How telecoms can increase revenue by embracing Software-Defined Networking (SDN)
The next several years could be tumultuous ones for the telecom industry. With a pending FCC decision on net neutrality, 5G networks and demand for Internet-of-Things-enabled devices all looming on the horizon, there’s a great deal of uncertainty in this space. However, every seemingly disruptive force could be viewed as an opportunity to drive revenue and support the bottom line. This is certainly true when it comes to Software-Defined Networking.
SDN may seem like a daunting project to tackle for telecoms, requiring some pretty fundamental changes to their network topography – as well as their front- and back-office systems and, by extension, their customers’ experience – but the benefits far outweigh any upfront investment. Ultimately, SDN can help telecom businesses improve customer experience and dramatically increase their revenue – and early adopters will enjoy a marked competitive edge over other organizations.
Demand for SDN grows
“Telcos can begin investing in SDN services of their own.”
This technology isn’t exactly some closely guarded secret at this point – Tier 1 carriers are already well underway with their own SDN projects and have made great strides to retool their networks. In a way, these companies have done a lot of the heavy lifting, providing successful use cases for SDN and demonstrating to the industry at large just how beneficial a more centralized and responsive network can be.
Australian carrier Telstra has been a proponent in this area, pursuing SDN capabilities at an impressive rate and being among the first to offer SDN-based offerings. Earlier this year, the telco announced the launch of the Telstra Programmable Network, which combines elements of SDN, network function virtualization and the cloud to create a customer-facing, programmable network.
Telstra customers can provision network resources on an on-demand basis, allowing them to keep up with traffic spikes and meet user demand at any moment. As data needs continue to grow across the globe, this kind of dynamic, flexible service will be a major boon to telecom customers with over-burdened networks.
According to a December 2016 Technology Business Research study, some of the most pressing drivers for SDN adoption include the need to support 5G and IoT, along with a desire to create new digital services.
Deloitte outlined several more factors pushing telcos to embrace SDN:
- Rising network traffic demands strain resources and increase costs.
- Avoiding vendor lock-in.
- Launching new telecom services is expensive and difficult.
Now that the groundwork has been laid by large carriers like Telstra, AT&T, etc., other telcos can begin investing in SDN services of their own with the peace of mind knowing that their investments will pay off in the end.
Efficient, smarter network management
Historically, telcos have had difficulty getting a full view of their network resources, creating challenges for asset allocation. Because SDN separates the control plane from the data plane, telecom carriers can gain more oversight and more immediate control across their entire network topographies and better manage traffic.
What this means is that telcos can dynamically respond to changing traffic demands and move around network assets as needed to keep pace and avoid bottlenecks. There are some evident opportunities to drive revenue out of these newfound capabilities. Telecom companies could devise new service tiers to incorporate flexible network management features, allowing high-priority clients to receive uninterrupted service delivery at all times and with the absolute best performance possible.
By building around the network flexibility afforded by SDN, telcos can create all-new service menus that meet the very highest business demands and exceed anything other companies could offer.
Bring services to market quicker than ever
As Deloitte noted, launching any new telecom service has historically been difficult. Many of the challenges with telco service creation involve scaling up delivery and releasing these offerings to keep up with the competition. As a result, many telcos struggle to effectively deal with competitors’ disruptive service menus, and wind up falling behind and losing revenue in the process.
SDN enables quicker service development and release, allowing telecom companies to bring new offerings to market faster than ever before. Not only can they effectively match whatever new service has been introduced into the telco space, but they can create some market disruption of their own by leading the charge.
Telecom service development doesn’t need to be a slow, lumbering process. With SDN, service menus can be quickly updated to account for new developments and deploy revenue-building offerings.
Telcos can go a step further and package their own solutions as white-label services for other businesses. For instance, AT&T has done something similar recently, creating an SD-WAN solution to sell to the SMB-focused telecom market. There are endless opportunities out there for SDN-driven revenue.
The road to SDN maturity
Now that leading Tier-1 carriers have established the money-making value of SDN, other telecoms should follow suit and begin converting their networks and devising services of their own. Although the path ahead may seem daunting, CloudSmartz telecom solutions fpr SDN and digital transformation customer portals can help make the journey far easier. Contact us today to learn more about the revenue-driving benefits of embracing SDN technology.