SDN: A Solution to Helping Bridge the Mobile Backhaul Funding Gap

Software Defined Networking (SDN) has become the industry “buzz term” of 2013. Players at all positions in the telecom market are now trying to demonstrate their part in providing, enabling or deploying SDN solutions.

However, to date, there has been limited demonstration of genuine and valuable use cases of SDN deployment and the positive impact it can have on the operator’s financials. To attribute a value to the technology, we commissioned a study by Strategy Analytics. The resulting report examines the potential CAPEX savings that SDN could enable, specifically in mobile backhaul.

When exploring such a new market, forecasting its future value is a challenge. In order to estimate capex savings from SDN, Strategy Analytics analyzed 5 application areas that it expects to be key for backhaul, across 6 geographical regions. The resulting analysis identified an opportunity for the industry to reduce backhaul CAPEX annually by more than $4 billion by 2017.

Listed below are the CAPEX savings attributable to each application and geographical region. 

CAPEX savings through the application of SDN to backhaul in year 2017, by application area:

  • Metro Aggregation/Load Redistribution - $1,116 million
  • Local Breakout/Internet IXP - $1,083 million
  • Wi-Fi Offload/Video Redirect - $1,021 million
  • Cloud RAN - $777 million
  • Small Cells - $202 million.

CAPEX savings through the application of SDN to backhaul in year 2017, by geographical region:

  • Asia-Pacific - $2,662 million
  • North America - $599 million
  • Western Europe - $574 million
  • Middle East & Africa - $162 million
  • Central & Eastern Europe - $112 million
  • Caribbean & Latin America - $89 million

Earlier this year, we worked with Strategy Analytics to identify the potential funding gap facing the mobile industry by 2017, due to a shortfall in planned backhaul investments. This latest study demonstrates an opportunity to bridge a significant part of the mobile backhaul gap.

The author, Sue Rudd, discusses the findings of the report in this video. Sue says, “SDN is poised to become a major weapon in mobile operators’ battle to optimize capacity and protect margins in the years ahead.”

This report provides the evidence that the industry needs to build business cases that demonstrate the value of SDN. Given the limited parameters of this study, it’s exciting to imagine the impact of SDN as it’s deployed across various applications on multiple network layers.