NFV as an enabler of new revenue streams for mobile operators
The cloud has fundamentally changed the way organisations, including Mobile Network Operators (MNOs), provide and consume computing resources.
Network Function Virtualisation (NFV) is one of the principle technologies underlying cloud-computing platforms and is often discussed in terms of its technology and features, such as resource pooling, rapid elasticity, and on-demand self-service. These discussions are appropriate since it is NFV that allows a service provider to rapidly and economically launch instances of network services to meet variable demand using Commercial-Off-The-Shelf (COTS) hardware, says, Steve Barefoot, senior product analyst, Interop Technologies.
The agile MNO
MNOs can be both providers and consumers of cloud services. As providers, MNOs can utilise NFV to implement cloud platforms in their datacenters, enabling them to offer new digital services to their subscribers. This type of agile MNO is unencumbered by historical service offerings of voice and messaging; instead, new business lines can be pursued, such as mobile health monitoring (mHealth) or cloud-based unified communication. Large tier one MNOs have already begun to pursue this strategy as evidenced by the mHealth initiatives of Vodafone, Verizon, AT&T, and others. Similarly, the large MNOs have well-developed, unified communication platforms. Many of these platforms are most certainly supported by NFV. Providing multiple, non-traditional services can be an effective component of an MNO’s omnichannel customer strategy to increase value and reduce churn. This approach also has the potential of opening new business lines with individual subscribers, but also with enterprises, as would be the case with unified communications.
The barriers to entry are reducing
A potential obstacle to offering these new services to subscribers is the resource capacity limitation of the organisation. Some MNOs may find it challenging to concurrently provide traditional services while expanding into new service lines. One way to overcome such a barrier is by the MNO becoming a consumer of cloud-based, traditional telecom services. MNOs now have the ability to deliver core mobile services via third-party cloud providers. This has long been the case with text messaging, but now cloud-based solutions are available for IMS, Voice Over LTE (VoLTE), Voice Over WiFi (VoWiFi), Voice Over Data Channel (VoDC), and Rich Communications Services (RCS).
Embracing the cloud to secure enduring benefits
There may be cultural inertia to overcome in outsourcing core services to an external cloud. To be fair, the historical model for most MNOs was to implement, operate, and maintain all services from their own Network Operating Centers (NOCs). However, in today’s rapidly evolving industry with new products appearing frequently, a self-contained model of delivering all services from one’s own NOC is becoming untenable. Embracing an external cloud solution to offload core services is one way operators can free internal resources to develop those services that will provide enduring benefits.
The ultimate end-point of any service delivery platform is to have the ability to respond with agility to the needs of one’s customers. NFV and cloud-based service delivery platforms have provided new alternatives for MNOs to consider when pursuing that goal.
The author of this blog is Steve Barefoot, senior product analyst, Interop Technologies.
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