Cisco: NFV set to upend current wireless carrier business models

Virtualization is set to take the telecommunications space by storm as operators search for ways to more cost efficiently run their network operations in the face of growing consumer demand for mobile broadband services.
One company that has been keeping track of that demand is Cisco, which earlier this year reported that mobile operators handled 1.5 exabytes of data traffic in 2013, which was an 81% increase compared with the previous year. Cisco said it would have grown 98% if operators had not been able to offload traffic to Wi-Fi connections and femtocells. Globally, 45% of total mobile data traffic was offloaded onto the fixed network through Wi-Fi or femtocells in 2013. Carriers offloaded 1.2 Eb of mobile data traffic onto the fixed network each month.
A recent report from Maravedis-Rethink predicts nearly three-fourth of mobile operators will deploy some form of network functions virtualization by 2018, noting the move to NFV will be one of the most important ways carriers will “transform their cost base and their service delivery in the next few years.” In its report, “Pace of NFV uptake accelerates, despite many risks,” Maravedis-Rethink noted that carriers are targeting total cost of ownership savings of up to 35% over the next five years by the use of NFV, with savings coming from “key elements like the packet core.” The firm added that 16% of carriers it interviewed claimed NFV was a first step towards a broader software-defined networking policy that is expected to generate greater benefits.
RCR Wireless News spoke with Sanjeev Mervana, senior director for Cisco’s Product and Solutions Marketing, Service Provider Routing and Software division, about the growing need for wireless carriers to adopt virtualization technologies, like NFV. This need is being driven by consumer demand for mobile data services placing increased financial pressure on operators to maintain service quality levels.

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