Archive for April 2014
The shift from dedicated expensive boxes of network kit to flexible cheap servers running NFV (Network Functions Virtualization) is speeding up. Mobile Network Operators will benefit from this evolution through lower equipment costs and greater flexibility of network design and configuration.
However MNO’s are appropriately conservative people mostly very appreciative of the value of reliability and the nasty consequences of system failures. Thus it is likely that only as the big network equipment suppliers begin to adopt SDN (Software Defined Networks) and NFV that major deployments will accelerate. It is not that the current big suppliers of mobile network kit (Ericsson, Huawei, NSN, Alcatel Siemens, ZTE) will be the only participants in this market it is just that until these big players can make it reliable and practical to implement in the tough real network world it will not get momentum in the market.
A good indication of the direction and priority of SDN and NFV can be seen from market leader Ericsson which has 35% of the world market for this kit and a market share which their CEO Hans Vestberg says is more than number two and three suppliers to the market combined. Ericsson is undergoing a restructure which will see its Networks Division split into two parts Radio and Cloud and IP. Radio will manage the traditional radio networks kit while Cloud and IP will develop and market NFV, SDN and cloud based platforms.
Recently Vestberg said that only one third of Ericsson’s 2013 revenue (227Bn SEK or $37Bn AUD) came from harware with 23% from software and 43% from services. Back in 1999 73% of their revenue was from hardware sales. The movement of focus from hardware to services which include network design, build, operations and support has been underway in Ericsson for a long time. The next wave will clearly reduce dependence on hardware sales further as NFV and SDN as supported by the open sourced OpenDaylight become widely adopted.
The MNO’s will benefit from these changes through reduced network equipment costs but will need to carefully manage the transition and reliability issues associated with the move.
Reuters reports that the European Parliament has voted in Brussels overwhelmingly in favour of a law removing mobile roaming charges in 26 counties of the EU from December 2015.
Neelie Kroes, the European commissioner for digital affairs a champion for this change is reported as saying “This is what the EU is all about – getting rid of barriers to make life easier and less expensive.”
It is reported that the changes will take 5% off the European mobile telco’s revenue but that most of this will be picked up by increased usage of mobile roaming and by reducing the cost to operators caused by mobile users bypassing the high roaming charges by buying prepaid service for small durations.
In this regard it is a pity there is not a world body which could enact a global version of the new EU law.
In Austrlaia Comms Minister Turnbull earlier this year released a draft of a law “The Telecommunications Legislation Amendment (International Mobile Roaming) Bill 2014″ which would give the ACCC powers to control wholesale prices for roaming between Australia and New Zealand – One small step for man!