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Vodafone Spain: Virtual in more ways than one

virtual realilty

via Flickr © Pargon (CC BY 2.0)

Interesting developments in Spain - particularly in the light of Google’s possible elevation to the status of MVNO (mobile virtual network operator  (see - Why might Google want to go wireless?).

Backin Europe, part of Vodafone’s strategy is to develop low cost offerings through MVNOs, but not just as a branding exercise where the same old services get marketed and priced differently with a new logo slapped on the windscreen.

Vodafone Spain has built its latest MVNO - Lowi - from the ground up on virtualized technology and is literally banking on the cost savings it calculates will accrue with this approach. Low priced offerings -  Lowi  has plans such as 1 Gigabyte of mobile data for just €6 - must have low capital, operational and marketing costs to make the sums work (amortising the capital cost of the actual network is surely a smaller and smaller proportion of the whole every year).

To get it there Vodafone is using the SDN/NFV platform from Elephant Talk running on top of which is a virtualised evolved packet core (EPC) from Affirmed Networks, and an HLR/HSS from HP.

So everything’s virtualised and therefore economically scalable and highly manageable, but best of all (from Lowi’s point of view) the soup to nuts roll-out took just three months. That might sound like a long time to boot up a server, but it’s a bat of an eyelid against the time (and therefore the technical effort) usually required to equip and test an MVNO using what we must now call ‘legacy’ infrastructure.

“The speed with which Vodafone was able to launch [Lowi] is breathtaking,” says Yankee Group Research VP, Jennifer Clark in a client newsletter. “That it was able to do so riding on the SDN/NFV product offerings out of two very small companies – start-up Affirmed and ElephantTalk Communications, which reported $7.3 million in revenue last quarter – is likewise startling. The agility the industry was promised with SDN/NFV is emerging in real-world service offerings.”

That ability in the hands of a company like Google (if the Google MVNO  story pans out) should ring warning bells, according to CIMI Corp’s Tom Nolle, a long-time SDN/NFV practitioner.

“It’s my view that the Google (see - Why might Google want to go wireless?) move will propel SDN, NFV, application architectures for mobile empowerment, and a bunch of other things.  The propulsion will be focused on vendors, though, and not on the standards processes.  There is simply no time left now to diddle with consensus.  Once Google gets in the game, once Amazon and Apple are stimulated to accelerate their own MVNO positions, it’s every vendor for themselves.”

And not only vendors. It may well be every operator for themselves as well. As Nolle has acknowledged in earlier posts, the complexity of SDN/NFV only really kicks in when it’s shoehorned into a legacy environment - such is the integration, training and so on required to bring the the whole creaking construction up to speed.

In these circumstances (classic incumbent upgrade) the costs savings from the transition, Tom Nolle reckons, is probably around 25 per cent. The payoff is agility not cost savings, although the savings obviously recur as the incumbent upgrades platforms and software over the longer term.

What Tom is suggesting is that total standardisation for NFV/SDN  is not where the money is. Instead, both vendors and their telco clients need to cut to the chase and introduce virtualised infrastructure islands in particular areas - like MVNOs - if they want to stay in the game.

The Google MVNO might prove to be a wake-up call and Lowi is the proof of concept.

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