How Cloud Entitlement Servers & 5G are driving the evolution of new telco services

A Capgemini Research Institute Report recently claimed that half of worldwide telco architecture will be fully cloud-native in as little as three years.  

This radical, rapid transition from physical network machinery to pure software is well underway, and the digitization of the most fundamental architecture components is driving shifts in the market – most notably the evolution of Entitlement Servers.  

Essential Entitlement 

Entitlement Servers (ES) are crucial components in mobile networks, ensuring devices receive the correct service configs automatically. Here at 1GLOBAL we have some excellent briefings and introductions to the role of ES, as well as analysis on how they are shaping the telco market as a whole. In terms of network architecture, they’re essential for eliminating compatibility issues, service performance, and enhancing user experience.  

ES span core mobile services like Voice over Long-Term Evolution (VoLTE), Voice over Wi-Fi (VoWi-Fi), and 5G Entitlement, as well as more advanced features such as secondary device eSIM provisioning, eSIM transfer, and account management.  

Operating ‘behind the scenes’, ES orchestrates interactions between devices, carrier and third-party systems to deliver a smooth customer experience. Its automation allows modern networks to take their customer satisfaction and operational stability to a new level.    

Soft power 

The telco industry is undergoing a paradigm shift from rigid, hardware-defined infrastructure to agile, remotely managed cloud-native networks. Almost daily there’s a new use case of something ‘as a Service’ with that now-familiar -aaS suffix. This transformation is driven by increasing data demand, competition for pricing, and the need for next-generation services.  

5G, built on a 3GPP-defined Service-Based Architecture (SBA), is inherently cloud-native, optimizing resources and enabling dynamic service introduction and performance.    

The evolution of ES to a cloud solution is more than a tech upgrade or space-saver. It's a fundamental transformation that’s realizing some of 5G's most long-anticipated promises of agility, scalability, and monetization. Without agile, cloud-native ES, 5G's full potential will remain permanently out of reach. 

From Hardware to Cloud-Native 

The evolution of ES reflects the telco sector’s overall shift from static systems to dynamic cloud-native architecture, driven by scalability, flexibility, and cost efficiency. 

First-gen ES were designed to gatekeep and provision mobile devices with configs for carrier services, minimizing compatibility issues and automating hand-over. These ES interfaced directly with devices via a carrier bundle and communicated with backend systems like Mobile Network Operator's (MNO) Business Support Systems (BSS) for service verification, plus Authentication, Authorization, and Accounting (AAA) servers for subscriber authentication, and Websheet Servers for user interactions.    

Despite the sophistication with which they automated process, and were instrumental in huge leaps forward in consumer telco, these physical servers had inherent limitations… 

Rigid scalability  

Hardware-based ES require manual scaling, with specific thresholds that would require an engineer on-site with new components in hand to overcome, leading to inefficient resource over- or under-allocation and performance stutter during high loads. Expanding capacity via adding more components is costly and time-consuming, lagging dynamic growth.    

Growing cost 

Initial setup and ongoing maintenance for an ES is substantial, including hardware, licenses, and dedicated IT hours. Fixed overheads are inefficient for a service with fluctuating demand. Older legacy systems face creeping maintenance, component sourcing headaches and increasingly obscure and forgotten operational quirks. Their rigidity makes them reassuringly stable but slow to adapt, unsuitable for the rapid innovation driven by 5G. Modernization for such setups is complex, risky, and costly, making it a strategic imperative to avoid accumulating liabilities being postponed to another quarter.    

Obsolete security  

Virtually all hardware eventually ages beyond vendor support. Thereafter, lacking crucial security patches and updates, it grows increasingly vulnerable to intrusion, breach, and non-compliance.    

Virtual networks 

Virtualized Network Functions (VNFs) were the first major step in freeing network architecture from physical hardware.  

They transformed traditional network components (e.g., routers, firewalls) into apps running on virtual machines (VMs). These VMs can be rapidly deployed on everyday commercial off-the-peg hardware, using ‘hypervisors’ like Linux KVM or VMware vSphere to allow multiple functions to be run in parallel on a single physical machine.  

VNFs offered multiple advantages over physical versions, primarily in scalability and flexibility. They allowed instant and finely calibrated dynamic capacity adjustment and enabled upgrades without new hardware. This improved efficiency, especially in optimizing WAN traffic. VNF management and orchestration could be further boosted by dedicated software like a VNF Manager to automate instantiation, monitoring, and scaling.    

Beyond the Virtual Machine  

However, as much as network functions running on VMs improved efficiency and reduced hardware dependency, they themselves still depend on local physical machines and will therefore always have limitations in a dynamic market.  

Cloud-Native Network Functions (CNFs) represented a more profound evolutionary leap, engineered for exponentially greater agility and efficiency. The shared resource of cloud models makes CNFs significantly more resource-efficient, especially for functions distributed across geographies or at the network edge.    

CNF’s allow ‘microservices’ for network functions, which means much more granular, distributed, and independently deployable components.  

Imagine hardware only having to exist for the few fractions of a second, exactly when and where it was needed.  

This fine-grained control and resource efficiency is essential for the sophistication and speed of 5G networks, establishing a clear progression where microservices enable cloud-native architecture, which in turn contributes to realizing the full potential of 5G architecture. 

The shift to CNFs allows ES functions to be broken into smaller, independently deployable microservices, enabling provisioning in precisely the volumes that a network operator needs.  

Benefits of Cloud-Native Entitlement Servers 

Adopting cloud-native architectures for Entitlement Servers has provided a strategic edge beyond the simple benefit of having someone else look after your hardware. It’s fundamentally reshaped the operational capabilities and business models for MNOs everywhere. 

These core advantages include: 

• Scalability & resilience  

  Cloud-native systems are built for dynamic scaling, able to respond to fluctuating demand in real-time. CNFs acting as ES can hyperscale based on traffic and service requirements, preventing costly over- and under-provisioning for optimal resource utilization. Simple examples include rapid capacity boosts for major sports or calendar events like New Years Eve, which can be just as easily de-provisioned afterward.  

  Cloud-native applications are true to the founding concept of the internet itself, designed for enhanced resilience, to withstand failures and recover quickly. Redundant fail-over capabilities can be easily automated and support superior fault tolerance crucial during high-traffic events or emergencies.    

• Agile deployment  

  Cloud-native infrastructure slashes development and deployment cycles for exponentially faster time-to-market. This means operators can respond to market changes and deliver new features in a fraction of the time needed by hardware acquisition, securing a powerful competitive advantage. The ability to quickly experiment with, deploy, and monetize new services such as Dynamic Network Slicing and Specialized IoT (both of which we cover later on in this article) transforms MNOs into agile enablers bold enough to explore new use cases.    

• Cost efficiency 

  Going cloud-native offers substantial cost optimization with what is essentially a pay-as-you-go model, radically reducing both upfront CAPEX and ongoing OPEX. Anecdotal reports by operators quote as much as 60% reduction in CAPEX simply by cloud consolidating their network functions.  The increased efficiency in terms of human resources is also enormous, with in-house dev teams freed up to focus on app design and meeting the demands of relevant customers.    

• Enhanced API Integration 

  Application Programming Interfaces (APIs) are fundamental to cloud-native infrastructure, enabling smooth communication and integration between systems that might be wildly disparate in age, sophistication, and location. Cloud-native structures are inherently API-driven, providing engineers with flexibility and admins with real-time event response.   

   

  The shift to cloud, with its emphasis on open standards and easy cross-platform compatibility, creates an open environment that gives MNOs greater choice from diverse suppliers, competitive pricing, and reducing vendor lock-in.    

• Environmental sustainability 

  Cloud telecom networks also offer significant environmental advantages. By dynamically scaling processing and storage minute-by-minute, resources and power are only utilized when there is actual demand, rather than being kept idle. This is the network equivalent of when office buildings switched to smart environmental monitors and stopped leaving skyscrapers fully-lit and air-conditioned over weekends and holidays.  

  The same CapGemini report that predicted a three-to-five-year transformation estimates that as much as 5% of all global greenhouse gas emissions could be saved simply through telco cloud transition.  

Enabling new services  

The combined capabilities of cloud-native ES and 5G will be pivotal in enabling the next-gen of dynamic and specialized services, some of which are already transforming how mobile network operators deliver value and generate revenue. 

Dynamic Network Slicing   

Network slicing is a ground-breaking 5G tech that allows Operators to create on-demand, isolated, end-to-end networks on pre-existing and shared physical infrastructure. Much like the concept of VMs and VNF, this is the ability to digitally replicate what until recently would require a dedicated hardware project.  

Each network ‘slice’ is created on-demand and overlaid, customized for specific business or event purposes, and given its own separate service level agreements, QoS indicators, security, and regulatory compliance.    

Typical for any network function that depends on automating what device is allowed which privileges, ES are crucial for managing access and enforcing policies for these separate slices.  

Apple has already incorporated this next-gen tech into its ecosystem with the 5G Network Slicing Traffic Category entitlement, for operators and apps to create on-demand cellular networks. 

The main advantage slicing gives operators is the ability to create highly differentiated service tiers tailored to specific traffic or usage profiles. Slices can be customized with new customizations, such as Massive Machine Type Communication (mMTC) for low-bandwidth devices, Ultra-reliable Low Latency Communication (uRLLC) for critical and latency-sensitive uses, and Enhanced Mobile Broadband (eMBB) for high-bandwidth occasions.  

Slicing, backed by 5G and cloud ES, could support a situation where event attendees connect to eMBB slice to livestream, while hospitality IoT devices are on a mMTC slice, and the self-driving vehicles transporting the crowds have their own uRLLC – all without needing a single new bit of networking hardware.  

Specialized IoT management 

Industrial IoT use cases are as tough as the devices themselves, demanding high availability, rugged reliability, ultra-low latency, minimal jitter - and all for the most frugal power consumption.  

5G is the only tech that has a chance of keeping pace with the growing demands and ambition of the IoT sector, much of which has already exceeded what can be supported by LTE or Wi-Fi. Private 5G is ideal for connecting a high-density fleet of IoT devices in network-confined areas, providing infrastructure for low-latency, high-speed data transmission, robust security, and failover protection for uninterrupted uptime, even without public cell network coverage.    

Private 5G combined with cloud enhanced ES enables a wide range of advanced use cases, with technologists citing examples such as efficient Automated Guided Vehicles (AGVs) in factories, Extended Reality (XR) headsets for remote expertise, high-volume Ultra-HD cameras for machine vision, and remote control of critical industrial plants.  

Other IoT relevant new applications also include Network Exposure Function (NEF) to simplify and enable next-gen asset tracking. Just as with the service specialization made possible by Network Slicing, the granular management of cloud-native ES is essential for ever-evolving fleets of IoT devices to receive precise and compatible network profiles, quality of service, and security updates.    

Emergent services  

Network Slicing and Specialized IoT is only the tip of the iceberg when it comes to 5G capabilities, and any article trying to list the emergent use-cases would be out of date before anyone finishes reading it. Some of the most promising include immersive Wearables like Augmented Reality (AR) and Virtual Reality (VR), enhanced video streaming with guaranteed QoS, and sophisticated enterprise self-service portals leveraging network programmability to turn what would been weeks of engineering into a manager just selecting a new network template from a drop-down menu.  

Next steps 

The nature of ES’s role as gatekeepers necessarily includes determining who has paid up for what. Even if the sophisticated state of global telco wasn’t already driving the evolution of the ES, the proliferation and specialization of services becoming available certainly would.  

While ES is already essential architecture for operators due to its sheer speed of automation, it’s now even more so due to the diversity and granularity of services that clients will demand. Only by leveraging cloud-native ES capabilities can operators effectively monetize the growing range of advanced 5G features.  

Any agile MNO's business strategy is going to be increasingly dependent on 5G, and that in turn that will be dependent on cloud-native entitlement management system, making ES a non-negotiable asset for revenue generation. 

The evolution of ES from traditional hardware appliances to cloud-native architecture is having a profound effect on the global telco market, and is pivotal for realizing the full potential of 5G.  

Physical ES still underpins the vast majority of network traffic but (as is the fate of all hardware) will inevitably and increasingly feel the pinch of manual scaling, high fixed costs, and rigidity.  

The initial upgrade to Virtualized Network Functions offered efficiency improvements and respite to a lot of Operators, but the true paradigm shift is in the form of fully cloud-native functions with Entitlement Servers controlling on-demand networks and microservices for future-proof agility, hyperscalability, and cost efficiency.  

To learn more about how 1GLOBAL ES can seamlessly enable new products or network features tailored to your product offering, contact our experts now.