Why Are Telecom Service Providers Interested in Open Source?

By | September 29, 2016

open-source-telecom-networksOpen source in telecom networks is an emerging concept that could disrupt the telecom value chain. Hardware solutions make up the vast majority of today’s telecom network infrastructure. In recent years, Network Function Virtualization (NFV) and Software Defined Networks (SDN) solutions began to appear in networks – a trend that will accelerate in the future. While virtualization provides a leap in flexibility over hardware-based architecture, virtualization solutions remain proprietary implementations that are optimized for performance. Open source solutions that build on SDN/NFV promise to open up the network to third parties, adding vitality to a mature market and stimulating innovation. This is much desired by mobile network operators (MNOs) who face a shrinking ecosystem of suppliers. In our survey of open source in telecom, the following are the main priorities cited by MNOs for pursuing the open source model:

  1. Enable new services: The leading MNOs feel highly constrained within the confines of the existing network infrastructure. They seek the ability to deploy new services and features more cost effectively to improve their competitive positioning, especially against OTT services. The type of services MNOs seek vary according to region and range, from highly advanced applications such as V2X to more common ones such as enterprise or rural connectivity.
  2. Reduce vendor lock: Consolidation of Telecom Equipment Manufactures (TEMs) has led to a few companies, such as Ericsson, Huawei, Nokia, and ZTE with overwhelming infrastructure market share. This impacts the innovation cycle and it becomes imperative for MNOs to stimulate innovation and creative solutions through open source.
  3. Morph cost models from capex to opex: The question of cost is complex, as MNOs are not necessarily expecting major reduction in the total cost of ownership from SDN/NFV-based solutions. What is certain is that in open source, as is the case with SDN/NFV-based solutions, the cost model is opex-based, which provides higher capital efficiency and is more responsive to network scalability, especially for new services such as machine connectivity.
  4. Stimulate and accelerate the innovation cycle: The leading MNOs participate heavily in standard activities to drive their vision into the process and ensure that the standard will meet their requirements. The ‘waterfall’ process is slow in the context of rapid technological innovation. Many standards exist, of which only a few are used. Open source as an iterative process is a means to accelerate the technology development and the deployment cycle.

open source telecom networks

The advent of open source in telecom networks marks the beginning of a highly transformative development. It is a very complex development with many variables that we are monitoring to assess the potential for success and extent to which open source can take hold. For additional insight please see our paper on this topic: Will Open Source Disrupt the Telecom Value Chain available at this link (or here – at the Xona Partners web site).