Transformation abounds in every corner of the ICT market. For telecom operators, this is the worst of times, but also the best of times. On the one hand, operators are finding it difficult to adjust to the new rules of the game introduced by mobile Internet, especially the sharp rise of over-the-top (OTT) content that's crashing up against them in massive waves, disrupting existing value chains. Services have increased without an increase in revenue, and operators have fallen into an unprecedented dilemma—the gradual decline into providing dumb pipe. On the other hand, as we approach a world where everything is fully connected, new technology and services are popping up everywhere. While this presents new challenges to operators, it also ushers in a world of new development opportunities.
Like a ship sailing against the tide, operators need to keep forging ahead lest they get swept away in the current. In the face of a changing industry, operators have no choice but to embrace transformation, the changing shape of user landscapes, and the restructuring of networks and services that ride in its wake. Of course, network experience will determine the success or failure of an operator's business, and for this reason network transformation has become a primary focal point across many aspects of operators' digital transformation. As representatives of the future of network evolution, network function virtualization (NFV) and software-defined networking (SDN) have become the rallying point for operators in the midst of network transformation; they are expected to offer great value.
Accelerating Operator Transformation: NFV Enables the Restructuring of Fully Connected Networks
Operators have their own urgent reasons to transform. Add to those the exigencies of creating a Better Connected World, which requires comprehensive restructuring of communications networks, and the path forward is clear: operators need to start transforming their networks without a moment's delay. NFV is an important enabling technology for restructuring operators' networks, architecture, operations, and services. It aims to decouple software from the hardware of traditional telecom equipment, using standardized IT hardware platforms and virtualization technology to replace the private dedicated network element equipment in telecom networks. NFV will help increase the flexibility of network operations, improve management and maintenance efficiency, and cut costs.
Operators have already recognized the importance and huge commercial value of NFV in the network evolution process. By consensus, they've placed it as the cornerstone in the strategic development of their future networks. Back in October 2012, 13 different operators, including AT&T, British Telecom, Orange, and Deutsche Telekom, selected the European Telecommunications Standards Institute (ETSI) as the home of the Industry Specification Group for Network Function Virtualization (NFV-ISG) to discuss NFV architecture and technology. Committed to promoting network function virtualization, the NFV-ISG released a series of white papers proposing goals and action plans for this new technology.
At the present, the world's leading operators have each come up with their own network transformation strategies based on NFV and SDN: AT&T launched their Domain 2.0 plan aimed at migrating from hardware-centric to software-centric network infrastructure, and restructuring its services on cloud-based open networks that expose network capabilities to third parties. Their goal is to virtualize 75% of their networks by 2020. Telefonica launched their UNICA project, which is devoted to building SDN-capable networks and deploying cloud-based telecom services. It aims to satisfy the agile deployment needs of telecom services and universal cloud services, give users on-demand access to these services, and simplify network control. At the 2015 Mobile World Congress (MWC) in Shanghai, China Mobile announced its NovoNet 2020 vision. Their goal is to fuse new SDN and NFV technology to build a next-generation network that enables flexible architecture with open interfaces, scalable capacity, and global resource scheduling.
In the future, the size of the NFV market is worth looking forward to. In the NFV market research report released in July 2015, IHS Infonetics revealed that the NFV market will grow from US$950 million in 2014 to US$11.6 billion in 2019, with a CAGR of 65%. Standards organizations, open source communities, operators, and equipment vendors are working closely together to collectively advance the NFV value chain. After more than three years of growth, NFV technology is maturing, and has entered a period of rapid development.
Core Networks Leading the Way to the Cloud: Commercial Value Goes Beyond Cutting Costs
The NFV era is fully on its way. However, operator networks are immense and their service scenarios are extremely complex. Which scenario will be the first to embrace NFV? In response to this question, the main participants in the value chain, including major operators and equipment vendors, have come to the same initial conclusion about NFV development: It will begin with core networks. First the control plane, then signaling, data, and finally the media plane—core networks will be the first stop along the path to full NFV adoption.
As for operators evolving their core networks with NFV, industry experts point out that the switching and control center network is the primary feature of a telecom plant. After the move to cloud networks, core networks must continue to offer carrier-grade services, such as high reliability and performance, and fault recovery, in addition to an open architecture. To achieve this, the core network must adopt a cloud-based software design.
To start with, operators need to build agile networks. Compared to the rapid service innovation and responsiveness of OTT players, operators take far longer to introduce new services or capabilities due to their traditional network architecture—and by no small amount. NFV/SDN enables operators to integrate the scalable resources of cloud-based infrastructure, including SDN and NFV service elasticity. The result is unified scheduling, network coordination, and VNFs based on service requests. Service instances increase in response to growth (and decrease during periods of slow growth) for automated end-to-end resource deployment, schedule flexibility, and faster time to market.
To achieve this, operators need to adopt advanced cloud-based software architecture that supports the separation of programs and data. With service state storage in an independent distributed database, service processing units can scale to meet service needs, flexibly adding or releasing virtual machine resources. And in the process of scaling up or down, the service at hand won't experience any loss whatsoever.
Next, operators need to build smarter and more automated networks. Currently, the following trends are taking hold: network virtualization of data centers, decoupling software from hardware, network personalization, introduction of massive third-party services, as well as auto-orchestration and auto-scaling of services and resources. All these require networks that are maintainable, serviceable, and operable.
To make this happen, we need a unified smart orchestration system that can:
- Enable unified scheduling and dynamic updates of networks, resources, and network elements based on different services and policies.
- Automatically integrate and consolidate operations to automate service orchestration and maintenance, slashing workloads and reducing maintenance complexity.
- Monitor service KPIs in real time – When KPIs deteriorate to preset thresholds, relevant alarms should be generated, and automatic recovery procedures should begin.
- Support end-to-end fault localization within an environment where hardware and software have been decoupled. The system needs to consolidate and analyze security information (e.g., logs, alarms, and output exception) from each component to ensure rapid fault localization and threat forecasting.
No matter how operators transform their networks, they must have a multi-layer strategy for reliability, backed by innovative technology, to deliver 99.999 percent carrier-grade reliability after adopting NFV.
Finally, operators need to create more services and value through cloud-based networks. In their current state, operators have little chance of beating OTT players in terms of innovative service applications. However, they have accumulated a great number of valuable digital assets over a long period of time. Therefore, it's critical for them to figure out a way to unleash the incredible potential of their traditional pipe resources.
Operators can employ emerging NFV/SDN technologies to flexibly integrate their pipe capabilities, provide services—such as VNF as a Service—directly to third parties by exposing their network capabilities, create a brand-new ecosystem, and increase their own revenue. To this end, operators need support in offering third parties a one-stop platform that provides exposure to network capabilities, including a DevOps mode that supports the entire service lifecycle, from development to maintenance. Moving forward, this platform will need to encapsulate communication capabilities—including voice, video, conferencing, SMS, and access to location, bandwidth, and data—into Application Programming Interfaces (APIs) and Software Development Kits (SDKs). This will accelerate service innovation and release, and create an environment conducive to win-win outcomes between operators, their partners, and even OTT players.
Here it's worth noting that existing telecom networks cannot meet all of the varied requirements that each and every industry has for network capabilities. For example, the Internet of Vehicles (IoV) requires ultralow latency; video streaming sites need high bandwidth; and banks need the highest possible level of network reliability. NFV and SDN technologies enable Virtual Private Network (VPN) "slices" that support the unique communication characteristics of each enterprise or industry. In other words, traditional telecom networks can be divided into thousands of network slices, and each slice will meet the custom needs of individual enterprises or industries. Such a model, which could be coined as Network Slice as a Service, would help operators better meet user needs in different personal, household, business, and specific industry scenarios.
Deployment by Tier-1 Operators: Vodafone Launched the World's First Cloud-based VoLTE Commercial Network
Above and beyond reduced OPEX, the true value of NFV is found in its ability to drive more revenue with an agile, smart, and value-added cloud-based network. And when it comes to NFV deployment, operators are no longer just talking the talk, but walking the walk. They have accumulated valuable experience in NFV deployment, and are ready to move forward.
Although it's a leading global telecom operator, Vodafone has felt the impact of OTT services on its traditional telecom services such as voice and SMS. NFV effectively addresses this challenge, paving the way for Vodafone to build smart pipes, optimize networks, improve management efficiency, and make its networks smarter and more controllable—all while slashing maintenance costs. In addition, NFV enables Vodafone to truly open up its underlying networks, and strongly promote the innovation and flexible deployment of Internet services.
As early as 2013, Vodafone announced its One Cloud strategy of moving everything to the cloud. They adopted this transformation strategy not only to challenge OTT services, but more importantly to adapt to the explosive growth of data traffic in the Internet era, deliver better experience to its users, and shift its role from a pipe provider to a service provider.
Launching the world's first cloud-based VoLTE commercial network is a key step in Vodafone's One Could strategy. In 2014, Vodafone partnered with Huawei to build an NFV, cloud-based VoLTE network in Italy. Later in July 2015, Vodafone chose Huawei to help its Italian subsidiary with the commercial launch of the world's first cloud-based VoLTE network. Their successful delivery was an important milestone in the global operator market's "shift-to-the-cloud" transformation, drawing great attention across the industry. In this project, Huawei provided Vodafone with a cloud-based IP Multimedia Subsystem (IMS) network, and, as the primary systems integrator, delivered a vertically integrated, end-to-end system with a horizontal service layer—all the while guaranteeing carrier-grade capability over a cloud-based network. Both parties developed the CloudHealth tool kit in Huawei's NFV/SDN open lab. In a mirrored network environment, researchers injected simulated errors into the system. As anticipated, CloudHealth automatically detected sub-optimal performance and began automatic system recovery. Previously, merely detecting and localizing a fault would have taken four hours after the problem had already occurred. With their new system in place, Vodafone could be warned of potential system-level faults a full three hours in advance of system failure.
NFV Pilots on Live Networks in China: Experience Worth Learning From
Chinese operators have also been hit hard by the sudden surge of OTT services. NFV has gradually become a must-have technology for operators in the midst of network transformation. In September 2015, China Mobile began the pilot deployment of a cloud-based core, kickstarting a period of tests applying NFV to live networks in China. In this pilot project, Huawei, together with the Shaanxi and Anhui Branches of China Mobile, performed a comprehensive set of verifications with different focal points, and also performed a small-scale field trial of the cloud-based network. The small-scale trial was aimed at verifying cloud-based networking, technical specifications, service capabilities, maintenance, and full lifecycle management, laying a solid foundation for large-scale trial and commercial use of cloud-based core networks in the future.
On December 10, 2015, China Mobile worked with Huawei, HP, and Inspur to make the first VoLTE call over China Mobile's pilot NFV-based network. This cloud-based VoLTE call demonstrated that the IMS system deployed in a multi-vendor hardware environment had successfully connected with a live network, setting yet another major milestone in the development and application of practical NFV technology.
After this, China Mobile kept up the pace of innovation with its first cross-province high-definition video call based on its pilot NFV networks in Shaanxi and Anhui.
Vodafone, China Mobile and other tier-1 operators are actively piloting NFV technology, providing useful reference for other operators going through the trials and tribulations of NFV deployment. NFV-based networks aren't going to happen overnight. NFV is a key enabling technology in the network evolution process. It is difficult, complicated, and requires operators to step back and fully consider how NFV-based networks align with their network transformation and all-around development strategies. Because of this, we still have a long way to go before we realize full, large-scale commercial deployment of NFV-based networks. Nevertheless, the foundation is already there, and we must all continue to forge ahead.