TM Forum Survey: Communications Service Providers Struggle with Business Case for NFV & Digital Transformation
Communications Service Providers (CSPs) are still contending with how to convince customers of the business value of network functions virtualization (NFV) and also struggling with digital transformation (CX), according to a TM Forum industry survey of 160 people from 66 CSPs. Approximately one third of CSPs surveyed said they are deploying NFV in the packet core and 36% reported NFV deployment at the mobile edge or as virtual CPE. The number of survey respondents admitting to having no timetable for virtualization also fell from 30% a year ago to 23% this year.
The TM Forum CSP survey, conducted this past summer, was dominated by non-North American operators, with 34% based in Asia Pacific, 24% in Europe and only 3% in North America.
Most CSP respondents are also struggling with network transformation, even though many (44%) think it’s essential to their overall digital transformation process. They are also struggling to adopt new ways of working within their network operations, with 67% admitting they have not introduced DevOps, considered important to become more agile and less siloed, in network teams at all.
Speaking during a Telecom TV panel at 5G World, Franz Seiser, VP of Core Network & Services, Deutsche Telekom, explained that NFV is, indeed, a key building block for 5G, but it will take time to implement.
“We are not where we’d like to be as an industry [with NFV deployment],” Seiser said, adding that it’s less a technology issue than one of transformation. “We have a big job still head of us in progressing and transforming the way we work.” He noted, however, that there is time to catch up because the first 5G standards are for new radio access only and do not include the network core although the development of these is well underway.
Tier 1 CSPs including AT&T, China Mobile, Deutsche Telekom, Orange, Telefónica, Telstra, Verizon and Vodafone have announced publicly that they are embracing NFV and SDN, and our latest DTT survey shows that the pace of network transformation is picking up among these and other telcos. Nearly a third of CSP respondents said they are deploying NFV in the core, up from just 22% six months ago. In addition, fewer respondents said they have no timetable for virtualization, and among respondents whose companies are not yet deploying NFV, one in five said they will start deploying VNFs within the next year.
Tier 1 CSPs including AT&T, China Mobile, Deutsche Telekom, Orange, Telefónica, Telstra, Verizon and Vodafone have announced publicly that they are embracing NFV and SDN, and our latest DTT survey shows that the pace of network transformation is picking up among these and other telcos. Nearly a third of CSP respondents said they are deploying NFV in the core, up from just 22% six months ago (see graphic below). In addition, fewer respondents said they have no timetable for virtualization, and among respondents whose companies are not yet deploying NFV, one in five said they will start deploying VNFs within the next year.
Not all CSPs are taking the same approach to network virtualization. Some are focusing on virtualizing specific applications, without undertaking wider transformation programs. Others are taking an approach that focuses more on improving customer centricity, particularly for enterprise customers, while many see network transformation as part of a bigger digital or business transformation. TM Forum research shows that 44% of CSP respondents view network transformation as part of overall digital transformation.
Digital Transformation Status:
“Our technical team believes we are well along the way to (digital) transformation,” the online report quotes one survey respondent saying. “The business team has absolutely no idea what digital transformation means to them and their work. In my opinion, it feels like the technical team is using this transformation as a way to grab power within the organization.”
One of the problems, says TM Forum Chief Analyst Mark Newman, is that CEOs don’t have the confidence in their IT staff to lead a digital transformation effort.
The TM Forum Digital Transformation Tracker cites two other reasons network transformation is lagging, including the fact that there is still “a loose definition and interpretation of what a digital transformation program involves.” In addition, it says, there are “different objectives of network transformation programs and the constantly-evolving timeframe for network virtualization and cloud adoption.”
Legacy OSS/BSS systems remain the biggest challenge to network transformation, according to 60% of respondents, while 56% ranked security vulnerabilities as a major issue and 52% were concerned with how long it’s taking standards to mature.