AT&T's Donovan: Wireless network costs decreasing due to SDN, Ethernet backhaul, cloud computing

John Donovan, senior EVP of AT&T's (NYSE: T) technology and operations, said the carrier is rapidly moving to deploy software-defined networking (SDN) into its mobile network to lower the company's networking costs.

"We're collapsing the core of the network," Donovan said during AT&T's analyst day. "The first software-defined networking thing we did was that mobile packet core. And we're starting to move large amounts of traffic in our mobile network onto a software-defined architecture."

Donovan explained that today's wireless networking requirements are challenging, considering wireless networks today are being called on to deliver both data-heavy video as well as lightweight Internet of Things (IoT) communications.

To respond to that situation, Donovan said AT&T is employing a range of technologies to make its wireless network more nimble and more efficient.

Aside from employing SDN, Donovan said that AT&T is being "very aggressive" in its efforts to install Ethernet connections to its cell towers for backhaul. Such connections can carry far more data than legacy backhaul connections.

Donovan added that AT&T is leveraging its current fiber expansion for cell site backhaul. Donovan pointed to the 14 million locations that AT&T plans to roll fiber out to, noting that those fiber connections are going to be "near cell towers." He said that it's much cheaper for AT&T to connect its cell towers to its own fiber network rather than to another provider's fiber network.

Finally, Donovan said that AT&T is working to centralize the computing requirements on its wireless network. "There's a lot of that [computing] capability that's going to move further back into the cloud and we're going to take advantage of that," Donovan said. "We're going to be on the real leading edge of companies globally that deploy that technology to go software defined on the radio network."

"We are very, very focused on making those packets go down on cost per gig," Donovan noted.

Indeed, Donovan said that traffic on AT&T's wireless network has increased a whopping 100,000 percent from 2007 to 2014. To address that growth, AT&T has pledged to virtualize 5 percent of its network by the end of this year, on its way to virtualizing 75 percent of its network by 2020.

"We need to become a software company," Donovan noted.

For more:
- see this AT&T webcast

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