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How NFV Is Changing The Landscape Of Telecommunications

How NFV Is Changing The Landscape Of Telecommunications

Companies Brave Enough To Make The Change Reap The Rewards

by Massimo Fatato 

Not since the introduction of IP (Internet Protocol) has the The Landscape of Telecommunications (TLC) industry seen so many radical changes at the same time. The most relevant market dynamics for a carrier today include NFV, “cloudification” of TLC services and OTTs. These dynamics are leading to a progressive blend between the classical world of telecommunications and the modern IT world.

  • The advent of the Network Function Virtualization (NFV) promises to transform complex and expensive dedicated machines into simple, agile, effective network systems.
  • The “cloudification” of TLC services, which is moving data and functions from the inside of corporate IT systems to the outside, allows enterprises to take advantage of the resources made available by service providers (SP), with operational and economic benefits for the enterprise itself.
  • The advent of “Over The Top” (OTT) which, according to the definition, are Service Providers (SP) that leverage the extensive connectivity resources provided by the carriers to offer integrated services. The most popular today are Google and Amazon, which exploit the enormous storage capacity that support from their core business to provide server and storage services and then cloud businesses to third parties. The most obvious and direct consequence of all this for the carriers is that while the OTT receive the benefits in form of profits, carriers remain with the infrastructural complexity to manage and with the substantial costs associated with it.


For the sake of this article, let’s focus on NFV. We’ll examine:

  • How NFV transformation is not clear, and in fact there is no one size fits all
  • A huge opportunity for consultants and system integrators who can select or design a future-proof transformation methodology.
  • A threat for the telcos who are confronted with, amongst many others, a major operational, organizational and financial challenge.
  • A new variable, learning, which is the (partial) adoption of the open source approach.


Network Function Visualization (NFV) Transforms Business Today

NFV, as a term, was first coined more than three years ago and in that short time, has become a reality that is not going anywhere anytime soon. Indeed, after the first testing phases and proofs of concept, carriers have established that transforming a classic network function (such as Home Location Register – HLR) in a virtual operation is technically feasible and there are already dozens of companies of all sizes that are able to do so. In fact, it is now widely agreed upon that virtual and physical will live together for the foreseeable future. It is clear that NFV is acting as a catalyst to bring the telecom and IT world together.

So, why is NFV not taking off as many expected?

The reason lies in a number of challenges associated to the virtualization for the telecom world.

Challenges For The Carriers

Regardless of the underlying infrastructure to support their services, the greatest challenge for carriers remains the inability to provide their enterprise customers with integrated communications services, not only connectivity, in a way that is both fast and flexible. Even today, the product management phase of a communications service easily extends for 6-9 months.

History has proven that anytime there a new service is introduced, a comprehensive set of systems and management capabilities were dedicated to it. This reesulted in a proliferation of systems that hardly communicate with each other, presenting a fractured view of the service. As a consequence, significant manual and procedural interventions are required, making the service management costly and inefficient. Adding to the confusion is the complexity of operation and organization related to the potential transformation dictated by the advent of NFV.

It is clear that if the OTT are able to do service provisioning in a matter of hours, carriers have a serious problem.

However, carriers’ intimate knowledge of the customer’s historical data and the physical connectivity that could ensure the carrier to learn about their customers’ behavior, gives them a competitive advantage which, however, has yet to be adequately exploited.

3 Core Functions Of NFV Implementation

Thus, while NFV is already a production reality with several carriers around the world, both as a generic virtualization platform or implementation of a specific network function (both core or edge), there are at least three core functions that are tremendously affected by the NFV implementation and are still to be properly addressed in the NFV context.


Someone once likened NFV transformation to someone who wants to replace an engine on a plane while it is flying. This analogy gives you a good idea of what it means for the VP Operations of a carrier to switch from the actual situation to a hybrid scenario where legacy and virtual coexist efficiently. It is therefore apparent why Operations essentially push back the idea of virtualization of network functions. If you asked a VP Operations in a large carrier, she would list the following as her most hated words:

Virtualisation – “Who moved my BRAS (Broadband Remote Access Server)? Where is the HLR?”

Devops – “It is either Dev or Ops. Doing both in a telco environment is extremely dangerous. Why? Because introducing even the smallest change in a telecom network environment might introduce a serious instability with unpredictable domino effects (think, the Butterfly Effect). This is why carriers require long trials before introducing innovation in their network environment. And they have depoy complex fall back procedures in case something goes wrong on at 3 a.m. on a Saturday morning.”

As it is for the technological portion of the NFV transformation, there is not a single path that suits every carrier. Each service provider is therefore required to design its own long term objective, operational architecture, taking into account their strategic and operational needs, and then apply methodologies that are truly proven to drive the transformation towards the objective.

There will be common elements but the most relevant to focus on are:

  • OSS efficiency.
  • Leverage customer intimacy to gather related data to drive operational efficiency.
  • Leverage “as a Services” capabilities (the modern wording for outsourcing)  whenever repetitive processes are required.
  • Embrace devops, or at least begin to understand how development could marry operations without giving away the 6×9 reliability target of the entire infrastructure system (as opposed to the reliability of its components), again looking at methodologies that would facilitate this process in a telco environment.



The advent of virtualization, cloudification and the pressure exerted by the OTT is imposing a cultural shift to the telecom service providers. Indeed, the classic dominance of the CTO over the CIO is gradually being challenged as carriers are required, more and more, to look at their infrastructure and related management from both the CTO and CIO perspective. In fact, it is those who are capable to merge the classical knowledge of the TLC world with those in the IT world that will be coming out of the pack as winners.

Already several carriers around the world have embraced this transformation, some even creating the position of “Chief Digital Officer – CDO.” This role takes into account the need for “digitization,” which is the buzzword of the moment, and is designed to combine IT and TLC knowledge in one place. Even here, there is no one size fits all approach, but each carrier should make the necessary organizational adjustments that fit with their strategic intent and actual situation.


Another hot issue associated to the transformation NFV is linked to monetization. It’s still difficult to measure how the NFV transformation will impact the carrier’s business success. Before taking on such a significant change and not losing sight of financial goals, carriers need to identify the business criteria (and related leading indicator and KPIs) that will transform the NFV transformation in a success.

A potential approach for carriers to leverage virtualization as a means to generate new revenues and profitability streams is to deploy a platform that is capable of supporting the introduction and provisioning of new services. If such a platform is consumed “as a Service” (PaaS), all of a sudden, carriers will find themselves in a position to to catch up with, and in fact surpass, the OTT.

The advantages of this approach:

  • Start-up costs are minimal, especially if the open source approach is preferred, meaning the platform is delivered on the basis of no license costs.
  • Maximum flexibility in scaling up and down, according to the real needs of the market.
  • If a solid certification system is set up around the PaaS, carriers are in a position to introduce applications and services much quicker than today, solving one of the biggest problems they face with the advent of OTT, dramatically shortening time to market.

Once properly calibrated and structured, the PaaS might support the carrier to gradually migrate existing business and network applications, unifying the delivery platform for such services with both organizational and operational benefits.

Opportunities For The Ecosystem

Although it is evident that NFV and the other market dynamics bring apparently insurmountable challenges, these are also times of great opportunities for the entire telecom ecosystem. If carriers want to regain their fair share of the market and profitability lost in favor of the OTT, the most important macro opportunities presented to telco are:

  • Take the NFV approach, starting the transformation from a single network function and then gradually expanding from there.
  • Integrate operational and business aspects of the NFV with the technology transformation.
  • Understand how to monetize NFV, by leveraging the Internet of Things and other technologies and services related to the media.
  • Focus on learning how to effectively gather and analyze customer data to gain insight, and be ready to tailor communication offerings to their customers, both enterprises and consumers.
  • Leverage open source in at least two directions:
    • Deploy OpenStack (and other related components) effectively, involving operations upfront in the architectural design and implementation.
    • Use a PaaS based on open source by leveraging the portfolio of human and business resources that come from open communities to build Business Intelligence applications faster and and at a lower cost to be used on PaaS.
  • Take the discontinuity forced by the market dynamics to revisit the entire OSS/BSS systems and migrate them under a single management platform.

In conclusion, no matter how the NFV is turned around, it is a necessary step that carriers have to take and gradually deploy on a full scale. However, NFV also brings unprecedented challenges both for the carriers and the entire ecosystem.

In this complex scenario, the upper hand is with those who:

  1. Can leverage proven transformational methodology, possibly borrowed from other industries, and deploy a solid risk management plan.
  2. Can bravely embrace the open source approach to build infrastructure, service management and business application platforms.

Telecom service providers have to look beyond their comfort ecosystem and embrace a wider set of potential partners to ensure a successful transformation, which will underline their very own survivability.

The SFE Platform Advantage

Since 2003, SFE is a pioneer of the Sales-as-a-Service (SaaS) model. More than 200 enterprises have trusted SFE to expand their sales into Europe and other international regions using our acclaimed Accelerated Sales Platform. Learn how we did it here. Our Platform includes Accelerated Market Analysis, Accelerated Lead-Gen and Accelerated Sales modules, which can be delivered as an integrated service or as stand-alone modules.

Our platform is deployed through an international team of 75+ Sales Professionals who represent your brand in-country/language, blend into your company culture and use their local market knowledge and sales contacts to make revenues and ROI manifest quickly.

If your company is looking for a competitive advantage using the latest sales methodologies to reach enterprises and channels throughout Europe, SFE can help. Let’s talk.

Contact Us Today!

Photo by Johannes Plenio on Unsplash

Digitalization As An Advantage In The Telecom World

Digitalization As An Advantage In The Telecom World

6 Differentiators To Success & Growth

by Massimo Fatato 

Every a few years the Information and Communication Technology (ICT) industry comes with a buzzword that accurately defines an era or even a shift in the market. Digitization is one of those terms that today, is having a global impact on the way business is done.

Digitization is not a new concept, around since Bell Labs introduced the world to the transistor in the middle of the twentieth century. Today we live in a digitized world and it’s hard to imagine not having access to the ease and efficiency that this technology brings to every aspect of our lives, including how we do business.

So if digitization has been around for so long, what is really new?

Gartner defines digitization as, “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.”

Based on this definition, the buzz is not around digitization as a concept, but rather in how enterprises use the technology to develop competitive services to lure customers away from their competition; how it is being used as a disruptor.

Digitization, Telecom and OTTs

Let’s look at how digitization is changing the face of the telecom service provider market.

Carriers went digital a long time ago when they transformed the old analog central offices into innovative ones, based on digital technology. This move opened the door to the creation of new services (e.g. 800 numbers), some of which they were able to convert into new revenues streams. This was soon followed by the IP revolution, bringing a multitude of changes all at one time to this stalwart industry. Very quickly, relatively speaking, carriers found themselves under threat from so-called Over The Tops (OTTs). An OTT is a service that is on top of those provided by the service provider. Think of apps or other such services that a consumer doesn’t necessarily pay for.

There are two main reasons why are OTTs such a threat:

  • Carriers struggle to bring new service to the market in a competitive timeframe compared to the fast consuming world we live in. Still today, the average time to take a new service to market is measured in months.
  • Carriers have not been aggressive enough to leverage their customer intimacy to create new, effective services to run on their own infrastructure, hence maximizing not only revenues, but most importantly profitability.


It is imperative for the telecom service providers (not only for their success but their very survivability) to regain the center stage of the market. In other words, carriers have to get out of the corner (they relegated themselves) where all they do is to provide connectivity to others who profit from it.

6 Ways Digitization Can Help

How can digitalization really help with this daunting task?

If we look at little closer to what some of the OTTs offer to their enterprise customers, we see a set of simple services combined to form complex platforms (e.g. gather, store and analyse a vast amount of data).

The OTT approach is to offload enterprises from building and managing such a complexity and offer them their platforms as a basis for the enterprise to run their Business Intelligence (BI) applications. Oversimplifying, OTTs commoditize the platform complexity, leaving the true business value in the BI application rather than in the platform, the latter being multi-purpose, the former being a specialization dedicated to the specific enterprise or industry.

Apparently for a service provider, revenues (and most importantly profitability) are concentrated in the Business Intelligence application portion of the value chain, where the enterprise is capable of creating a difference, without the commitment to buy and maintain sophisticated and very expensive systems.

This is where digitalization comes to the rescue of the good old telecom service providers, but only if they are capable of leveraging the technology at their disposal to:

1. Build a portfolio of Business Intelligence (BI) application services to bring value to customers in a cost effective way then market them appropriately not only to the large enterprises, but also to small and medium business with a tailored offering.

2. Become fast and nimble in building and bringing to market such services in a matter of hours and not months, by focusing on:

  • Virtualisation – To once and for all turn network functions virtualization (NFV) into a reality by gradually transforming their legacy, complex, cumbersome, costly infrastructure into a set of platforms that are capable to effectively support their market and business requirements.
  • Orchestration – To gradually but steadily transform their operation support systems (OSS) and business support systems (BSS) to allow end-to-end visibility of their services and customer experience.
  • Open Source community – To start participating consistently and structurally to enrich the portfolio of open source applications that are tailored for the telecom service providers and their customers.


This is a new frontier, but also the opportunity for carriers to take back the leading position in the communication market from their unusual competitors by:

3. Providing connectivity and control through customer behavior

4. Leveraging someone else (could be an OTT) or build their own digital platform

5. Selling a value proposition based on BI application services on top of such platforms

6. Managing all of this seamlessly, end-to-end

Does it sounds like a dream? Perhaps, but the technology and the capability offered by the virtualization and potentially by leveraging the open software community constitute a solid basis on top of which carriers can significantly revive their business for many years to come.

The opportunity is up for grabs for those who are brave enough to leverage the virtualization in an effective way, but most importantly exploit the opportunity presented by the open source philosophy. Easier said than done. Carriers face unsurmountable obstacles to take this journey – organizational, financial and operational.

Platforms Serve As A Commodity

Platforms are a commodity. One of the biggest examples of this is Google. Google offers a set of functionality, pulled together in a neat architectural framework to gather, store, process and analyze massive quantities of data. What is notable in the architecture provided by Google is the small number of BI applications that would truly make the difference for an enterprise between buying a very capable platform (and do not know what to do with it) and buying an ad hoc application that knows what to do with the massive number accumulated.

So the platform becomes commodity and the difference is made by the BI application.

If we apply the definition of digitalization, we’re facing a once in a lifetime opportunity for the carriers to take the center stage back from the Over The Tops (OTTs), but only if they can address the challenges they currently face, as mentioned above. Service providers will need to focus on providing competitive services in the shortest time possible in order to have a chance.

As the best opportunities come from the road less traveled we will witness a new order in the industry where only the bravest – and fastest – will survive.

The SFE Platform Advantage

Since 2003, SFE is a pioneer of the Sales-as-a-Service (SaaS) model. More than 200 enterprises have trusted SFE to expand their sales into Europe and other international regions using our acclaimed Accelerated Sales Platform. Learn how we did it here. Our Platform includes Accelerated Market Analysis, Accelerated Lead-Gen and Accelerated Sales modules, which can be delivered as an integrated service or as stand-alone modules.

Our platform is deployed through an international team of 75+ Sales Professionals who represent your brand in-country/language, blend into your company culture and use their local market knowledge and sales contacts to make revenues and ROI manifest quickly.

If your company is looking for a competitive advantage using the latest sales methodologies to reach enterprises and channels throughout Europe, SFE can help. Let’s talk.

Contact Us Today!