There is intense competition in the telecom sector. Customer expectations have increased.
That’s why telecom operators can no longer afford to use legacy network infrastructure. They are not built for the current type of services. Network infrastructure modernization has become so important in this context. The modern network infrastructure is more resilient and scalable than the legacy infrastructure. It helps prepare telecom operators to thrive in a hyper-competitive space. One way to modernize the network infrastructure is through network virtualization.
Unlike the traditional networks dependent on physical hardware, the virtualized ones deliver the network resources through software. So, operators are able to respond to market changes quickly and with more agility.
In fact, Network Function Virtualization (a kind of network virtualization that allows operators to virtualize specific network resources) is growing so significantly that a study predicts its market size to grow at a CAGR of 22.9% by 2024.
Let’s delve further to understand the impact it could have on the telecom sector.
Impact Of Network Virtualization On The Telecom Sector
- Prepares for 5G
There will be 3 billion active 5G subscriptions in Asia and North America by 2024. 5G is expected to be a boon for the connected world we live in right now as it lowers the latency, reduces costs, accelerates the data speed, and reduces battery consumption. Considering that 5G will become a mainstay in the future, operators need to be prepared for it. However, 5G requires flexible and scalable infrastructure, which the monolithic architecture of the legacy network cannot promise. Operators need to virtualize their network architecture to support 5G capabilities. 5G works on the foundational idea of delivering all types of telecom service from anywhere, so it cannot work well with proprietary infrastructure. It works well with a service-based architecture in which multiple software networks are supported. Network virtualization can offer that flexibility. Network slicing is another 5G feature that virtualization could support, i.e., the physical network could be sliced into different virtualized networks to exchange resources efficiently.
- Reduces costs
Network virtualization could reduce operation costs by 60%. Legacy network architecture required heavy investments in physical hardware. Operators had to also provision for more hardware investments in the future. Network virtualization is software-based and could potentially solve some of these issues. Operators can save costs on different network resources such as switching, routing, firewalling, etc. They are pooled and delivered through software and only require an IP packet forwarding from the physical network. Operators don’t have to worry about future scalability. The network resources can be scaled up if the demand grows and the capacity to scale up is available.
- Provides more agility
Telecom operators can no longer rest on their past innovations for years to generate revenue. They have to innovate to stay agile and meet customer demands. Unfortunately, legacy network architecture cannot support such quick changes. Network virtualization provides that agility. The scalable and elastic nature of network virtualization allows operators to virtualize their hardware resource pool, improve their workflows, and support a range of applications. It helps the operators to launch services quickly and respond to the market changes by reducing the time-to-market.
- Improves network security
Network virtualization enables telecom operators to support complex network security needs. As connected devices and data exchanges increase, the need for network security has increased. Legacy networks lack the capability to secure the increasing workload. Network virtualization enables operators to improve network security to safeguard data centres across the world and thus secure the data. Also, considering that technologies such as 5G require network slicing, there’s more network security guarantee. Network slicing separates the network resources. Each of these slices has its own authentication process. So, it’s easier to detect changes in behaviour patterns and traffic and mitigate the security risks accordingly.
- Enhances operational efficiency
Network virtualization has become a necessity for operators to enhance their operational efficiency. First, the operators can save time on deploying hardware and other support systems. They also don’t have to follow the legacy processes that, by design, function in silos or rely on the IT team to configure each hardware system manually. Virtualization enables operators to automate the processes, so the teams can quickly deploy solutions to the increasing customer demands and achieve operational efficiency.
Network virtualization is changing the way operators consider business. It has opened more opportunities for operators to keep pace with emerging technologies like 5G and IoT and open a new revenue stream. However, mobile operators need to rethink the network architecture. They need to move away from using monolithic architecture and plan how to deploy it in their organization. A partial or complex overhaul of the network architecture could get complicated. That’s why operators need to work with experts who understand the virtualization model thoroughly and can help them with the transition and leverage the full potential of network virtualization.