Cost efficiency of SDN in LTE-based mobile networks: Case Finland

Mobile data traffic is expected to increase 11-fold between 2013 and 2018. A more dynamic and flexible network is needed to cope with the growing data volume. Software defined networking (SDN) enabled by, for example, the OpenFlow protocol is a potential solution to improve the flexibility and agility of the mobile data network by decoupling the control plane from the user plane. By centralizing the control plane into data centers, the network elements may become more standardized, which lowers prices due to scale-benefits and competition. At the same time, SDN may ease network management and deployment, which further reduces mobile network operator´s (MNO´s) costs. On the other hand, data centers become more complex due to virtualization and increased control intelligence. To quantify the cost impact, the changes in capital (CAPEX) and operational expenditure (OPEX) from adding SDN into the LTE network are modeled in this paper by using a Finnish reference network. The quantitative results show that SDN reduces the network related annual CAPEX by 7.72% and OPEX by 0.31% compared to non-SDN LTE. These changes, though a small fraction of the total expenses of a Finnish MNO, may have a significant influence on the profit levels.