Home Latin America 2014 Virtual reality: What mobile network functions virtualization means for the Americas

Virtual reality: What mobile network functions virtualization means for the Americas

by Administrator
Chris PearsonIssue:Latin America 2014
Article no.:7
Topic:Virtual reality: What mobile network functions virtualization means for the Americas
Author:Chris Pearson
Organisation:4G Americas
PDF size:202KB

About author

Chris Pearson is the President of 4G Americas. In his role as the spokesperson and senior executive of the corporation, he is responsible for the strategic planning of the organization and providing management for the integration of strategy and operations in the areas of technology, marketing and public relations, as well as public and regulatory affairs. Mr. Pearson has more than 26 years of experience in the telecommunications industry and has spoken at technology conferences throughout the world including Mobile World Congress, CTIA and 4G World.

Article abstract

More than 200 network operators, infrastructure vendors and other companies worldwide are working on NFV standards, products and services.

Along with the bottom-line efficiencies and competitive benefits, it can give mobile operators in the Americas confidence that NFV has a bright future.

Full Article

NFV has become a hot topic in telecom over the past year. What is it? And what does it mean for mobile operators and their customers?

NFV is short for Network Functions Virtualization. It is one of those rare concepts where a possible “paradigm shift” is not a hyperbole because it fundamentally changes how telecom networks are designed, built and operated, as well as the services that run over them.

Wireline, cable and mobile networks have all traditionally used infrastructure designed specifically for the telecom industry. This approach has several drawbacks. For example, the proprietary nature of those boxes limits the diversity of infrastructure choices for operators as they evolve their networks.

Purpose-built infrastructure can also sometimes limit innovation because when operators or their business partners want to create new services, they often have to wait for either new equipment or specialists to come in and reprogram the existing gear to perform new tasks. This is a complex project; meaning new services may take longer than they should to start improving customers’ lives.

NFV aims to eliminate those and many other drawbacks by breaking tradition. The NFV name describes how services that were traditionally implemented in and locked to proprietary hardware are now virtualized, meaning they can be implemented entirely as software. As a result, those services can now typically run on off-the-shelf servers, switches and other IT gear. In fact, NFV eventually enables mobile operators to have data center providers to host some of their network infrastructure.

Virtualization is not a new concept; the IT world has used it for years, including for the foundation of cloud computing; therefore, it is a proven concept in parts of the IT world. The concept received a boost in October 2012, when the European Telecommunications Standards Institute (ETSI) released a white paper titled, Network Functions Virtualisation: An Introduction, Benefits, Enablers, Challenges & Call for Action, explaining how NFV benefits network operators and their customers.

Source: ETSI

What are some of those benefits?

The major ones are:

• Reduced capital and operating expenses (CapEx and OpEx). For example, on the CapEx side, mobile operators could use more off-the-shelf equipment and thus leverage the IT world’s economies of scale.

On the OpEx side, mobile operators can leverage solutions that IT vendors have developed to automate processes such as onboarding, provisioning and service activation. Although telecom applications are often more complex than IT applications such as e-commerce shopping carts, mobile operators can still apply many of those types of IT innovations.

There are also significant potential OpEx savings from the way that NFV minimizes the number of disparate, proprietary platforms and operating systems. This could enable greater efficiency in installation, administration and maintenance of the physical infrastructure.

• Faster development and rollout of new services. NFV avoids the complexity that comes with proprietary and hardware-centric services. As a result, new services could have faster time to market and expand revenue; which is also an example of how mobile operators are using NFV to gain competitive advantages. These advantages are not only over fellow mobile operators that are slow to embrace NFV, but also over cable operators and telcos that are not aggressively implementing NFV. In that sense, NFV builds on mobile’s history of bringing telephony and broadband to underserved markets.

• More flexibility. NFV enables mobile operators to scale services up much more quickly than they can in the traditional hardware-based, telecom specific world. NFV’s ability is critical because mobile data traffic continues to skyrocket. In 2013 alone, global mobile data traffic grew 81 percent to 1.5 exabytes per month, according to Cisco’s Visual Networking Index. Another example is when a new service turns out to be more popular than an operator expected. Being able to scale up to meet demand ensures that the service’s quality doesn’t suffer, which would undermine its potential as a revenue generator and market differentiator.

Flexibility also includes a broader, deeper selection of vendors to choose from, such as for virtual appliances and software. This enables mobile operators to choose best-of-breed solutions or to mix vendors to create exactly the service or application that will help them stand out in the marketplace.

• Less risk. By reducing the CapEx and OpEx of new services, as well as their development costs and lead time, mobile operators have a lower investment in each new service. This reduces their risk, which could make them more inclined to try services they would not consider in today’s hardware-centric world.

What is the status of NFV among mobile operators in the Americas?

More than 200 network operators, infrastructure vendors and other companies worldwide are working on NFV standards, products and services.

Along with the aforementioned bottom-line efficiencies and competitive benefits, it can give mobile operators in the Americas confidence that NFV has a bright future.

AT&T is one example of how aggressively some operators are migrating to NFV. In September 2013, it launched Domain 2.0, a program that makes NFV a key criterion when selecting vendors for all of its networks, including mobile. By March 2014, AT&T had already moved 20 percent of its internal applications to what it calls a “User-Defined Network Cloud,” which enables it to begin the separation of software from hardware.

Another example is Telefónica, which has a two-year schedule for rolling out NFV worldwide, including Latin America. It recently created a reference platform and lab to help vendors and partners develop NFV solutions quickly.

Regardless of the operator, some parts of the mobile network are migrating to NFV before others. For example, the analyst firm Heavy Reading said earlier this year that “the 3GPP Evolved Packet Core (EPC) has emerged as a leading candidate for NFV, and progressive operators are already starting to deploy virtual EPC in their networks.” Heavy Reading expects those progressive operators to finish their virtual EPC deployments by the end of 2016. Those operators would not be moving so aggressively if they were not convinced that NFV gives them competitive benefits they cannot get with traditional telecom architectures.

The EPC aspect also highlights how NFV is a journey rather than a destination. Mobile operators have the freedom to deploy or migrate services and network elements when it is right for them and their customers. NFV does not have a rigid set of steps that every operator must follow.

In that respect, NFV is like LTE-Advanced in which operators can deploy features when it makes sense for their particular situation. Mobile operators can pick and choose the best NFV features for their network evolution strategy. For example, some mobile operators have made Carrier Aggregation their first step in upgrading to LTE-Advanced. With NFV, some operators are beginning with the core network before expanding virtualization for their Radio Access Network (RAN). Others are focusing on the IP Multimedia Subsystem (IMS). The exact nature of NFV implementation depends on an operator’s specific network transformation strategy.

Some operators are studying whether or not NFV is an opportunity to eventually outsource some of their RAN, EPC or both. The reasoning is that if the RAN and EPC can use off-the-shelf IT infrastructure, then perhaps a data center provider could host that equipment, thus providing additional efficiencies and possible CapEx and OpEx savings. One thing operators are studying is how to ensure that a hosted model does not compromise longstanding, key requirements such as five-nines (99.999 percent) uptime.
Hosted RAN and EPC are another example of my earlier statement about why it is not a stretch to say that NFV marks a possible paradigm shift. It gives mobile operators many more options when it comes to technology, services and business models.

How does NFV fit in with Software-Defined Networking (SDN)?

AT&T’s Domain 2.0 press release does a good job of comparing the two: “SDN is an architectural framework for creating intelligent networks that are open, programmable and application aware. NFV is the process of decoupling hardware from software that transforms dedicated network functions into software-based virtualized network functions that can operate in a common, standard, execution environment.”

Source: ETSI

The telecom industry is implementing SDN basically in parallel with NFV. Some mobile operators are focusing their initial SDN efforts on backhaul, where it enables them to manage bandwidth more efficiently and effectively. A recent Strategy Analytics study estimates that SDN backhaul alone could save mobile operators US$9 billion in OpEx by 2017. A previous Strategy Analytics study identified another US$4 billion in CapEx savings by 2017—that is US$13 billion that mobile operators can plow into developing innovative services and expanding their networks in addition to their NFV savings.

In North, Central and South America, there were 93 HSPA and 89 LTE mobile broadband commercial networks, and more than 717 million mobile broadband connections as of June 2014 which presents wireless operators with a huge opportunity to utilize NFV.

NFV is a paradigm shift that is present today and a possible key to the future of mobile broadband operators.

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