Telefónica and NEC win innovation award for virtualized home gateway trials

Virtualized consumer broadband services are helping to reduce operational costs but also pave the way for many more home entertainment service innovations

Spain, Brazil & the UK, January 12, 2015 – Telefónica and NEC Corporation (TSE: NEC 6701) have won the award for the best fixed network innovation project of 2014 for their virtualised CPE (vCPE) trial which is helping to reduce access broadband network costs while providing a platform to accelerate future service innovations. The trial is taking place in Brazil where Telefónica operates under the Vivo brand and provides broadband as well as landline, cable TV and mobile services.

Telefónica and NEC were the first companies in the world to begin virtualizing consumers’ broadband gateways in October 2013. The simplified gateway provides basic connectivity, acting as an access point, switch and modem. All other IP routing (IPv4 and IPv6), Dynamic Host Configuration Protocol configuration and Network Address Translation functionality is provisioned remotely from the cloud, running as virtualised network functions (VNFs) on commercial-off-the-shelf (COTS) servers.

A simplified home gateway is less prone to breakdowns and fixes or upgrades to firmware, bandwidth or memory can be provisioned remotely, eliminating costly engineering visits to the customer’s site. Vivo’s existing customers are using their current home gateway as a virtualised router and migrated functions are disabled remotely. By not having to ship a new box operators can benefit from savings of up to 30% according to NEC’s global study. A simpler, inexpensive gateway can be provided to support even advanced services for new customers.

Virtualized IP edge functions are hosted on general purpose servers, which can be dynamically up-scaled and hibernated in line with demand to minimise power usage and equipment costs. In addition, a single datacenter could be used to support virtualized home entertainment services across multiple countries in the future to provide economies of scale.

Additionally, to introduce new services operators often need to send out engineers to reconfigure or replace the gateway when it lacks the performance power and flexibility to add in new functionality leading to an excessive number of costly truck rolls. As a result, traditional CPEs are not very agile and able to dynamically adapt to offering and deploying additional services rapidly and cost-effectively without implementation issues and customer involvement. A vCPE solution tackles this challenge by simplifying the equipment installed in customer premises to bare connectivity (access point, switch and modem functionalities) and delivering network services through virtualized network functions (VNFs) running on carrier-grade commercial-off-the-shelf (COTS) servers in its network.

Enrique Algaba, Director of Network Innovation at Telefónica I+D – Global CTO Unit, said, “We’re delighted to win this innovation award, which recognizes the progress we’ve made to date in this journey from point of view of technological availability. We’re now on track to launch the virtual CPE to our customers.”

Kazuya Hashimoto, Executive Vice President of NEC’s Carrier Division in Europe, commented, “NEC’s vCPE trial with Telefonica is about giving consumers easier access to wider choice of broadband services and reducing the number of helpdesk calls they need to improve satisfaction levels and revenues. Telefonica is also being a trailblazer, showing that it will be possible to develop, deliver and support virtualized entertainment and communications more quickly and flexibly.”

NEC’s vCPE solution will be featured at Mobile World Congress in Hall 3 on stand #3N10 on 2-5 March 2015.

About NEC Corporation

NEC Corporation is a leader in the integration of IT and network technologies that benefit businesses and people around the world. By providing a combination of products and solutions that cross utilize the company’s experience and global resources, NEC’s advanced technologies meet the complex and ever-changing needs of its customers. NEC brings more than 100 years of expertise in technological innovation to empower people, businesses and society.  For more information, visit NEC at

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