SDN Could Save Operators $9 Billion Globally
Published on: 12th Feb 2014
Note -- this news article is more than a year old.
Switching to Software Defined Networking (SDN) could reduce the mobile industry's backhaul network expenses by USD9 billion, by dynamically managing traffic and backhaul bandwidth.
Research conducted by Strategy Analytics projects that by 2017, total operating expense (OpEx) savings from SDN in mobile backhaul networks could reach $9 billion globally.
In a new study, Tellabs reveals that OpEx savings from the same 5 applications are more than twice as much as the CapEx savings.
In fact, their report reveals that OpEx savings are forecast to be far greater than CapEx savings every single year between now and 2017, across all 5 applications. According to the August 2013 study, CapEx savings could potentially reach $4.2 billion by 2017. Overall OpEx savings are forecast to reach almost $9 billion, or more than twice the CapEx savings, over the same timeframe.
5 Top SDN Applications Save 25% to 70% of Operating Expense
As in the previous report, Strategy prioritized the top SDN applications, based on where SDN will have the most impact on mobile backhaul. The 5 applications are Metro Aggregation/Load Redistribution, Local Breakout/Internet IXP, Small Cells, Cloud RAN and Wi-Fi Offload/Video Redirect.
Although overall OpEx savings are significant, the contributions from each application vary greatly with savings varying between 25% and 70% identified across the board. The largest single saving in OpEx will come from Wi-Fi Offload/Video Redirect. According to the research, this application could contribute a 70% saving by 2017 - increasing from $222 million in 2013 to more than $3.1 billion by 2017.
The value of OpEx savings across the 5 applications by 2017 is forecast to be:
- Wi-Fi Offload/Video Redirect - $3,144 million
- Cloud RAN - $2,173 million
- Local Breakout/Internet IXP - $1,832 million
- Metro Aggregation/Load Redistribution - $1,219 million
- Small Cells - $591 million.
Potential OpEx savings for each application differ greatly from CapEx savings. For instance, in the CapEx report, Metro Aggregation/Load Redistribution ranked first in CapEx savings with a $1,116 million savings by 2017. Yet it ranks only fourth in OpEx savings.
Asia Pacific Will Witness the Biggest Impact
As identified in the report, the amount of OpEx saved through SDN will vary greatly by region. Asia Pacific, the region expected to adopt all-IP networks very aggressively, is predicted to gain the greatest OpEx savings from SDN - reaching 37% by 2017.
Estimated OpEx savings by region in 2017 are forecast to be:
- Asia-Pacific - $5,619 million
- North America - $1,263 million
- Western Europe - $1,253 million
- Middle East & Africa - $368 million
- Central & Eastern Europe - $255 million
- Caribbean & Latin America - $201 million
The earlier report demonstrated that CapEx savings from SDN for backhaul were significant. However, the value of SDN in helping operators to save on the ongoing provisioning and management of backhaul capacity is far larger.
"Earlier, we highlighted the key role of SDN in closing the mobile backhaul gap," said Stu Benington, Tellabs director, technology and strategy. "Now we can show that on top of the CapEx savings, SDN can cut OpEx dramatically and preserve operator margins in backhaul networks.