5G Converged IP Transport: Get the Lowdown on Total Cost of Ownership(TCO)

Today, many Service Providers face stalled growth, shifting demands from the consumer market to the enterprise market, increasing regulatory pressures, and mounting competition. As a result, they are seeking new ways to fund and deploy their 5G infrastructure to capture new customers.

However in order to be profitable, the Cisco Visual Networking Index estimates that for each dollar they invest, their networks will need to “move” approximately 900MB of monthly traffic— 11 times the traffic they moved in 2012!

While automation provides the opportunity to drive top-line growth with new services and reduced operating costs, many Service Providers are sidelined by their inability to free up budget due to the burden of numerous purpose-built networks. For many years, Service Providers have been rolling out purpose-built, stand-alone networks to deliver specific services (mobile, residential or enterprises).

These siloed networks require specialized skills, dedicated resources, and unique operational processes and tools. Delivering services across these network boundaries is extremely cumbersome and expensive.

The evolution of the operator’s network is a significant financial and engineering undertaking that must be thought through from end-to-end. The new network infrastructure must simultaneously satisfy exploding bandwidth demands, massive logical scale, and the incredibly low-latency needs of new applications and services in an efficient, automated, and programmable manner.

To free up budget and resources to implement 5G, Service Providers need to converge services onto one transport network to handle the amalgamation of service offerings. With this converged strategy, they can significantly change their economics and lower their total cost of ownership (TCO) while benefitting from the latest technology advances to enable service innovation and velocity.

ACG Research just released a paper presenting their results of an extensive TCO analysis, which compares the economics of a converged IP/MPLS transport network to more traditional dedicated networks. The results of the analysis demonstrate significant savings with an overall TCO savings of 62%, capital expense (CapEx) savings of 60%, and operations expense (OpEx) savings of 66%. The analysis asserts the financial advantages of a converged future mode of operation, and it elaborates on the benefits of the higher price performance of Cisco’s 5G ready routing portfolio, as well as the benefits of segment routing, network programmability, and automation.

If you are interested in exploring new ways to increase growth while reducing CapEx and OpEx, I encourage you to download a copy of the ACG Research TCO analysis,as well as learn more about Cisco 5G offerings.