Disruptive technology innovations mature across the telecoms industry

  • Disruptions such as software-defined networking (SDN) and network function virtualization (NFV) create bigger opportunities in the telecoms sector
  • Telecom operators can reduce total costs of ownership by 15 percent through implementation of SDN and NFV

Software-defining networking (SDN) and network function virtualization (NFV) constitute one of the largest technological disruptions that the telecom industry has witnessed in the past decade.

The disruption will bring new prospects for revenue protection and capture, coupled with cost efficiencies, according to Oliver Wyman’s ‘Programmable Infrastructure Will Transform Telecoms’ report. The paper examines the maturity of the technology and how it is now fully equipped to change the way networks and IT services are designed, deployed and operated.

“The benefits of this technology ‘growing up’ are vast,” says Diego de Miguel, Partner, Oliver Wyman Middle East and co-author of the report. “With disruption bringing new prospects for cost efficiencies, opportunities such as cloud VPN, specialized networking, digital value proposition and multi-micro-brand marketing are likely to outweigh the expected unitary cost reduction. The emerging industry consensus is that SDN and NFV technology enables the cost of ownership reduction by 10 to 15 percent.”

“Numerous applications have been proposed for SDN and NFV technologies, ranging from highly technical, cost-oriented applications to top-line related applications. However, as with previous technology disruptions, only a few case studies will actually go the distance and have real transformational impact.”

5G is a prime example of why there is a need for the market to mature before the network is introduced, said, Mr. de Miguel. He added that in order to introduce 5G, there will be a great need for the technology community to pave way for a truly multi-technology, multi-access, multi-service, and multi data model environment – an all-encompassing standard to cover the needs of a hypo-efficient network.