SDN to save operators $4 bn in capex

SDN can save mobile operators more than $4 billion in capital expenses (Capex) by 2017 according to Strategy Analytics.

The savings can be attributed to 5 key SDN applications for mobile backhaul networks- metro aggregation/load redistribution, local breakout/Internet IXP, Wi-Fi offload/video redirect, cloud RAN and small cells.

Value of capex savings through SDN by 2017
Metro Aggregation/Load Redistribution – $1,116 mn
Local Breakout/Internet IXP – $1,083 mn
Wi-Fi Offload/Video Redirect – $1,021 mn
Cloud RAN – $777 mn
Small Cells – $202 mn
Source: Strategy Analytics

As mobile data traffic grows, the investment required to meet users’ experience expectations escalates. The “backhaul gap” is the difference between required backhaul investment and planned spending.

The largest single saving in capital expense value terms will come from Metro Aggregation/Load Redistribution. This application could contribute savings of $96 million in 2013, rising to $1,116 million in 2017.

Asia Pacific is the region facing the most significant backhaul funding shortfall. Asia Pacific will also be most likely to benefit from SDN.

Estimated capex savings through SDN by region in 2017
Asia-Pacific – $2,662 mn
North America – $599 mn
Western Europe – $574 mn
Middle East & Africa – $162 mn
Central & Eastern Europe – $112 mn
Caribbean & Latin America – $89 mn
Source: Strategy Analytics

So far, SDN has been used to optimize data center resources and service platforms in the cloud. Recently, operators have tested SDN applications for operational network elements. Applying SDN to transport and backhaul optimization is so new that standards work began only recently.

“Until now, we’ve seen too little quantification to support SDN business cases for service providers,” said Dan Kelly, CEO and president, Tellabs.

Based on customers’ input and the compelling business cases we’ve identified, we plan to incorporate SDN functionality into the Tellabs 8000 intelligent network manager, and into Tellabs 8600 and Tellabs 7100 products, early in 2014 added Kelly.

Earlier this year, Tellabs demonstrated its Congestion Control Application, which applies SDN to head off bottlenecks in the backhaul network – even before users become aware of a service issue. SDN is expected to drive demand for Tellabs optical and data solutions in customer networks.

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