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Facing the same need to cut costs and introduce new services faster, smaller telcos are looking for a pragmatic path to virtualization.

Small Telcos Take Different Path to NFV

Carol Wilson
5/14/2014
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NEW ORLEANS -- Metaswitch Forum 2014 -- The journey to virtualization will be different for smaller telecom network operators than for their larger brethren, but that doesn't make it less needed or less important, according to Metaswitch executives.

The global giants of telecom are the ones who are driving NFV, having drafted the launch white paper and formed the ETSI Industry Specifications Group on NFV in 2012. (See Carriers Collaborate on Network of the Future, NFV Group Finds Its Feet, and NFV Group Preps Its Afterlife.)

Although Metaswitch Networks is supplier to some of those very large operators -- AT&T Inc. (NYSE: T) has been a customer for a decade, says CEO John Lazar -- the company still has a large and loyal base of Tier 3 and smaller telcos in the US, which used Metaswitch's softswitches and later its session border controllers and media gateways as part of their shift to an IP world from the traditional TDM realm.

Many of the 400-plus telco folks here this week are from that large group of smaller companies, and much of the morning's keynote sessions, which focused heavily on NFV and SDN, was aimed at them.

Here are some of the key take-aways from that session and a later press briefing:

  • Smaller telcos have the same motivations for moving to cloud-based, software-centric, all-IP networks as larger companies. "The current revenue versus cost model is broken: The value of voice minutes is plummeting and keeping up with the explosion of data services is a huge investment and doesn't always earn the revenue back," Lazar says. "Communications networks need to become more cost-effective, flexible, programmable, revenue-generating, intelligent and competitive." Moving to virtualization enables that with an end goal of reduced costs for networks that can turn up new services more quickly.

  • Rural telcos are used to pioneering technology -- they deployed IPTV and VoIP well ahead of their larger brethren -- but they need pragmatic approaches to how it's done and recognition that every company's journey to virtualization will be different. "We're not going to push anyone," Lazar says. "Each company has to go at its own pace."

  • Metaswitch customers are asking for a series of concrete steps, adds Steve Gleave, VP of marketing for Metaswitch. The move to virtualization is one of the most dramatic (and important) to ever hit telecom and it comes with major changes in technology, terminology, skill sets, and business models. Processing that change will take time and likely additional guidance from vendors.

  • Acquiring the kinds of skills needed to support a more software-centric future is a challenge for all network operators, but may be even harder for telcos in rural areas to find. That may also put more pressure on vendors to those companies to assist.

  • Rural telcos are among those who have downloaded Project Clearwater, Metaswitch's open-source IMS core initiative, and started trying it out, on their own. Many of those companies are now coming back to Metaswitch asking for the professional support the company provides (for a price, of course) to those who ask for it.

— Carol Wilson, Editor-at-Large, Light Reading


Want to learn more about NFV? Check out the agenda for Light Reading's Big Telecom Event (BTE), which will take place on June 17 and 18 at the Sheraton Chicago Hotel and Towers. The event combines the educational power of interactive conference sessions devised and hosted by Heavy Reading's experienced industry analysts with multi-vendor interoperability and proof-of-concept networking and application showcases. For more on the event, the topics, and the stellar service provider speaker lineup, see Telecommunication Luminaries to Discuss the Hottest Industry Trends at Light Reading's Big Telecom Event in June.


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Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
5/14/2014 | 8:02:48 PM
Finding skills

Good point about acquiring skills. NFV requires specialized skills, and people with those skills might be less likely to want to live in rural areas served by Tier 3 providers.

Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
5/14/2014 | 8:02:15 PM
Re: Greater risk for smaller operators?
Good point. Smaller companies = smaller revenues = smaller margin for failure. 
RitchBlasi
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RitchBlasi,
User Rank: Light Sabre
5/14/2014 | 5:15:11 PM
Rural NFV
Good point. But I would think it would be easier to deploy and trial NFV at smaller telcos as the scaling might not be as much of an issue. One of the greatest concerns revolve around QoS and carrier grade software and those two combined might not be as much of an issue for smaller rural telcos. Good testing ground for the smaller NFV vendors
Ray@LR
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Ray@LR,
User Rank: Blogger
5/14/2014 | 1:00:05 PM
Greater risk for smaller operators?
Major operators have a greater opportunity to try out new technologies and services (and are maybe slower moving as a result) -- but do rural players and Tier 3/4 operators have the same luxury? Isn't NFV going to be a bigger risk initially for the early adopters at smaller operators? 
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