Ericsson CEO: Almost all our products are already virtualized, but industry moving slowly to SDN, NFV

Although carriers including AT&T and Telefonica have boasted of their progress toward virtualized, software-defined networks, the overall wireless industry remains in the very early stages of this transition, said Ericsson CEO Hans Vestberg.

Indeed, Vestberg estimated that while AT&T has set a goal of virtualizing 75 percent of its network by 2020, the bulk of the global wireless industry likely won't be anywhere near that target.

Vestberg, in an interview with FierceWirelessTech, pointed out that there are 500-600 wireless network operators across the world, and most – particularly those in emerging markets – appear largely content to operate their networks in the future much in the same way they have done in the past, at least in the near term. He said that, while AT&T is driving the shift to SDN and NFV by building its own products like ECOMP, most carriers will likely wait until vendors like Ericsson and others are able to deliver virtualized, software-defined products with quality-of-service guarantees.

But, Vestberg added, most carriers will eventually make the move since SDN and NFV promise to lower carriers' overall network expenses.

And Vestberg argued that Ericsson is well positioned to help transition operators into the virtualized world.

"Right now all the products we have coming out are virtualized," he said, noting a few exceptions on the radio side of the company's product portfolio. He said Ericsson's OSS, routers, packet core, gateways and other products can now all can be purchased virtualized. "We're very well positioned," he said.

Further, Vestberg pointed out that "the complexity of the networks has gone up tremendously" as the industry has moved from 2G networks to 4G networks. And during that same time, the number of major wireless equipment vendors has shrunk from more than a dozen to just three: Ericsson, Nokia and Huawei. "There are new players in certain areas [including in SDN and NFV], but from the holistic point of view, to build a network that's going to hold up, and have a range of quality, there are pretty few [vendors that can do that]."

Indeed, Vestberg said software-defined networking and virtualization allow carriers to more easily plug in products from a wide range of vendors, but that situation too creates challenges. "You can have a standard hardware and you can have every different software from all kinds of different companies," he said. "You need to think much broader when it comes to system integration, guaranteeing quality, how you build all this together. I think a company like Ericsson that has equally much revenue in services as well as technology, we have a position to build that."

Concluded Vestberg: "I think we have a great opportunity."

However, Vestberg made his comments on the heels of Ericsson's second-quarter earnings report, which showed declines in the company's sales and plans for further job cuts. Ericsson in general is hoping that the industry's pending move toward 5G network technology will re-invigorate its operations.

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