Ray Le Maistre, TelecomTV (00:25):
Telefonica is one of Open RANs most ardent telco supporters and has been working towards deployments in multiple markets for a number of years already. Well, to find out how O2 Telefonica the Telcos operation in Germany is progressing, I'm talking today to Mallik Rao, the CTIO at O2 Telefonica, which is also known as Telefonica Deutschland Malik, great to talk with you today. Thanks very much for joining us on telecom tv. If we can start with the bigger picture, can you give us an overview of O2 Telefonica's open RAN strategy?

Mallik Rao, Telefonica Deutschland (01:07):
Yeah. Before getting into the open ran Ray, first of all, I would like to give a context of why are we doing it? What are we doing to just give you a bigger landscape. We've been announcing a program called GPS, the Growth, profitability and Sustainability across Telefonica globally launched by Jose Maria. Technology is definitely one of the big enabler for our GPS plan. There are two important building blocks in the whole technology landscape. Number one is opening up our networks through a well-defined simple to consume APIs for the application developer community to enable new business models, new revenue models, and 5G advanced capabilities like slicing red capital bring a lot of new use cases, so that's number one. So enabling the whole network ecosystem for application developers. The second one I would say is growth. However, grow sustainably telecom as an industry, we've been running building the plan, build, run kind of networks for the last two or three decades, but if you really want to go towards a CapEx intensity from high teens, the 17 18% towards the 11, 12%, that's what we announced as a part of the GPS plan.

(02:35):
You have to do things completely differently. You have to disrupt ourself, first of all as the service provider and disrupt the technology landscape and technology service providers as well as technology providers itself. So for us cloud as a technology, we see the disruptor and first of all, it disrupt us, and if it is disrupting us to deliver the service towards the customer, we need a disruptors in the market. So for us, belief in terms of disaggregation, decomposition to a microservices is a critical part of a pillar in our entire technology journey when I'm talking about technology right from B-S-S-O-S-S networks and digital enablers and digital platforms. So this is how I see it as a landscape. And then happy to talk a little bit around our initiative in each side of it. Maybe one big highlight for me in the last four years across Telefonica Group in Telefonica, Germany is our whole BSS transformation.

(03:48):
We launched about three years back A BSS transformation, completely hosted onto a public cloud cloud, no on-premise equipment, right from channels to the billing order management, product catalog, everything. It's a program which we call it as radical architecture and IT transformation. We moved close to 145 applications into a public cloud. Of course, in the multi-cloud environment, no on-premise solutions deployed without learning. And now we really want to say if you want to disrupt telecom, the core of telecom, you have to start working at the core. That is basically the access network and the core network. So this is how I believe on the overall say, initiative of cloud, what we are doing.

Ray Le Maistre, TelecomTV (04:34):
Okay. And so how does then the development of the RAN fit into this? I mean, what is the O2 telefonica strategy in terms of evolving? The RAN towards open ran,

Mallik Rao, Telefonica Deutschland (04:49):
So open ran, whether you call it open run, virtual run, cloud run, the idea for us is, or the belief in the last three, four years, we've been trying in different markets, right from the Brazil to UK to Germany, we've been working with entire industry ecosystem. What we learned from there is, at least for me, personal belief is unless the big suppliers really adopt the change that is basically aggregating the hardware and software, you are not making a big difference In a Brownfield network. You can build a greenfield network with open run technology. Maybe last few years you have seen different managed service providers trying this technology. But for O2 in Germany as well as across Telefonica, the belief is we need to disaggregate, we need to decompose the RAN software. Because if you want to run AI automation, right, you want to run the workloads in terms of CICD, DevOps, you cannot do a monolithic kind of architecture.

(05:57):
And that's what we've been trying to do. Again, we tried with all the suppliers. In fact, we've just started off working with Samsung in the last six, eight months, bringing the whole virtual run open, run and demonstrate deaggregate the software and hardware because the heartbeat of a hardware is different versus software. Again, just want to clarify, we don't have any aver that we should not buy a hardware from a Samsung or Ericson or Nokia kind of companies. We don't have a problem in buying the hardware. We have a problem in terms of the way the architecture of the RAN software is defined. So with Samsung, what we are right now working on disaggregate completely the software and hardware, so we've gone live with one site in Berg. Again, the belief for us is if you want to try open run or cloud run technologies in a rural area, we are not going to make a big difference unless it is working in our core of the cities core of our businesses, then only these technology will be successful.

(07:12):
And that's what we are doing with Samsung right now. We have of course in the funnel with Ericsson and in couple of, we should also be able to try it out. Our intent is definitely decompose for enabling automation for enabling application that will deploy new use cases at enterprise locations. For example, let's say if I'm building a private 5G network, the use case for the enterprise will not necessarily be applied across a macro network and right from access to the transport towards the internet. So we need to decompose this aggregate at every segment of our technology landscape.

Ray Le Maistre, TelecomTV (08:01):
Okay. So you mentioned there the first site going live with Samsung and that was a milestone you achieved just recently. What will be the next steps? I mean, will you gradually start to add more open ran sites around Germany? Will you wait and gather data and information and experience from this one site? What can we expect in the near future?

Mallik Rao, Telefonica Deutschland (08:29):
We'll scale up from these one site pilot to at least 10, 15 sites to begin with next one quarter. It's not a one year kind of plan. However, we would like to see the deployment of open run networks in Germany in a sizable scale starting into 2025. Intention is to go at least 20% of the network where we want to deploy with open run technologies and gradually say test the whole software disaggregation and ability to open up the interfaces for different use cases. That's what we're trying right now. So one side will go into seven to 10 sites in next three to four months time, and then we'll of course do load testing and do, how do you do the lifecycle management of a software? Because we want to really get into A-C-I-C-D DevOps kind of framework in the access network. We don't want to get into a deployment circle of every quarter or every six months. We want to go in life software deployment kind of capabilities. We've already started doing it in the core network recently when we have Ericsson core in our network at this point of time and we do inservice software upgrades, we tested the inservice software upgrades and that's what we want to start doing in the radio network incoming quarters.

Ray Le Maistre, TelecomTV (09:56):
Okay. So really this is fitting in then with this broader strategy. You talked about opening things up and having a more software and cloud approach. I mean, how is this manifesting itself? You mentioned there the 5G core, I mean there's been more new developments just right now with Nokia and AWS, hasn't it? How does this all fit in together, the evolution of the RAN as you evolve the core towards standalone cloud-based core?

Mallik Rao, Telefonica Deutschland (10:31):
Absolutely. In fact, as I've just mentioned, we have Ericsson as a complete core right now. However, we said we want to really start working on cloud native solutions hosted on a public cloud, right? Of course, we have Ericsson core, which is cloud native, however deployed on-premise. But we really want to take a big step in terms of going into public cloud. We've been working with both AWS, Google, Ericsson, Nokia for the last roughly about two years. I mean, I spent enormous amount of time in convincing the ecosystem to say, okay, this is the right thing for us to do. It's not just only for Telefonica, it's for the supplier ecosystem, it's for infrastructure providers like AWS or Google or Microsoft. So what we have done today, we've announced today is no more trial. Our intent is to go and do a million customers on a live customers live network.

(11:30):
And that's the plan which we have. We have tested all of it. In next, let's say in one to two months time, we will ramp up the whole core, which we have deployed on AWS and Nokia with 5G standalone capability to a million customers live in next say two to three months time. So why are we doing it right? If I look back, why are we doing it? As I mentioned, clearly disaggregation, disaggregation in managing software and hardware are two different perspectives. It also helps my team and my organization, the way we've managed applications and telecom, we will not be able to work in the cloud native public cloud-based deployments. You need to have, right? Starting from observability then your in-service software upgrades, the way you deploy the software, the way you manage the infrastructure. This is what we've been doing for the last one to two years time.

(12:39):
Now, we're fairly confident now that okay, with a million customers on the platform, we'll learn a lot. We'll learn a lot in how do we manage as Telefonica? Because in the industry, if we have moved to a situation from a service provider perspective, we said we won't have a single neck to choke, right? If any problem is that I want to go to one company or one solution provider, possibly in the cloud environment, it may not, we will not be able to achieve that kind of say hands-off approach. That's what I call it as we need to be knowing we cannot outsource responsibility. We cannot outsource accountability from a customer perspective. We will provide the services despite its hosted in public cloud or private cloud with security, with the data privacy. So that is the kind of learning curve which we are doing. My plan towards next year will be at least 20% of my overall traffic on the entire core network should be sitting on this kind of technologies.

(13:44):
Again, we don't want to start with, we don't want to stop only packet core. Then if I take the core network as a whole, so for me, core starts at the end of transport aggregation and core ends for me at handover into internet. So there is about 16 to 17 elements in the core network. So we want to see all these 16, 17 elements to be hosted on the public cloud, hosted on the cloud environment, and we are able to orchestrate the application, orchestrate the infrastructure, and orchestrate the service what we are delivering to customers. So this is journey which we have ahead of us. It's pretty exciting and of course it's challenging.

Ray Le Maistre, TelecomTV (14:25):
Okay. Yeah, no, absolutely. And this is the kind of the vision, the roadmap that we've been hearing from many in the industry for a few years now. How is all this going to change the way that O2 Telefonica works on a day-to-day basis and the skill sets that its staff will need? I mean, how much re-skilling have you already had to do within your teams and how is it impacting how the operations team is working on a day-to-day basis?

Mallik Rao, Telefonica Deutschland (14:59):
Absolutely. In fact, today I must say I'm super happy. When we started off about four years back, we had five cloud certified architects. So we started as a program, first of all, re-skill upskill program about three and a half years back. So we worked of course with all the hyperscalers in terms of cloud certification. Before we started moving the applications into cloud, we said we want to have 100 cloud certified architects. And we took a pretty bold step in terms of saying, I mean you don't need to be doing every time a business case. I offered to my entire organization, not only technology, to my 7,000 people organization, if anybody wants to learn cloud, if anybody wants to do certification, it's on my cost center technology cost center. And roughly 18 months into the entire program, we were able to have close to 1,800 people went through the entire program.

(16:04):
And today we have about 65 cloud certified architects. And so this is the first investment we said we want to do over-invest in people culture and trainings. If you don't over invest, there is no point for us to just do a pilots and trial. Glad that we started about three, four years back, this whole program today, I don't need to convince my team that cloud is the better thing. In fact, we have moved complete charging, right? The entire charging when we are working with Matrix and Google Cloud. So all my charging is now sitting on public cloud with data security, data privacy hosted in Frankfurt. So you are able to make these kind of big, bold decisions. Only when you have your people, your team, you're able to work in A-C-I-C-D, you're able to work with the suppliers in terms of saying you have a uniform pipeline of CSCD.

(17:01):
It doesn't need to have a separate and network doesn't need to have a separate, because we have built organization which is much more horizontal. I don't have any organization which is centric to domain. We talk about technology like for example, cloud and data center. So that's a team which enables any applications, both network as well as the IT say workloads. If I look back, we have moved these 170 applications into public cloud technology, and the biggest beneficiary of it is my stability and quality. I had only one incident in the last say, close to 18 months of operation with such a massive workload setting on the cloud because it forces you to be agile, it forces you to think DevOps. It forces you to really have A-C-I-C-D disciplined pipeline and security patching. In our on-premise world, we really didn't know what kind of security patches we need to put in every component. But once it goes to cloud, you are forced to do it. So discipline brings in discipline brings the culture, and culture is really extremely important for us to really manage these kind of critical workloads on the public cloud.

Ray Le Maistre, TelecomTV (18:23):
Okay, that's really interesting. And to see how things have evolved in the team and to hear about the appetite within your team as well for this kind of evolution and these kind of developments. So Mallek, great to hear from you today. Thanks very much for the update not only on what's happening on open ramp, but in your broader cloud oriented cloud native strategy as well. Really interesting. Thanks very much. So a really great update there from Mallik at O2 telephonic, and we look forward to hearing more from the broader Telefonica group and from other operators well in the near future about not only their open ran plans, but their broader cloud native, cloud oriented disaggregated network plans. Thanks for watching.