Communications service providers can cut operating costs by up to 40% by virtualizing complex residential gateway functions into the network cloud, according to a study by Alcatel-Lucent's Bell Labs.

Residential gateways are becoming more capable and complex with the increased demands from households accessing cloud applications and bandwidth of 100 Mbit/s or more. Greater complexity leads to greater support challenges and cost, according to the Alcatel-Lucent (NYSE: ALU) Bell Labs study, released Tuesday.

Want to know more about the cloud? Visit Light Reading's Cloud Services content channel.

A virtualized residential gateway (vRGW) moves functions such as IP routing and network address translation (NAT) into the cloud, centralizing management and control and reducing operations costs.

In addition to cutting costs and improving customer experience, a virtualized gateway allows CSPs to introduce new services more rapidly and consistently, driving providers to New IP networks.

A vRGW reduces service fulfillment costs by 7% to 12%, with faster activation of upgrades and new services and fewer home visits by technicians, AlcaLu says. Service assurance costs are reduced 63% to 67%, streamlining response to trouble tickets. And lifecycle management is reduced 66% -- a big savings proportionally although lifecycle management costs are relatively small.

Related posts:

— Mitch Wagner, , West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected].