The news is simply breathtaking! (And this, from a
jaded telecom journalist, no less!) For champions and boosters of the fledgling Internet
telephony industry, the announcement by British Telecom and Nortel Networks two of
the largest incumbent, PSTN players that they will build a brand-spanking new IP
telephony network infrastructure in Spain is the watershed event weve all been
waiting for. In one fell swoop, BT and Nortel have helped validate the technology, the
applications, and the astounding opportunities awaiting companies that are smart enough
and brave enough to take the IP plunge.
Nortel Networks (www.nortelnetworks.com), as
evidenced by this announcement, has not been twiddling its R&D thumbs (all 40,000 of
them) in the time since its 9-billion-dollar merger with Bay Networks. To wit: Nortel
Networks is winning a large share of recent voice and data switching sales to new
carriers, has a huge chunk of the new pan-European OC-192 network business, and is winning
lots of business from new CLECs entering the telco market. More importantly, the company
is starting to deliver on its oft-quoted approach to deliver IP telephony from the network
core and has the carrier-class equipment to finally back up its claim.
British Telecom (www.bt.com), once lumbering and slow
to respond to new market opportunities, is acting more like a new telecom tiger it
has refocused on new, emerging broadband and IP-centric technologies and revamped itself
to aggressively pursue new opportunities in the deregulating European telecommunications
market. BT is currently the sixth largest carrier in the world, with over 27 million
subscriber lines and revenues of over $25 billion.
THE GIST OF IT ALL
In December 1998, when the Spanish market opened to competition, British Telecom won a
competitive operating license, allowing it to compete with Telefonica Espana, the Phone
Company of Spain, for subscribers in Telefonicas backyard. But instead of sticking
with old-line PSTN technology and infrastructure, BT decided to catapult itself and the
Spanish telecommunications services market into the new millenium with a new, native IP
telephony service infrastructure.
This new network aims to offer a combination of full-featured telephone services and
advanced data/multimedia services to customers of BTs Spanish subsidiary. BT will
initially install over 90,000 lines in 10 cities, with plans to expand to 27 cities within
three years. Beginning with full-featured long-distance services available by the end of
1999 to over 20 million potential customers, BT will offer a full range of voice, data,
and multimedia services using new Internet-based technology from Nortel Networks (these
technology elements are described in more detail under the heading Nuts and Bolts
The new network will be entirely based on Internet Protocol (IP) equipment and software
that will strive to offer a user experience and level of quality on par with traditional
telephone networks largely due to the support and use of Signaling System 7 (SS7).
Because the new network is running IP, BT estimates the cost to acquire and operate the
network will be approximately 50 percent of a traditional voice network. And, because of
the open, modular nature of Nortel Networks Internet telephony technology, it should
be possible for BT to introduce advanced services on a large scale more quickly than using
more traditional service platforms.
According to estimates by Probe Research (www.proberesearch.com)a
leading market research firm covering the IP telephony market, the total installed base of
voice over IP by service providers is under 200,000 lines today. These lines are primarily
used for discount services that avoid high long-distance charges by using the Internet
instead of established phone companies networks. This would make BTs network
in Spain, at an initial 90,000 lines, the largest VoIP network in the world.
THE GAME PLAN
Initially, by the beginning of the year 2000, BT and Nortel will offer alternative
long-distance services nationwide to citizens in Madrid, Barcelona, Seville, Valencia,
Valladolid, Malaga, San Sebastian, Zaragoza, Bilbao, and La Coruna. The service will be
offered over a high-speed optical network connected to approximately 75 CVX 1800 access
switches from Nortel Networks, the majority of which will be installed over the next 24
months. The CVX switches are controlled by open and extensible Java-based software
one of the linchpins of Nortel Networks Internet telephony strategy.
Around the year-2001 timeframe, BT and Nortel will aim to consolidate all voice and
data services over the network, and launch the first wave of multimedia services. In the
year-2002 timeframe, the plan is to start offering multimedia and broadband enterprise and
The services that will initially be offered include an array of core network services
such as SS7 ISUP 1+ long-distance, local number portability, calling cards, 800 and 900
number services, operator services, and voice VPNs. Second-phase, managed voice services
will include IP Centrex, IP CLASS services, emergency 911, and global roaming.
Third-phase, multimedia services will include Internet call waiting, unified messaging,
desktop video conferencing, and click-to-talk Web buttons.
NUTS AND BOLTS
BT plans to leverage Nortel Networks new IPConnect Internet Telephony solutions
product line to make these services a reality. IPConnect is Nortel Networks platform
for providing full-featured telephone services and advanced data/multimedia services,
employing Java-based call control and services, and a scalable MGCP (Media Gateway Control
IPConnect implements a distributed architecture consisting of five basic components:
IPConnect Call Engine (ICE);
CVX 1800 Access Switch or media gateway;
Universal Signaling Point (USP) SS7 gateway;
Universal Audio Server (UAS); and
Integrated Network Management (INM).
The IPConnect Call Engine is Java-based call control software that runs
on commercial computing platforms, such as Sun Microsystems Solaris-based servers.
The IPConnect Call Engine issues instructions to various media, signaling, and
service-related elements in an IP network. This includes call signal processing, call
establishment and related management, resource management, service delivery, and
admissions control in an IP network environment. The IPConnect Call Engine maintains
current status information of all calls and generates administrative records necessary for
activities, including billing.
The CVX 1800 Access Switch is a third-generation media gateway that is
optimized for large-scale, IP-based long-distance networks. Its purpose is to provide
bidirectional interfaces between a circuit-switched network and various media-related
elements in an IP network. The key responsibility of the CVX 1800 is to transport media of
various types including voice, fax, video, and modem data between the IP
network and the circuit-switched network without loss of integrity or degradation of
The Universal Signaling Point (USP) is a signaling gateway that provides
reliable and secure access points between an SS7 network and various call control-related
elements in an IP network. The key responsibility of the USP is to repackage SS7
information into formats understood by elements in each network and to present a reliable
view of the elements in the IP network to the SS7 network.
The Universal Audio Server is a service module that provides value-added
capabilities beyond call establishment and control. The main function of the Universal
Audio Server is interactive voice response (IVR). Other available features include fax and
conferencing services. The Audio Server accommodates multiple languages and enables
dynamic recording, flexible configurations, user-friendly provisioning, and natural sound.
Integrated Network Management (INM) enables carriers to perform a
multitude of functions, such as configuring new services, monitoring element performance,
and downloading software upgrades. INMs key management functions include fault
management, accounting management, performance management, and policy management.
Nortel Networks IPConnect promises to deliver a number of benefits to BT,
allowing the company to leapfrog current implementations of Internet telephony. One of the
key features of the solution is its ability to provide PSTN equivalent telephony services
with no customer behavior changes a smart and very meaningful capability. The
system also allows BT to ramp up services very quickly, as it has de-coupled services
creation from the transport mechanism.
Other valuable benefits to BT include the ability to have the IP telephony network
interoperate with existing circuit-switched networks using native SS7 signaling, and the
lower infrastructure costs that are part and parcel of taking advantage of an open
architecture, general computing platform, and silicon economics.