Last month, we announced our investment in Affirmed Networks, a category leader in fully virtualized, cloud native mobile core solutions. We’re thrilled to partner with a strong management team and join other great investors, and we’re excited about what this strategic investment might represent in terms of accelerating the roll-out of 5G worldwide.
To give a bit of context, the last few years have been challenging for global telecommunications companies. Large Telcos, the providers of essential connectivity infrastructure for the growing digital economy, are currently facing massive challenges not only with their top line — affected by OTT apps, revenues are flat or declining in many cases — but also with costs, which have been deeply affected by the exponential data growth of an increasingly connected digital society.
As a result, the business model for Telcos is currently upside down, to a point where the revenue per bit is converging to the cost per bit, leaving little economic profit. This impending financial milestone is what has been driving Telcos to push substantially new infrastructure models, on which it is easier to deploy new services, scale up and down resources and automate service delivery.
The inspiration behind these new types of infrastructure models is the hyper cloud service providers (CSPs) — AWS, Google and Microsoft. These companies have mastered the art of delivering innovative products at a very low cost using native cloud models, extensive open source utilization, machine-learning based automation and self-service models.
Given such a challenging environment, it becomes increasingly clear that the Telco of the future will be a different animal, adopting many of the elements and technology being used by the hyper CSPs today. Ultimately, in order keep up with these modern disruptors, Telcos will have to reinvent themselves.
That’s where Affirmed Networks, a leader in virtualized mobile networks, comes in.
Affirmed Networks is a pioneer in bringing together 5G and webscale technologies to bring digital transformation to the telecommunications world while respecting the carrier-grade requirements of availability and performance. With virtualized and cloud-native network solutions, Affirmed Networks allows Telcos to design, orchestrate and operate their networking infrastructure in a similar way to hyperscale cloud service providers, enabling them to launch new products and services in days or weeks vs months.
Qualcomm Incorporated and Affirmed Networks share a fundamental objective, which is to unlock the value of 5G and accelerate its adoption worldwide. 5G will redefine connectivity, computing, and the edge cloud for the next decade. Affirmed Networks has a proven ability to help mobile operators quickly adopt a 5G-ready architecture, shortening dramatically its implementation cycle.
5G will deliver fast data speeds (10x to 100x faster than LTE), ultra-low latency (below 1 millisecond, in some cases), and great flexibility and scalability. It will improve current applications and experiences, as well as enable brand new ones we can’t even conceive of yet. But to extract the full business value of its implementation, the core network has to be upgraded to be hyper automated, totally software defined, and super flexible. An intelligent network infrastructure becomes the foundation for what is ahead of us in terms of technology.
5G will have to accommodate different use cases, from a massive number of IoT devices in a manufacturing plant to high throughput, low latency Virtual Reality experiences in consumer devices. We might have situations where different use cases, each one with completely different requirements, share the same physical infrastructure. Implementing these logical networks at scale, a concept also known as network slicing, is one of the examples of innovation that Affirmed Networks brings to the market.
This is innovation at its finest, and one of the reasons Qualcomm Ventures is so excited to add Affirmed Networks to our portfolio. Now currently deployed in over 100 networks worldwide, including Tier 1 operators such as AT&T, Vodafone, and Softbank, Affirmed Networks has an effective solution with massive potential to scale. We see great synergy in terms of strategic objectives and asset complementarity between our two companies, and we look forward to working together.
With Affirmed Networks and its customers already at the edge of the 5G world, we’re confident this investment will capitalize on market momentum and transform networks around the globe.