators are really become smarter about this. And they’re tapping into these funding resources to really finance that part. They have familiarity with access technologies, but it really is taking this holistic end-to-end approach that’s really going to be the kicker. That’s going to be this fundamental difference maker and getting this access, really, to a broad universal basis to everybody,
Shelly Kramer: Right. And a topic that Sarah and I tackled in our most recent Futurum Tech webcast was the topic of partnerships and how in today’s business world, and I really think that it doesn’t matter what you do, what sector you serve, smart partnerships I think are really the path forward. And I think that what we’re seeing when it comes to these rural service providers is that, yes, there’s some great government funding that you need to take advantage of. But, I think, that realizing that there are partners out there, partners like Cisco, ADTRAN, Nokia and Ericcson, who know this stuff, who have the resources to step in and provide a significant assist, and to speed up the process for a lot of these rural partners. I think that’s really important for them to understand and know that that that’s an option for them.
And I see, I think you covered this recently, some news that Cisco is really committed to closing the digital divide. And they’re engaged in a robust rural broadband push. And they, also, have a new report out that, Cisco’s 2020 Inclusive Future report, that if you’re interested in this topic, I’ll link it in the show notes. But it estimates that providing internet access to unconnected parts of the planet has the potential to lift a half a billion people out of poverty. And the report, also, indicates that internet usage in lower levels of inequality often have a close correlation making digital communications infrastructure essential to attain equality. So, Cisco’s really tried to prioritize enabling, and inclusive future, making broadband infrastructure available to everyone, especially rural communities.
So, I think we’re seeing Cisco is not the only service provider, not the only big tech company doing this. I think we’re seeing more and more of this. But, again, I think it goes back to really smart partnerships with some of the established vendors in this place are going to play a big role in the success of rural communities in the United States and the world over. And I think that I’m sure that you agree with me on that one.
Ron Westfall: Exactly. And I couldn’t come up with better examples. And you’re fundamentally right, it is an ecosystem play. And it is important for the service providers to have strategic partners. This Cisco initiative is aligning with their Internet for the Future initiative. And this is, fundamentally, emphasizing the fact that it has to be ecosystem play. It has to be thought out all the way from the semiconductor chip set level, all the way to the most advanced software implementations. And includes making sure that all the pieces are synced up and working together in an automated, real-time fashion. So, this is really raising the level of the game, and it really is correlating to the reality out there that in order for this to work these services, these connections had to have those built-in capabilities.
And we’re seeing, for example, when it comes to what can be characterized as 5G greenfield builds such as a Rakuten based in Japan, as well as Dish here in the US, they’re not coming out and saying, “Oh, here is the one supplier that we want to make this work end-to-end.” They’re announcing multiple suppliers. So, it’s not just, for example, about the transport aspects and the routing aspects, which Cisco is capable of supplying. But it’s also about the radio access networks. So, we’re seeing the relatively new players like Mavenir and Altiostar being enlisted to enable these capabilities. And we’re seeing companies such as Nokia and Ericsson paying special attention to digital divide initiatives. And so, for example, we have the Ericsson Mobility report, which is really, I believe, validating the business case for fixed wireless access, for example. And, also, we’re, quite simply, seeing that it’s also about the software components. So, we’re seeing companies such as Netcracker and Amdocs, and MATRIXX software, really the telco software specialists, playing a vital cog in all of this.
So, it is not just about partners, it is about an ecosystem play. And so, the ones that you’re engaged with directly, i.e. the operators, they have to make sure that the suppliers that they select you can assure interoperability with the hot new application out there. It could be an internet of things capability. It can be the gaming application. Obviously, none of these companies are directly supplying a gaming application. It’s going to rely on being able to inter-operate with these capabilities, and working with public cloud providers as needed, and so forth.
And so, what this all is totaling up to is the fact that it is something that is going to be powered by ecosystem prioritization, being enabled by government funding. But also, quite simply, the fact that the players out there are prioritizing their own resources to make this happen. And we already know that there’s built-in rewards. The more access that a country has, and we’ve seen this with mobile money applications, for example, it is a huge difference maker. These remote villages in developing regions, the mobile phone is the only means of communication. But it’s also the only means of financing. For example, being able to use mobile money in order to conduct transactions in a secure, predictable way. Quite simply, there aren’t ATMs and bank branches in many of these places.
And so, this is showing that this can really make a difference. It’s already done so in many places. And, now, it’s just really making sure that this happens on a truly universal basis. And I think we’re very close to enabling that, at least, for anybody who has a desire to have a secure internet connection, preferably with the enhanced mobile broadband capabilities, or flat-out broadband capabilities.
Shelly Kramer: Well, it is a game changer, for sure. And, as we know, the time for this has come. So, whether we’re here in the United States, or anywhere else in the world navigating work from home, learn from home culture, and the shift that our workplace is undergoing right now, and our education system is undergoing right now. And then, you extrapolate that out into third world countries, and the needs that they have. So, the time is now, and there’s really some exciting things happening.
And I think that it’ll be interesting to watch the telco industry as it moves forward, collectively on its journey to the cloud. And we’ve already seen some great partnerships. I know we’ll see some more interesting partnerships. And we’ve seen lots and lots of big brands, many of whom we are lucky enough to work with, many of whom you mentioned today, who are making some significant inroads. So, I think with that, I’m going to wrap up our show here. And I’m going to thank you, Ron, as always for sharing your deep technical expertise on this topic. I know that it’s a topic that you’re immersed in all day every day, and it’s always great to have these conversations with you. So, thanks for hanging out today. And I look forward to continuing this conversation.
Ron Westfall: Thank you, Shelly. And yes, time has come today, and I think that’s the right note to end our conversation today.
Shelly Kramer: Well all right, then, I’ll see you on the flip side.
Shelly Kramer is a Principal Analyst and Founding Partner at Futurum Research. A serial entrepreneur with a technology centric focus, she has worked alongside some of the world’s largest brands to embrace disruption and spur innovation, understand and address the realities of the connected customer, and help navigate the process of digital transformation. She brings 20 years' experience as a brand strategist to her work at Futurum, and has deep experience helping global companies with marketing challenges, GTM strategies, messaging development, and driving strategy and digital transformation for B2B brands across multiple verticals. Shelly's coverage areas include Collaboration/CX/SaaS, platforms, ESG, and Cybersecurity, as well as topics and trends related to the Future of Work, the transformation of the workplace and how people and technology are driving that transformation. A transplanted New Yorker, she has learned to love life in the Midwest, and has firsthand experience that some of the most innovative minds and most successful companies in the world also happen to live in “flyover country.”