Quantum technology has great potential, but can telcos really profit from it?
- BT is exploring options to offer quantum computing as a service (QCaaS) in the future
- Challenges to deploying quantum-based technologies remain, but the UK operator is hopeful market demand will pick up
- ABI Research Michela Menting is doubtful about the market need for quantum key distribution (QKD) capabilities, despite its touted security benefits
- Telcos will need to focus on niche markets with deep pockets if they are to develop a business case for quantum technology investments and deployments, believes Menting
BT is betting big on quantum key distribution (QKD) technology to enhance security in telecoms networks, but an industry analyst has cautioned that telcos need to carefully consider how they develop, deploy and pitch the innovation so they don’t expend a lot of time, effort and R&D investments in vain.
Andrew Lord, senior manager of optical networks and quantum research at BT, told TelecomTV the UK operator is looking at how it can develop a commercial quantum computing as a service (QCaaS) offering for enterprises and organisations that want to benefit from the power of quantum computing without having to deploy and manage their own platforms.
“When you run up a model on a quantum computer or programme, sometimes it only takes a second to run. It’s not worth buying a quantum computer to do that. What you need to do is just have access – I think that’s something BT could offer,” he explained.
Lord envisages a model where there could be “just a small number” of very powerful quantum computers, and customers “buy time on them and that time is via a very secure network”.
While part of BT’s team is engaged in exploring such options, others are assessing the potential in-house use of quantum computing for the telco, including for solving “very difficult BT problems, such as telecom optimisation logistics”. The company is also looking at the role of quantum sensors in its labs in the UK.
Although Lord did not commit to a timeline when he envisaged such QCaaS services could be made commercially available, he noted that BT is already “heavily involved” in a three-year project to develop the so-called quantum datacentre of the future, which aims to build use cases around quantum access to datacentres.
Working on quantum-based solutions is something the UK operator has been focused on for a few years. Earlier this year, BT touted itself as a pioneer in launching the world’s first commercial quantum-secured metro network with Toshiba, for which it attracted Ernst & Young as the first big client. Eventually, its goal is to sign up thousands of customers to use the innovative data transport network, which uses QKD to distribute encryption keys on individual particles (photons), a method that promises more advanced security capabilities. (See BT targets thousands of businesses with its new quantum-secured network.)
The market might not be entirely ready yet, though.
Stumbling blocks on the quantum road
Lord admitted there are numerous hurdles to overcome in the QKD sector. Among the most significant is complacency, an industry lack of urgency, he says. And because quantum computers that are advanced enough to crack security codes are not yet available, some people are tempted to wait until QKD is a necessity, rather than preparing in advance.
“But if you [wait], you then have to move infinitely quickly to get something in place. So we’re urging good preparation,” he added.
Another challenge is the widespread feeling that quantum computing is overly complicated or still just a research topic. He noted, however, that quantum computers are commercially available, and people don’t need to understand the absolute details of it in order to make use of such technology: “It works like other systems... there’s an educational kind of challenge there as well,” noted Lord.
Then there’s the problem of scale. As quantum technology is still in its early days, there aren’t “hundreds of vendors”, so there isn’t a lot of choice and differentiation as yet. “Ultimately, there has to be, so if we start to install lots of these, we would want some choice, we’d want to be able to choose a vendor according to their capability, their cost, and so on,” he emphasised.
According to the BT man, there is still “a reticence” from established communities, such as the UK’s National Cyber Security Centre (NCSC), when it comes to going through proof tests of the technology. BT assures, however, that it is working closely with the agency on the matter.
He also suggested the UK government could focus more on initiatives to promote the studying of quantum and, more broadly, understanding science at school – an approach he noted was used in other countries, such as Singapore.
According to Lord, the adoption of QKD by the market will be a slow process but his expectation is for BT to quickly expand its own resources next year to handle the number of customer requests regarding the technology. “The next 18 months is when we’re going to see this start... to see exponential growth,” he stated.
He reaffirmed that BT has the ability and capabilities to build a nationwide quantum-secured network, but the telco still needs to do some work on the design of its architecture which, he said, is something that can be done relatively quickly. He also suggested satellite companies might also play a role in providing quantum-secured international connectivity.
So far so good, but other industry experts list many more obstacles to a QKD future. Michela Menting, digital security research director at ABI Research, told TelecomTV there are a few major deployment challenges for quantum-secured networking, particularly range (as the current distance is approximately 100km, with some pilots reaching 300-400km), and moving beyond point-to-point architectures.
“Transmission beyond 100km requires the use of repeaters, at least for fibre optics, at least every 2km to 50km of optical fibre. These will be necessary to be able to deploy quantum networks and connect multiple senders and receivers and, in time, to create a quantum internet,” she explained.
And, because commercialisation of repeaters is still in its early days, price points are in the $25,000 to $50,000 range, making it “rather prohibitive”. She added: “Vendors not only have to provide affordable photon detectors and create quantum repeaters for fixed-line communications, they also need to solve degradation issues over long distances, both in ground and air communication links.”
In terms of operators that aspire to build a national or even a global QKD-secured network, she noted that such an endeavour is “a significant capital expenditure with an uncertain payout – not least because there is the nagging question of whether QKD answers an actual need in the market”.
Menting continued: “It may well be of interest to a niche target market that wants to use high-security private networks, such as military/defence, government and BFSI [banking, financial services and insurance]. But does that usage justify the investment associated with the development of a QKD capable network? Operators will want some kind of ROI [return on investment] for the effort. Looking at this from a mass rollout perspective, it all seems very unlikely.”
Yet another issue is that QKD is a key exchange mechanism that uses quantum physics but, in Menting’s words, the actual cryptography it uses is “not quantum-safe in and of itself”. As a comparison, post-quantum cryptography (PQC) can bring quantum security affordably – “the development of algorithms and protocols that are quantum-safe and can be deployed without the development of dedicated quantum-based hardware. A much cheaper (if still complex) alternative, although it is not quite fair to compare QKD with PQC directly; they are different technologies with different intended use cases,” noted Menting.
While PQC is promising to secure all cryptographic operations, QKD is simply a means of sharing cryptographic key pairs over a network. That makes the latter “a niche offering targeted at a niche market that will be costly to roll out and upkeep”.
How can telcos make gains from QKD?
According to Menting, operators have to readjust their marketing and not focus on the mass market if they’re keen to build a business case around the use of QKD technology. “It is for a niche market of stakeholders that have unlimited security budgets and very high (and exclusive) security requirements,” she said. Those niche markets include military/defence, national security, and banking and financial services. She added that governments and the banking, financial services and insurance (BFSI) sector are ready to embrace and advance QKD, and they have a lot of funding available for it.
The ABI Research analyst also addressed the potential move by BT to offer QCaaS, saying that, typically, clients that need high security do not like to share their networks and want these to be as physically separate as possible. Menting gave an example of US embassies that usually get their own, dedicated fibre lines rolled out at a premium cost. “This is a highly lucrative market, if niche. Operators would need to target subsidiaries of a larger organisation (such as a government and various departments, or a multinational and its subsidiaries) to get any real traction with QaaS [Quantum-as-a-service],” she added.
While telcos are well positioned to offer such services, it is expected that hyperscalers and cloud service providers will be “equally, if not more, capable and certainly much more aggressive” in this area, she concluded.
- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV
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