AT&T expects ‘significant savings’ and cash flow tied to SDN and NFV technology
AT&T’s ongoing push to gain software control of its telecom network at its core is move to save the carrier money. At a recent investor conference, AT&T CFO John Stephens noted those moves could provide “significant savings going forward and a significant opportunity for us to generate cash flow on a continued, reliable, sustainable basis.”
In describing its push to use virtualization technologies like software-defined networking, network functions virtualization and cloud, Stephens told attendees at the recent Deutsche Bank 2016 Media, Internet & Telecom Conference the move towards SDN-infused white boxes throughout the network “could give us another 1% capital efficiency.” While that amount might not seem like much, in the scope of AT&T’s more than $20 billion in capital expense across its entire operations in 2015, a 1% improvement in capital efficiency appears worth the investment.
Stephens explained the savings are coming from various angles of its SDN and NFV deployments, which are central to its Network on Demand platform, which it initially launched in 2014. AT&T the time said it was the first SDN solution from a telecom operator available in the U.S., and built on its previous work with its User Defined Network Cloud program that was announced in early 2014, which was itself built on AT&T’s initial Domain initiative.
“Software-defined network are really important on making capital more efficient, but they are also really important on making installation costs be automated by a computer and not by a truck roll,” Stephens said. “And they are also really important because when you have a software-defined network and Network on Demand, customers can decide they want it and get the service that afternoon. They don’t have to decide they want it and put out an RFP and wait 30 days until all of the responses come in and another 60 days or 30 days for anybody to install it.”
AT&T earlier this year noted its virtualization moves have so far seen the carrier gain control of 5.7% of its network resources using software at the end of 2015, which was ahead of its stated goal of 5%. These efforts are expected to quickly ramp as vendor partners become more comfortable with the various virtualization technologies.
“When you take a different path than has been taken in the past, when you start talking about separating the equipment from the software, people do talk, people do get shook up,” Stephens explained in terms of getting vendors to change their operational mindset. “But once people get past that, everybody wants our business, everybody wants to continue to work with us.”
While still in its infancy, AT&T’s software moves have already paid dividends for consumers. The carrier last month said its recently relaunched unlimited cellular data plans was partially due to its software initiatives.
“We recently brought back unlimited data,” explained Andre Fuetsch, SVP of AT&T’s Domain 2.0 Architecture and Design, in a blog post. “One of the reasons we were comfortable doing that is we know this software-centric network can adapt to meet the demand.”
Fuetsch noted the carrier has moved 14 million wireless customers to its virtualized network, with plans to move “millions more” this year.
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