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New Study Reveals: SDN Could Save Operators $4 Billion In Capital Expense By 2017

Stocks in this article: TLAB

NAPERVILLE, Ill., Aug. 29, 2013 /PRNewswire/ -- A new study sponsored by Tellabs defines the value of Software Defined Networking (SDN) in mobile backhaul networks. New research by Strategy Analytics finds that SDN can save mobile operators more than $4 billion in capital expenses by 2017.

Savings stem from 5 key SDN applications for mobile backhaul networks. These savings can help close almost half of the $9.2 billion "backhaul gap" identified in Strategy Analytics' earlier report, "Future Backhaul Needs of Mobile Network Operators."

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As mobile data traffic grows, the investment required to meet users' experience expectations escalates. The "backhaul gap" is the difference between required backhaul investment and planned spending.

The earlier report found that a capacity shortfall in backhaul networks has already begun to build. The "backhaul gap" may reach 16 petabytes globally by 2017.

Key SDN Applications Cut Capital Expenses

To evaluate SDN's impact on mobile backhaul investment, Strategy Analytics researched 5 SDN applications. Strategy Analytics anticipates these areas are where SDN will have the most impact: Metro Aggregation/Load Redistribution, Local Breakout/Internet IXP, Small Cells, Cloud RAN and Wi-Fi Offload/Video Redirect.

The largest single saving in capital expense value terms will come from Metro Aggregation/Load Redistribution. This application could contribute savings of $96 million in 2013, rising to $1,116 million in 2017.

Across the SDN applications, the value of capital expense savings by 2017 is forecast to be:

  • 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.

Regional Breakdown

In addition, the research showed savings that SDN could generate by region.

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