AT&T (NYSE: T) has been one of the most aggressive telcos implementing SDN and NFV in their networks, and the service provider is seeing its bet pay off to enhance how it delivers services to customers.
Speaking to investors during the Deutsche Bank 2016 Media, Internet & Telecom Conference, John Stephens, CFO of AT&T, said the advent of SDN enables the provider to reduce capex and improve the service delivery process.
"If you add on that software defined networks and the ability to cut the cost of the boxes and equipment throughout the network can give us another 1 percent of capital efficiency, you can see that these are significant savings going forward and a significant opportunity to generate cash flow," Stephens said. "Software defined networks are also important on making installation costs be automated by a computer and not a truck roll."
But reducing truck roll costs is just one benefit AT&T is seeing with the advent of SDN. With network-on-demand capability, a business customer could go to a portal to provision a new Ethernet circuit or increase capacity in minutes.
"Software defined networks are good at making capital more efficient, but they are also are important in making installation costs be automated by a computer and not a truck roll," said Stephens. "They are also important because when you have a software definable network with network on demand, customers can decide they want it and get the service that afternoon and they don't have to put out an RFP and wait another 60 days to get responses."
SDN also enables AT&T to transform itself into a service provider that can solve customer problems versus being just a dumb pipe provider.
"For us that ability to have a software defined network with network on demand enhances our ability to be a solutions provider on a cost efficient basis for our customers," Stephens said. "It provides a whole lot more opportunities for us."
Network on demand continues to resonate with business customers. AT&T currently has over 200 customers worldwide using the service, a figure that will likely rise in 2016.
AT&T is hardly alone in providing on-demand Ethernet services. Fellow Ethernet provider Level 3 Communications is also leveraging an SDN construct to deliver its Dynamic Ethernet service to a growing large business customer base.
"AT&T and Level 3 are the two U.S. companies that have on-demand capabilities, and one of the major considerations is end-to-end SLAs," said Rosemary Cochran, principal of Vertical Systems Group, in an interview with FierceTelecom. "If you think about setting up a dynamic connection, you need to have that capability flow through."
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