Super Telco: How Service Providers and Their Suppliers Are Recreating Themselves

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Super Telco: How Service Providers and Their Suppliers Are Recreating Themselves

Carriers are scrambling as they see over-the-top services such as Skype and WhatsApp eating into their revenues. Indeed, OTT players have captured 30 percent of voice traffic in seven years, and now service provider voice growth is around 3 percent per year.

In response, carriers have joined forces to develop standards that will allow their telecom equipment to run on off-the-shelf servers so they can more effectively compete with their app-based competitors. This initiative, known as network functions virtualization, or NFV, will help turn hardware-based telcos into software telcos – allowing them to be more flexible in rolling out new offerings while saving money in the process. Meanwhile, software-defined networking will help them more effectively manage their networks.

All this, however, will take time to happen. In the meantime, carriers need to respond to this threat.

In the Meantime

GENBAND is one of the solutions providers that is positioning itself to help carriers respond both now and in the future. Like the service providers to which it sells, GENBAND wants to be more than just an underlying infrastructure provider. It wants to move up the stack to also provide more applications like real-time communications solutions.

In its latest effort to enable this transformation both for itself and its customers, GENBAND in February revealed plans to acquire uReach Technologies (News - Alert). The deal, for which the details were not disclosed, was expected to be finalized last month (in March).

Privately-owned uReach provides a variety of unified communications solutions – including Advanced VoiceMail, VideoMail, VisionMail, and VirtualReceptionist – to service providers of all stripes. The company appealed to GENBAND because of its product line, its size, and its proven and scalable solutions, said John McCready, executive vice president of corporate development for GENBAND. The uReach solution aligns with GENBAND’s strategy to support cloud, mobile and over-the-top options. Competitors of uReach like Comverse and France’s StreamWIDE (News - Alert) are both quite a bit bigger, he said, while uReach – which has been around since the late 90s and had its last funding round many years ago – was primed for the next level of growth and international expansion.

To date, uReach has been focused exclusively within North America, where its biggest customer is Verizon. The tier 1 telco called on uReach to replace its legacy voicemail with a new solution, said McCready, adding that there are lots of legacy voicemail systems out there that are no longer supported by their suppliers, some of which no longer even exist. The new uReach solution supports millions of mailboxes for Verizon alone, so it’s been proven to be scalable and reliable, he said.

Now GENBAND intends to take that and uReach’s other solutions – along with its existing product portfolio – and bring them to additional fixed and wireless tier 1 and 2 telcos and MSOs/cablecos in North America and beyond.

“We have our go to market channels already all set for those market segments,” said GENBAND’s Sanjay Bhatia, senior director of product marketing.

This is not GENBAND’s first acquisition targeting real-time communications. In September, the company announced the acquisition of fring.

The acquisition of fring was GENBAND’s move to enable its carrier customers to get into the OTT game immediately with a new real-time communications solution. Fring was one of the earliest apps on the iPhone and it supports VoIP. At the time the deal was announced, there were 40 million fring users.

Speaking of real-time communications, GENBAND – among others (see our WebRTC roundup in this issue) – also has been a pioneer on the WebRTC front. In April 2013 the company introduced a WebRTC gateway called SpiDR that sits at the edge of the network and provides open APIs that application developers can use to leverage the rich communications services of the telecommunications network – including voice, video, presence, shared address book, call history, instant messaging, and collaboration. Earlier this year GENBAND introduced SMART OFFICE 2.0, a WebRTC-enabled unified communications platform that delivers voice, videoconferencing, chat, presence and collaboration via a browser. And in February GENBAND unveiled a new UC solution named Call Grabber, which is based on SMART OFFICE and allows people to move a live call seamlessly from one device to another.

More applications are in the pipeline, McCready said, adding that both GENBAND and uReach have been working on interesting new things that he is not yet ready to make public. Additional acquisitions are also likely to be in the pipeline, he added, commenting that “inorganic growth is definitely part of our strategy.”

That strategy, added Bhatia, involves GENBAND delivering an intelligent messaging portfolio to its service provider customers to help enable their transformation into more agile competitors in the marketplace.

Telco Transformation

The longer-term vision of this transformation, of course, involves facilities-based service providers like the telcos embracing network functions virtualization and software-defined networking so they can more easily and cost effectively leverage and control their network resources to support any existing or new application they might want to deliver. In the near term, much of the focus on NFV and SDN is about how to enable carrier cost savings. But in the longer term, it’s about the transformation not only of carrier networks, but also of the basic mindset and business strategies at these carriers.

“We’re asking service providers to fundamentally change some part of who they are and embrace a new approach to product development and service development,” explained Phil Harvey, director of corporate communications at Metaswitch.

The move to NFV and SDN undoubtedly involves a major rethink in how networking is done, but it’s not just companies like Metaswitch that are doing the asking. It was the big telcos themselves – including AT&T, BT (News - Alert) Group, Deutsche Telekom, Orange, Telecom Italia, Telefonica and Verizon – that drove the creation of the ETSI Network Functions Virtualization Industry Specification Group, which came together in November 2012 and has since seen many more companies join the charge.

AT&T followed that up about a year later when, in September of 2013, it launched what it calls the next generation of its Supplier Domain Program – Domain 2.0.

Calling Domain 2.0 a transformative initiative, AT&T said it will trigger “a swift and broad move to a modern, cloud-based architecture that is expected to significantly reduce the time required to pivot to this target architecture while accelerating time-to-market with technologically advanced products and services.” Leveraging NFV and SDN, AT&T explained that it plans to simplify and scale its network by separating hardware and software functionality; separating network control plane and forwarding planes; and improving management of functionality in the software layer. And, while this new initiative doesn’t mean an increase in capital spending for the company, AT&T said this year it will begin selecting vendors as part of the initiative.  

“Our goal is to ensure that each investment accelerates our move towards an advanced all-IP broadband, all-wireless, and all-cloud infrastructure, delivers on the full promise of game-changing technologies, provides an industry leading customer experience, and maintains focus on a capital-efficient network,” said Tim Harden, president of AT&T Supply Chain.

At TMC’s recent Software Telco Congress, speakers indicated that the core of service provider networks would be the initial target of virtualization efforts at the telcos, as will specialized network elements such as SBCs. But Metaswitch’s Harvey said that any network element at layer 2 or above with a gigabit Ethernet interface is ripe for virtualization.

Core Exercises

The focus on the core explains why we’ve seen so much news recently in this arena.

For example, just before Mobile World Congress in late February, telecom network infrastructure giant Ericsson unveiled a new, virtualized evolved packet core solution. The vEPC, which is slated for general availability in the fourth quarter, is built on the previously announced Ericsson Cloud System, which is now in trials with several service providers. It has feature parity with Ericsson’s existing EPC solution.

At Mobile World Congress, Alcatel-Lucent and China Mobile demonstrated voice and video delivered over a virtualized proof of concept LTE (News - Alert) RAN Baseband Unit and virtualized evolved packet core on-boarded to the cloud by CloudBand 2.0 – the company’s second generation NFV platform, as reported by TMCnet’s Peter Bernstein.

ALU’s virtualized portfolio includes a Virtualized IMS solution, which is a cloud communications platform for delivering a rich portfolio of multimedia services over IP networks, and a Virtualized RAN portfolio, which encompasses a virtualized 3G Radio Network Controller and virtualized proof of concept for LTE and LTE-Advanced Radio Access Networks.

Startup Connectem in February issued a press release highlighting its recent trials with tier 1 carriers for its vEPC solutions.

“The introduction of network functions virtualization is changing the vendor environment for telecom operators, expanding the field to include innovators and new players,” said Iain Gillott, founder and president of iGR. “With its unique design for the virtualized Evolved Packet Core, Connectem is one of the earliest and fastest movers in NFV for telecom operators, and it has already completed trials for tier 1 carriers in all major geographies.”

Connectem said in the past 12 months it has completed eight trials of EPC functionality and integration testing with tier 1s in various locations around the world. During that same time period, the company also has established a subsidiary in India; forged agreements with distributors iCent of South Korea and Macnica of Japan; filed network virtualization patents; garnered new funding; collaborated on NFV with Cyan, HP, IBM, Intel (News - Alert), and VMware; and joined Cyan’s Blue Orbit partner ecosystem, an effort focused on NFV and software-defined networking.

“Building an NFV solution is not an exercise in isolation like designing a discrete network box or simply porting software from a network box to a virtual machine. It requires rethinking the way system functions should be realized in a virtualized environment. It also demands deep and rich collaboration with key partners to move quickly,” said Nishi Kant, CEO at Connectem.

What Else is New

Also new from Ericsson is Service Agility, a framework in which several software stacks are deployed to enable faster and more reliable service fulfillment and assurance. It's a combination of Ericsson's own software and some acquired capabilities. This software is available now for trials and implementation in customer networks. Telecom Cloud Transformation, meanwhile, is a new practice that provides operators with consulting and systems integration services to help them move to what Ericsson refers to as an network-enabled cloud architecture. 

Coming soon is the Ericsson Network Manager, an SDN-based tool that lets administrators automate and manage virtualized networks. This kind of tool is important because as carriers upgrade their networks they are using many more base stations/nodes, so they need the tools to enable them to deploy and do network optimization on these elements more easily – and that, in turn, can allow for a better end user experience. The first domains will be managed by Ericsson Network Manager in the fourth quarter of this year.

“Ericsson Network Manager provides unified network management in a single platform, making for ease of transition as service providers look to consolidate their network operations,” said Anil Rao, industry analyst with Analysys Mason’s Telecoms Software research team. “Communication service providers know that achieving the best end user customer experience is one of their top priorities today. The Ericsson Network Manager is a step-up and the right approach toward providing an integrated, end-to-end network view, along with the flexibility and automation needed to deliver a compelling customer experience that can differentiate the operator.”

In February, Ericsson also announced a strategic partnership with packet optical equipment vendor Ciena, through which the companies will jointly develop an IP optical solution that will leverage Ciena’s optical transport technology (specifically the Ciena WaveLogic coherent optical processors); build IPoWDM interfaces/boards for the Ericsson SSR 8000 platform; and create multi-layer and multi-vendor open service provider SDN transport control. The deal also involves a global resale agreement that will see Ericsson resell Ciena’s 6500, 5400 and OneControl NMS.

Ciena, which Ovum says is the No. 3 converged packet optical vendor globally with 14 percent market share, delivers coherent optical technology as part of its SSR edge router that addresses layers 4 through 7 applications and should be “readily adaptable to SDN/NFV,” according to Ovum analyst Ron Kline.

“The partnership could also open the door for future collaboration in the mobile backhaul market where both companies are quite strong,” Kline adds. “A combination of an integrated Ciena packet backhaul and Ericsson microwave radio would be tough to beat especially given Ericsson’s global strength in LTE.”

That looks to be a big opportunity. As Strategy Analytics recently said, SDN-related mobile backhaul operational savings could reach $9 billion worldwide by 2017. An earlier report from Strategy Analytics indicated service providers could use SDN to save $4 billion in capital expenses related to mobile backhaul by 2017.

Edited by Stefania Viscusi


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