AT&T: Sorry vendors, SDN is eating your lunch

The cold winds of disruption start to whistle through telco-tin-land


In news that will chill purveyors of big networking iron, AT&T last week told its earnings call it reckons its software-defined network (SDN) rollout will cut its capital expenditure.

While reports last week focussed on the company's revenue (US$33 billion for the second quarter), margins (36.3 per cent), and operating income ($5.7 billion).

With its LTE rollout winding down (310 million POPs built), the giant telco's capex is already slimming down from $20 billion in 2014 to “around” $18 billion predicted for this year, and that includes capex devoted to AT&T's expansion efforts in Mexico.

As Lightreading notes, the strategy will eventually reach all the way to customer self-provisioning.

Further into the future, however, Stephens expects SDN to squeeze capex, even though he said the main reason for the build (known as “Domain 2.0”) is to make a more flexible network.

“Our move to next generation networks is starting to make a real difference”, he said on the call.

There will still be opportunities for kit vendors: 5G is already on the company's mind, and it's eyeing off 600 MHz spectrum for future wireless services, something that would need a considerable build-out.

However, the more that AT&T can convert its core network into software running on generic Intel servers, the risk that something like 5G would demand a big capex spike is reduced, he said.

That's because the SDN vision, if it's realised, would mean most of the deployment cost associated with something like 5G would use far simpler base stations, with most of the intelligence in the network instead of the base stations.

Hence, Stephens said, “I think there's a real opportunity with some of the opportunities that are happening on a software-defined basis to bring that investment down”.

Given that companies like Ericsson and Cisco are seeing relatively flat spending from the service provider market, the idea that SDN will keep that market flat will hardly be welcome - especially since Verizon is on the same path.

AT&T's results announcement is here. ®

Broader topics


Other stories you might like

  • ESA boss gives update on stricken Sentinel-1B imaging satellite: All is not lost yet

    Still borked, 1C and 1D are waiting in the wings

    ESA Director General Josef Aschbacher has addressed the issue of the space agency's borked Copernicus Sentinel-1B spacecraft in his first annual press conference.

    The last useful bit of data from the Earth observation satellite came last year, and as of yesterday attempts to revive the equipment to normal working order have come to naught.

    It's an interesting anomaly: the spacecraft remains under control and, according to Aschbacher, "the thermal control system is properly working and the regular orbit control manoeuvres are routinely performed." However, attempts to reactivate the power unit that's holding back the transmission of image data have proven unsuccessful.

    Continue reading
  • Tesla driver charged with vehicular manslaughter after deadly Autopilot crash

    Prosecution seems to be first of its kind in America

    A Tesla driver has seemingly become the first person in the US to be charged with vehicular manslaughter for a deadly crash in which the vehicle's Autopilot mode was engaged.

    According to the cops, the driver exited a highway in his Tesla Model S, ran a red light, and smashed into a Honda Civic at an intersection in Gardena, Los Angeles County, in late 2019. A man and woman in the second car were killed. The Tesla driver and a passenger survived and were taken to hospital.

    Prosecutors in California charged Kevin George Aziz Riad, 27, in October last year though details of the case are only just emerging, according to AP on Tuesday. Riad, a limousine service driver, is facing two counts of vehicular manslaughter, and is free on bail after pleading not guilty.

    Continue reading
  • AMD returns to smartphone graphics with new Samsung chip for your pocket computer

    We're back in black

    AMD's GPU technology is returning to mobile handsets with Samsung's Exynos 2200 system-on-chip, which was announced on Tuesday.

    The Exynos 2200 processor, fabricated using a 4nm process, has Armv9 CPU cores and the oddly named Xclipse GPU, which is an adaptation of AMD's RDNA 2 mainstream GPU architecture.

    AMD was in the handheld GPU market until 2009, when it sold the Imageon GPU and handheld business for $65m to Qualcomm, which turned the tech into the Adreno GPU for its Snapdragon family. AMD's Imageon processors were used in devices from Motorola, Panasonic, Palm and others making Windows Mobile handsets.

    Continue reading

Biting the hand that feeds IT © 1998–2022