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Disrupting Telecom SDN NFV
Key findings of the survey
During the last years, the Information, Communication and Technology hyper sector has been characterized by continuous innovation and transformation in the way communication takes place between peers and who and how value and services are provided to end users. On the road to innovation and sector transformation, some technologies have been adopted to achieve higher efficiency in service provision or to add new services to the ICT ecosystem, but only a few of them have been able to disrupt the ICT sector itself. We believe that Software Defined Networks (SDN) and Network Function Virtualization (NFV) technologies belong to this selected group of technologies with great transformative potential. We present the summary of results of a survey made by Deloitte among telecom operators worldwide in order to pulse the momentum and expectations regarding this technology.
In order to carry out the following survey, the main telecommunications operators have collaborated as respondents, contributing and providing their point of view about SDN/NFV technology implementation level, main concerns and drivers of introducing such technologies and finally, about the level of impact inside and outside the telecommunications sector.
To achieve a significant sample, during the survey over 300 answers have been analyzed from 8 operators, with a presence in several countries, which totalize over 900 million fixed/mobile subscribers worldwide. Taking into account the current location of the operators’ headquarters, the region which accounts for the highest participation has been Western Europe.
The respondents selected to do the survey, were mainly CTOs, CEO and CMOs in telecom operators, these positions have the technical and business skills to know the implications of SDN/NFV technologies in the telecom sector.
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The outcome, after the telecommunications operators responded, consisted of a global outlook at a strategic-technical level of the impact and advantages and disadvantages of SDN/NFV. To this end, a division in the following three fields has been carried out
- Technology: Comprises the main issues related to technical characteristics, efficiency, maturity, entry barriers and impact of the new implementations
- Commercial: SDN/NFV capabilities expectations regarding new B2B/B2C services, evolution of current BSS and future strategies
- Regulation: Strong changes at network level will force questioning current regulation and potential changes in the near future
Key findings of the survey
- Interviewed companies foresee savings both in CAPEX & OPEX in NFV. Most relevant savings correspond to service platforms and CPE (Customer Premises Equipment)
- SDN/NFV will impact positively in the improvement of network flexibility and scalability. CAPEX & OPEX savings will come mainly from this flexibility and scalability improvement, with less importance in OPEX O&M and network utilization efficiency. Time to market for new services will impact also positively in operational efficiency
- The main barrier as for the operators is integration with legacy systems and, secondly, the interoperability among different vendors. Regulatory uncertainty and security are not seen as a barrier for SDN/NFV adoption
- Service platform and network management are the most mature segments in SDN/NFV developments, but operators are analyzing potential of these technologies in every network segment
Open source ecosystem
- Operators agree that open source solution may be attractive but are relatively concerned by security issues when using open-source solutions
- Most respondents think that the best solution will be a mix of open-source and proprietary solutions. For instance, most operators plan to use OpenFlow based SDN standards
- SDN/NFV services will be provided by traditional network equipment vendors (e.g. Cisco, NEC)
- SDN/NFV is being studied by efficiency issues and improving time to market of telecom services. Only a few operators foresee revenue improvement or changes in the services portfolio, which are secondary drivers
- However, most operators believe that new portfolio services, will be created based on SDN/NFV capabilities
- Pay-as-you-go and free trials are the most foreseen new business models
- SDN/NFV is foreseen to have more impact in B2B services, including security and bandwidth/connectivity services on demand
- Telecom operators believe that current regulation is obsolete but they are willing to make changes to support SDN/NFV in the future
- Some Telecom operators consider SDN/NFV network elements must not be regulated
- Among the topics of net neutrality, telecom operators are divided 50/50 between those who prefer:
o Moderately regulated (freedom to QoS, Quality of Service, for wholesale and retail services no content prioritization, and not allowing content blocking)
o Moderately deregulated (content providers pay the QoS, content prioritization and allowing content blocking)
Fernando Huerta Aguirre
Partner in charge of Deloitte's Telecommunications industry group in Spain
+34 914 432 540
Santiago Andrés Azcoitia
Senior Manager of Deloitte's Telecommunications industry group in Spain
+34 914 432 676
Carlos Sánchez Marcos
Senior Consultant of Deloitte's Telecommunications industry group in Spain
David Martín Lambás
Consultant of Deloitte's Telecommunications industry group in Spain