Service providers are exploring approaches to meet changing market conditions, including rising operational costs and increasingly flat revenue. Concurrently, they are facing challenges in addressing the exponential traffic growth on their networks. Drastic traffic growth continues – from video, gaming, and virtual and augmented reality, as well as from the introduction of 5G and future technologies. The majority of the services consuming this increased capacity are also causing lower Average Revenue Per User (ARPU) and higher operational costs for service providers as they build and upgrade network infrastructure to scale and support the capacity growing at an exponential rate.
These compounded market conditions require strategic decisions that enable the massive growth of IP services without incurring cost increases in Capital Expenditures (CAPEX) and Operating Expenditures (OPEX). In the not so distant past, service providers had to regularly upgrade their networks to deliver new services, leading to high OPEX increases for each upgrade due to the new ways to plan, manage, and deploy the upgrades. Currently, operational expenditures are about $5 for every $1 spent on network infrastructure. The increasing costs are a result of the complexity of managing multiple layers, the power and space constraints, and computer engineering definition management.
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