WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT & RESEARCH

SPECIALISATION PROJECT
ON
CLOUD COMPUTING FOR TELECOM SECTOR:

OPPORTUNITIES AND CHALLENGES

BY

ANKIT PATIL

PGDM e-Biz 2011 13 (MARKETING SPECIALISATION)

ROLL NO:-12

PROJECT FACULTY GUIDE

Prof. Shashikant Shirahatti

CISA, CGEIT, CCSK, ISO27001-LA, ISO9001-LA

PROJECT COMPLETION CERTIFICATE

This is to certify that project titled Cloud Computing For Telecom Sector: Opportunities and
Challenges is successfully done by Mr. Ankit Patil in partial fulfillment of his two years full
time course Post Graduation Diploma in Management recognized by AICTE through the Print. L.
N. Welingkar Institute of Management Development & Research, Matunga, Mumbai.

This project in general is done under my guidance.

___________________________
(Signature of Faculty Guide)

Name: Prof. Shashikant Shirahatti

CISA, CGEIT, CCSK, ISO27001-LA, ISO9001-LA

Date: ______________________

Index Page
2

1. Literature Review----------------------------------------------------------------------------------------------- 4
2. Cloud Computing As a Concept------------------------------------------------------------------------------- 6
2.1 Definition---------------------------------------------------------------------------------------------- 6
2.2 Cloud Reference Model------------------------------------------------------------------------------ 6
2.3 Cloud Deployment Models-------------------------------------------------------------------------- 7
3. Role of Telecom in cloud computing in Indian Market---------------------------------------------------- 8
4. Stakeholder in this sector-------------------------------------------------------------------------------------- 10
5. The Cloud opportunities for telecom operators------------------------------------------------------------- 12
5.1. Business cloud user--------------------------------------------------------------------------------- 13
5.2. Consumer cloud user--------------------------------------------------------------------------------- 17
6. Key Challenges for Telecom sector to provide Cloud Services------------------------------------------ 20
6.1. Infrastructure Challenges--------------------------------------------------------------------------- 23
6.2. Connectivity challenge------------------------------------------------------------------------------ 23
6.3. Security Challenges--------------------------------------------------------------------------------- 24
6.5. Interoperability--------------------------------------------------------------------------------------- 25
6.6. Policy-based management challenges------------------------------------------------------------ 25
7. Conclusion------------------------------------------------------------------------------------------------------- 27
8. References------------------------------------------------------------------------------------------------------- 28
9. Appendix A------------------------------------------------------------------------------------------------------ 29
9.1 Consumer Cloud User Questionnaire
9.2 Business Cloud User Questionnaire

Literature Review

In the initial days of Indian telecom industry, it catered only to the needs of voice services, slowly it
moved to data services as technologies evolved. But now telecom is at a transitional phase. The
industry is becoming instrumental in empowering the people through technological advancements.
Voice and data services are playing a crucial role in the overall socio-economic development. [NTP
2012, TRAI]
By adopting Internet cloud computing, the telecommunications industry can organize and apply
network storage, computing, and software service resources. Cloud computing will become new trend
in telecommunications development and can completely overturned the industrys traditional resource
provision and user application modes. It is likely to bring about fundamental reforms as the
telecommunications and IT industries are drawn together.
Mature telcos already have a strong managed service and unified communication service line in place.
Large enterprise segment in India are seen more inclined towards Private Cloud environments,
whereas SMEs are foreseen to adopt public and community clouds which address their requirements.
BFSI and Government verticals emerge as the potential early adopter of cloud technology in India.
[Frost & Sullivan]
With increasing globalization and mobility, there are various opportunities for telecom operator in
cloud computing. Operators must consider cloud computing as an integral part of their strategies. As
they are shifting from selling communications services to servicing on-demand ICT capacities.
So the clear understanding of the evolving cloud ecosystem, partnerships and business models will be
vital. Their networks, business processes, support systems and organizational structure must be
optimized to facilitate the proliferation and consumption of cloud services.
The opportunities for telecom operator are on consumer and on business front [Ericsson Discussion
paper, March 2012]
Consumer cloud user:
Today, many of the cloud services targeted at consumers are offered by Over-The-Top [OTT] players,
which exploit ubiquitous connectivity to provide easy-to-adopt, on-demand services. More often than
not, these companies are not providers of communications or connectivity services; hence a market for
bundling basic connectivity (fixed or mobile) and communications (voice, messaging, data and video)
with cloud-based applications is opened and largely untapped for telecom operators. Even telecom
operator in consumer market can provide simple online storage services that enable user to store and
share their digital assets in cloud.
Business cloud user:
Escalating competitive forces and corporate productivity requirements, corporations of all sizes have
started to re-think how they should operate. At the same time, a combination of rapidly changing

customer expectations and radically different technological advancements is driving a new generation
of on-demand services, which are transforming the way organizations operate and innovate.
Cloud can help enterprises achieve economies of scale by centralizing the access server and thereby
reduce IT hardware and software costs significantly. It also drives efficiencies via virtualization and
greater utilization rates, which allow enterprises to scale up or down their costs depending on the
usage and demand for cloud-based services.
In the business market, the value telecom operators bring is comparable to that in the consumer space,
although the scale, usage and charging schemes will be vastly different. For business users, telecom
operators are particularly well-positioned to deliver cloud services because they already own the
networks and have trusted customer relationships.
While customers agree about the benefits of cloud computing, there are concerns about security,
compatibility with existing applications, lack of a migration path from existing applications to clouds,
freedom of choice, federation of internal and external resources, lack of SLAs for policy-based
management, and interoperability.
This paper briefly addresses the various opportunities for telecom operator in cloud with respect to
business cloud user as well as consumer cloud user. Paper also puts light on various challenges faced
by telecom operator in terms of security, government policy, interoperability and connectivity.

2. Cloud Computing As a Concept

2.1 Definition
Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a
shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and
services). Cloud computing is a disruptive technology that has the potential to enhance collaboration,
agility, scaling, and availability, and provides the opportunities for cost reduction through optimized
and efficient computing. The cloud model envisages a world where components can be rapidly
orchestrated, provisioned, implemented and decommissioned, and scaled up or down to provide an ondemand utility-like model of allocation and consumption.(Csaguide version3.0)
Cloud computing is a general term for anything that involves delivering hosted services over the
Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS),
Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). The name cloud computing was
inspired by the cloud symbol that's often used to represent the Internet in flowcharts and diagrams.
A cloud service has three distinct characteristics that differentiate it from traditional hosting.
1. It is sold on demand, typically by the minute or the hour
2. It is elastic -- a user can have as much or as little of a service as they want at any given time
3. The service is fully managed by the provider (the consumer needs nothing but a personal computer
and Internet access).

2.2 Cloud Reference Model

1. IaaS
2. PaaS
3. SaaS

IaaS: This pay-for-what-you-use model resembles the way electricity, fuel and water is consumed;
it's sometimes referred to as utility computing. In the enterprise, cloud computing allows a company to
pay for only as much capacity as is needed, and bring more Infrastructure as soon as required.
Infrastructure-as-a-Service like Amazon Web Services provides virtual server instance API to start,
stop, and access and configure their virtual servers and storage for any enterprise.

PaaS: Platform-as-a-service in the cloud is defined as a set of software and

product development tools hosted on the service provider's infrastructure.
Developers create applications on the provider's platform over the Internet. PaaS
providers may use APIs, website portals or gateway software installed on the
customer's computer. Force.com, (an outgrowth of Salesforce.com) and
GoogleApps are examples of PaaS. Developers need to know that currently, there
6

are not standards for interoperability or data portability in the cloud. Some
providers will not allow software created by their customers to be moved off the
provider's platform.

Key Player in PaaS/IaaS Market in India

Amazon Web Services
SalesForce.com
Orangescape
VMWare
Zenith Infotech

Cynapse
IBM
Rackspace
Windows Azure

Google App Engine

Net magic Solutions
Reliance Data Center
Wolf Frameworks

Source: NASSCOM Strategic Review, 2009-10 & 2010-11;

IDC.

SaaS: In the software-as-a-service cloud model, the vendor supplies the hardware infrastructure, the
software product and interacts with the user through a front-end portal. SaaS is a very broad market.
Services can be anything from Web-based email to inventory control and database processing.

Key Player in SaaS Market in India

Citrix
NetSuite
Rightnow
WebEx

Google
Oracle
Salesforce.com
Zoho

Microsoft
Ramco
TCS

Source: NASSCOM Strategic Review, 2009-10 & 2010-11;

IDC.

2.3 Cloud Deployment Models

There are four deployment models for cloud services

Public Cloud: The cloud infrastructure is made available to the general public or a large industry
group and is owned by an organization selling cloud services.

Private Cloud: The cloud infrastructure is operated solely for a single organization. It may be
managed by the organization or by a third party and may be located on-premise or off-premise.

Community Cloud: The cloud infrastructure is shared by several organizations and supports a
specific community that has shared concerns (e.g., mission, security requirements, policy, or
compliance considerations). It may be managed by the organizations or by a third party and may be
located on-premise or off-premise.
7

Hybrid Cloud: The cloud infrastructure is a composition of two or more clouds (private,
community, or public) that remain unique entities but are bound together by standardized or
proprietary technology that enables data and application portability.

3. Role of Telecom in cloud computing in Indian Market

In telecom revenue from voice margin are becoming thin, so telecom companies are moving more
towards data services and VAS services (Value added services).
Even data services in Indian market only contribute to maximum 10% of the total revenue. Hence
Telecom Service Providers are increasingly moving away from plain vanilla services of Voice, Data
and Mobile and strengthening their portfolio in value-added services.
The diagram shows the evolution of service offering by telecom companies with product complexity
with respect to time progress. Mature telcos already have a strong manage services and unified
communication service line in place. The way ahead for such players is investing in enterprise cloud
services like SaaS and IaaS.

Source: Cloud computing services, Forst and Sullivan

Telecommunications companies can leverage their expertise in building and managing complex
networks to offer value-added cloud services that address these unmet needs. These may include the
following features:
1. A managed service wrapper to provide end-to-end management of the entire IT infrastructure for
business and government customers, including legacy, private and public clouds.
2. A toolkit that provides clients with provisioning, orchestration, predictive operations/monitoring,
service management and billing/metering services.
3. Dynamic sourcing of server and storage capacity from the lowest cost sources, depending on
specific service levels, across internal and external service providers.

4. Stakeholder in this sector

End Customer:
1. End user can be Consumer [Consumer Cloud user]
End customer are the smart phone users currently India has smart phone who are active on
Internet user base of around 27% of total active user i.e. 27million. According to survey in 2010 India
has total no. of active internet user.
2. End user can be Enterprise [Business Cloud user]:
Currently there is market of $50million for Business cloud users among SMEs.

Telcos (Telecom operator): There is total14 telecom operator in India. The major players which
are in cloud computing domain are Airtel, Reliance, Tata communication and Sify.

Cloud Provider: Cloud providers are the one who provide infrastructure and technology to telecom
operator. Major players in this domain are Microsoft, Google, Amazon and Salesforce.com

10

Source: Ericsson Discussion Paper March

2012

In order to reach healthy cloud ecosystem, Telecom companies have established key partnership with
cloud expertise with technology partner, hardware vendor and network carrier partnership. Hence
telecom operators already started making their mark and undergoing active partnership with various
domain experts in this arena.

Key Technology Partners of Key Telecom Companies

Telecom operator
Airtel

Key Partner
Savvis

Ramco

VeriSign

Microsoft

Tally

VMware

Symantec

Source:
Indian
telecom
Market
overviewZinnov
Analysis
[Oct 2012]

Software developers for mobility apps

Reliance Comm.

Ramco

Microsoft

BigRock

Tata

Zoho

SugarCRM

Cisco

Communication

SuccessFactors

Microsoft

Google

F-Secure

Hardware Partnerships
Besides software partnerships, all competitors have formed technology partnerships with most of the
key hardware OEMs (original Equipment manufacturer) like HP, IBM, Cisco, Juniper, etc.
11

5. The Cloud opportunities for telecom operators

A major shift in ICT (Information and Communication Technology) spending is taking place as cloud
computing takes center stage. The volatile global economic outlook will be an added push for cloud
adoption as consumers and businesses alike continue to keep a close watch on expenditures while in
continual search of innovative and cost-effective ICT solutions. An early and rapid adoption of cloud
services has in part been driven by businesses willing to embrace new business models and ways of
working. Telecom operators with cloud offerings become a natural choice for enterprises taking
advantage of the technology, as their trusted partner.
The cloud opportunity, combined with telecom networks, is providing a synergistic platform for
operators to realize new revenues and improve bottom lines. And those investing in the capability to
provide cloud services are opening the doors to holding an elevated position in the Networked Society.
As providers of cloud services, telecom operators can manage connectivity, deliver cloud capabilities,
and leverage network assets to enhance cloud offerings. Given their core competency, managing cloud
connectivity appears to be the most natural value-adding activity. In delivering cloud capabilities,
operators can deliver on-demand applications and computing capacity either through partnerships or
on their own infrastructure. By leveraging their network assets, operators add value by exploiting user
attributes such as profiles and activities, making cloud services relevant and meaningful to users and
12

providing the linkage between the upstream and downstream components of two-sided business
models.
Telecom operators also benefit from cloud computing as users by transferring selected business
functions to the cloud just as any large enterprise would. For operators building cloud infrastructure,
they can become their own customers for cost efficiency and speed to market. More importantly,
operators can simultaneously commercialize those cloud-based services, leading to new opportunities
in both traditional and emerging segments. Operators must ensure cloud computing is an integral part
of their strategies either as providers, users or both. Their networks must have the capacity and
intelligence while their business processes and support systems must be optimized for cloud services.
An understanding of the evolving cloud ecosystem, partnerships and business models will be vital, as
they enter the emerging cloud market.
There are especially two technical factors that make cloud computing attractive to telecommunication
companies.
Firstly, Telcos already own most of the infrastructure and facilities that is necessary to provide cloud
computing services (e.g. datacenters, networks, technical expertise). Therefore initial infrastructure
investments are heavily reduced and thus barriers of entry into the cloud computing market are
comparably low. Moreover, this infrastructure has often idle capacity which could be effectively
utilized for providing infrastructure cloud services to potential customers. By using virtualization
methods, cloud computing is able to provide these resources dynamically and to adjust to current
demand.
Furthermore, many cloud computing scenarios are not time sensitive and elastic demand can be
shifted to idle times by employing dynamic prices. In this way, telecommunication companies are able
to gain additional revenue from utilizing their existing infrastructure more effectively.
Secondly, telecommunications incumbents are at a competitive advantage over established cloud
providers such as Amazon and Google, because of their ability to control the entire cloud computing
value chain. The telcos vertical integration also helps them to better face technical obstacles, such as
availability of service and data transfer bottlenecks.
Moreover, owning the transmission network allows for better managing and upgrading the
network as well as for quality of service. Thus, telcos are able to provide service level agreements with
higher reliability, because their cloud service offerings do not involve any third party company.
Hence there are huge opportunities for telecommunication companies on both Business cloud user side
as well as Consumer Cloud user side.

5.1 Business cloud user

13

In the business market, the value telecom operators bring is comparable to that in the consumer
space, although the scale, usage and charging schemes will be vastly different. For business users,
telecom operators are particularly well-positioned to deliver cloud services because they already own
the networks and have trusted customer relationships. Telecom operators can offer business cloud
services under a simple pricing structure that includes connectivity and devices, self-service
provisioning, on-demand infrastructure hardware, as well as front- and back-office applications.
They can also provide value-added services, including analytics and reporting, predictive
capacity planning, and managed services. Telecom Operators ability to offer secure and reliable
connectivity with varying degrees of quality-of-service (QoS) required by enterprises also puts them in
a uniquely competitive position. QoS can be provided for different cloud service types used by the
same user, or it can be allocated among different user types, according to their profiles and network
policies. As, telecom operators are already in the business of providing usage-based services with
service reliability at the heart of those services, so extending that core capability to cloud offerings will
only be a natural extension.

For a small and medium size business (SMB), the benefits of cloud computing is currently driving
adoption. In the SMB sector there is often a lack of time and financial resources to purchase deploy
and maintain an infrastructure (e.g. the software, server and storage). So small businesses can access
these resources and expand or shrink services as business needs change. The common pay-as-you-go
subscription model is designed to let SMBs easily add or remove services and you typically will only
pay for what you do use.
So in order to grab this market opportunities telcos already started making their product portfolio for
various cloud based services. Major Telcos have been listed here but there are others who also started
moving towards such trend and to provide better choice for SMBs as well as large enterprises.

Cloud/ Hosting Portfolio of Key Telecom Companies

Services

Application
(SaaS/Hosted)

Airtel
ERP
F&A
CRM
HRM
Web
Collaboration

Reliance
Communication

Tata
Communication

14

E-Mail system
IaaS/Virtualized
Infra.
PaaS
Data Centers

Co-location
Managed
Hosting

Other Key
Offerings

On demand
security

Vertical Specific Soln.

for Media &
Entertainment
Online Desktop (VDI)
On demand security
Hosted Contact Center
Enterprise Mobility

Enterprise Content
Management
Core Banking
Soln.
On demand
security
Enterprise
Mobility
Hosted Contact
Center

Sources: Company website, Indian Telecom Market Overview October 2012, Zinnov analysis report

Surveyed Business Cloud Users

As far as discussion goes to telecom operator side there is enough research done regarding the
opportunities, but understanding market or client perspective is important hence small survey among
23 SMEs where conducted with their respective IT department head, and their view with
understanding cloud opportunities by telecom operator was taken into consideration
Sample Size: 23 Companies from different sector
Sector Breakup:
Distributor /Wholesaler
Consulting / Research/ Media/ Event Mgt
Advertising Agency
Education Inst/Coaching
Classes/College
Finance/ Banking/ Insurance/ Share
Broker
IT/Software development/Web design
Call Center/ BPO's/KPO's
Manufacturing Sector

Other

1
2
0
3

4%
9%
0%
13%

9%

8
1
4
2

35%
4%
15
17%

9%

Vendor Selection (User service of telecom

operator)
During survey we found out everyone had
internet broadband line. SMEs surveyed had Telecom
operator as their vendor for internet line and mailing
solution in case they had mailing solutions.

Mailing Solution used by companies from telecom

operator.

Servers located within company's premises or is hosted in a

data center

16

Company feels need for CDN (content delivery

Network) which is part of IaaS services for Cloud.
Generally companies which generate and distribute
content need CDN services.

Most of the SMEs already have telecom operator as their net provider and some other
services, and hence providing cloud services to SMEs has new opportunities for telecom sector.

5.2. Consumer cloud user

Today, many of the cloud services targeted at consumers are offered by OTT players, which
exploit ubiquitous connectivity to provide easy-to-adopt, on-demand services. More often than not,
these companies are not providers of communications or connectivity services; hence a market for
bundling basic connectivity (fixed or mobile) and communications (voice, messaging, data and video)
with cloud-based applications is opened and largely untapped for telecom operators.
Moreover, telecom operators often have an advantage over OTT web service companies when
it comes to offering connectivity with hosted infrastructure. In the consumer market, this can be as
simple as online storage services that enable users to store and share their digital assets in the cloud.
Leveraging their network capabilities, operators also have an opportunity to offer prioritized or
guaranteed services instead of best-effort on selected OTT cloud applications, leading to new
revenue potential. By combining cloud services with connectivity and communications-as-a-service
(CaaS), telecom operators are creating compelling offerings that enable the monetization of OTT
applications to complement their core business.

Surveyed Consumer Cloud Users

There are various OTT players in this which provide cloud services like email, photo sharing,
online music etc. The objective was to understand the perception of mobile smart phone users when

17

such services are provided by telecom operator and how much opportunities are there for such services
in this market
Sample Size: 50 smart phone users
Demographics: Age of the users between 15-35yrs (which is active smart phone segment)
Telecom operator distribution among the sample size

90% of the smart phone users use internet on their phone

Preferred service
used

Services
Email
Whatsapp/bbm
services
upload/download
video
upload/download
images
Music
Gmaps
Other

Cloud services used

Photo Sharing
Online Music
Online storage

34%
50%
6%
2%
4%
0%
4%

Yes

No
64%
34%
72%

36%
66%
28%

72% Mobile users are ready to use such cloud services provided if they are provided from
telecom operator. This opportunity is stated but still there are large no. of challenge which telcos
should address.
18

Telecom Service Providers App Stores

Hence in order to grab opportunities in Consumer cloud user telcos are launching their own
cloud where users can download apps.
Airtel App Stores

Bharti Airtel launched their own app store, Airtel App Central
in year 2010
Airtel App Central provides 1250 applications across 25
different categories, which include games, business, social
networking etc. as well
as India- specific to religion applications
The cost of the applications is either added to the subscribers bill or
Educated from the available talk-time, with the applications costs starting as low as INR 5

Reliance Communication in Cloud World

Reliance Communications has a total subscriber base of 100 million
across its
GSM & CDMA networks
It has entered into a deal with GetJar to provide access of 65,000+
free applications to all its 100 million subscribers via its VAS platform
R-World
GetJar offers applications that work with almost all handsets and OS
Including Symbian, Blackberry, Windows Mobile, Java & Android

Vodafone

Vodafone has launched its application store for Indian customers with
800 applications available currently, of which 25% are free
The paid applications have been reasonably priced between INR 5 and
INR 30

19

6. Key Challenges for Telecom sector to provide Cloud Services

The opportunity for telecommunications providers in cloud environments is rife with challenges.
While we will say that offering of cloud services by telecommunications companies, is no-brainers
say. The development and delivery of such services will be an extremely complexand expensive
initiative.
Large telecommunications providers operate their own massive, legacy business processes and
technology infrastructures, in which provisioning services can take days or weeks. The cloud, on the
other hand, is characterized by nimbleness, in which new services can be lit up in minutes, often by
end users themselves. Telecommunications providers will likely need to overhaul their sales and
provisioning processes to enable rapid, automated deployment of services. Some may need to create
entirely new business modelsperhaps even separate business unitsto address the dramatically
faster cycles of cloud deployment .Scale is another issue. Amazon and Google rely on massive data
centers to provide the processing horsepower needed for high-volume cloud services.
Telecommunications providers will need either to make use of these types of services or to build out
their own data farms to achieve the scale of these cloud providers, and theyll need to do so in a far
more cost-effective way than they may be used to for deploying traditional communications services.
The cost base for cloud providers is lowand telecommunications companies will have to adapt so
they dont price themselves out of certain services.
When challenges/ concerns surveyed among Business cloud user, major of concerns about telecom
companies providing were listed as follows
20

As expected security was major issue of SMEs to move from existing system to cloud or using
different cloud offering services. Whereas pricing was scored lowest concern, as expected cloud will
be cost effective for SMEs.
When concerns surveyed among the Consumer User Cloud the following perception were seen.

Here connectivity was major concern among the consumer cloud user. Were as they pricing was higher
in consumer than in SMEs as they thought if telecom operator provide this service they may not be
that much cost effective comparing to current OTT players in the market.

21

Various concern rated by Consumer Cloud User, for using cloud service from
telecom operator

Various concern rated by Business Cloud User, for using cloud service from
telecom operator

6.1 Infrastructure Challenge

22

Cloud computing in essence as applied to the developed countries within the context of
broadband Internet is not only a challenge; it is still not viable for many developing countries like
India considering its economy, existing infrastructure, and affordability. The reason why mobile
phones and mobile applications have an influx within developing countries is because they are
affordable and are able to make use of existing radio broadcast infrastructure and emerging wireless
cellular network architecture.
Many telecom service providers have invested substantial capital into infrastructure
development to provide mobile phone networks in remote regions, forfeiting their profit margins.
Working in Indian emerging market comes with challenges, sometimes with marked differences in
approaches to risk around issues such as customer loyalty and revenue, when compared to other
developed countries.
Users of mobile phone services in developing countries do not make the volume of calls
required to give the mobile service provider the required profit.
Providers and users of the mobile applications enabled via cloud computing face additional
challenges in developing economies, due to unfavorable institutional environment. In many
developing countries, factors such as corruption, the lack of transparency, and a weak legal system can
exacerbate security risks. These factors combined with famine, civil strife, political upheaval, and
natural disasters make mobile service providers more reluctant to move into the markets of developing
countries. Lack of return on investment and business continuity is not guaranteed.

6.2 Connectivity Challenge:

Cloud computings lifeline is connectivity. All the services, benefits, and goodies that it is
envisaged to deliver only exist when we are connected to the network.
No network = No services.
Different people have different perspective for connectivity. Connectivity may be online and
network coverage. Users recall times when they were disconnected, or when their network service
provider was down, or the service that they wanted in the cloud was down. If connectivity diminishes
the value of cloud computing, certainly does. For businesses that rely on telecom services provider or
mobile phones, connectivity downtimes translate into huge losses.
One more part in connectivity is the transparency of the cloud market .When a service goes
down, people blog about it. They tweet it. When a service outage left 14 percent of Googles user base
without services in 2009, the social media channels lit up with outrageeven though the outage lasted
only a few hours.6 Telecommunications companiesfrom sales representatives up to executiveswill
need to accept that their interactions with customers will be in real time, through social media
channels. The more proactive they become in these interactions, the better they will lessen the fallout
when service issues do occur.
23

6.3 Security Challenge:

The mobile revolution is a primary driving force behind the quick ascent of cloud computing.
Smart phone users are engaged in mobile cloud computing from anywhere, at any time, and need
secure data access, access to applications and services.
Security and privacy issues are even more challenging than they were before.
In the future, there might not be a choice because some of the applications might only be
mobile applications. However, if the application is only developed and delivered through the cloud
environment, and if it is the only way you can use that service you will have to find a way to
connect to the cloud. Strategies need to be employed to manage not only risk but also those situations
when a cloud service provider suddenly and unexpectedly stops delivering services. There might be
several reasons why this could happen. Reputable sites like Google, Amazon, and Microsoft have been
known to have been down and unable to provide services for some time. The other issue to be
considered is that in moving services to the cloud, the organization or individual no longer retains
direct access and control.
Some serious question telcos should address first
How do we reach a balance in security and usability?
Will service providers segregate users according to the digital divide?
Will cloud computing give rise to online piracy?
By giving customers access to almost unlimited computing power and storage, cloud
services could make it even easier to share copyrighted material over the Internet.
Will cloud service providers be required to take special measures to prevent this?
Will they be liable for illegal activities of their customers?
Would doing so make it impractical for companies to provide cloud services to the general
public?

The biggest challenges for telcos in privacy are vendor lock-in and proprietary technologies. If data
gets locked in, then the flow of data will be disrupted, disrupting the very nature of the cloud itself.
Other challenges include the clamp down on content by media giants, who, in the name of privacy, can
have a tendency to inhibit expression and, as a consequence, the free flow of information.

6.4 Interoperability Challenge

24

Cloud services are largely dominated by vendor specific walled gardens and debate is not as
intense as one would expect, given the number of cell phone users and No. of SMEs using Cloud in
India. This is probably due to the fact that not only are free software powered mobile phones still a
minority, but installing new software on phones was not an option for the mass market until recently.
Now iphone and android coming with market app stores, even telcos are coming with new
cloud service for consumer cloud user, in this freedom of mobile user is questionable. Users of one
handset, for example, may want to get their email from one provider, sync pictures with another, and
use the international services of yet another.
Even legacy system of enterprise should equally and cloud services working is still under
doubt. Anyways moving from legacy system to cloud may have serious issues regarding business
continuity and data interoperability issues.
Network operators do not want users to be too free, so most of them prevent users from running
applications that are not digitally signed. RIM, Apple, and, to some extent, Symbian devices are
locked down, which renders users freedom in the mobile cloud a balancing act: on one hand a
developer needs to obey the rules dictated by network operators and device manufacturers, and on the
other hand the same developer needs to find ways to deliver freedom to users.
Many of the most successful and most visible applications of cloud computing today are
consumer services such as email services (Google Mail, Hotmail, and Yahoo Mail), social networks
(Facebook and MySpace), and virtual worlds such as Second Life. The companies providing these
services collect terabytes of data, much of it sensitive personal information, which are then stored in
data centers in countries around the world. How these companies, and the countries in which they
operate, address privacy issues will be a critical factor affecting the development and acceptance of
cloud computing (Nelson, 2010).

6.5 Policy-based management challenges

With the Internet, strong economic benefits and customer both demand pushed network service
Providers and wants link their different networks and create a network of networks. The situation may
not be as clear-cut with the cloud, and some companies building the infrastructure of the Cloud may be
able to use economies of scale, ownership of key intellectual property, and first-mover advantage to
block or slow competitors.
Governments will need to watch carefully to see that companies do not use their dominant
position in one sector of the IT or telecommunications market to gain an unfair advantage in the
market for Cloud services. A Cloud built by only one or two companies and supporting only a limited
set of applications would not be in the best interest of either individuals or corporate customers.
One of the hot issues related to the Cloud may be electronic surveillance, particularly when it
spans international borders. In most cases, the police must get a search warrant to examine data on
someones home computer. It is not at all clear whether the same data is protected if backed up in a
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data center in the Cloud, particularly if that data center is in another country. If users believe that
governments will be monitoring their activities, their willingness to use the Cloud for important
functions will surely decrease.
Would governments try to enforce laws against this in ways that limit or slow the development of
cloud services?
The government may play its own part as it seeks to regulate, which in turn may create an onerous
environment for the development of the cloud. Cloud computing also means that companies may shed
their IT resources, saving on capital expenses. That may mean a loss of jobs but it is clear the upsides
may be considerable as to the cloud scales.

7. Conclusion
26

In summary, considering the technical as well as the economic factors, it is concluded that
telecommunication companies have comparably low market entry barriers and competitive advantages
over established providers in the cloud computing market. Telecommunication companies should be
able to use their datacenters to provide cloud services and furthermore take advantage of their vertical
integration of transmission networks as well as their established customer base and reputation.
Telcos should put themselves in the position of a mere infrastructure provider (bit/dumb pipe)
That means they should focus on their core competences and relegated as a supplier of cloud providers
i.e. extending and providing their transmission network to face cloud specific challenges. Moreover,
they could also offer their customer management experience in services such as customer support and
billing.
Telecommunications companies can try to overcome their disadvantages by cooperating with IT
companies by means of strategic alliances. Telcos should also be aware that established content
providers will follow a similar strategy and cooperate with infrastructure providers as well.
Hence there advantages exceed the disadvantages, Telcos can certainly become a successful player in
the cloud computing market and quickly gain reasonable market share, only if they focus on the
security, connectivity and reliability concerns as well as handling of sensitive personal data.

8. References:
27

www.trai.gov.in
Ericsson Discussion Paper March 2012
Cloud computing services, Forst and Sullivan
Indian Telecom Market Overview October 2012, Zinnov analysis report
Cloud India Overview snippet- Zinnov analysis report
Cloud computing: Opportunities and issues for developing countries by Sam
Goundar, Fiji
http://www.telecomindiaonline.com/
http://www.tele.net.in/trends-a-developments
http://www.voicendata.com/
Accenture Six Questions Telecommunications Cloud Computing

9.Appendix A
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9.1 Consumer Cloud User

9.2 Business Cloud User

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