Analysis: Reducing Costs in the SGi/Gi-LAN

Unprecedented growth of mobile network devices and bandwidth usage means that the mobile operators need to scale their networks more efficiently than ever. Consolidating network functions is one way operators are looking to lowering costs.

Mobile network subscribers and services have exploded to the forefront of the communications market over the last decade, with nearly 4 billion global subscribers at the end of 2015, according to the GSMA. As the mobile network moves to supporting next-generation applications such as Internet of Things (IoT) in 5G, these demands will only grow, making virtualization of the mobile networks functions more important than ever as a way of holding down costs and achieving service deployment agility with operational efficiency.

An additional one billion subscribers are predicted by 2020, taking the global penetration rate to approximately 60%, according to the GSMA. Machine to Machine connections (M2M), which will drive connections to the IoT, number at least 8 billion and are expected to scale to tens of billions, according to multiple sources.

Many of these new connections, including M2M connections will require special security approaches and additional support in order to control the cost of delivering these services. As the mobile operators move toward new network functions virtualization (NFV) platform to support these applications, serious thought will have to be given to the architecture of the mobile core and virtualizing functions to provide efficiency – and preserve the profitability of these services.

Consolidating Functions and Lowering Costs

As mobile networks scale-out for expansion, look for more of opportunities where operators can consolidate platforms and position themselves to scale more aggressively to meet the ever-increasing demands of the network. Reducing costs in the SGi/Gi-LAN, a critical component of the mobile core network for supporting services and applications that require high concurrent connection and connection per seconds, is simplest to virtualize among network functions and thus helps to achieve operational efficiency.

Traditionally, this area is made up of a variety of specific hardware and software, carrying out individual functions such as load balancing, firewall, or specialized packet-based functions such as IP multimedia services (IMS), and these functions are merging. The move to NFV ensures that mobile operators can service chain these functions to build a simplified architecture and thus lowering costs and gain operational efficiency in the SGi-LAN.

Operators are increasingly interested in replicating the “scale-out” model of cloud computing installations, using commodity servers or integrated platforms. This means that layer 4-7 services will be easily executed together, to provide efficiency, as we have written about in an earlier article in this series. Telecom operators see this as an opportunity to collapse both the hardware and software architectures to drive more cost out of their infrastructure.

Packet-based functions such as load balancing, security, and IMS can be plugged into one platform as software – rather than requiring specific hardware for each function, as was the model in the legacy network. Then imagine that these services can be executed all at once.

Several research firms have published studies that show chaining functions in a SGi/Gi-LAN platform can save money. For example, ACG Research published the results of a TCO analysis among three leading vendors that was sponsored by F5 Networks that showed a use case for combining load balancing, network firewall, and Carrier Grade Network Address Translation (CGNAT). TCO analysis showed could result in a 35% lower cost as the throughput of a typical representative mobile network grows from 40 Gbps to 80 GBps, concluded ACG.

Savings can come as a result of the combining the platform for different functions, reducing replication of hardware elements such as of i/o ports (back-to-back) and chassis components such as power supplies, backplanes, and software operating systems, says ACG. The deployment of a integrated platform for these functions can also reduce service contracts, training costs, and software licensing costs by consolidating all of them under one platform.

But consolidating common SGi/Gi-LAN will go beyond cost savings. It also has the potential to speed the agility of deployment of new service, improve user experience, and offer more opportunities for managing bandwidth. These are some of the other benefits that have outlined here at SDxCentral.com.

In yet another study, ACG says that Mobile Virtual Network Operators (MVNOs) who adopted a virtualized Evolved Packet Core (EPC) solution with an NFV approach reduced capex by 68% and Opex by 67% on average. This occurred by using virtualized software functions on a NFV platform supplied by Affirmed Networks and VMware.

Whether the mobile operators pursue a converged platform or pure NFV software approach to their next-generation networks, the mobile core and the SGi/Gi-LAN will continue to be a natural point for integration of L4-7 service functions. As the locust of the IP traffic in the mobile network, it’s one of the key areas where mobile operators are focusing on lowering their costs as mobile networks continue to scale.