no sweat news in brief timeline the burbs...to march 2016 as it integrates new acquisition cable...
TRANSCRIPT
no sweatas things heat up in Dubai, telcos look to give a new lease of life to legacy networks and spectrum holdings.
news in brief
3 Timeline A round-up of some of the major stories reported in our daily news service www.totaltele.com
CDMA 450
8 The Burbs Telcos are making money out of rural broadband services based on CDMA 450, but that spectrum band could have more to offer.
VeCTOrinG
10 Marking Time Operators prepare to roll out vectored VDsL2, but with fTTH their ultimate goal they must ensure their investments are reusable.
iTr AMenDMenTs
13 Sticky WCIT eTnO wants to hit the reset button on the principles of peering and interconnection, but operators and governments do not necessarily agree.
sTATisTiCs
17 Prime Numbers Operators lose sMs revenues, small cells lack scale, real global mobile penetration, OTT services, mobile payments and location- based services.
leader contents
nick Wood assistant editor
total telecom
Business analysis for telecoms professionals november 2012
nights are drawing in and the mercury is plummet-ing–here in the UK, at
least–and hats, scarves, and plenty of layers are the order of the day.
However, for the 193 iTU member states gearing up for the impending world Conference on international Telecommunications (wCiT) in Dubai next month, wintery attire would be a mistake. Temperatures touch 26 degrees Celsius in that part of the world at this time of year, spelling trouble for anyone foolhardy enough to pack their parka. in addition, discussion at the event is likely to be heated.
Up for debate are potential changes to the international
Telecommunication regulations (iTrs). The iTrs form a treaty that has underpinned the liberalisation and global expansion of the indus-try for the past 24 years, and some argue fervently that overhauling them is long overdue.
eTnO is one of the most vocal outfits advocating change. The european telco industry body claims on p.13 that tweaking the iTrs is the most feasible way of securing a bigger share of revenue
Telcos insist much of the investment in copper acceleration is reusable
for network operators. However, its proposed amendments have attracted scathing criticism from several quarters, including the operators themselves, and its efforts to qualify its position are unlikely to prevent them from being dead on arrival in Dubai.
while eTnO works up a sweat over the iTrs, european operators have been making steady progress on how best to sweat their copper networks (p.10). belgacom will spend up to €200 million on rolling out vectored VDsL2, a considera-ble amount of money, but “of a different magnitude” to the cost of deploying fTTH, it notes. fibre proponents are naturally dismayed, but telcos insist that much of the investment in copper acceleration solutions is reusable and say fTTH remains their ultimate goal.
Just as vectoring aims to prolong the usefulness of copper in the fixed world, reusing mobile spec-trum for new access technologies can give it a new lease of life.
That is one of the objectives of the CDG (p.8). The industry body claims the propagation characteris-tics of 450-MHz spectrum, which has seen limited use in some coun-tries for fixed-wireless services, could play an important role in extending LTe to rural and remote areas. Challenges remain though, including a lack of both devices and standards, and operators seem reluctant to take the plunge. n
featurinG
tellaBs
insiGHt maGaZine
SECURE. FAST. AGILE. MOVE YOUR DATA OVER TO A CARRIER-GRADE CLOUD SOLUTION.Data needs can fl uctuate unexpectedly, and no one knows this better than your customers. Enterprise Cloud – Managed Edition from Verizon Global Wholesale provides a cost-effective way to quickly control server, storage, and computing resources based on day-to-day demands. Your customers will enjoy secure access to an extremely reliable infrastructure solution backed by our world-class global IP network. And with the Customer Management Portal, they can track network performance 24/7. It’s a very cost-effective and empowering way for your customers to avoid business turbulence.
verizon.com/wholesale/globalsolutions Verizon Global Wholesale serves: Carriers - Wireless Providers - ISPs -Cable Operators - Resellers
© 2012 Verizon. All services are provided by Verizon in accordance with certain rates, terms, conditions, and restrictions
set forth in Verizon’s tariffs or in applicable agreements between Verizon and the carrier.
Sprint + Softbank based on 2011 revenues
In october Japan’s softbank agreed a $20.1 billion deal to acquire a 70% stake in US mobile operator Sprint Nextel. Based on the latest available full-year financial results, the combined entity generated €55.18 billion in annual revenues, making it the world’s eighth largest telco in terms of turnover, according to the 2012 edition of total telecom’s Global 100 report. the combined softbank/sprint would be hot on the heels of mobile giant vodafone, ranked seventh in the Global 100, having generated €55.63 billion in revenues in its most recent financial year.
source: total telecom Global 100
Telewings Communications, enabling the norwegian telco to bid in the upcoming spectrum auction. Telenor earlier bought out former partner Unitech.
MIC acquires Paraguay unitArgentina’s Grupo Clarin completed the sale of its Cablevision Paraguay business to Millicom international Cellular for $150 million.
Maroc on the block?Vivendi is reportedly mulling the sale of its 53% stake in Maroc Telecom. sources say Qtel, etisalat, saudi Telecom and MTn have all shown interest.
Voda’s C&W integration costVodafone will incur costs of around £500 million in the period to March 2016 as it integrates new acquisition Cable & wireless worldwide. The deal will deliver cash flow synergies of £150 million-£200 million per year by the same date, Vodafone predicts.
Business
Softbank M&A movesJapan’s softbank agreed to pay $20.1 billion for a 70% stake in Us-based sprint nextel. Just weeks earlier CeO Masayoshi son (see p.4) announced softbank’s acquisition of domestic rival eAccess in a stock swap valued at 180 billion yen ($2.3 billion).
US mobile mergerT-Mobile UsA will merge with MetroPCs in a $1.5 billion deal. Deutsche Telekom, parent of the former, will hold a 74% stake in the new entity and T-Mobile UsA CeO John Legere will lead it.
Voda buys TelstraClearVodafone completed the nZ840 million acquisition of new Zealand’s TelstraClear, marking former owner Telstra’s exit from the country.
Austria merger in doubteuropean Competition Commissioner Joaquin Almunia objected to Hutchison 3G Austria’s bid to take over Orange’s local unit. He said it will be difficult for the companies to come up with remedies to enable the deal to pass.
O2 Germany IPOTelefonica will receive around €1.45 billion from the flotation of 23.17% of its German business, which has started trading in frankfurt.
Telenor’s new India partnerindia’s Lakshdeep investments & finance agreed to buy a stake in Telenor’s new indian unit
Telecom NZ sees tepid 2013new Zealand’s Telecom Corp reiterated that it expects flat or slightly lower earnings in the current financial year compared with last as it battles to maintain its broadband market share amid fierce competition.
Qtel raises Wataniya stake Qatar’s Qtel is in the process of increasing its stake in wataniya of Kuwait to 92.1% from 52.5%, spending 519.1 million Kuwaiti dinars ($1.8 billion).
Huawei, ZTE threat to USA year-long congressional investigation in the Us ruled that China’s Huawei and ZTe could be a threat to Us security due to their links with beijing.
Canada blocks BCE/Astral dealThe Canadian broadcast regulator ruled bCe’s planned C$3 billion takeover of Astral Media would damage competition in the TV and radio sectors.
a round-up of the major stories in telecoms in the past month, as reported in our daily news service www.totaltele.com
The government said it will not overturn the decision.
Russia Internet censorship law A new law came into force in russia that enables the government to block websites that contain material such as child pornography and drug or suicide information.
NSN sells IPTVAccenture acquired nokia siemens networks’ iPTV assets in a deal of undisclosed value.
France taxes Google french tax authorities have reportedly asked Google to pay €1 billion in taxes on its operations there over the past four years.
neTWORKs
Fibre attracts Winditaly’s wind will sign up to Metroweb’s fibre-optic network in Milan in the near future, according to CeO Maximo ibarra. Vodafone is expected to follow suit.
KPN sells towersnetherlands-based KPn sold off a portion of its domestic towers portfolio to indonesia’s Protelindo for €75 million.
EE LTE net goes live...ee launched the UK’s first mobile LTe network in 11 major cities. CeO Olaf swantee described London as “the widest covered european capital already.”
...And JV to speed up othersThe UK’s mobile operators brought forward the creation of
softbank sprint softbank + sprint
verizon at&t
2011
reve
nue
in €
(m)
100,00090,00080,00070,00060,00050,00040,00030,00020,00010,000
0
3
timeline
november 2012 www.totaltele.com
a joint venture company–Digital Mobile spectrum Ltd (DMsL), formerly known as Mitco–to ensure a smooth transition as TV broadcasters vacate spectrum earmarked for LTe services.
LTE launches elsewhereTango Telecom launched Luxembourg’s first LTe service having rolled out its network to 60% of the country. Vodacom switched on its LTe network in Johannesburg, with more south African cities set to follow suit. And Telecom italia also lighted its LTe network.
Brazil looks to LTEbrazilian mobile operator Oi said it will invest 1 billion reais ($500 million) in the rollout of its LTe network in the 2012-2015 period. Meanwhile, rival TiM selected ericsson, Huawei and nokia siemens networks to build its LTe infrastructure.
Croatia sells digital dividendT-Hrvatski Telekom and Vipnet together paid €40 million for digital dividend spectrum in the 800-MHz band.
India tackles 3G roamingbharti Airtel received a notice from india’s telecoms department asking it to stop offering 3G services in circles in which it does not have licences, something it had been able to do thanks to cross-carrier roaming deals.
Thailand auctions 3G licencesAfter years in the planning, Thailand raised 41.63 billion baht (Us$1.35 billion) from the sale of 45 MHz of 2.1 GHz spectrum to existing operators Ais, DTAC and True.
Bangladesh gets 3Gstate-owned Teletalk launched bangladesh’s first 3G service. The country aims to auction 3G
spectrum to private operators in the near future.
Virgin backs small cellsVirgin Media pitched itself as a small cells-as-a-service (sCaas) provider, offering street furniture, power supplies and backhaul to UK operators keen to add small cells into their networks.
UK net share OKThe Office of fair Trading gave the go-ahead to Vodafone and Telefonica UK’s plans to merge their mobile networks into a joint venture known as Cornerstone Telecommunications infrastructure.
LightSquared spectrum sharewould-be Us mobile network operator Lightsquared has proposed that the fCC modify its licence to enable it to use the 5 MHZ of spectrum its owns that do not cause interference with GPs. it also seeks to use another 5 MHz that it would share with government users.
Romania spectrum saleCosmote, Orange, rCs&rDs, Vodafone and 2K Telecom won spectrum in the 800-MHz, 900-MHz, 1800-MHz and 2.6-GHz bands in romania, paying a combined €682.14 million.
Another O2 outageUK mobile operator O2 committed an additional £10 million investment into its network after a second outage in four months. both faults occurred in an ericsson-supplied database that will now be replaced.
Sailfish swims into viewJolla confirmed plans to unveil its new MeeGo-based mobile operating system sailfish in Helsinki in november. Jolla was founded by a group of former nokia engineers and directors.
aiminG HiGH“as a man, I aspire to be number one in the world,” softbank Ceo masayoshi son said as he announced the Japanese telco’s planned $20.1 billion acquisition of a 70% stake in Us mobile operator sprint nextel. that announcement came less than a month after softbank agreed to buy smaller domestic rival eaccess via a stock swap valued at $2.3 billion. while the combined softbank/sprint/eaccess has 96 million customers, making it bigger than Japanese mobile market leader ntt DoComo, softbank remains the third-largest mobile operator in its domestic market. However, it regularly surpasses DoComo and number two operator KDDI in terms of new customer additions; in october softbank added 284,200 new customers, taking its total base to 30.75 million. KDDI has 36.35 million subscribers and DoComo 60.79 million. softbank’s rise to become a credible competitor in Japan has been rapid. then an IsP, softbank entered the mobile space under son’s leadership in march 2006 via its Us$15 billion purchase of vodafone KK, which at the time had a customer base of just 3 million. softbank expects the sprint nextel acquisition to close in mid-2013, pending regulatory approval and the green light from sprint’s shareholders. It faces some opposition though. Us giant at&t has objected to the deal on the grounds that it would leave the Japanese company holding more Us mobile spectrum than any other.
PeOPLe
Bross offHuawei chief technology officer Matt bross has left the company. reports that he will join Juniper networks have yet to be confirmed.
More changes at YahooGoogle advertising executive Henrique de Castro was named as Yahoo’s new chief operating officer. He will join the company on or before 22 January. Yahoo also confirmed that chief revenue officer Michael barrett will leave the company in December.
iOS chief out in Apple shuffle scott forstall, sVP of iOs software, will leave Apple next year as apart of a management shuffle that will also see retail head John browett head for the exit after just six months.
More job losses at ALUAlcatel-Lucent said it will cut 5,500 jobs globally as part of a cost-cutting initiative. france will be the hardest hit, accounting for 1,430 of the positions to be cut.
Eircom to axe 2,000ireland’s eircom will cut 2,000 staff–35% of its workforce–over 18 months as part of an accelerated cost-cutting programme.
Juniper job cutsAround 500 employees will lose their jobs at Juniper networks as the company aims to reach cost-cutting goals. The move will reduce Juniper’s workforce by 5%.
FT recruitment slowsfrance Telecom said it will recruit 4,000 new employees in 2013-2015, compared with the 10,000 newcomers it signed up in the 2010-2012 period.
timeline
4 www.totaltele.com november 2012
Coming soonThe all new Total Telecom+
If you’re not receiving your copy of Total Telecom+ each month please email [email protected]
to ensure you’re on our mailing list
Themed monthly issues, starting
with 'LTE' in February 2013
News and trend-driven analysis of
major industry developments
EDITORIALCOMMENT
INDUSTRYEVENTS
CALENDER
Infographic-style snapshots of key global telecoms
markets
Business analysis for telecoms professionals, now optimised for reading on a tablet or smartphone
www.pccwglobal.com
Contact us:
Tel: +33 (0)1 84 88 05 88 Email: [email protected]
PCCW Global Connected with your world PCCW Global designs, builds and manages IP, Fiber, Satellite, Ethernet and Voice communications worldwide, while enabling Enterprises and Service Providers to take their business overseas and run operations worldwide.
Resilient global infrastructure and robust network covering over 1,800 cities and 120 countries
More than 120 regional MPLS partners globally, with over 70 partners in the EMEA region
PCCW Global’s media solutions enable broadcasters to deliver high quality media broadcasts over an enhanced MPLS network
Industry experts on-the-ground to support your business
24/7 Global Network Operation Centers (NOC) to monitor service quality
www.pccwglobal.com
Contact us:
Tel: +33 (0)1 84 88 05 88 Email: [email protected]
PCCW Global Connected with your world PCCW Global designs, builds and manages IP, Fiber, Satellite, Ethernet and Voice communications worldwide, while enabling Enterprises and Service Providers to take their business overseas and run operations worldwide.
Resilient global infrastructure and robust network covering over 1,800 cities and 120 countries
More than 120 regional MPLS partners globally, with over 70 partners in the EMEA region
PCCW Global’s media solutions enable broadcasters to deliver high quality media broadcasts over an enhanced MPLS network
Industry experts on-the-ground to support your business
24/7 Global Network Operation Centers (NOC) to monitor service quality
8 www.totaltele.com november 2012
Mobile operators are obsessed with city slickers, sometimes forgetting that there is money
to be made in providing network cover-age to suburban and rural areas.
while telcos in high-density urban areas are moving towards heterogeneous network strategies, melding GsM and LTe macro base stations with small cells and wifi, outside of the major centres some players are taking the opposite approach and covering huge swathes of land with a handful of cell sites, thanks to the propagation characteristics of CDMA deployed in the 450-MHz band.
These are highly niche, but profitable services for those with 450-MHz spec-trum. Proponents of the 450-MHz band also highlight other potential uses for the spectrum, including for M2M services and as an alternative band for LTe. but operators without 450-MHz spectrum are not rushing to add it to their portfolios.
brazil’s experience of awarding 450-MHz spectrum in June demonstrates operators’ mixed views on its worth. regulator Anatel was forced to bundle 450-MHz bandwidth with the more lucra-tive 2.5-GHz spectrum, and attach coverage requirements to it, since it attracted no bidders. However, last month one of the auction winners TiM brasil revealed that it plans to launch LTe
services in the 450-MHz band in 2015 and is working with the 3GPP on the stand-ardisation of LTe 450. Telefonica’s Vivo is also considering such a move.
with spectrum at a premium, the ability to roll out LTe at 450-MHz is doubtless attractive to operators, but there are still obstacles to be overcome. in the meantime, the opportunity lies in providing coverage in hard-to-reach areas with fixed broadband-like services.
“we are doing DsL to the regions,” says raimonds Pelna, CeO of Latvia’s Triatel, which has offered CDMA 450-based fixed wireless voice and data services for eight years and is upgrading its network to CDMA2000 1X eV-DO revision b2, which will permit download speeds of 14.7 Mbps. in february “the network will be 100% ready,” Pelna says. “[with rev b] we will start to compete with DsL and with all the cable technolo-gies.” HsDPA is a “good technology for smartphones, [but] internet for home is our market segment that we are seeing work,” he says. Triatel has 20,000 active subscribers.
in the Polish suburbs there are many “new houses but there is no fixed line,” says Piotr stepniewicz, head of strategic project management at Orange Poland. Orange launched a fixed wireless CDMA 450 offer in late 2008 and added a mobile
service in July 2009, offering various fixed wireless terminals and dongles. it has 200,000 customers, paying 49 zloty-99 zloty (€12-€24) per month for a fixed service and 19 zloty-159 zloty (€5-€39) for mobile. “[it’s] a very good offer for people in suburbia...and we see very big poten-tial in rural areas,” stepniewicz says. “[CDMA 450] gives very big coverage and we didn’t have to spend a lot of money to cover the whole country.”
However, this is a niche opportunity. stepniewicz predicts that the rate of customer growth will slow to 100,000 net additions over the next two years, exclud-ing the possibility of machine-to-machine (M2M) connections.
sweden’s net 1, which targets rural dwellers, businesses and second home owners with its CDMA 450 network, also highlights the coverage benefits of the technology. “we cover 96% of the surface and 100% of the population,” says Gosta Kallner, CTO of net 1, compared with Telia and Tele2’s joint HsPA network that covers more than 98% of the population but only 54% of the territory. “we have 400 sites for coverage,” Kallner says, while Telia/Tele2 have 8,000-9,000.
similarly, Triatel covers 98% of Latvia’s landmass with 160 base stations, whereas HsPA would have required “a few thou-sand base stations,” says Viktors Topors, technical director at Triatel. According to Alcatel-Lucent, one 450-MHz base station can cover the same geographic area as three base stations at 850 MHz, 13 at 1900 MHz and 16 at 2.1 GHz. The frequency band is ideal “when we have coverage obligations to meet,” says brahm Parasher, strategic management and busi-ness development at Alcatel-Lucent.
“Obligations” could be the operative word. There are few, if any, operators actively seeking out 450-MHz spectrum.
There are eight operators worldwide using the 450-MHz band solely for broad-band services and a further 108 for voice, says Joe Lawrence, VP marketing at the
telcos are making money out of rural broadband services based on CDma 450, but that spectrum band could have more to offer. By mary lennighan
C D M A 4 5 0
tHe bUrbs
spectrum strateGies
network technologies as a % of global cellular connections
source: wireless Intelligence
1%
n CDma (Family) n Gsm n wCDma (Family) n Lte (Family) n other
2%
9%
69%
19%
7%7%
4%
30%
52%
20162012
november 2012 www.totaltele.com 9
CDG, the industry body formerly known as the CDMA Development Group. Orange Poland is one of a number of players in eastern europe and the nordic markets reusing spectrum originally used for analogue nMT-450 services. but in other markets, like the UK, analogue mobile services were based on 900-MHz TACs and 450-MHz spectrum is used by public safety bodies or taxi services.
“There is interest in making that spec-trum available in other western european countries,” insists Lawrence. “we see it as a valuable piece of spectrum that should not be discounted...if you can grab that spectrum now, while it’s cheap, do it,” he urges operators. “Then you can use it for LTe.”
with many of its members in the vanguard of the move to LTe, the CDG has reinvented itself as the champion of the 450-MHz band and is keen to share its potential not only for rural DsL-like services, but also for M2M and as an alter-native frequency band for LTe.
but deploying LTe at 450 will not be as easy as it sounds. LTe is not yet standard-ised at 450 MHz, although that could take place by the end of 2013. in addition, LTe requires at least 10 MHz of spectrum, but operators tend to have smaller chunks of 450-MHz spectrum; Orange Poland has 5 MHz, while Triatel is running three carriers of 1.25 MHz each with CDMA rev b. but the industry is working on aggregation techniques that enable oper-ators to “expand [their] bandwidth with
non-contiguous spectrum,” Lawrence says. However, this lack of spectrum also means operators rolling out CMDA 450 now would have to rip it out to replace it with LTe when the time comes, Lawrence concedes.
The industry is moving forward though. brazil’s telcos may have been forced to take 450-MHz spectrum and to use it to cover all rural areas within 30km of municipality headquarters with voice and data by the end of 2015, but this is still driving the market. And vendor support is building. China’s Huawei, which provides equipment for many CDMA 450 players, including Orange Poland, is also backing LTe 450. in July it signed a commitment with the brazilian government to develop LTe technology for the 450-MHz band.
but it could be too late for some. MTs Ukraine is reportedly considering selling or leasing out its CDMA 450 network due to the lack of compatible devices. This is something Orange’s stepniewicz also laments. There is no 450-MHz iPhone, he says: “This is my dream!”
target audiencesCDMA 450 operators need to consider carefully how they position themselves.
“[A] niche player cannot be the most expensive,” says Pelna. Triatel has priced its services at the mid-range compared with DsL products already on the market at 19 lats (€25) per month for an unlimited service. “next year it will be necessary to
look at the pricing,” he says. “everyone is demanding that it must be unlimited,” but that is a risky strategy, especially for a small player, he says. As such, Triatel may consider a 20-Gb data cap; Pelna notes that subscribers currently use around 6 Gb a month.
but neither is a niche player the cheap-est available. net 1 targets an addressable market of 2.15 million people in 900,000 households, mainly outside the cities; its market share is around 30% in some rural regions, but below 1% in urban areas. Prices range from around $50 per month for a dongle to $2,000-$3,000 for business customers, Kallner says. “The mining industry consumes an enormous amount of traffic and they are big spenders.”
Kallner admits net 1 is looking to grow its customer base to “a couple of hundred thousand,” rather than millions. it has an eye on the cost of attracting customers and is keen to maintain its sub-10% churn rate. “it takes a little while,” to build up the brand, Kallner explains. “we don’t advertise at all in the south,” but in the north of the country the company has taken TV and radio advertising opportu-nities, amongst other things, to attract consumer attention.
but even with a technology like CDMA 450, there will always be some areas that are uneconomic to serve.
Triatel won eU funding for its service in 2007, but that came with some obliga-tions, specifically, that it provide coverage to 98% of the Latvian territory. That project runs until 1 May 2013, after which date Triatel says it will turn off five to seven base stations that are no longer economically viable. “we need at least 50 or 100 customers on a base station,” says raimonds. “it’s hundreds of people who will be lost.”
As is often the case with small compa-nies, net 1 has an exit strategy. “we are looking at business opportunities all around the world,” says Kallner, suggest-ing that net 1 could be bought out by another CDMA 450 player in a different country. such a deal would provide some much-needed scale to the CDMA 450 market, but ultimately it looks set to remain a niche proposition. n
transportation is a key area for CDma 450 network operators. “we would like to implement this on the buses,” says Piotr stepniewicz of orange Poland. He aims to launch “maybe this time next year,” explaining that the service would act as a marketing tool for the company’s wider services. “I think Internet on buses should be free,” he says. Users might be encouraged to pay for continued use of the service once they have left the bus, he says.
meanwhile, triatel is already doing something similar. the riga-moscow railway line offers wiFi over CDma using triatel’s network for the Latvian portion. “It’s only 15 base stations,” covering the 250km from riga to the russian border, explains technical director viktors topors. “It’s a free service,” he says. triatel’s network also supports free Internet services on buses between riga and talinn. “maybe [the end users] are paying for it when they buy bus tickets,” suggests Ceo raimonds Pelna.
meanwhile, “boats are more and more getting connected,” says net 1’s Gosta Kallner, explaining that there are 200,000 boats that can be slept on overnight in sweden alone, plus 150,000 caravans and mobile homes. the company also has deals in place with ferry companies, especially along the Norwegian coast. “They consume a lot of traffic, but [do] not [have] that many subscribers,” he says. net 1 also has a contract with car rental company Hertz, which rents out wireless broadband routers for €3-€5 per day alongside car hire. However, Kallner admits that this has yet to really take off, due to a lack of advertising.
On the buses
spectrum strateGies
10 www.totaltele.com november 2012
T heir actions often suggest other-wise, but europe’s telecoms operators really do want to get
fibre into the homes of their customers. However, for many it does not make
sense to roll out the technology right into the customer premises in the immediate future. As a result, the past year has seen an increase in interest in stop-gap solu-tions that have the potential to bring fibre-like speeds to copper access networks and help telcos to meet national and regional broadband targets.
but this approach is not without its pitfalls. Operators need to ensure they are not wasting money by ploughing investment into technologies like vector-ing that they will not be able to reuse once they make the move to fibre. They also need to think carefully about pricing so as not to damage their future revenue-generating potential. And there are a number of technical and regulatory diffi-culties still to be overcome.
The number of players “now putting detailed plans in place for the deploy-ment of vectoring has significantly increased,” said John O’Connell, head of Alcatel-Lucent’s fixed access business, at broadband world forum last month.
operators prepare to roll out vectored vDsL2, but with FttH their ultimate goal they must ensure that their investments are reusable. By mary lennighan
V E C T O R I N G
tecHnoloGy trends
marKinG tIme
indeed, a number of equipment makers at the event shared their latest develop-ments in the vectoring space. Adtran announced it has added system-level vectoring across its broadband platforms, including the multi-service access nodes (MsAns) it gained when it acquired nokia siemens networks’ fixed broadband access assets in May. ZTe revealed that its system level vectoring solution is ready for commercial rollout. And Alcatel-Lucent announced it is conducting a trial of VDsL2 vectoring with Denmark’s TDC and said it is “well on track” to deliver vectored VDsL2 to belgacom.
At belgacom’s quarterly results presen-tation in October Geert standaert, VP service delivery engine and wholesale, said the telco will spend €150 million-€200 million to deploy vectoring, that investment being “of a different magni-tude” to the cost of its fibre-to-the-home (fTTH) rollout. “The regulatory frame-work that we negotiated here is favourable for vectoring...The timing will be a bit subject to what we get approved by our board,” he said, indicating that much of its rollout will be in the next three years.
Vectoring is “the next step towards eventually fTTH coverage, but the
‘eventually’ will probably take decades,” says wim de Meyer, VP of business transformation at belgacom. “eventually. not by 2020,” he insists. in the meantime, “we believe we can use vectoring to differentiate from the competition.”
That is not good news for those working to promote the benefits of fTTH. “we’re very worried about it,” says nadia babaali, communications director at the fTTH Council europe. “The operators just need to take a long-term view,” she says.
The fTTH Council insists that demand for fTTH is not an issue. According to data compiled by iDATe, in mid-2012 europe (excluding russia) had 5.95 million fibre-to-the-home or building (fTTH/b) subscribers and 31.9 million homes passed, giving an average take-up rate of 18.6%. six months earlier take up stood at 18.4%, with 5.15 million subscriptions from 27.9 million homes passed. The length of time services have been availa-ble for is the biggest influencer of take-up, the council says (see chart). “Demand follows service availability,” it claims.
nonetheless, many operators prefer to wait and are moving ahead with their vectoring plans, often alongside fTTH.
“Vectoring we plan to introduce in 2014,” says steen Krogh nielsen, chief architect at Danish incumbent TDC. it will coexist with coax and fibre “at least up to 2020,” he predicts.
“we have the same problems as the big countries,” when it comes to fTTH, says serge eiffes, head of the fixed access network department at P&T Luxembourg. in fact, P&T has it tougher than some european operators, being faced with national broadband targets that are more stringent than those imposed by the european Union. The government mandates that 80% of the population should have access to 100-Mbps services next year, rising to 100% in 2015. in addi-tion, by 2013 25% of the population should be able to get 1 Gbps downstream, rising to 50% in 2015 and 100% by 2020.
take-up versus years in operation
0 2 4 6 8 10 12 14
source: Diffraction analysis for FttH Council europe, 2012
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
take
-up
acro
ss d
eplo
ymen
t
Years in operation
altibox
networx BredbandsBolaget
superonline
HKBnVerizonKpn
teopt
orange
november 2012 www.totaltele.com 11
As it stands, P&T has covered 30% with fibre, but will not be able to increase that to meet the 2015 target, eiffes says. “Therefore we are investigating the bonding and vectoring possibilities.”
Telecom italia is working towards eU targets of 100 Mbps to 50% of the popula-tion and more than 30 Mbps to 100% by 2020. However, “100% is just a target. it’s not a real number,” says sandro Dionisi, director of Telecom italia Lab.
The italian incumbent’s network is suited for VDsL, since “we have a very short access network...and most of our network is via street cabinets,” Dionisi explains. Therefore, for now it makes sense to deploy fibre to the cabinet and rely on the existing copper for the last mile. The ultimate target is fibre all the way to the customer: “we don’t deny that fact”, says Dionisi. but although VDsL2 is an interim step, interim means years and not months, he says. fTTC plus VDsL2 is “the best transition solution.”
but some warn that telcos could be wasting money by investing in stop-gap solutions.
The interest in copper acceleration technologies “is understandable from a business perspective,” says babaali. “[but] the investments they are making are short-term.” Telecoms operators know they will have to deploy fTTH in future, she says. “[Copper] is obsolete. it will have to go...[and] they know it.”
The operators themselves are less concerned though.
in an fTTC plus VDsL deployment, “a major part of the investment is completely reusable...it’s definitely a step towards fibre-to-the-home,” says TDC’s Krogh nielsen. The fibre feeder to the cabinet is one reusable element, for example, he says. And Telecom italia’s Dionisi agrees that all investment is “valid”, even if the telco has deployed point-to-point Gigabit ethernet for VDsL2. “[You] just have to change the card in the central office,” from Gigabit ethernet to GPOn, he says.
Trenching is the major cost element when it comes to putting fibre in to the access network, belgacom’s de Meyer points out. And that is naturally a reusa-ble investment.
the waiting gameDespite operators’ apparent enthusiasm for vectored VDsL2, it could be some time before it is widely deployed.
system-level vectoring–which unlike board-level vectoring works across copper pairs on different line cards or across cards in different DsLAMs–is being trialled in the field, but commercial chipsets will not be available in suffi-ciently high volumes until mid-2013, says Adtran VP of marketing Gary bolton. “it’s just not scalable with the current chipsets,” he says.
Meanwhile, some regulatory regimes have yet to catch up with operators’ desire for vectoring. in many cases difficulties stem from the fact that it is incompatible with sub-loop unbundling (sLU), since it requires all the lines in a binder to be vectored to effectively remove crosstalk. some regulators have lifted sLU require-ments though, and vendors are working on techniques that would enabled vector-ing to work where sLU exists. italy has sLU, Dionisi points out. “we have some time,” but we need to push providers to make vectoring possible, he says.
Vendors are working to overcome other obstacles too. Vectoring only works prop-erly when all the customer premises equipment on a particular node have been upgraded, explains O’Connell. However, last month Alcatel-Lucent unveiled zero-touch vectoring which ensures that VDsL2 modems already installed in customer homes do not nega-tively affect the service quality for customers with vectored services.
There are also non-technical issues to be taken into account, one of which is revenue-generation.
with its short access network Telecom italia can already offer downlink speeds of 50 Mbps without the need for vector-ing. it is working on putting in vectoring-ready solutions, but is in no hurry to hike speeds up to 100 Mbps. instead, it will raise speeds incrementally in order to capture the most revenue from consumers, rather than immedi-ately going to maximum speed with only a small increase in price. “we want to be paid!” says Dionisi. n
tecHnoloGy trends
Connected withyour world
■ Wide-reaching international coverage featuring innovative IP, Fiber, Ethernet & Satellite solutions
■ Robust solutions connecting the Middle East, Africa and other emerging markets
■ Full resilient network design and dedicated service management
Contact us Tel: +33 (0)1 84 88 05 88 [email protected]
www.pccwglobal.com
WORLDORLD
1 day conference13 November 2012
www.totaltele.com/world
For sponsorship opportunities contact [email protected]
Awards ceremony and gala dinner13 November 2012
www.worldcommsawards.com
1 day conference14 November 2012
www.totaltele.com/ customerexperience
Total Telecom brings you 3 co-located events from 13-14 November at The Lancaster Hotel in London
The time is now
13november 2012 www.totaltele.com
network operators may not be as keen to force OTT providers to pay their own way as we had
previously thought. european telecoms industry body
eTnO has a plan to shake up the regula-tory landscape and secure a bigger share of revenues for the telcos. This plan will face the acid test when iTU member states convene in Dubai next month to debate rule changes that have the poten-tial to reshape the industry.
but not only have national and govern-ment bodies–whose impetus would be required to implement any changes–shared objections to the plan, citing concerns over issues such as the impact on developing countries, more surpris-ingly operators themselves also oppose the move to make internet companies pay for what they transmit on their networks.
“Just try. send the bill to Google or facebook and see what happens,” said Vodafone CeO Vittorio Colao, speaking at the fT eTnO summit last month. There is nothing to stop telcos from charging over-the-top (OTT) players to
deliver their content today, but none are actually doing it. it is unrealistic to expect services like YouTube and other web services that are wildly popular with consumers to begin paying their way, Colao says. “Good luck to the first one who wants to turn off Google.”
And yet, growth in network traffic driven by iP data has become a more lucrative source of revenue for the OTT companies generating the data than for the networks that carry it. Operators’ share of mobile content and commerce revenues will decline to 31% in 2016 from 44% in 2011, informa Telecoms & Media forecasts.
And according to Ovum, VoiP alone will cost telcos $479 billion in lost reve-nues between 2012 and 2020, while OTT messaging applications will cost mobile operators $54 billion in lost revenue by 2016.
Trends like these will continue unless changes are made at an international policy level, eTnO believes. Consequently in June it proposed amendments to the iTU’s international Telecommunication regulations (iTrs) that, if approved,
could effectively establish a two-tier internet, and consign settlement-free peering agreements to the history books.
eTnO wants to give operators the chance to offer two flavours of iP intern-connection: best-effort service delivery, as the internet has today, and end-to-end quality of service delivery, where for a fee, data delivery from the interconnec-tion point to the end user is subject to predefined performance targets. its other recommendation, the one that has caused the most consternation, proposes telcos strike deals whereby OTT players pay them to deliver their services, adopting the principle of sender network pays “where appropriate”.
This amendment is nothing if not ambiguous. eTnO has explained its proposals in great detail, with the excep-tion of the “where appropriate” clause.
“[it] appears to invite national regula-tors or incumbent network operators to demand ‘sending party network pays’ in a potentially broad array of circumstances where no such principle exists today for the internet,” says public policy organisa-tion the Centre for Democracy and
reGulation
etno seeks to hit the reset button on the principles of peering and interconnection, but operators and governments do not necessarily agree. By nick Wood
sticKy wCItI T R P R O P O S A L S
source:Cisco vnI, 2012
GLOBAL IP TRAFFIC 2011-2016 2011 2012 2013 2014 2015 2016 caGr
2011-2016
By type (pB per month)
Fixed Internet 23,288 32,990 40,587 50,888 64,349 81,347 28%
managed IP 6,849 9,199 11,846 13,925 16,085 18,131 21%
mobile data 597 1,252 2,379 4,215 6,896 10,804 78%
By segment (pB per month)
Consumer 25,792 37,244 47,198 59,652 76,103 97,152 30%
business 4,942 7,613 9,375 11,227 13,130 7,613 22%
By Geography (pB per month)
north america 10,343 14,580 17,283 19,796 23,219 27,486 22%
western europe 7,287 10,257 13,026 16,410 20,176 24,400 27%
Asia Pacific 10,513 14,792 18,976 24,713 31,990 41,105 31%
Latin america 1,045 1,570 2,333 3,495 5,208 7,591 49%
Central and eastern europe 1,162 1,673 2,290 3,196 4,419 5,987 39%
middle east and africa 384 601 903 1,417 2,320 3,714 57%
total (pB per month)
Total IP traffic 30,734 43,441 54,812 69,028 87,331 110,282 29%
WORLDORLD
1 day conference13 November 2012
www.totaltele.com/world
For sponsorship opportunities contact [email protected]
Awards ceremony and gala dinner13 November 2012
www.worldcommsawards.com
1 day conference14 November 2012
www.totaltele.com/ customerexperience
Total Telecom brings you 3 co-located events from 13-14 November at The Lancaster Hotel in London
The time is now
2 – 3 July 2013ETC Venues St Paul’s, London
2 day strategic conference and exhibition with senior decision makers from the largest telecoms brands.
Profiting through the network
Find out how to get involved at:
www.totaltele.com/network
november 2012 www.totaltele.com 15
reGulation
Technology. “in short, this proposal is an attempt to fundamentally change how the internet currently works.”
established in Melbourne, Australia in 1988, the iTrs formed the basis of a treaty that paved the way for liberalising the global telecoms industry. in short, they set up a framework that governments could use to enable telecoms networks in different countries to exchange traffic, and for companies to offer competitive, fairly-priced services across infrastruc-ture that spans the world. eTnO describes the iTrs as “the only truly global treaty on telecoms.” As such, the iTrs are “a fitting home for the princi-ples it wishes to see introduced,” it says.
“The iTrs are clearly out of date...Our proposal calls for the iTrs to reflect the
current reality,” says Luigi Gambardella, chairman of eTnO’s executive board. “investing in faster networks is to the advantage of both telecom operators...and content providers. To allow this win-win relationship to work...players in the value chain should come to agree-ments on how to get the most value out of networks.”
in December delegations from 193 iTU member states will descend on Dubai for the world Conference on international Telecommunications (wCiT) where proposed amendments to the iTrs will be debated. eTnO’s proposals will be up for discussion and there will likely be a number of dissenting voices.
“we will oppose the eTnO proposal to amend the iTrs,” says william Kennard, Us ambassador to the european Union and former fCC chairman. “if it ain’t broke, don’t fix it,” he says.
“The eU parliament in all probability absolutely will oppose eTnO’s propos-als,” adds Malcolm Harbour, MeP and chairman of the european Parliament’s internal market and consumer protection committee. “Abandon it, drop it now.”
but, irrespective of whether or not they back eTnO’s proposed iTr amendments,
not everyone believes that the system “ain’t broke”.
The iTrs “require some changes,” insists etisalat CeO Ahmad Julfar. “what was designed in 1988 was good for 1988. we need to review it, we need to amend it,” he says. However, before the industry can move forward, Julfar says it needs to articulate exactly what it wants to achieve by adapting the iTrs for modern use. “we need to get the policy makers and regulators and we as an industry to agree on the objectives that will be in the best interests of all of us: telecom [companies], internet players, regulators and policy makers,” he says.
“we need to define the objectives,” agrees Telekom Austria CeO Hannes Ametsreiter. “i believe many things need
to be addressed,” including the future of interconnection and a reduction in regu-lation in certain areas of the industry. “we need to have more liberalisation,” Ametsreiter continues. “Competition is not lacking, investment is what’s lacking. we need to decide whether it’s best for end users to have the best prices today, or the best infrastructure tomorrow,” he says.
but bT chief executive ian Livingston notes that passing the cost of the network on to consumers might not be possible, despite their voracious consumption of OTT content. “we as an industry...have a pricing problem,” Livingston says. “bT used to charge £40 [per month] for half-Meg broadband. Today we’re charging £20 for 80 Meg.”
As such, it is easy to see why some believe revising the iTrs is the most effe-cive way to address the imbalance between network operators and OTT providers.
yes ministereU ambassador Kennard, meanwhile, is also concerned that changes to the iTrs, particularly with respect to interconnec-tion, will lumber future peering
arrangements with unnecessary govern-ment oversight.
“The commercial relationships that have evolved to define this marketplace are fluid and unpredictable,” he says. “90% of peering agreements are made on a handshake. They’re flexible; they evolve as business models evolve,” Kennard says. “The market has decided that it needs the flexibility to conclude these transactions without a regulatory framework, and consumers have benefited enormously as a result.”
Gambardella insists that eTnO’s proposals do not constitute new regula-tions. “rather, they should promote innovation by redefining the basic prin-ciples in this new era of the internet,” he says.
Meanwhile, some observers warn that OTT players would likely be unwilling to pay network operators to deliver their content in countries that have a small addressable market, potentially jeopard-ising the availability of some online services in developing economies.
“in less developed countries in particu-lar, [eTnO’s proposals could] hinder the ability of internet users to access the full range of information, services, and tools available online because large companies may be reluctant to serve certain users due to high costs,” warns the Centre for Democracy and Technology.
However, if that is the case, says Malcolm Johnson, director of the iTU’s telecommunication standardisation bureau, then eTnO’s proposals stand little chance of being adopted. “The majority of our members are developing countries–they’re not going to agree to anything that would be negative for them,” he points out. for any amendment to pass at wCiT requires consensus among attendees, and that is no small task.
Other proposed amendments to the iTrs will be on the agenda at the confer-ence. but some believe that the answer lies not in tweaking the regulations, but in a more market-driven approach.
“The solution has to be found in scale, the solution has to be found in consolida-tion,” says Vodafone’s Colao. n
Send the bill to Google or Facebook and see what happens
www.asiacommsawards.com
Asia Communication Awards 2013Celebrating the success of Asian telecoms, globally
20 June 2013 • Conrad Centennial, Singapore
Talk to us about sponsorship opportunities today!Call Oliver Chandler on +44 (0) 207 608 7041
awards
A T o t a l T e l e c o m P r o d u c t i o n
section Header
november 2012 www.totaltele.com 17
prime numBers contacts
editorial4th Floor, welken House, 10-11 Charterhouse square, London eC1m 6eH +44 (0)20 7608 7030; [email protected]
total telecommary lennighan [email protected] editor +44 (0)20 7608 7069nick Wood [email protected] assistant editor +44 (0)20 7608 7046michelle young [email protected] art editor
adVertisinGHeaD oFFICe, LonDon Keith dalton [email protected] sales Director +44 (0)20 7608 7065Jessica Gillies [email protected] manager +44 (0)20 7608 7027oliver chandler [email protected] manager +44 (0)20 7608 7041
UnIteD states anD CanaDa KCs International t +1 717 397 7100 F +1 717 397 7800 Karen c smith-Kernc – east [email protected] alan Kernc – west & Canada [email protected]
JaPan Hiroko Kujime [email protected] Business t +81-3-3661-6138 F +81-3-3661-6139
production/ suBscription/customer serVicesPlease forward all advertising material directly to: [email protected] aleisha Bryant [email protected] Customer services executive +44 (0) 7608 7042 or subscribe free at: www.subscription.co.uk/totaltelecom
marKetinGtally Judge [email protected] marketing manager +44 (0)20 7608 7076ruth clark [email protected] marketing executive +44 (0)20 7608 7047
eVentsmatthew secker [email protected] Conference Director +44 (0)20 7608 7039charles Georgiou [email protected] Project manager +44 (0)20 7608 7071
manaGementrob chambers [email protected] Publisher +44 (0)20 7608 7077Greg Hitchen [email protected] Chief executive officer
otHer puBlicationsonline: www.totaltele.comtelevision: www.totaltele.tv
total telecom eVentsWorld communication awards www.worldcommsawards.comWorld Vendor awards www.worldvendorawards.comasia communication awards www.terrapinn.com/2011/asiatotal telecom Worldwww.totaltele.com/world total telecom Wireless Worldwww.totaltele.com/wireless
total telecom+ is published by
© 2012. all rights reserved.
Terrapinn Holdings Ltd registered office: 4th Floor welken House, 10-11 Charterhouse square, London eC1m 6eH
$4 billionRevenues from location-
based services in 2012 (ABI Research)
small cells space too smallThe small cells market is growing fast but volumes will not be high enough to support the number of vendors trying to get into the space, according to infonetics Research. “A vendor battle is looming and not everyone is going to win,” says principal analyst stéphane Téral. The analyst firm predicts that the number of small cell units sold will grow nearly 40-fold between 2011 and 2016 to 3.2 million, while small cell revenues will rise at a CAGR of 73% in the same period.
smartpHone users Go ottMore than 45% of consumers with smartphones use instant messag-ing or an over-the-top (OTT) messaging application in addition to or instead of traditional sMs, while 20% use voice-over-iP (VoiP) apps, according Analysys Mason, which gathered data from 1,000 smartphone users in france, Germany spain the UK and the Us. On the plus side for operators, only 1.7% used iM or OTT messaging exclusively, without using sMs. However, 20% of the mobile VoiP users (or 4% of the total) used VoiP apps more than operator voice services.
8,479,912“The number of people that are speaking on a telephone every
second around the world.” (Joe Gallagher, KPMG UK)
sms reVenue loss GroWsOperators will have lost $54 billion in sMs revenues by 2016, more than double the $23 billion they are predicted to have lost by the end of this year, as smartphone users turn to other forms of social messaging, according to Ovum. The analyst firm advises telcos to cooperate with handset makers in order to remain relevant in the messaging space. “OTT players are changing consumers’ messaging preferences, and the pressure they are exerting on operators’ messaging services is forcing them to offer increased sMs bundles and to experiment with messaging pricing models, further dampening revenue growth,” said neha Dharia, consumer telecoms analyst at Ovum. until Rich Communication suite (RCs) reaches the mass market in 2014, telcos must rely on innovative pricing, partnerships, and own-brand iP messaging services to keep up with demand, Ovum said.
source: ovum: Counteracting the social messaging threat (July 2012)
GloBal moBile penetration at 45%fewer than half of the people in the world have mobile phones, according to new research from the GsMA. The total number of connections stands at 6.8 billion globally, falling to 5.9 billion when M2M connections and inactive siM cards are excluded. However, mobile subscribers own an average 1.85 siM cards each, leaving unique mobile users at just 3.2 billion, or 45% of the world’s population. That figure will rise to 4 billion within the next five years, the GsMA predicts.
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
reve
nue
loss
(Us
$ m
illion
s)
2010 2011 2012 2013 2014 2015 2016
n north america n south and Central america n europe n Asia-Pacific n middle east and africa
loss in sms reVenue By reGion
3.5
0
Uni
ts in
milli
ons
2012 2016
small cell units sHipped
580 millionConsumers purchasing physical goods remotely via their mobile
handsets by end-2014 (Juniper Research)
source: Infonetics researchwww.asiacommsawards.com
Asia Communication Awards 2013Celebrating the success of Asian telecoms, globally
20 June 2013 • Conrad Centennial, Singapore
Talk to us about sponsorship opportunities today!Call Oliver Chandler on +44 (0) 207 608 7041
awards
A T o t a l T e l e c o m P r o d u c t i o n
HELPING VODAFONE ITALY ADVANCE TO LTE
The European carrier has relied on Tellabs solutions since 2010. Now it’s trialing Tellabs products as it prepares a move into the future.
Q4 2012 Advance smart networks
LEADING EDGETarcisio Ribeiro, Tellabs vice president, Europe, MiddleEast and Africa, discusses Tellabs’ commitment to customers as they face challenges around the globe.
UPLOADSmartphones are taking on increased importance inusers’ lives. Spending on software-defined networks increased from $80 million in 2010 to $140 million in 2011. And more.By Joan Engebretson
HELPING VODAFONE ITALY ADVANCE TO LTEThe European carrier has relied on Tellabs solutionssince 2010. Now it’s trialing Tellabs products as it prepares a move into the future. By Joan Engebretson
4
6
11
THE FRENCH BROADBAND REVOLUTIONHow service provider CELESTE is expanding its fiber-based metro network to the largest cities in France.By M.J. Richter
SMART MOBILE BACKHAUL IS KEY TO HET NET SUCCESSWith the flexibility to adapt to changing technologiesand services, operators can position themselves higherin the communications value chain.By Ian Volans
WHEN SMALLER IS STRONGERThe new Tellabs 120 Mini ONT saves customers CapEx,OpEx and physical space. And you don’t have to worryabout spilling coffee on it.By M.J. Richter
17
22
28
Insight Q4 2012 2Subscribe to Insight: www.tellabs.com/insight
Insight Q4 2012 3
One Tellabs Center1415 West Diehl RoadNaperville, IL 60563 USAPhone: +1.630.798.8800Fax: +1.630.798.2525www.tellabs.com
Acting President and CEODaniel P. Kelly
Editorial BoardGeorge StenitzerTom Lynch
EditorTom Lynch
Editorial ContributorsJoan EngebretsonM.J. Richter
DesignHerring Design
Statements herein may contain projections or other forward-looking statements regarding future events, products,features, technology and resulting commercial or technological benefits and advantages. These statements are fordiscussion purposes only, are subject to change and are not to be construed as instructions, product specifications,guarantees or warranties. Actual results may differ materially. The following trademarks and service marks are ownedby Tellabs Operations, Inc., or its affiliates in the United States and/or other countries: Tellabs®, Tellabs and T symbol®, T symbol® and SMARTCORE®. Any other company or product names may be trademarks of their respective companies. Copyright ©2012 Tellabs. All rights reserved. 74.2231E
Subscribe to Insight: www.tellabs.com/insight
LEADING EDGE Focused on our customers’ success
All over the world, service providers face the challenge of exponential mobile datagrowth. Addressing user demand puts considerable strain on networks. What’s more,service providers need ways to maximize revenue and keep costs down.
With our innovative solutions, Tellabs helps our customers overcome these chal-lenges. Our products make customers’ networks smarter and simpler, so users aroundthe globe can get what they need, exactly when they need it.
We recently updated our mobile backhaul solution to help you move forward to LTE.And as service providers debate the needs of small cell networks, we’re here to helpguide them to a more efficient backhaul infrastructure.
Vodafone Italy is addressing the demand challenge by preparing to deploy a higher-capacity mobile data network with LTE. Since 2010, Tellabs has provided backhaulconnectivity for Vodafone’s 2G and 3G wireless networks. Now we’re in trials to helpthem make the crucial transition to LTE (page 11).
CELESTE is expanding its fiber-based metro network to reach the 25 largest citiesin France. So it needs a flexible network that can stay ahead of demand. That’s why CELESTE turned to the Tellabs® 7100 Nano™ Optical Transport System. The Tellabs7100 Nano OTS enables the network to provide 1-Gbps connections to 2,700 existingsmall/medium enterprise customers—and attract new customers as well (page 17).
Tellabs has developed an innovative optical network terminal (ONT) that will revo-lutionize PONs and OLANs. The Tellabs® 120 Mini Optical Network Terminal creates
Insight Q4 2012 4
2G: Second Generation3G: Third GenerationLTE: Long Term EvolutionOLAN: Optical Local Area NetworkPON: Passive Optical Network
Tarcisio RibeiroVice President, Sales, Europe, Middle East andAfrica
Subscribe to Insight: www.tellabs.com/insight
LEADING EDGE big savings in CapEx and OpEx, and gets rid of the clutter created by traditional desktopONTs (page 28).
Early this year, the number of mobile broadband subscriptions worldwide reached1 billion. As demand for mobile communications continues to soar, our industry is atan inflection point. Ian Volans argues that “smarter” backhaul can empower operatorsto position themselves higher in the communications value chain (page 22).
Tellabs is dedicated to helping our customers win. By adding intelligence to yournetwork, you can exceed user expectations and improve the quality of their experiencesevery day. Tellabs solutions enable you to take advantage of the tremendous opportuni-ties our industry offers—we’re here to help you succeed.
Sincerely,
Tarcisio RibeiroVice President, Sales, Europe, Middle East and Africa
Insight Q4 2012 5Subscribe to Insight: www.tellabs.com/insight
UPLOADBy Joan Engebretson
Smartphone as Swiss Army knifeSmartphones seem to be taking on increased importance in users’ lives.
More than half of smartphone users (54%) in a recent survey said they use theirphones in place of an alarm clock and 2 in 5 (39%) said they no longer use a separate camera, instead relying on the one built into their smartphone. The survey, conducted by U.K.-based mobile operator O2, also found that making phone calls is now only the fifth most popular smartphone activity.
On average, people spend just over 12 minutes per day using their smartphones to make calls, according to the O2 research. But they spend nearly 25 minutes per day browsing the Internet with their smartphones and nearly 18 minutes a day using their smartphones to check social networks. Other smartphone activities that are now more popular than making phone calls include listening to music and playing games. Those activities consumed an average of about 15 minutes and 14 minutes of customers’ daily smartphone usage, respectively. (continued)
Insight Q4 2012 6
2525
1212
1818
MINUTES
MINUTES
MINUTES
UPLOAD As smartphone users engage in some of these activities, apps they’ve downloadedwill likely assist them.
ABI Research estimates that the average smartphone subscriber worldwide downloads about 37 native apps per year. That’s up 6% from 2011, when the averagesmartphone subscriber downloaded 35 apps.
But even though smartphones seem to be increasingly ubiquitous in consumers’lives, their dominance in certain areas is now being threatened by the increasing popularity of wireless media tablets.
People now are more likely to use tablets oversmartphones for 4 out of 15 common uses, includ-ing playing games, watching TV programs andreading books or magazines, according to astudy GfK Marketing and Communica-tions conducted. Users preferred smartphones for searching theInternet, listening to music,filming video and 8 otheractivities.
Insight Q4 2012 7
Smartphone activitiesthat are now morepopular than makingphone calls includelistening to music and playing games.
Subscribe to Insight: www.tellabs.com/insight
1414MINUTES
1515MINUTES
Strong momentum for SDNService providers are getting serious about software-defined networks (SDN)—a newapproach to networking that separates the control plane from individual switches orrouters with the goals of simplifying network control and enabling new services.
Spending on SDN increased from $80 million in 2010 to $140 million in 2011,according to research firm Dell’Oro Group. And within 5 years, Dell’Oro Group expectstoday’s number to increase 17-fold.
Dell’Oro Group researchers see data centers as a key contributor to SDN growth,observing that the switch to SDN “has to happen” because data centers are beginningto require a higher level of automation to effectively support the movement of virtualmachinery.
Research firm Infonetics also sees strong interest in SDN, noting that the majorityof service providers worldwide are considering purchases of SDN technologies. Serviceproviders are motivated by the desire to simplify network provisioning and add new services in ways not previously possible, Infonetics said.
OpenFlow is the “most developed programmable network initiative,” according toInfonetics, which noted that 80% of 21 network operators surveyed said they are including OpenFlow in their purchase considerations.
Insight Q4 2012 8
Within 5 years,spending on SDNwill increase 17-fold, accordingto Dell’Oro Group.
Subscribe to Insight: www.tellabs.com/insight
UPLOAD
SDNGROWTHSDNGROWTH
Tellabs is architectinga data and optical solution that usesSDN technologies toenable a flexible, virtualized network for data center connectivity. Formore, search “SDN”on Tellabs.com.
UPLOAD Small cells loom large for 4G/LTESmall cells may be on their way to becoming indispensable for 4G/LTE networks.
The small cell’s appeal lies in its ability to increase network capacity to supportexplosive mobile broadband demand. In a report titled “The New 4G/LTE Radio: SmallCells & New Architectures,” Heavy Reading Research Analyst Claus Hetting offers somedata to illustrate just how big a capacity boost small cells can provide. Hetting estimatesthat by extensively deploying small cells, wireless operators can see network capacitythat exceeds 1 Gb/s per square kilometer.
A small cells strategy isn’t the only contender for increasing network capacity, however. Wi-Fi is the biggest threat to thesmall cell business case, according to Hetting, who seesvendors responding by designing equipment that integrates small cells and Wi-Fi.
Critical to new network architectures based onsmall cells is a whole lexicon of technical termsand acronyms, notes Heavy Reading. Amongthese are self-optimizingnetworks (SON), system-on-a-chip (SoC) and OpenBase Station ArchitectureInitiative and Common Public Radio Interface (OBSAI/CPRI).
9Subscribe to Insight: www.tellabs.com/insight
4G: Fourth GenerationLTE: Long Term Evolution
Small cell and “het net” deploymentsare a natural exten-sion of Tellabs’ mobilebackhaul solution andhelps us enable ourcustomers to optimizetheir 3G and 4G networks. For more,search “small cells”on Tellabs.com.
UPLOAD
Insight Q4 2012 10
Visit Tellabs at these upcoming events:
Light Reading Ethernet ExpoNovember 6-8HiltonNew York, New York
OSP Expo 2012November 14-15Booth #1204Colorado Convention CenterDenver, Colorado
LTE/EPC & Converged Mobile BackhaulDecember 3-6Stand 1Grange City HotelLondon, United Kingdom
“Would you mind talking to me for a while? I forgot my cell phone.”
Subscribe to Insight: www.tellabs.com/insight
Insight Q4 2012 11
HELPING VODAFONE ITALY ADVANCE TO LTE
HELPING VODAFONE ITALY ADVANCE TO LTEThe European carrierhas relied on Tellabssolutions since 2010.Now it’s trialing Tellabsproducts as it preparesa move into the future.
By Joan Engebretson
The European carrierhas relied on Tellabssolutions since 2010.Now it’s trialing Tellabsproducts as it preparesa move into the future.
By Joan Engebretson
PHOTO: GIANLUCA GRASSANO
MOBILE As mobile users begin to demand higher-speed data connectivity, Vodafone Italy—one of the top mobile operators in the country—is preparing to deploy higher- capacity mobile data networks with LTE.
The company recently conducted real-world trials of the technology using Tellabs®
8600 Smart Routers and Tellabs® 8800 Smart Routers for backhaul connectivity. Theprovider found the products to be well-suited to providing network synchronization andIP-virtual private network (IP-VPN) capabilities that the LTE network will require.
“During the demo LTE, there were really impressive results from the Tellabs prod-ucts, with good latency and fantastic peak results,” said Nadia Benabdallah, Head ofSouthern Region Network Engineering for Vodafone Italy.
LTE trialsVodafone Italy originally deployed the Tellabs® 8660 Smart Router in 2010 to
provide backhaul connectivity for the carrier’s 2G and 3G wireless networks. Later, theoperator added the Tellabs® 8840 Smart Router to the network.
The carrier has now deployed nearly 4,000 Tellabs products in its wireless backhaulnetwork—including the Tellabs® 8605, 8609, 8630, 8660 and 8840 Smart Routers.
Vodafone also used Tellabs products in its LTE trials, which the company conductedin 2012 in the city of Ivrea and in 3 football stadiums in Torino, Milan and Naples. Thegoals were to verify LTE performances in high-density traffic sites and to test completecoverage of a major city.
Also in 2012, the company trialed LTE deployments in hot-spot applications atspecial events and at Vodafone locations, including some retail outlets.
“In the LTE architecture, from the backhauling point of view, the connection is nolonger between a radio base station and a controller,” explained Benabdallah. “The con-troller is replaced by a security gateway, which in our network will be located in the core
Insight Q4 2012 12
2G: Second Generation3G: Third GenerationLTE: Long Term Evolution
Vodafone used Tellabsproducts in its LTE trials, which the company conducted in 2012 in the city ofIvrea and in 3 footballstadiums in Torino,Milan and Naples.
Subscribe to Insight: www.tellabs.com/insight
MOBILE
sites where the Tellabs 8840 router is also located. The security gateway will always beinterfaced on the access side by a Tellabs 8840 router.”
Benabdallah said the LTE trials involved different frequencies, different LTE vendors and different network topologies. For example, some trials involved a fiber-to-the-node architecture while others were based on IP-MPLS rings, with or without a security gateway.
Tellabs products required very few changes to support the LTE trials. “Except forsome parameter upgrades, the network was almost ready to transport LTE,” Benabdallahexplained.
Insight Q4 2012 13
IP-MPLS: Internet Protocol/Multi-Protocol Label Switching
“Except for some parameter upgrades,the network was almost ready totransport to LTE.”
—Nadia Benabdallah,Head of Southern RegionNetwork Engineering,Vodafone Italy
Subscribe to Insight: www.tellabs.com/insight
MOBILE Technical requirementsVodafone Italy anticipates that its LTE network will rely largely on a packet backhaul
network based on IP/MPLS that typically will use synchronous Ethernet access inter-faces. As Benabdallah explained, because Vodafone Italy is migrating the transport network from legacy SDH transport toward an IP/MPLS solution, the synchronizationmust evolve to the new types of distribution.
The backhaul network will require both frequency and phase synchronization. Thenetwork achieves frequency synchronization through a variety of options, including:
• external synchronization inputs• STM-1 SDH interfaces • on Ethernet interfaces, through support for 2 standards that are relatively newto backhaul networks (ITU-T standard for Synchronous Ethernet (Synch-E) andthe 1588v2 standard from the IEEE).
Certain LTE capabilities require phase synchronization, including location-basedservices and certain multipoint and multicast services. And for phase synchronization,Vodafone Italy intends to rely heavily on the boundary clock 1588 feature.
“1588v2 timing over packet is generally used to synchronize the ATM NodeBs andTDM basestations using the Tellabs 8605 router to connect to a 1588 v2 server via aLayer 2 access network,” explained Benabdallah.
Radio access base stations are quite demanding in synchronization for the correcthandover functionalities. The Tellabs-based solution, Benabdallah said, has been meet-ing Vodafone Italy’s expectations.
A unique requirement of LTE drove Vodafone Italy’s need for IP-VPN support. Earlier-generation wireless networks used a hub-and-spoke architecture, with each base station connected to a central base station controller. But with LTE, each base
Insight Q4 2012 14
ATM: Asynchronous Transfer ModeITU-T: International Telecommunication Union -TelecommunicationSDH: Synchronous Digital HierarchySTM: Synchronous Transport ModuleTDM: Time Division Multiplexing
Subscribe to Insight: www.tellabs.com/insight
MOBILE
station can communicate directly with other base stations without going through a centralized controller.
Using IP-VPNs enables Vodafone Italy to logically separate the network as needed.This way, the routing tables per IP-VPN contain fewer entries, optimizing the complexityand troubleshooting of the network.
Looking aheadAs Vodafone Italy looks to take LTE beyond the trial phase, the company is consid-
ering the possibility of upgrading existing Tellabs 8840 and 8630 smart routers to support faster interfaces.
Insight Q4 2012 15Subscribe to Insight: www.tellabs.com/insight
As Vodafone Italy upgrades its backhaul network to LTE, the service provider expects to see a “significant saving inenergy consumption.”
MOBILE
Insight Q4 2012 16
The Tellabs 8840 smart router is able to provide 10-gig Ethernet interfaces to connect to the core devices and provide more switching capabilities.
“The Tellabs 8630 smart routers will help migrate to the 1 Gig Ethernet and 10Gig interfaces and are future-proof, having the ability to deliver full-IP technologies,”said Benabdallah.
As Vodafone Italy upgrades its backhaul network to support LTE, the serviceprovider expects to see a “significant saving in energy consumption” as a result of thereduction in the number of platforms (such as add/drop multiplexers and ATM switches)that are required at a single site.
One advantage that Vodafone Italy anticipates from using Tellabs products in itsLTE backhaul network is that technicians are already familiar with the Tellabs® 8000Intelligent Network Manager, which they have been using to support the current 2Gand 3G backhaul networks, potentially minimizing technician training requirements.
An important function of the Tellabs 8000 intelligent manager will be to help ensure that the 1588v2 capability continues to support good transmission quality onthe transport network.
Vodafone Italy has not yet announced specific LTE deployment plans, but the company is laying important groundwork to be prepared when that day comes. �
Subscribe to Insight: www.tellabs.com/insight
THE FRENCHBROADBANDREVOLUTION
THE FRENCHBROADBANDREVOLUTIONHow service provider CELESTE is expanding its fiber-based metro network to the largest cities in France By M.J. Richter
Insight Q4 2012 17
BROADBAND More than 2 centuries ago, popular demand for change ignited the French Revolution. Today, business demand for bandwidth is sparking whatNicolas Aubé, president and CEO of French ISP CELESTE, calls “a
major revolution for the French broadband market.”He is referring to the rapid transformation of CELESTE, the company he
co-founded 11 years ago, into a nationwide competitor. Using the Tellabs® 7100Nano™ Optical Transport System, CELESTE is expanding its fiber-based Parismetro network to the 25 largest cities in France.
Consisting of ROADM-based multi-channel nodes and Optical Line Ampli-fiers, the Tellabs 7100 Nano OTS network will enable CELESTE to do more forits customers. The network will provide 1-Gbps connections to its existing 2,700small/medium enterprise (SME) customers—and will help attract new ones as well.
Because the new 880-Gbps network gives French SMEs fast, easy access to com-petitively priced, high-bandwidth services, Aubé says it sets CELESTE apart from itslarge telco competitors.
“We are a small group, with 50 employees, but our offer now is very famous, andwe can change the [broadband] market for companies in France,” Aubé says.
When completed by early 2014, the network will stretch more than 4,000 kilome-ters around France, connecting major economic centers such as Lille, Nantes, Bordeaux,Toulouse, Marseille, Lyon and Strasbourg.
Staying ahead of demand requires a flexible networkCELESTE’s analyses of its customers revealed their collective consumption of data
grows by 50% each year. To keep up with that growth in traffic, the company wanted anetworking solution that it could roll out fast and could support its portfolio of Internetaccess, IP-VPN, VoIP and hosting services.
Insight Q4 2012 18Subscribe to Insight: www.tellabs.com/insight
“We can change the broadband market for companies inFrance.”
—Nicolas Aubé,President and CEO, CELESTE
Gbps: Gigabits Per SecondIP-VPN: Internet Protocol/Virtual Private NetworkROADM: Reconfigurable Optical Add/Drop MultiplexerVoIP: Voice Over InternetProtocol
BROADBAND When planning the network expansion, CELESTE engineers originally decided togo with “a simple Optical Add-Drop Multiplexing (OADM) solution,” such as the one onwhich the company bases its Paris metro network. However, when Tellabs presented theTellabs 7100 Nano OTS ROADM-based solution, the CELESTE team immediately understood the advantages of the system’s built-in flexibility and scalability.
“CELESTE needed a partner that could deliver quickly the high-quality infrastruc-ture necessary to support its aggressive deployment targets,” says Tarcisio Ribeiro,Tellabs vice president and general manager, Europe, Middle East and Africa. “We designed the Tellabs 7100 Nano OTS not only with fast deployment in mind, but alsoto provide the kind of flexibility and scalability that operators like CELESTE need.
“The Tellabs 7100 Nano OTS will make it easy for CELESTE to introduce new serv-ices quickly to enterprises across France,” he said, “and its scalability will enable theCELESTE network to accommodate the growing volumes of traffic.”
Those characteristics were the decisive factors in CELESTE’s choice of the Tellabs7100 Nano OTS, Aubé said. He noted the company’s Paris network is a traditionalOADM network, which is “kind of difficult to change.”
Aubé said, “When we change the OADM network, when we add some nodes, wehave to change the design for the whole network. That’s not easy to do—and not cheapeither.”
Because CELESTE will need about 2 years to deploy the new 4,000-kilometer net-work, the company wanted to make sure it does not run into the same kind of difficultiesit has experienced with its Paris infrastructure.
“We anticipate some changes in the [new network] design,” Aubé says. “We wantto do some add-ons, to be able to go to other cities. The ROADM design makes it veryeasy to change the network, both during the deployment and afterward.”
Insight Q4 2012 19Subscribe to Insight: www.tellabs.com/insight
“The Tellabs 7100Nano OTS willmake it easy forCELESTE to intro-duce new servicesquickly to enter-prises acrossFrance.”
—Tarcisio Ribeiro, Vice President, Sales, Europe, Middle East andAfrica, Tellabs
BROADBAND CELESTE leases fiber capacity for its intercity backbone. But the company is run-ning its own fiber from its main loop to the customer premises in each of the 25 cities connected to the expanded network.
Big cost savings in a small footprintBy deploying Tellabs 7100 Nano OTS packet optical technology as the basis for its
network expansion, CELESTE is significantly reducing its total cost of ownership.Tellabs customers have reported that the Tellabs 7100 Nano OTS reduces their
capital expenses by up to 65% and their operating expenses by as much as 85%.“Tellabs 7100 series’ flexibility and efficient use of power and space help cut cost,”
said Brian Nagle, Tellabs director, product management. “It also makes adding servicesvery simple and fast.”
The Tellabs 7100 Nano OTS combines advanced optical networking technologywith a full-featured services layer in a package about half the size of alternative ROADMsolutions. Providing the same integrated networking and Ethernet switching in a smallerfootprint makes the Tellabs 7100 Nano OTS a more affordable network-edge solution.
Add bandwidth without disrupting serviceAs a node for reconfigurable or fixed add/drop multiplexing of up to 88 wavelengths,
the Tellabs 7100 Nano OTS gives CELESTE maximum flexibility to transmit any wave-lengths to any port.
That flexibility delivers even more long-term benefits compared with traditional,fixed-filter (non-ROADM) technology. At any given location, a fixed-filter system canadd and drop only specific channels or bands of wavelengths.
Consequently, network engineers have to plan far in advance for changes in trafficpatterns. Inserting new filters into the network to boost capacity causes service disruptions.
Insight Q4 2012 20 Subscribe to Insight: www.tellabs.com/insight
“Tellabs 7100 series’ flexibility and efficient use ofpower and spacehelp cut costs.”
—Brian Nagle, Director, Product Management,Tellabs
BROADBAND As traffic volumes increase, engineers must power-balance thesystem, which requires a lot of time and labor.
By contrast, the Tellabs 7100 Nano OTS with integratedROADMs enables service providers like CELESTE to add band-width and roll out new services with minimal planning, andwithout disrupting existing services on the network.
This architecture also enables service providers to auto-mate constant optical power balancing on a site-by-site basis.This way they save significant costs in terms of time and labor.
The broadband revolution rolls onAubé said that CELESTE already has 6 cities up and run-
ning on the new network: Paris, Saclay, Orléans, Tours, Poitiersand Bordeaux. Customers include new ones, as well as SMEsthat CELESTE has migrated from its previous services (whichhad been based on other operators’ facilities). The next citiesslated to come online for CELESTE will be Toulouse, Marseilleand Montpellier.
He adds that CELESTE markets its services well in advance of its entry into eachmarket, explaining the benefits of very high bandwidth fiber service to its customers.
“Our 1-Gbps connection for SMEs is a unique offer in France,” Aubé said.By making it possible to provide additional bandwidth quickly and efficiently, where
and when customers need it, the Tellabs 7100 Nano OTS positions CELESTE to respond very quickly to enterprise customers’ requirements. And by making symmetrical1-Gbps service affordable for the SME market, the Tellabs solution also positions CELESTE to compete very effectively with its much larger rivals. �
Insight Q4 2012 21
The Tellabs 7100 NanoOTS enables serviceproviders to add band-width and roll out newservices with minimalplanning.
CELESTE already has 6 cities up and running on the new network. The next cities slatedto come on line are Toulouse,Marseille and Montpellier.
Subscribe to Insight: www.tellabs.com/insight
Orléans
F R A N C E
Saclay
Tours
Poitiers
Bordeaux
MontpellierMarseille
Toulouse
Paris
22
GUEST COLUMN Demand for mobile communications continues to soar. The International Telecom-munication Union (ITU) reported the number of mobile broadband subscriptions grew 40% during 2011. That increase brought the total to more
than 1 billion subscriptions by the beginning of 2012. This phenomenal growth has brought the mobile industry to an inflection point. As
consumers, we were once satisfied with an occasional voice call or text message. Todaywe expect to have all that the Web can offer—social networks, email, apps, games,music, videos and news—at our fingertips.
As a result, operators find themselves being squeezed On one hand, competitive realities dictate that carriers continue to invest in the
mobile broadband capabilities and ubiquitous network coverage. All the while, consumers and businesses consume ever-increasing amounts of data.
On the other hand, low-cost, Internet-based alternatives to traditional telephonyservices are disrupting telecom markets and challenging operators’ established business models. Although mobile networks facilitate the use of alternative online serv-ices, the operators do not necessarily share in the revenues they generate.
In this new environment, more players are sharing total mobile service revenuesthan before. Consequently, operators’ capital and operating expenditure are rising whiletheir share of revenues dilutes.
Fortunately, operators still hold a trump card: they are custodians of the spectrumnecessary to provide the wireless connectivity that subscribers demand. By re-thinkinghow they provide radio coverage, implement backhaul and administer their legacy and newmobile technologies, operators can overcome the dual challenges they are currently facing.
Insight Q4 2012 23
Ian Volans
By re-thinking how they provideradio coverage, implement backhauland administer theirlegacy and new mobile technologies,operators can over-come the challengesthey are currently facing.
Subscribe to Insight: www.tellabs.com/insight
GUEST COLUMN “Smarter” backhaul with inherent flexibility to adapt to changing technologies andservices can empower operators to position themselves higher in the communicationsvalue chain.
Smart backhaul maximizes ROI Operators tend not to retire a legacy network technology until its maintenance costs
exceed the revenues it generates. As a result, most of today’s mobile networks are heterogeneous networks, or “het nets,” that incorporate 2G, 3G and, in a growing numberof cases, LTE technologies.
Smart backhaul solutions can help operators maximize the returns on their investments in their het net assets. The key is to ensure that all traffic passes throughthe networks as efficiently as possible. By providing the headroom to support sub-scribers’ use of OTT services, smart backhaul strengthens operators’ abilities to attractand retain subscribers and retain their network advantage.
For a het net operator, the minimum requirement for a smart backhaul solution isthat it should be able to support simultaneously the transport of both legacy 2G/3GTDM traffic and high-volume, IP/Ethernet-based 3G/LTE traffic. As operators increaseradio access network (RAN) capacity by deploying successive versions of high-speedpacket access (HSPA) technology, or an LTE overlay, the business case for IP/Ethernetbackhaul grows stronger.
However, many operators are also evaluating small cells. This approach can provide fill-in coverage to localized “not-spots” or add capacity in traffic hotspots. Deployed beneath macro-cell coverage, small cells add a further layer of complexity tohet nets that also requires a smart backhaul solution.
Planning ahead, the capability to integrate packet-based synchronization will be essential for those operators expecting to migrate to all-IP transport later. Phase
Insight Q4 2012 24 Subscribe to Insight: www.tellabs.com/insight
Most of today's mobile networks are heterogeneousnetworks, or “het nets,” that incorporate 2G, 3G and LTE technologies.
2G: Second Generation3G: Third GenerationLTE: Long Term EvolutionOTT: Over The TopTDM: Time Division Multiplexing
GUEST COLUMN synchronization also needs to be on the smart backhaul solution’s development roadmapfor networks that will incorporate TD-LTE or LTE-Advanced in the future.
Physical backhaul: fiber or microwave Operators deliver backhaul over a variety of physical layers. For many operators,
2 approaches now dominate: fiber and microwave. Fiber can accommodate the spikes in bandwidth demand caused by the exponential
growth of tablet and smartphone usage. In urban areas with good access to points-of-presence, fiber backhaul has been growing rapidly as operators seek to take advantageof its substantially lower cost-per-bit.
Microwave offers a degree of flexibility that will ensure it retains an important rolein the Ethernet backhaul mix. Microwave is also important in more rural areas whereeconomic access to fiber is not so readily available.
Many small cell use cases depend on being able to locate the small cell preciselyin the coverage or capacity trouble spot. Microwave’s flexibility is likely to make thetechnology particularly relevant to many future small cell deployments.
A smart backhaul solution clearly needs to be able to accommodate all the physical backhaul connections in operators’ networks.
Smarter network management tools Smart backhaul can significantly contribute to operational efficiency by providing
tools that:a) hide the complexity of the heterogeneous network; and b) provide a homogeneous approach to implementing and managing various backhaul options.
Insight Q4 2012 25Subscribe to Insight: www.tellabs.com/insight
Microwave offers adegree of flexibilitythat will ensure it retains an importantrole in the Ethernetbackhaul mix.
TD-LTE: Time Division Long Term Evolution
GUEST COLUMN To be able to exercise effective control over their networks, operatorsmust be able to see backhaul availability to each and every site at all times.Without full network visibility and control, operators will find it difficult tocompete in the marketplace.
Network management systems must also support and simplify the installation of new network elements. If an operator needs to deploy thou-sands of small cells, it is vital to minimize the risk of human error duringinstallation and maintenance.
Content awareness capabilities will underpin network managementtools, which help operators test new business models. They can experiment based ondata segmentation, monetization, quality of service and class of service. Tools that helpget new services to market first can also enhance the operator’s competitive position.
Smart backhaul for long-term profitability Throughout the last 2 decades, operators have expanded the capacity and
capabilities of their networks by overlaying newer mobile technologies on previous-generation systems. Now, major technological changes occurring within the industryprovide an opportunity to pause and reflect.
All operators need to implement is a backhaul strategy that can support their legacysystems. But they also must accommodate subscribers’ service choices over what maybe a lengthy transition to newer, more advanced, radio technologies. A truly smart back-haul solution can take the transition from 3G to 4G in stride.
Many markets are currently experiencing a difficult economic environment. Theseconditions, combined with the high costs associated with securing new spectrum androlling out LTE, highlight the potential benefits of network sharing through infrastructurejoint ventures.
Insight Q4 2012 26Subscribe to Insight: www.tellabs.com/insight
A truly smart backhaulsolution can take thetransition from 3G to 4G in stride.
GUEST COLUMN If each of the participating operators is to retain the ability to offer differentiatedservices, then a smart backhaul solution is a prerequisite for such a strategy. The capabilities of the backhaul network, shaped at least in part by the network managementsystem, will determine whether each partner can allocate bandwidth correctly and main-tain control of its own spectrum.
Operators around the world will continue to run het nets for some time to come.But by applying a homogeneous and smart backhaul strategy, they can adapt morequickly to the constantly changing mobile ecosystem and thereby strengthen their long-term profitability. �
For more on smarter backhaul, read this new white paper.
Insight Q4 2012 27Subscribe to Insight: www.tellabs.com/insight
Insight Q4 2012 28
WHEN SMALLERIS STRONGERWHEN SMALLERIS STRONGERThe new Tellabs 120 Mini ONT saves customers CapEx, OpEx and physical space. And you don’t have to worry about spilling coffee on it.By M.J. Richter
The new Tellabs 120 Mini ONT saves customers CapEx, OpEx and physicalspace. And you don’t have to worry about spilling coffee on it.By M.J. Richter
The new Tellabs 120 Mini ONT saves customers CapEx, OpEx and physicalspace. And you don’t have to worry about spilling coffee on it.By M.J. Richter
ITmanagers in both enterprise organizations and federal-government agencies have become big fans of passiveOptical LAN technology. Not only does it give them faster
network speeds and greater capacity than their legacy copper-based active Ethernet LANs, it also reduces costs by con-suming less energy and taking up less physical space.
Users also like fiber-based Optical LANs’ speed and band-width. Some, however, are less than enthusiastic about the opticalnetwork terminals (ONTs) that sit on their desks and the associ-ated cabling strung around their workstations. They don’t like theclutter—they are afraid of accidentally disconnecting their ONTs
OPTICAL
or damaging them with spilled beverages. In addition, users say the desktop ONTs andcabling “just don’t look good” in the work environment.
Tellabs has developed a next-generation ONT that will revolutionize PONs andOLANs. Installed out of sight and out of reach, the Tellabs® 120 Mini Optical Network Terminal gets rid of all the workstation clutter created by traditional desktop ONTs.
A familiar look and feel but with the power of fiber opticsThe Tellabs 120 Mini ONT is “a revolutionary step,” says Tom Ruvarac, Tellabs
director, product management. “It enables enterprises and government agencies to de-ploy and use Optical LANs just like they deploy and use copper Ethernet LANs.”
The first release of the Tellabs 120 Mini ONT includes an in-wall model, the Tellabs120W, and a model that fits into cubicle raceways, the Tellabs 120C. The in-wall, single-gang version features a built-in faceplate, so installers simply insert it into thewall and use a standard mud ring to mount it.
Insight Q4 2012 29
Subscribe to Insight: www.tellabs.com/insight
Tellabs® 120 MiniOptical NetworkTerminal gets rid ofall the workstationclutter created by traditional desktopONTs.
LAN: Local Area NetworkOLAN: Optical Local Area NetworkONT: Optical Network TerminalPON: Passive Optical Network
OPTICAL The cubicle version of the Tellabs 120 Mini ONT fits into the raceway, which runsthe length of the cubicle wall.
“Installers can deploy it in the cubicle wherever users need connectivity,” Ruvaracsays. “So, beneath the flip-up lid on the desk, underneath the desk itself or in the floorraceway. The Tellabs 120C Mini ONT was specifically designed for fast, easy deploymentin the standard modular furniture systems found in most offices.”
With all the Tellabs 120 Mini ONT electronics inside the wallor inside the cubicle raceway, users “get something that looksand feels just like the copper-based active Ethernet LAN tech-nology they’re familiar with,” Ruvarac says. “But they also getthe same great benefits of fiber that desktop ONTs deliver.”
These benefits include GPON connectivity via standard gigabit Ethernet ports, including Power over Ethernet (PoE), andhigh-speed data, voice and video integrated within a single fiberinfrastructure. This Optical LAN architecture can support the corporate resources of a high-performance building, includingunified communications, wireless access points (WAP), buildingsecurity, building surveillance and building automation.
Remote powering eliminates cord clutterUsers of first-generation desktop ONTs also do not like the clutter in their work
areas that comes with having to plug the ONT power supply into a local power outlet,run a cord to the ONT and have a fiber jumper as well.
Tellabs designed the Tellabs 120 Mini ONT to use a remote power and battery backupsystem. Installers plug both single-mode fiber and a copper pair into the back of theTellabs 120 Mini ONT, and the copper carries DC power from the communications closet.
Insight Q4 2012 30
GPON: Gigabit Passive OpticalNetwork
Subscribe to Insight: www.tellabs.com/insight
OPTICAL “The remote powering enables an enterprise or an agency that’s upgrading from active Ethernet to Optical LAN to reuse the power and battery backup system originally installed in the communications closet for the legacy copper-based LAN,” Ruvarac says.
Installers also can repurpose the existing CATx cabling. They can use it to transmitpower to the Tellabs 120 Mini ONT while the single-mode fiber transmits data. Theycan do the same with the battery backup system that supported the Ethernet switches,reusing it to supply power to the new ONTs.
Within new facilities, installers can deploy the remote power and battery backupsystem either by running single-mode fiber and CATx cabling separately or by using thenew hybrid fiber/copper medium. In this new method, the fiber carries the PON signal,and the 24-gauge copper wire carries the power.
For the power supply itself, installers can use off-the-shelf power systems or deploy the new Tellabs® 500 Series Optical Distribution Hub between the optical lineterminal (OLT) and the ONTs.
“The Tellabs® 553 Optical Distribution Hub is the first model in the Tellabs 500series, and it has an integrated 1x32 PON splitter, which supports 32 copper interfacesand 32 single-mode fiber interfaces,” Ruvarac says. “When connected to a main powersource and battery backup system, the Tellabs 553 ODH powers remotely up to 32 Tellabs 120 Mini ONTs. Future models in the Tellabs 500 series will introduce 2:Nsplitter configurations for PON redundancy and high-power PoE, in both splitter-onlyand power-only versions.”
Simpler installation further reduces Optical LAN costsJust as the Tellabs 120 Mini ONT provides the familiar active Ethernet LAN-type
connectivity, it calls for the same familiar active Ethernet LAN-type deployment method-
Insight Q4 2012 31
“The Tellabs 120 MiniONT taps into a bigtrend toward full-fiberdistribution throughthe LAN, through thedesktop. The abilitythat will unleash asfar as people havingfaster service, betterservice and more reliable service is sensational.”
— Mark McDonnell, Senior Analyst, Telecom,Media & Technology, BBY Ltd.
Subscribe to Insight: www.tellabs.com/insight
OPTICAL ology. Installers place the terminating points of the equipment inside the wall and/orcubicle raceway and run the cabling back to the communications closet and on into thedata room. The only deployment difference is that active Ethernet uses copper cabling,while Optical LANs use fiber with all the inherent benefits of a passive infrastructure.
Enterprises and federal agencies that have deployed the Tellabs Optical LAN solu-tion already are reducing their CapEx by up to 70% and their OpEx by up to 80%, com-pared with their legacy active Ethernet LANs. Yet Ruvarac says the Tellabs 120 MiniONT drives their CapEx/OpEx costs even lower than those of alternative passive OpticalLAN solutions.
“By eliminating the need to mount ONTs in the desktop environment, the Tellabs120 Mini ONT eliminates the need for ONT mounting brackets and fiber jumpers,” heexplains. “Less material and labor mean lower installation costs, so the Tellabs 120Mini ONT provides still more savings over active Ethernet LAN solutions because it reduces the total cost of ownership even more.”
He says the new ONT also speeds up the installation process. In fact, the installa-tion sequence for the Tellabs 120 Mini ONT now matches standard construction sched-ule logistics.
The Tellabs 120 Mini ONT simplifies the enterprise or agency’s network evolution, especially as 10G-PON emerges, along with more innovations in Optical LAN technology.
“Enterprise and agency IT departments can upgrade their Optical LANs just by replacing the wall outlet and OLT PON service module,” Ruvarac says. “They won’t haveto upgrade the fiber infrastructure itself or modify the work environment in any way.”
A mini ONT saves even more physical spaceThe Tellabs Optical LAN solution takes up about 90% less physical space than
active Ethernet LANs do because it requires far fewer rack units. By eliminating some
Insight Q4 2012 32Subscribe to Insight: www.tellabs.com/insight
OPTICAL or all active Ethernet communications closets, the Tellabs solution recovers still more physical space. The space sav-ings directly impacts building design as well, as architectscan lower A/C, ventilation, power generation and powerbackup requirements because of the lack of energy-consuming and thermal-generating equipment in data centers and communications closets.
The Tellabs 120 Mini ONT not only frees up moreworkspace for users but also conserves space by eliminat-ing all Ethernet-access electronics from the communica-tions closet and cubicle environments.
A next-generation ONT with next-generation securityThe Tellabs 120 Mini ONT is physically more secure than the ONTs in alternative
passive Optical LAN solutions. Because it resides behind walls and within cubicle race-ways, it is far less vulnerable to damage, theft and vandalism.
The Tellabs 120 Mini ONT also offers enterprises and agencies top-notch data security, Ruvarac says. “With no exposed fiber, it’s very, very difficult for anyone to gainaccess to the fiber for malicious purposes. On the other hand, with no exposed fiber,associated electronics or cabling, the Tellabs 120 Mini ONT makes it easier than everbefore for users to gain access to all the benefits of Optical LANs.”
Want to hear more about the Tellabs 120 Mini ONT? Check out how industry analysts have responded at Tellabs.com. �
Insight Q4 2012 33Subscribe to Insight: www.tellabs.com/insight
The Tellabs OpticalLAN solution takes up about 90% lessphysical space than active Ethernet LANsdo because it requiresfar fewer rack units.
World’s highest-density metro solution.1Mb to 100Gb in a single modular platform.
One system for enterprise, edge, metro and core networks.End-to-end solution for cloud connectivity, mobile backhaul and business services.
For every networking need, all you need is Tellabs.tellabs.com/solutions/packetoptical
Did you know Tellabs offersworld-class Packet Optical Solutions?
Insight Q4 2012 34