ABI Research says open source communities and individual telcos are fueling development in Asia-Pacific NFV market
As telecom service providers in Asia-Pacific continue to virtualize their network architecture, a new report by ABI Research forecasts the network functions virtualization (NFV) market in the region will swell to $9.24 billion in 2022. Japan is the biggest market in Asia-Pacific, encompassing 25.7% of the total revenue, followed by South Korea and China, at 22.7% and 14.6% respectively.
The NFV market is extremely competitive, consisting of a mix of large and small scale vendors globally. It blankets North America, Europe, Asia Pacific, the Middle East, Africa and Latin America. In order to survive and generate revenue in the NFV market, companies are forging partnerships and participating in open source communities like Open NFV. ABI said a “flurry” of development can be seen from open platforms like OPNFV and ONAP, in addition to individual efforts by telcos.
“Japan leads in the region, not only because of the desire to design resilient and reliable networks in preparation for future disaster threats, but also to prepare for the 2020 Summer Olympics,” said Lian Jye Su, senior analyst at ABI Research. “South Korea and China are actively preparing for 5G, which requires both cloud radio access networks (C-RAN) and cloud core networks.”
As these countries prep for 5G, tier-two companies like Banglalink and Ncell Axiata are progressing with the launch of virtual subscriber data management platforms. Both businesses have contracted with ZTE to leverage the company’s network virtualization equipment to develop virtual subscriber data management platforms.
ABI says the industry has long recognized there are many approaches vendors can take to the NFV market. In July 2017, for instance, SK Telecom commercialized T-MANO, an architecture framework for managing virtual network functions and other software. The release stood in contrast to other major Chinese telecom service providers, which chose to work with ONAP vendors in developing a mutual MANO platform.
Telcos in China intends to spearhead the government “Made in China 2025” initiative to comprehensively upgrade the Chinese industry. The aim is to increase domestic content of core components and materials to 40% by 2020 and 70% by 2025. ABI says through these NFV initiatives, Chinese telcos can bestow local startups with additional capabilities, including multi-access edge computing, massive machine type communications, dynamic cloud services and vehicle-to-everything communications.
“That is why the recent NFV interoperability test between Cisco, Ericsson, Huawei, and Nokia are important. Such collaboration allows telcos to truly embrace the multi-vendor NFV deployment and benefit from the open source nature of NFV,” said Su. “We believe that virtualized network function onboarding, interoperability testing, and lifecycle management are becoming the new focus of the industry, as telcos seek to leverage the strengths of different hardware and software vendors.”
