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The Time for Mobile Network Operators to Move to NFV is Now

By Joe Rizzo July 16, 2015

We live in a generation where everyone wants to be, or possibly even needs to be connected all the time. Video streams are available to all mobile devices, relating to a rise in mobile network traffic. In fact, according to an ACG Research report, mobile network throughput will increase at a 50 percent compound annual growth rate (CAGR) over the next five years.

When you add to this the fact that technology has matured and evolved to the point where more and more devices are connected to each other, you will see that over the past few years machine-to-machine (M2M) traffic has greatly increased. As the Internet of Things (IOT) connects even more devices and creates a greater load of mobile network traffic, the question arises as to how mobile network operators (MNOs) will handle the additional loads.

There are two approaches that MNOs can use; the first is the method that has been used up to now. The traditional method is to create a proprietary system designed to add new features and additional functionality, hopefully extending the current network capacity. This tends to be a process that generally takes on average 15-16 months.

The second method, which is much faster, is a virtualization approach. A software-based solution that allows for deployment on commercial off-the-shelf servers and is managed in a virtualized environment is a much more cost-effective method. Network functions virtualization (NFV), allows MNOs to take advantage of this approach giving them the ability to add network functionality along with capacity.

A new study conducted by industry research firm ACG and sponsored by Affirmed Networks and VMware was released this morning. The Total Cost of Ownership (TCO) Study provides a detailed business case which outlines the benefits that MNOs can realize by moving to an architecture based on NFV.

According to Affirmed’s vice president of strategic alliances and systems engineering, Amit Tiwari, Affirmed Networks was founded with a vision of the many benefits that NFV would deliver to operators from both a cost and revenue perspective. This was proven at last year’s Mobile World Congress when AT&T laid out a roadmap to its envisioned network of the future, in what it referred to as the user-defined network cloud, where Affirmed Networks would be supplying an essential piece of AT&T's next-generation network puzzle.

Essentially, the problem that MNOs face is how to keep their expenses down and maintain their revenue stream, while at the same time providing better service and offering more functionality to their customers. Although it appears that an NFV approach is the most cost effective way to proceed, the report shows that if MNOs take too much time to think about it, the decision to delay network virtualization might be a costly one.

Some of the findings from the report include:

Image via Shutterstock
  • MNOs that transitioned to an NFV-based platform would begin saving money in the first year and realize an investment payback in 3 years.
  • Adopting a virtualized Evolved Packet Core (EPC) solution will reduce capex by 68 percent and opex by 67 percent on average.
  • Mobile operators are able to deploy a virtualized network much more quickly (typically in less than 6 months) than they are with traditional networks (15 months on average) resulting in quicker time to market and time to revenue.

Due to the fact that M2M and IoT have created a lot of connections, causing a significant increase in data traffic, capacity planning has become a sort of hit and miss option. Predicting how much network capacity will need in the future is challenging to every network operator. Since virtualized deployments can be accomplished in considerably less time than traditional network deployments (six months versus 15+ months), MNOs can make more accurate predictions and carry less excess capacity during the turn-up phase.

We will continue to more devices communicating with each other, in addition to seeing more mobile customers taking advantage of video streams increasing their data traffic. For MNOs, the cost of delaying a move to virtualization could be a costly mistake. There is a need to significantly reduce capital and operational expenses as network operators ramp up for the surge in mobile data and M2M traffic.

By moving to an NFV-based solution now, ACG Research believes that MNOs can realize their return on investment within just a couple of years of deployment which will lead to greater savings over the next five years. It is important to keep in mind that savings are predicted on a robust NFV solution that offers critical capabilities.

Edited by Dominick Sorrentino

Contributing Writer

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