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Telefónica Hands Huawei a Key Virtualization Deal

Ray Le Maistre
1/30/2017
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Telefónica has confirmed Huawei's position as a key virtualization partner by awarding the Chinese vendor a significant role in its next-generation network program, Unica.

And it seems that joint development activity focused on optimized hardware utilization in NFV environments has been instrumental in the vendor's selection for what is a critical role in Telefónica's virtualization program.

Huawei is to help the Tier 1 operator build an extensive virtual Evolved Packet Core (vEPC) based on the vendor's CloudEPC platform. Once activated, the system will be at the heart of converged 4G LTE voice and data service delivery to tens of millions of customers across 13 key markets in Europe and Latin America -- Spain, Germany, Brazil, Argentina, Uruguay, Mexico, Colombia, Peru, Panama, Costa Rica, Nicaragua, El Salvador and Guatemala.

The virtual EPC has long been regarded as one of the primary initial NFV use cases: Telefónica identified the introduction of vEPC capabilities as one of its initial virtualization goals when it first unveiled its Unica strategy in early 2014. (See Telefónica Unveils Aggressive NFV Plans.)

And it's not just the system that will enable 4G packet voice and data services -- it's at the heart of MVNO (mobile virtual network operator) enablement, emerging IoT service delivery, private LTE network provisioning and the introduction of mobile edge computing (MEC) capabilities that will become increasingly key to operator fog networking strategies. (See Fog Computing: The Virtualization Angle and The Future Is Foggy – HR Report.)


Want to know more about the companies, people and organizations driving developments in the virtualization sector? Check out Virtuapedia, the most comprehensive online resource covering the virtualization industry.


The selection of Huawei as Telefónica's key vEPC partner will not come as a major shock -- the two companies have been close collaborators covering multiple markets and technologies for years and Huawei has always been identified by the carrier's CTO office as a key SDN and NFV partner.

Still, the selection of Huawei for this critical next-generation network role will sting the Chinese firm's key rivals, Ericsson and Nokia: Ericsson, remember, is now Telefónica's prime Unica integration partner and, in that role, was hoping to pick up many of the key virtual network function (VNF) deals. (See Telefónica CTO: It's Time for Unica Phase II and Telefónica Chooses Ericsson as Its New Virtualization Kingpin.)

But in the past month alone Telefónica has handed two important Unica deals to Chinese vendors -- in addition to the new vEPC deal, ZTE was selected just before the turn of the year to build a multi-market virtual IMS platform in Latin America. (See ZTE Scores NFV Deal at Telefónica.)

And it's clear that Huawei's willingness and ability to develop the appropriate capabilities to suit Telefónica's needs has been instrumental in its selection. Since the inception of the Unica program, the operator has been as focused on the hardware requirements of a telco cloud architecture as it has on the software requirements, and it has long been involved in the development of EPA (Enhanced Platform Awareness) capabilities that enable management and orchestration systems to assign virtual network functions (VNFs) to the optimal hardware platform to maximize performance and service-level agreement (SLA) predictability. In awarding Huawei this vEPC deal, the operator noted:

    Telefónica and Huawei have been jointly working and testing Huawei CloudEPC performance, in Telefónica's NFV (Network Function Virtualization) Reference Lab in Madrid. During the test, Huawei CloudEPC showed one of the best performances in both data and signaling planes by good cloud-formation architecture and by using EPA (Enhanced Platform Awareness) technologies. That achievement was a joint effort by both companies within the Telefónica NFV Reference Lab framework.

This is only one part of the Unica program, though, and it's only the initial vEPC step for Telefónica, which is still very vocal on the importance of multivendor environments and the avoidance of vendor lock-in. But it provides Huawei with a considerable opportunity to prove itself as an NFV partner that can deliver in a production environment across multiple markets for one of the biggest communications service providers in the world.

And it provides a very loud wake-up call for Huawei's rivals, which need every Tier 1 carrier virtualization deal they can get in order to remain competitive.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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mendyk
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mendyk,
User Rank: Light Sabre
1/30/2017 | 10:19:54 AM
Re: This shows how hard NFV is to implement
That's the challenge, isn't it -- changing the internal structure away from reliance on massive long-term deals upfront. When a company's entire economic system is based on that approach, adopting a more flexible and more agile model is a massive undertaking. Kind of like moving from hardware-centric networks to virtualized systems, but maybe even harder.
Ray@LR
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Ray@LR,
User Rank: Blogger
1/30/2017 | 9:59:25 AM
Re: This shows how hard NFV is to implement
I believe you may have jusy described the go-to-market approach of a large Chinese company that is doing quite well these days.

Then, of course, you need the post-engagement revenue stream - and from what I am hearing the operators are ready to engage in new business models that are more along the lines of pay-as-we-grow and pay for support services, which is where this industry is naturally headed, one would think. 
mendyk
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mendyk,
User Rank: Light Sabre
1/30/2017 | 9:47:00 AM
Re: This shows how hard NFV is to implement
Maybe the way to begin is to start a conversation with "What do you need?" instead of "Here's what we have." And maybe, at least at first, price should be no object, as in, we'll do what we have to even if it means taking a loss at the beginning. These are not easy changes to make though, and the latter entails quite a bit of risk. 
Ray@LR
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Ray@LR,
User Rank: Blogger
1/30/2017 | 9:32:05 AM
Re: This shows how hard NFV is to implement
Tech R&D cycles take years but I don't think this is about technology as much as it is about market appoach and general corporate strategy.

I think they can respond with:

 

A different customer engagement model

+

A different business model

 

Those changes need to come form the top. I believe some of Huawei's rivals are further down that evolution path than others but this is what former Man Utd manager Alex Ferguson used to call "squeaky bum time"** -- who has got the nerve to do somethig that maybe goes agaist the grain and involves a shift in tactics in order to stay in the game and eventually win out? 

 

** See https://en.wiktionary.org/wiki/squeaky_bum_time

 
mendyk
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mendyk,
User Rank: Light Sabre
1/30/2017 | 9:26:17 AM
Re: This shows how hard NFV is to implement
Ray -- This does look like a wake-up call for Huawei's competitors. Do you think they've already hit the snooze button too many times, or can they still shake off the mental cobwebs and respond effectively?
Ray@LR
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Ray@LR,
User Rank: Blogger
1/30/2017 | 8:16:49 AM
This shows how hard NFV is to implement
Telefonica was hoping to have virtual EPC technology in its network in the 2015-16 timeframe - now it's still working on getting the onboarding of this VNF in early 2017... testament to how hard this is to do when introducing virtual elements into an existing hrdware-based network.

The irony being, then, that the development of EPA (Enhanced Platform Awareness) capabilities, which enable the management systems to house VNFs on the most appropriate shared hardware platforms, with Telefonica is one of the things that has helped Huawei land this deal.

And this is what makes it so hard - everything has to fit together.... because TEF will need the hardware platform to be EPA-enabled to maximize the benefits and no doubt INtel is the beneficiary as a result of that particular development. 
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