Rethinking The Core Switch
BY DAVID HEARD
These are sobering times for our society and our industry.
The news brings constant reports of potential global flashpoints, of dirty
bombs and corporate integrity bombs, of war and worry and economic strife.
In the telecom business, poor economic indicators and countless revised
forecasts make many participants ready to crawl under their desks and assume
the fetal position.
So maybe this is a good time to take a deep breath, and focus on the
basics of telecommunications.
While no reasonable person can deny the reality of our current
marketplace, things are seldom as bleak as they seem. If we examine the
fundamentals of the telecom industry, in the context of historical
technology development cycles, we can gain a more honest and accurate
perspective on our situation. Sure, the traditional telecom suppliers
continue to struggle. Yet even as you read this sentence, consumers the
world over are touching the networks in growing numbers, with a variety of
new devices, and to access an exciting new menu of services.
TRENDING TO GROWTH
According to virtually every reliable research finding, subscriber usage
patterns for both data and voice will continue to drive the dramatic growth
in network traffic volumes. Last year in the United States, wireless traffic
grew by 23 percent, data traffic by 39 percent, and long-distance and local
access traffic by 25 percent. Even basic applications are undergoing a
dramatic usage shift. Five years ago, the average size of a typical e-mail
message was just 2.5 kilobytes, while today a typical message is now a
bandwidth-eating 286 kilobytes in size. The number of e-mails in the same
period has risen from about 200 billion to more than 1.5 trillion per year
in the United States alone. Cellular is set to topple the 1 billion
subscription mark globally by 2003, and driven by the flexibility of
ubiquity, it is increasingly becoming a true challenger to POTS. Even plain
long-distance service will add 700 billion calls to U.S. networks.
As service providers introduce ï¿½all you can eatï¿½ pricing models, and
as consumers increasingly use their mobile phones for more of their telecom
conversations, Voice over Packet will constitute a significant and growing
network traffic element. Industry analysts are projecting that Voice over
Packet will generate more than $7 billion in services revenue domestically
Thanks to this surge in network traffic, we are beginning to see a true
convergence of voice and data communications, and the lines are blurring
between fixed and mobile and between voice and data. At the same time,
applications are increasingly linked to these converged voice and data
service capabilities. More and more consumers now use multiple access
technologies, from mobile phones to wireless notebooks and personal digital
assistants. Growing demand for these advanced applications, as well as the
need for increased operating efficiencies, are driving the most fundamental
change in our industry in more than 25 years, forcing the migration from
circuit- to packet-based networks. And in an industry where earnings per
share (EPS) determines success, this migration and convergence would be the
key for yielding dividends on a sustained basis.
To position their networks to more fully exploit this emerging reality,
carriers are moving to adopt core switching technologies that can bridge
voice and data, fixed and mobile in both the current and the next
generation. Switching will be the fulcrum of the circuit-to-packet
evolution, and to envision the networks that will support a resurgent
telecom industry, we must understand the nature of this new class of
BACK TO BASICS
Letï¿½s first focus on the fundamentals of our business: The consumers,
the service providers, and the telecom networks.
Subscribers. Telecom consumers care about service breadth, cost, and
quality. They are protocol agnostic and they donï¿½t care or want to know
about whether those services are delivered to them on TDM, FR, ATM, or IP.
They want connectivity, prices they can understand and afford, and cool new
applications. They now touch the networks via a growing variety of devices.
And because so much is available to them from so many potential providers,
todayï¿½s subscriber is more willing than ever to jump from service provider
to service provider to take advantage of the latest services at the lowest
Service Providers. Those hard facts create both challenge and opportunity
for service providers. To survive todayï¿½s challenging environment, and to
be ready for the coming boom in packet-based traffic, service providers need
networks that are robust and scalable, that allow them to drive down costs
while introducing popular new applications, and that give them the
flexibility to manage the tempo of the circuit-to-packet evolution. Because
no carrier can survey a city block and accurately predict who will use IP-
versus TDM-based services in the next year, todayï¿½s network service
providers need infrastructure that can scale to seamlessly handle sustained
growth of any traffic mix. Recently published reports predict average annual
growth rates of 20 percent for long-distance, 25 percent for wireless, and
40 percent for data. On top of this, the solution must provide significant
efficiencies to derive maximum cost benefit to improve EPS even in the
current trend of flat or shrinking revenues.
Networks. So what are the most basic requirements that network operators
will need to survive and prosper in the telecom environment of the future?
To begin with, network operators must deploy true carrier-class switches
that can handle any type of traffic, incorporate both trunk and line
functionality, and a circuit to packet migration approach that has a
positive impact on EPS.
They will need switches capable of delivering both legacy- and
next-generation capabilities, including the core applications of enhanced
voice switching, integrated voice and data switching, and voice over
To meet these ambitious demands, an entirely new class of software-driven
telecom switch has now emerged. It delivers both circuit (TDM) and packet
functionality on a single platform, so operators can deploy this solution in
TDM-only mode to cap legacy switch networks. Then, as their need for
additional traffic capacity or transport efficiency grows, this new type of
platform upgrades quickly and easily to support voice over packet in a
converged network environment.
In this architectural approach, the TDM switch matrices and interfaces
continue to handle legacy circuit-switched traffic while voice over packet
capabilities are deployed. Hence, operators can evolve to a converged
packet-driven network with no service interruptions. This highly flexible
design also supports both centralized and distributed architectures,
allowing operators to deploy the most productive and cost effective network
model in virtually any market situation.
This carrier-grade approach is also designed to support a wide range of
high-value applications, like full-feature trunk applications (tandem, PRI
offload) and line applications (Class 5, VoIP/VoDSL). It will satisfy all
regulatory requirements of a traditional legacy system, including Local
Number Portability, CALEA, and E911. It will also provide complete feature
transparency to the existing infrastructure including full back-office
integration. As such, it enables a seamless evolution from todayï¿½s
circuit-driven network to the more powerful and flexible packet-driven
technologies of the future, including IP and ATM networks.
This next-generation softswitch solution consists of three key elements:
- An open feature exchange includes a media gateway controller, a
signaling gateway, and an application server;
- A broadband office exchange provides high-density media gateway
- An element management system provides a common GUI-based control for
all switching activities.
Capacity and scalability are, of course, important qualities in any
carrier-grade switching solution. Operators need an architecture that can
scale up quickly and easily from a few thousand to the ability to serve
several million subscribers. In optimum deployments, this new class of
switch might hold from 100,000 to 200,000 TDM and/or packet ports in a
single frame and can scale to support between three million and six million
ports in a single system.
Cost is another bottom-line consideration for every player in todayï¿½s
telecom marketplace. The fact that the traffic keeps rising and the average
revenue per user keeps shrinking, the carriers are focused on reducing their
CapEx and OpEx more than ever before. For example, to upgrade an existing
circuit switch to handle 100,000 ports, the service provider today spends
anywhere between $6 million and $8 million, while the operating expenses
(space, power, maintenance, sparing, etc,) are two-to-three times that
amount annually. For a similar configuration, the new class of switch not
only halves the capital expense, it delivers a huge OpEx reduction ï¿½ by
some estimates as much as 70 percent. While providing these economic
benefits, this new class of switch also supports existing applications and
paves the way for next generation applications on the same platform.
The power and flexibility of these new core switching solutions will
play an important role in the resurgence of the telecommunications industry.
And make no mistake, while our industry has struggled, it is following a
path that is familiar to other industries that underwent similar business
and technological upheavals.
Consider the transition from the traditional mainframe-only computing
environment to our current mixed and distributed computing landscape. When
distributed computing was first introduced, many observers predicted that
computing costs would rise while quality and reliability would fall. But
just the opposite took place. While mainframes still provide valuable
service in many situations, distributed computing networks deliver
affordable and dependable performance in most corporate IT environments.
But before achieving that level of success, the distributed computing
industry underwent a painful period of dislocation. At one time, companies
building enterprise-level computing solutions numbered in the triple digits.
But by the end of the distributed computing shakeout, maybe 10 major
computer manufacturers remained.
Similar dynamics are shaping the future of the telecom sector. While
traditional switching suppliers continue to retrench and reduce their
R&D expenditures, operators and service providers need innovative,
cost-efficient switching technologies capable of meeting the network demands
Given current market dynamics, even next-generation switch suppliers are
enduring a painful and ongoing shakeout. While there were once more than 110
active competitors in the softswitch space, today a small handful of those
have survived. And, like the successful few left standing after the
distributed computing shakeout, suppliers that survive the current telecom
downturn will be those that deliver the very highest level of performance
So while times are tough right now, the best advice is to focus on the
fundamentals. Consumer demand for telecom services is healthy and growing.
Operators can leverage these new core switching solutions to connect
subscriber demand with their network capabilities, while opening a graceful
pathway to the packet-based future. c
David Heard is Chief Executive Officer of Santera Systems, a leading
source of next-generation switching technologies. For more information,
please visit the company online at www.santera.com.
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