Telecoms in Europe can generate €39 billion or nearly $44 billion by re-imagining the network – using NFV and SDN, said a study by Arthur D. Little and Bell Labs.
The telecom analysis report says that NFV and SDN are a strategic opportunity and a necessity for the telecom industry in Europe.
Network virtualization technologies such as NFV and SDN can enable telecoms to tap into higher-value products and services segments e.g. the fast-growing 18 billion euro IT security business and 17 billion euro cloud services market and the emerging non-access-based wholesale businesses.
The report proposes that operators form an organization equivalent to the StarAlliance or SkyTeam alliance in the airline industry, to allow facile agreement and exchange of services and capabilities between individual operators to form a global network that can compete effectively with webscale providers.
By first consolidating network functionality and eliminating outdated hardware, telecoms operators will realize the systemic gains from full IP transformation and modernized operations.
Deploymgent of NFV and SDN can bring 14 billion euros per year in the network domain alone, which will be augmented by a further 25 billion euros per year in non-network operating costs through greater automation and simplification of business processes.
“The time is now for Europe’s telecommunications industry to bring networking into the cloud era, it will not be trivial to execute programmability and automation at the scale required for success, but the prize is significant,” said Jesus Portal, partner at Arthur D. Little.
The study examined operators in 35 European countries. Collectively, these operators had adjusted revenues of 250 billion euros in 2013, with annual OPEX of 150 billion euros.
