Verizon virtualization drive will reduce capex, boost network builds, says research firm

Verizon (NYSE: VZ) may be less vocal than AT&T (NYSE: T) about its SDN and NFV transition, but with plans to have all of its relevant network functions in a virtual environment by the end of 2018, it's clear that this transition is a top priority for the telco.   

Nicki Palmer, chief network officer for Verizon, told attendees during keynote speech at the Wells Fargo Convergence & Connectivity symposium this week that the carrier "has been very active with its virtualization approach."

Covering its wireless and wireline networks, Verizon has been centralizing its baseband units and then moving important network functions onto their network cloud in core and edge locations.

In 2015, Verizon created live SDN lab environments in San Jose, California, Tampa, Florida, and Waltham, Massachusetts, and has commercial data center environments on both the East and West Coasts. The telco also named five of its key vendor partners: Cisco, Ericsson (NASDAQ: ERIC), Juniper Networks and Nokia (NYSE:NOK) along with its recently acquired Alcatel-Lucent.

One area where Verizon has been active is in rolling out new services like SD-WAN. Through its partnership with Viptela, the service provider will offer the service in the U.S., Europe and Asia Pacific regions. This service expands Verizon's Managed SD-WAN portfolio currently based on Cisco's iWAN technology in these three regions, which it launched in 2015. 

AT&T, meanwhile, has set an even more aggressive timeline. The service provider revealed that it will virtualize 30 percent of its network applications by the end of the year.

Regardless of these carriers' timelines, Wells Fargo said that AT&T and Verizon's SDN plans will provide a number of financial benefits.

"T and VZ's SDN plans should drive both operating and capital expenditure savings, which will enable the Big 2 carriers to continue investing in their networks despite long-term guidance for relatively flat capex," said the analyst firm in a research report.

Related articles:
As AT&T, Verizon and CenturyLink migrate to SDN, reliability and service agility are top priorities
Verizon's SDN strategy will migrate aging wireline platforms to software
Verizon, Viptela partner on SD-WAN to meet managed hybrid networking demand
SD-WAN to reach $6B by 2020 as enterprises optimize cloud strategies, says research firm

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