AT&T said it has a virtualized evolved packet core (vEPC) network to handle its growing Internet of Things (IoT) traffic in Europe. That IoT traffic is primarily from General Motor’s OnStar service, which AT&T powers in select European countries.

Cameron Coursey, vice president of product development at AT&T’s IoT solutions group, says the vEPC in the IoT network in Europe allows AT&T to customize the IoT network capabilities more quickly and to also more easily segment the traffic.

Coursey notes that AT&T’s IoT network in Europe was virtualized before the company’s Domain 2.0 program was in place. Domain 2.0 is the name for AT&T’s plan to virtualize 75 percent of its network by 2020.

Virtualization of the network is appealing to IoT service providers like AT&T because it will allow them to customize IoT for different customers and different use cases.  Software-defined networking (SDN) "allows us to segment traffic through different enterprise customers so they can almost have their own core network,” Coursey says.

He declined to provide details on how and when AT&T is planning to virtualize its IoT networks in the U.S. Instead, he just said that the IoT networks are in different stages of virtualization. “Some components are virtualized, and some remain to be.”

Analyst Godfrey Chua with Machina Research says, while AT&T’s IoT traffic in Europe is probably roaming on other operators’ radio access networks through roaming agreements, the vEPC allows AT&T to deliver services more economically because the data usage can now be streamlined. Chua adds that most wireless networks are designed primarily for usage by smartphones and tablets, but by virtualizing the core network, IoT providers can then tailor their services for the client.

Different IoT use cases require different types of demand on the network – from transporting small packets of data to several gigabytes of data – and operators like AT&T see great value in having network flexibility. “We know the network is going to be subjected to much more variability depending upon the requirements that the IoT users have,” Chua says.

But Chua also says that many operators aren’t jumping on the vEPC bandwagon for IoT, because so far the amount of IoT traffic in the networks is fairly small. “They [operators] can still get away with the old network.”

However, that may soon not be the case. Chua says he expects some of the big operators that have a lot of IoT business on their networks will soon be moving to a more virtualized core. “For the top IoT telcos,” Chua says, “IoT is playing a key role in their network architecture – and virtualization is part of that.”