NASHVILLE, Tenn. — For small Tier 2 and Tier 3 wireless operators, the notion of software-defined networking (SDN) is a bit overwhelming. For many, the prospect of such a dramatic change is a low priority given the other obstacles they are facing, such as increased competition from the Tier 1 operators like Verizon and AT&T.

But here at the Mobile Carriers 2016 Show, where hundreds of smaller operators have gathered, vendors such as Ericsson and Nokia are encouraging these companies to consider SDN and network functions virtualization (NFV) because of the cost savings these tools offer.

Glenn Laxdal, Ericsson’s CTO of North America, said he believes smaller operators will eventually have to virtualize their network cores but that they just don’t have the resources to be on the forefront of this trend. “Smaller operators will benefit from SDN in the same way that larger operators will, because there is cost savings in moving from purpose-built hardware to software in the core,” Laxdal said. “But they don’t have to be at the bleeding edge of this.”

That sentiment was echoed by Michael Murphy, Nokia’s global 5G head of technology, although he cautioned that smaller operators shouldn’t wait too long to virtualize their networks or they will risk being left behind. “Eventually it may be difficult to buy non-virtualized products,” he said, noting that operators are shifting away from buying end-to-end hardware stacks.

And with 5G on the horizon, the move to SDN becomes even more critical for smaller operators. Murphy said that, as standards groups such as the Third Generation Partnership Project (3GPP) begin to write 5G standards, there is an assumption that most of the network applications will be in the cloud. If operators want to offer applications that require low latency, they will need to have a distributed network at the edge – and the only way to do that is with SDN.

Ericsson’s Laxdal noted that bigger operators like AT&T are already starting to cloud-enable the central office, which means that certain applications will be able to work closer to the edge of the network. This trend, Laxdal noted, will pave the way for applications that require low latency, such as the connected car.

Although small operators may have to eventually move to 5G, some are still just trying to get 4G deployed. “We are still figuring out 4G,” said Kevin Keinsmith, director of engineering at Union Wireless, a regional telco that provides landline and wireless services in rural Wyoming. “Lots of people are talking about 5G, but we are just focused on roaming and getting our billing figured out. Billing is the most important thing we do.”