NEC goes forward in the first virtual Customer Premises Equipment trial with Telefonica in Brazil. This is the first time that an NFV project takes place with real customers in the residential market

Tokyo, Japan – June 22, 2016 – NEC Corporation (TSE: NEC 6701) announced today the completion of the first phase of a pre-commercial trial for virtual Customer Premises Equipment (vCPE) for residential users in the network of Telefonica's Brazilian affiliate VIVO.

This trial was conducted with existing customers and deployed in the carrier's own commercial network. Virtual CPE architecture focuses on home simplification achieved by shifting functions to the carrier's network. This is done to enable better diagnostics and more effective troubleshooting, thereby delivering operational benefits. Telefonica is a pioneer in the testing of NFV (Network Functions Virtualization) technologies, aligned with its positioning of operating as a digital company, focused on delivering the best customer experience. The objective of this world's first (*) vCPE commercial trial is to evaluate operation efficiency and flexibility, in addition to accelerating its time-to-market.

In October 2013, Telefonica and NEC were the first to virtualize consumers' broadband gateways. These simplified gateways provide basic connectivity, acting as an access point, switch and modem. All other functionalities, such as IP routing (IPv4 and IPv6), Dynamic Host Configuration Protocol and Network Address Translation, are provided remotely from the network, running as virtualised network functions (VNFs) on commercial-off-the-shelf (COTS) servers.

Atsuo Kawamura, Senior Vice-president of NEC Corporation commented,

"This trial with Telefonica/VIVO represents the creation of a new technology wave using network virtualization technology for telecom networks. We expect that the virtualization of network functions will enable Telefonica to raise the efficiency of operations and quicken the development and distribution of new services, thereby allowing customers to enjoy a wide variety of services while promoting convenience and customer satisfaction."

Following the completion of this trial, and according to the evaluation of its results, both companies aim to start commercial implementation of vCPE in Brazil, with additional deployment within the Telefonica Group to follow.

NEC and Netcracker, a wholly owned subsidiary of NEC, will further provide comprehensive end-to-end SDN/NFV solutions to help Telefonica promote its virtualization projects.

• * According to research by Telefonica