The advent of network functions virtualization (NFV) is shaking up the telecom scene quite dramatically. One of the avenues that will see a change is the Mobile Virtual Network Operator (MVNO) space.

An MVNO is like a wireless-service reseller. It's a service provider but it doesn't own any wireless infrastructure; it buys capacity from established operators.

Traditionally, MVNOs have had little to no view of what goes on inside the mobile operator’s network. They approach the operator with a number for current or future subscribers and the services they require. However, upon provision of these services, MVNOs are kept obscured from network statistics and are unable to perform meaningful analytics to understand the subscriber behavior on the services they are offering. Thus, MVNOs don’t have any visibility into, or control of, the traffic their subscribers generate.

NFV will provide MVNOs an opportunity to have a significant chunk of the core network as their own on the cloud. This way, MVNOs would only share the radio access network (RAN) elements while managing their very own virtualized cores. This would provide MVNOs with visibility into the traffic generated by the subscribers, plus MVNOs would be able to offer almost all the services that an actual communications service provider (CSP)  can.

With NFV, not only will the MVNOs’ visibility and overall control of the backhaul network increase, but this will also likely shift the paradigm in terms of service customization. At present, virtual mobile operators function by providing mobile access services bought from a mobile operator which they then provide to their customers. As both the RAN and the core network are owned and controlled by the telecom operator itself, the current scenario offers very little room for customization in terms of services being offered by different MVNOs. A virtual operator might want to offer single services, one example being Netflix, or a bundle encompassing a variety of platforms. Or an MVNO may just want to launch a service for wearables or POS or fleet management, but instead has to make do with the very limited scope of customization offered by mobile operators.

With the migration of the core network to the cloud, MVNOs would easily be able to offer and manage services they deem best for business. They will no longer have to comply with "across the board" and "all encompassing" policies. Although it all appears too good to be true, such a setup does come with its limitations. For instance, there is general consensus that regardless of the future implementations of NFV, the RAN segment is most likely to remain managed and maintained by the telecom operator themselves.

However, will the core network completely shift to the cloud? The answer to that is unfortunately no. There will still be chunks of the core which would stay under the mobile telecom operator’s control.

For instance, within 4G LTE networks, consider the Mobility Management Entity (MME) — the mobility anchor for the LTE network which pages mobile terminals throughout the radio network. Imagine an array of MVNOs all having their virtualized MMEs on the cloud that page throughout the radio network. Losing control over what goes on in the RAN in that regard is something that CSPs will not be comfortable with. A single MVNO's MME malfunctioning can have an astronomical effect and has the tendency of bringing the entire network down;, especially during peak hours — something no telecom operator can afford.

The core network elements best suited for cloud migration are thus the Serving Gateway (SGW), PDN Gateway (PGW), Home Subscriber Server (HSS), and the Policy Charging and Rules Function (PCRF). A lot of new software vendors are emerging with solutions around these entities.

The SGW deserves special mention here, as it encompasses two interfaces, the S5 and S8 (see below), toward the PGW. In principle, it's the same interface, the difference being that where the former is used for intra-operator LTE traffic, the latter is used for roaming traffic.

From the telecom operators' and MVNOs' perspective, going the S8 route would be ideal. This setup would allow different virtual operators to own and manage their own PGWs while their traffic gets routed as roaming traffic across the S8 interface.

In this way, along with all the other capabilities that were mentioned, the MVNO would be able to do the charging on its own based on any criterion that it wants.

In my next posting, we'll examine how the hyperscale cloud players could have a stake in all this. (UPDATE: Here's Part 2.)