Looking back over the past year, the most overused acronyms seem to be NFV (Network Function Virtualization) and SDN (Software Defined Networks). With so much hype surrounding these abbreviations, it can be difficult to identify what they actually mean. They are touted as disruptive technologies, which, to me, mean they will have a positive impact on the value chain for Communications Service Providers (CSPs).

I have been studying the positive impact of NFV, and the effect it will have on a mobile network operator. One of the most important things that NFV has the potential to achieve is positive cost reduction, and this is why I have come up with an alternative, and, from a financial perspective, a more accurate meaning of NFV — New Financial Value.

CSPs are faced with a myriad of complexities in network infrastructure procurement, for example: the licensing costs per subscriber, the cost for node license, capacity licensing, software licensing — the list goes on. Due to these complex costs, I maintain that it is an almost impossible task to come up with a highly accurate cost per subscriber, per month. Imagine if you could simplify the whole software buying cycle. No more license costs for capacity, subscribers, number of nodes etc. with a single charge.

The challenges involved in the exponential growth in data and the number of subscriber additions, together with machine to machine (M2M) traffic, such as wearables and automotive contributing to decreasing revenue per user factor, have never been greater. The opportunity to begin your NFV strategy has never been bigger.

Let’s take a look at what the telecom equipment manufacturer’s approach has been to NFV. So far we have seen proprietary hard and software ported over to virtualization of the various different network nodes, HSS, P-GW, S-GW etc. and their placement onto virtual machines running on Common Off The Shelf (COTS) hardware. So exactly what has changed with their approach? Nothing. The same nodes still exist, the same complexities of managing expansion, the same license cost.

NFV is just one technology that fundamentally changes the CSPs business into the data centre and cloud services model, allowing associated savings by running networks on COTS and more cost effective infrastructure. It allows for rapid expansion, earlier creation of services and the ability to create products in short timelines.

But NFV goes further than a change in technology; it fundamentally changes the value chain positively along with the procurement cycle. CSPs have to focus on the business and operational transformation to maximize the NFV opportunities and benefits. This goes all the way through the entire CSPs business, from planning to procurement, and design to implementation.

Here at Azenby, we are all change agents. Looking back over thirty years since most of us were involved in the launch of the first UK mobile networks, we have seen the transformation of the wireless industry and networks progress from 1G to 4G — and now we see the introduction of NFV. With our extensive knowledge of NFV, knowing the implications, the benefits and the positive value chain impact, we are well positioned to guide you through the profound change NFV will bring.

The time is right for extracting New Financial Value – NFV and unlock the hidden revenue in your network enabled with NFV.