Case Study – Telco Network Virtualisation

Context:

• Our client needed to understand how telcos across the globe were viewing the current and potential financial benefits of network virtualization, especially surrounding core networks.
• The objective was to assess if the prior predictions of CAPEX and OPEX savings were being realized, and to get rough estimates of savings potential due to SDN/NFV for the years to come.

Accelerated’s approach:

• 5 interviews were conducted with executives from tier 1 telecom operators in Europe, Asia, Australia and the US. The experts were in roles such as VP or Head of Network Engineering, Business Innovation Manager, Head of Network Planning and SDN/NFV business development.
• The front-line experts shared non-confidential data and perspectives relating to current and future savings from network virtualisation. 

Synopsis of key findings:

• All the organisations were taking an organic rollout approach, utilizing current assets as long as possible. However, for new parts of the network like 5G deployment the rollout would then be aggressive. 
• The current level of virtualisation adoption ranged between 10% – 20%, with the exception of the US where 50% was noted.
• Experts confirmed that current Capex and Opex savings were mostly zero as of 2020, but they were forecast to increase substantially (30-40%) in 5-7 years, or even higher in 10 years with the savings being realized on operations, maintenance and power spend.
• These predictions represent a shifting of forecasts by 2-3 years, given similar SDN/NFV savings predictions and business cases had been made a few years ago. This raises the question of whether realization of those benefits is merely delayed by a few years, and on which drivers it is dependent for the forecasts to eventuate.
• Key requirements for benefit realisation include full orchestration being in place across a multi-vendor technology platform, as well as vendors not capturing all value creation through new pricing schemes.
• Experts commented that the current zero savings estimates provided were averages, potentially weighted by current traffic where the proportion of 5G is very low compared to traditional network traffic.

Accelerated‘s model of sourcing and interviewing infield experts provides consistently successful outcomes for our clients. Get in touch to see how we can provide the right intelligence and insights for your strategy team.