Ericsson (NASDAQ:ERIC) is actually the fifth-largest software company in the world, and that situates it nicely as mobile operators revamp their networks to accommodate new revenue streams generated by Internet innovators, said Ericsson CTO Ulf Ewaldsson.
Today's mobile networks are limited and built upon a best-effort design, but that means they have latency issues and cannot dedicate high bandwidth to a particular user on the fly. But employing software-defined networking (SDN) techniques could help mobile carriers overcome those hurdles and attract new data-centric revenue streams, said Ewaldsson.
Ericsson's vision of service-provider SDN entails enabling all of the services created and run in data centers to use the mobile network's capabilities more efficiently, said Ewaldsson, who spoke at at GigaOM's Structure:Europe conference in London.
Currently, only 30 percent of the investment in mobile networks is dedicated to hardware. That will not change much going forward, but what will change is that there will be more virtualization of the platforms running applications that are delivered through network. In fact, large operators are already adding such capabilities in their data centers. "Cloud has already made its entrance," Ewaldsson said.
He said networks should be opened to over-the-top (OTT) providers, which can create services that drive innovation as well as generate new revenue streams for operators.
Ewaldsson cited the United States as a market where this is already occurring. With the data-share plans implemented by AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ), every bit consumed by an OTT app becomes a revenue stream for the mobile operator.
"That is changing the relationship [between carriers and OTT providers]. Where there used to be enemies, there is more love. That love is something that is very important because that unleashes all the power of the innovation on the Internet into the mobile industry," he added.
But for this kind of future to emerge, mobile operators must make significant investments in their networks and strive for differentiation. "The only reason why the innovation power that's going on in the cloud will not be unleashed or not happen is if the networks are not good enough," Ewaldsson said.
"Over all the years Ericsson has been working with these kinds of technologies, we have innovated a lot of things that we want to do, and then we see they cannot be realized because the networks are not good enough," he lamented.
- see this GigaOM article
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