Every Telco Should Have a Virtualisation Strategy

Every telco should have a Virtualisation Strategy and a Roadmap whether it’s a fixed telco, MNO or both. This goes for virtual network operators such as MVNOs and CSPs, too.

Conceived some five or six years ago, NFV is poised to revolutionise the industry. It is a truly ‘disruptive’ technology development.


  • Together with SDN, is a key enabler for the future world of 5G and Internet of Things (IOT)
  • Brings the unit cost of production down radically, not by some percentage points, but by an order of magnitude
  • Speeds up time-to-market significantly. It is possible for telcos to move at the innovation speeds of OTT players when they adopt NFV with suitable delivery processes.
  • Has the potential to trigger new business models both in the vendor and in the operator space. Diversity in suppliers and in CSPs is inevitable in the future 5G world.

NVF enables true IaaS (Infrastructure as a Service). LTE platforms such as EPC and IMS are already available as a service off the Cloud, today.

IaaS opens up business models where networks are delivered as a Managed Service. Telcos don’t have to build and operate all or some of their networks anymore. They can buy it as a service even on a pay-as-you-go basis with no or little capital outlay.

Virtualisation in a Cloud environment generates efficiencies beyond the direct benefits of NFV, particularly where fixed and mobile networks of a telco get optimised together and so do the NT and IT platforms and organisations.

Also, Groups with networks in different countries can leverage IaaS to share core networks and service platforms in a shared centralised or distributed cloud facility. This strategy would bring organisational efficiencies, as well, of course.

Managed Service delivery of network platforms leveraging NFV breaks down the old payment models. Operators can avoid heavy capital investment requirements traditionally necessary to deploy new technologies like 4G and 5G. Instead, they can pay as they grow. They should be demanding such changes of their vendors.

Heavy, up-front capex burden is replaced by ongoing, pay-as-you-grow opex. Licence-based payment is replaced by a consumption-based model. Purchasing whole infrastructures made of ‘nodes’ is replaced by purchasing functions at a fraction of the old prices and deploying on COTS servers and storage. Coupled with SDN and automation, future unit cost of ownership should be radically lower and consumption-based payments so much more affordable.

Virtualisation, finally, breaks down the protective barriers of major network infrastructure vendors. There is a growing diversity of new players in the NFV eco system who present credible alternatives to the traditional vendors.

Whilst the major vendors appear to have embraced NFV, they continue to do it their way, delaying the true promise of NFV where (1) software and hardware are totally independent, and (2) ‘functions’ are sold as products, not ‘nodes’. Therefore, telcos should look at the upcoming vendors seriously.

Vertical IOT services lend themselves particularly well to the use of virtualised networks where telcos can deploy a dedicated separate core network for IOT in a cost-effective manner. Plus, the fact that IOT, like its forerunner M2M, requires a network solution which can achieve the low unit cost compatible with the low per-subscriber revenues gives IOT an ideal fit with virtualisation.

Similarly, virtualisation is an enabler for network slicing which gives mobile operators a new degree of freedom in running different networks, say, for different speeds and latency in an AI manufacturing environment or when extending the home network services and experience to another country for roaming customers, the latter being particularly relevant for MNO Groups.

Small Cells deployment for enterprise or for public wireless service at major venues is another area where a dedicated virtualised core network becomes attractive proposition for an MNO. Furthermore, it opens up the coverage delivery model where third parties can provide an end-to-end small cells service.

NFV is not, of course, constrained to the core network. Virtualisation is already spreading to the edge. Whilst not as advanced as core network platforms such as v-EPC and v-IMS, Cloud-RAN solutions are emerging, already.

After an exciting start with numerous vendor and operator trials a few years ago, NFV appears to have slowed down in the last year or so. Most telcos appear to be re-evaluating their virtualisation road maps, particularly, looking at their NFV infrastructure (NFV-I) such as data centres and IP transmission networks before building functions over them. Despite this relatively slow take-up by telcos, the NFV solutions available in the market have matured over this period and some are quite viable, now.

Relatively slow development of NFV management and organization (MANO), at least against the initial hype and promise, and concerns over 5G-type latency and reliability appear to have dented enthusiasm. The industry needs to support ETSI to move faster in order to avoid point solutions and/or de facto standards.

Nevertheless, there is quite a significant momentum around virtualisation. Some examples below serve to illustrate the importance of virtualisation to the industry.

  • AT&T seems to be setting the pace with their comprehensive virtualisation programme
  • Vodafone is also bullish having implemented some early SD-VPNs and is looking at deploying a shared IMS for ten of their businesses globally
  • DT and SKT lab-trialled intercontinental network slicing for their future 5G roamers
  • Although Orange and Telefonica appear more cautious, they are still running virtualisation programmes
  • Leading mobile operators are sponsoring an international programme to accelerate Virtualisation
  • Vodafone has contracted Nokia Nuage Networks to connect its global data centres
  • Softbank has contracted Affirmed Networks for its virtualised IOT and enterprise connectivity services
  • TIM is providing a virtualised VOIP solution for the Italian Post company
  • TA Belarus subsidiary, Velcom, has announced that it is moving its entire core architecture to cloud
  • Three UK has contracted Nokia to develop its cloud-based core network in preparation for 5G.
  • Nokia has shown that network slicing isn’t just for mobile networks by launching their solutions for fixed networks
  • Telenor has announced a three-country virtualisation programme ahead of 5G using Ericsson’s Cloud Core solutions.

Given its enormous potential, every telco should;

  • Have a Virtualisation Strategy and Roadmap
  • Be developing their NFV-I plans
  • Be conducting trials and/or small-scale deployments – For example, for M2M or Small Cell deployments
  • Optimise their data centres for NT and IT
  • Ensure security is built in from the start (https://azenby.com/archives/2562)
  • If a global telco, be looking at shared NFV platforms
  • Consider Network Slicing in their spectrum strategy
  • Conduct six-monthly surveys of the market for solutions and vendors
  • Be buying network equipment which is NFV upgradable
  • If buying NFV solutions, should be demanding consumption-based pricing
  • And should be careful to ensure interworking of functions from different vendors, especially where they might be bringing in new-world NFV vendors alongside their incumbent tier-1 vendors who might not automatically cater for that smooth interworking and integration.

Finally, one doesn’t need to wait for 5G before deploying NFV; there are benefits in the short term on earlier generations of equipment, including new paradigms leveraging NFV for traffic quality and cost optimisation, for instance, in local breakout (https://lnkd.in/dy9qwsr)

Azenby is a forward leaning consultancy. Our specialism is helping mobile operators. We have implemented a number of strategic projects for leading MNOs around the world helping them find ways to increase revenues as well as reducing the cost of doing business. NFV is a real catalyst for both. We believe that MNOs can leverage virtualisation for providing new services to their own customers directly, and indeed, for facilitating a new wholesale market for other service providers needing access to the right technology. Why not get in touch with us to learn more?

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