As operators grapple with competing business models, and the dislocation of existing business models, who is there to help them align their networks with these competing demands in a cost efficient way? Keith Dyer speaks to Wolrad Claudy, Senior Vice President for Global Sales, Tekelec

Mobile Europe:
Wolrad, many people will know Tekelec as a signaling specialist, but it’s probably not an area of the industry that gets much attention compared to some others. What is the role of signaling within operator networks, and Tekelec’s presence in that?

Wolrad Claudy: 
Signaling is really the brains of a network, from session control on the network plane, to the management of value added services such as messaging and roaming. It is also critical to areas such as security, number portability and performance monitoring and assurance. And we know it inside out, from SS7 all the way to SIGTRAN and SIP.  As a company, we’ve certainly been around a while, having been established for 30 years and listed on Nasdaq for more than 20. At year end 2007, we had roughly a one billion dollar market capitalization, annual revenues of approximately $450 million, and now employ one thousand people, of which about 300 work outside the USA, incidentally.   Although we started life as a company providing Test & Measurement equipment, our focus now is on dominating the network control plane of telecoms networks. The majority of our clients are Tier One operators. Two thirds of our business comes from Tier One wireless operators, and in fact eight out of the top ten wireless operators worldwide use our solutions to support all kinds of different applications and services. We also count six of the top ten wireline operators as our customers.  This justifies the decision the company made to diversify and enter new markets, expanding our signaling presence to get into complementary niche markets, such as messaging and roaming.

ME:
With such a high grade customer base, it would be interesting to hear what their priorities are at the moment. 

WC:
Well, in a way that’s very fragmented by market. In high-growth emerging markets – such as India and China – adding and supporting huge numbers of new subscribers is the challenge of the day.   In developed markets, such as much of Europe, we are seeing the consolidation of legacy networks as operators seek to reduce the number of suppliers on their books. The key drivers there include the need to reduce operating costs.  But also, mobile data traffic is picking up as 3G finally starts to generate growth, and the developed world is also getting prepared for 4G, which will further expand bandwidth and throughput, even though most operators are just in their 3G Release 4 rollouts.   Yet this growth has brought with it a headache for operators. In the past, traffic growth equaled revenue growth, but now that relationship is completely uncorrelated, as tariffs move from linear to flat rate models. So these operators know they need to keep the network scaleable and efficient. They can do this by transitioning from TDM to IP, reducing operating cost by reducing the number of nodes in the network.   Our role in that is to offer a transitional strategy for network operators to migrate from their existing legacy networks to all IP networks, moving from TDM networks based on SS7 to SIGTRAN, SS7 over IP, and the like. We are the market leader in providing SIGTRAN, for instance. The aim our customers have is to condense the number of nodes in a network, to consolidate signaling networks from dozens of nodes to one or two pairs, with SIGTRAN and gateway capabilities in between.   Yet while customers might be discussing the impact of migration to 4G in two years, they will continue to work in 2G and 3G, requiring services and network interoperability between them all. These new upcoming challenges, for services interoperability in hybrid network environments, will keep us busy for the next decade, because there’s a long way to get to all IP. 

ME:
And the operators are also faced with challenges to their business model from external sources.

WC:
Absolutely, there are a lot of convergence trends, between fixed and mobile, voice and data, that are just increasing the complexity – as operators think about providing new converged products and services on top of separate fixed and mobile, voice and data domains.
This is where we appear – to provide services interoperability between these different domains as well as a bridge towards converged services and applications.
At the same time one can see competition between different domains. The fixed operators are moving forward, with technologies such as fibre to the home. Mobile as a vertical has to provide higher bandwidth to compete, and we’ve seen it embrace that challenge with the NGMN alliance starting to achieve agreement on what 4G will all be about.

ME:
One of the paths forward in this converged world, where services were interoperable across networks, was IMS. Yet you have not mentioned IMS yet, and it seems to have dropped right off the list of industry buzzwords.

WC:
Well there is still undeniably a move towards IP, for instance in the transport network. That’s happening. But the introduction of IMS has probably been behind the initial expectations. It’s not happening as expected because all the deployments so far have been vertically integrated in a one-vendor solution, whereas our play will be in mass multi-vendor rollouts. We have to get there, and it needs a push because at the same time the telco operator business model is being confronted by Web 2.0/ 3.0, and smart devices, and web-based suppliers opening up platforms to allow any developer to create new applications. That encourages a lot of dynamism compared to a world where all applications are based in the network.  I think part of the issue has been with standardization, which can be a very slow and not very agile process. If we are not achieving the idea of IMS – to have just one application block where a common platform is available for operators to develop apps on – if that is not happening then IMS only equals IN 2.0, and might fail.  So the problem is, what are the applications going to be to justify that investment at the end of the day. No-one will deploy a platform without approving the network ROI. Yet without IMS there will be no such applications, so it’s a chicken and egg situation.  As an industry, we have been very stable for many years. Device manufacturers, infrastructure vendors and operators all had a firm idea of who pays whom. Now, this static model is turning into chaos with a lot of competing business models. And the next two years will decide what business model will be more dominant.

ME:
Do you think your role will be about helping operators deal with these challenges, and if so, how?

WC:
We are living now at time of uncertainty, and operators have been in a holding pattern to think about what to do next. For many, the driver is still cost reduction, and they are not necessarily about to open up their profile and services model in a Telco 2.0 model.  I would say we are well-positioned to help network operators defend their current business models and keep existing business models alive, as they transition their technology. There might be a lot of suppliers only supporting next gen greenfield solutions for the new business models. But our solutions are focusing on helping operators to transition from TDM to IP and to do this more cost efficiently by leveraging  existing infrastructure and ensuring interoperability. So  our solutions are geared to supporting the  existing T1 business  models of  today  and  preparing for what’s next.

ME:
Do you think that necessarily means we will see greater SIP rollouts, even if not accompanied by full IMS transformation projects?

WC:
SIP, yes it’s fantastic. In terms of the challenges we have outlined, SIP is far more flexible. But SS7 is a very well standardised protocol that guarantees interoperability between vendors and networks. So right now because of two acquisitions we have made in the last three years with SIP entrepreneurs we are ahead of the game, and are being considered the industry reference point for all other suppliers. R4 rollouts are still based on the SS7 protocol over IP transport. This is going to be replaced by SIP, and right now there are several different SIP variants to be deployed. I’m not really sure which version will succeed, but the industry is gearing up towards the SIP protocol and it makes no difference to Tekelec which variant is deployed. We are at the forefront of deploying SIP technology, ensuring interoperability for the next two decades between legacy and next generation networks.

ME:
You said that your signaling expertise has enabled you to diversify into other areas of service; can you give a couple of examples?

WC:
One example is within messaging, where we can provide firewall filtering and screening, and first delivery attempt routing services, without having to store and forward messages through the legacy SMSC. We are also very involved in extending that into mobile IM, which might be a very interesting area going forward. Our messaging solution is a full-blown solution, including the SMS router, firewall, store and application gateway. In fact, we just announced Mobilink, a mobile operator in Pakistan, as a customer for our SMS firewall product – to combat SMS spam.  Then, because we can add these routing and security filtering capabilities in front of the SMSC, we can support the trend to SMS carrying advertisements, using our solution to inject ads on any text message. Many mobile operators consider mobile advertising to be the next big revenue opportunity.
We also have used our unique location in the network to aid QoS and performance monitoring. We have unique ways of monitoring everything that’s going on in the network, to improve service efficiency but also to provide better subscriber profiling, enabling a user to have the services capability he needs. That’s a big and increasing area. In the past, much of this centred around performance and fault management, and network surveillance. Today we are much more focused on looking at services, at groups of subscribers, to profile them and provide the adequate resources and QoS. This provides a user view to all areas of the operator that can utilise that information, from the customer helpdesk to marketing and strategic departments.  Roaming management is also an evergreen subject, where optimal routing of traffic, as well as concepts such as ensuring a user is forced onto a specific network, or knowing exactly when a user has left and entered your network, is crucial.

ME:
Much of what you have touched on, of course, brings you into competition with many dedicated players in markets such as roaming, messaging and service assurance and management. Why do you think Tekelec is best-placed to address all these challenges for an operator?

WC:
The unique position we have is that we can bundle these products and services to create an integrated, flexible solution to meet the specific needs of each of our customers.  This gives operators the opportunity to do all these things very efficiently with one platform, versus building point solutions across multiple suppliers. And that’s going to be crucial as operators address all the challenges, and opportunities, we have mentioned.

Iptego’s SIP mediation platform, Palladion, will be integrated into Mycom’s  NIMS-PrOptima service assurance platform allowing the creation of solutions that support real-time monitoring, troubleshooting and optimization solutions for any SIP-based service, beginning with quality of service (QoS) assurance for VoIP services.

The Mycom VoIP service assurance solution gives providers the ability to manage and report on business-critical SLAs and subscribers’ usage more easily while improving the efficiency of the problem resolution process. The solution provides the ability for real time monitoring of voice quality, end-to-end call transactions for each customer session, detection and anticipation of service quality degradations, and instantaneous drill down to the problem’s root cause.

The first solution will be Mycom’s end-to-end VoIP Customer Assurance solution with further solutions designed for IMS, NGN and LTE network architectures for services such as IPTV, Gaming and Chat.

Mycom’s Mounir Ladki, General Manager, Product Business Unit said, “In today’s challenging environment, Mycom is helping service providers achieve three objectives: reduce costs through efficient and automated business processes; improve customer loyalty by optimizing customer experience; and monetize bandwidth through quality of service differentiation. The collaboration with Iptego addresses this triple objective as migration towards NGN and IMS architectures accelerates. The new solution will enable our customers to accelerate and optimize the rollout of VoIP services at minimal cost, and we look forward to future solutions for other multi-media services.”

Iptego’s CEO Alex Hoffmann added: “With SIP being the primary control technology for IP-based networks and applications, such as IMS or LTE, it is essential for operators to have SIP and session OSS visibility. PALLADION is designed for complex NGN environments and its distributed architecture helps future-proof operators’ investment in the NIMS-PrOptima-based OSS solution in three ways: it scales easily to accommodate large subscriber numbers; it is compatible with advanced services such as video, presence and gaming; and it supports cloud environments. The collaboration with IPTEGO allows for true end-to-end and top-down monitoring, combining high-level overview, long-term trend analysis and real-time root cause analysis in one solution.”

Can the IMS, along with Advanced TCA, enhance converged service delivery after all? Is that why it is generating renewed interest from operators?

Network operators are moving to reinvent themselves as service providers, and looking to new enhanced services to attract and retain customers in order to increase revenue. The IP Multimedia Subsystem (IMS) architecture, a modular standards-based service platform that uses Internet Protocol (IP) and Session Initiation Protocol (SIP), is poised to help transform network operators into service providers at a low cost and with minimal network disruption.

IMS is generating renewed interest amongst network operators because of its ability to provide modular, flexible service delivery and fast time-to-market. The dynamic architecture of IMS allows operators to offer promising new services more quickly, add resources for successful services as demand increases, and downplay or remove unsuccessful services easily.

Because IMS has standards-based interfaces and network elements, some network operators and carriers are deploying hybrid implementations using existing equipment or applications. With this approach they can leverage prior investments and migrate over time to a standard implementation.
Because the acceptance of new services is unpredictable and what succeeds in generating huge amounts of revenue in one market may fail in another, network operators and service providers are working to develop their own unique set of "must-have" services. Some examples of potential new services are:

Multimedia video on a mobile handset: The number of mobile TV users is expected to grow exponentially in the coming years and innovative services based on user-generated multimedia content are also rapidly growing in popularity.

Network-based gaming applications: Game enthusiasts are increasingly looking to the mobile handset as the "platform of choice" for interactive and collaborative network-based versions of popular games.
Triple-play services:  The ability to offer triple play services can allow network operators to differentiate themselves with the right mix of all three services at a price point that will retain old customers and attract new ones. As the success of a particular service cannot be predicted with certainty, a dynamic environment that can provide the capability to develop and deploy promising new services quickly, add resources to successful services on demand and reduce resources for unsuccessful services – or remove them entirely – is critical.

Different Approach
Unlike other approaches, which are aimed at carrying circuit services on top of IP, the IMS framework allows operators to build an open IP-based service infrastructure that will enable easy deployment of rich multimedia communications services.
IMS addresses the following network and user requirements:
– The delivery of person-to-person, real-time, IP-based multimedia communications such as voice or video telephony, as well as person-to-machine communications such as gaming, video-on-demand, and web surfing;
– The full integration of real-time communications such as live streaming and chat, with non-real-time multimedia;
– The enablement of multiple services and applications to interact, e.g. video conferencing and gaming, or real-time video and instant messaging combined with presence;
– The ability to escalate communications sessions easily, e.g. turning an instant messaging session into a voice session with "one click."

Although IMS has many advantages, the following four are particularly noteworthy to mention: mobility management, service quality, service control, and standard interfaces.

Mobility Management
IMS is designed to find users and establish sessions between them regardless of geographical location within an IP infrastructure. One important component holds subscriber data and enables end-users (or servers) to find and communicate with others. Another important component aids in the setup and management of sessions and forwards messages between IMS networks. Together, these two components provide very efficient mobility management.

Service Quality
Impairment factors such as latency, jitter, packet loss and echo caused by inadequate bandwidth provisioning, among other factors, can result in unacceptable transmission quality. Special mechanisms have been incorporated into IMS to control real-time mobile IP communication quality by interacting with and controlling the underlying packet network to ensure acceptable quality.

Service Control
When a customer accesses a provider's IMS network, a personalised profile is downloaded. Once the system is in possession of this profile, it knows what services the customer is entitled to use and can make decisions about the order in which services are executed, if necessary, and will know which application server(s) on the network are delivering these services.

Standard Interfaces
Because IMS has a standardised architecture for deploying advanced IP services, a variety of services can be developed independently by third parties for IMS deployment. It also allows some components to be combined to allow operators to use existing equipment and/or simplify their deployment.

Choose the Right Platform
In the past, modular infrastructures have been prevalent in packet-based data networks where standardisation and flexibility have proven their value. However, communications networks have a different set of criteria, and the challenge in the last few years has been to create an infrastructure that can provide the high availability, "five-nines" reliability, and the excellent performance expected of telecom equipment.

Due to the heavy technical demands placed on an IMS, AdvancedTCA is an excellent platform for IMS infrastructure deployment, meeting the differing needs of telecom equipment manufacturers and service providers alike. AdvancedTCA addresses the following specific requirements for IMS elements:
High Availability

AdvancedTCA has a framework that allows redundancy, shelf management, and other techniques that maximise system uptime for stringent "five-nines" availability – particularly critical in the IMS Call Session Control Function (CSCF) network element, and the Home Subscriber Service (HSS) network element.

High Performance for SIP and Media Processing
AdvancedTCA provides 200 watts of power draw per slot, which allows high-performance processors to be used and cooled adequately. This enables a high compute density, important in minimising delay in call setup times in a SIP environment.

Video Encoding and RTP Acceleration
Advanced Mezzanine Card (AdvancedMC or AMC) technology can provide the supplemental processing that may be required for rich media environments. For example, specialised DSPs can be used to obtain higher scalability than a pure software environment.

Signaling
AdvancedTCA processing boards can be customised via AMC daughterboards to provide connectivity to legacy networks when SS7 or other PSTN signaling is required.
Storage
CSCF and HSS elements may require bladed storage for fast access to subscriber data. AdvancedTCA supports a bladed storage architecture across either base or extended fabric interfaces.

In-Memory Database
Because an HSS typically needs to keep upwards of ten gigabytes of subscriber information in memory for fast access, it requires the large pool of memory available on today's high-performance processors. AdvancedTCA enables this type of access with linear addressing to 64 bits.

Control and User Data Separation
An IMS may require up to four separate networks and AdvancedTCA can fulfill this requirement with its flexible GbE fabric interface architecture. GbE fabric architecture allows physical partitioning of control and use data, which is critical for security and high performance.

Privacy and Security – TLS, SSL
Security features in high-performance systems usually require network processors. Network processor blades can be integrated easily into AdvancedTCA systems either as AMC daughterboards or as standalone boards that integrate into the flexible packet-based backplane.

Operators need to look to the bigger picture as they migrate their core networks to IP – but face short term technical and business challenges

When it comes to their networks, mobile operators in Europe are beginning to suffer from the law of unintended consequences. While the long-promised mobile data revolution is finally here, it has arrived wrapped in the expectations set by users of the fixed Internet – the availability of seemingly limitless content at minimal cost to the consumer.

To meet mobile consumer service demands, operators have to upgrade their networks to create the bandwidth and capability necessary to deliver massive choice and access on demand – yet they will not receive the level of revenue from data that was initially expected. In addition, because operators are behind the curve in terms of both mobile broadband pricing and provision, Wi-fi has stolen the consumer market. 

ABI Research predicts a 40 per cent growth over 2007 in Wi-fi hotspots. Growth is fastest, and availability most widespread, in Europe – where the mobile market is largely saturated. With Wi-fi hotspot owners increasingly adopting a loyalty-based business model, mobile operators must invest in marketing and network upgrades just to draw level – with no assurance of increased revenue for delivering the service. 

At the same time that Wi-Fi, WiMAX and new business models are threatening the status quo, operators are struggling to reduce their costs to maintain profitability as their margins are eroded. They also face new technical challenges such as the introduction of 3GPP R4 architectures, IP capabilities and potential new revenue opportunities from the FMC market.

On top of that, the traditional 'walled garden' approach to services is breaking down. The industry is starting to see new data services between handset clients and the Internet emerge, such as those offered by the iPhone. Operators must therefore find ways in which to consolidate voice and data traffic, platforms and services, while remaining conscious of the need to reduce operational and maintenance costs.

These financial pressures, together with an inherently risk-adverse mindset and a reluctance to consider new technologies from other vendors, means operators are in danger of sacrificing vision and planning for the long term for short term savings.

The next phase of evolution in the mobile network – from R99 to R4 and beyond – can deliver new opportunities to exploit certain cost-reducing features of the next wave of architecture evolution. For many, IP is considered the most promising media on which to build the new, integrated services. IP provides an effective way to transport user data and enable operators to expand the capability of their networks to meet the demands of the data-hungry generation.

However, operators are still grappling with the arrival of IP into their networks – not only to facilitate HSPA in the next year or two, but also to pave the way for LTE in the medium / long-term future. If they lag behind in the IP upgrade race, they are missing out on opportunities to put in place the necessary components into their network to deliver on the promise of IP, and are also missing out on the potentially lucrative cost-savings that changes in core network architecture and migration plans can achieve.

While IP gives operators the means to introduce new services and features – and therefore competitive differentiation – into the saturated and ultra-competitive European market, it also brings new and challenging demands. Admittedly, operators will get to benefit from cost-reducing opportunities. But radical changes to the core also have the capability to disrupt the entire network. 

IP migration must therefore be carefully planned and managed; if done so correctly, it can deliver substantial OPEX cost reductions. But operators must not be myopic in their approach, which is no easy task. Faced with ongoing pressure to reduce costs in the here-and-now, and provide an immediate ROI on any and all network projects, they feel that they can't afford to look more than a few years ahead.

But look ahead they must. R99 architecture is being 'end of lifed' by infrastructure vendors – they may continue to support it but new features are not being developed. Operators must move to R4 and beyond, with IP at the core reflecting the concept of NGN architecture.

Here's the major junction where the risk aversion causes unnecessary cost. While over the past few years, European operators have been leading the marketing charge to promote the "holy grail" of the mobile Internet, when it comes to delivering on their promises they are their own worst enemy. Rather than take advantage of equipment from newer vendors who are designing and building for the IP generation, an operator is instead selecting the R4 solution from its existing R99 provider due to perceived risk. It can end up paying several times the going rate for R4 switching which could be supplied more cost-effectively from new entrant switching vendors.

While there are many examples of operators swapping out the RAN, there is only one instance worldwide of an operator (US-based) replacing its core network. In Africa, demonstrating a willingness to innovate in a classic example of leapfrog technology, ZTE is developing a nationwide optical transmission network in Ethiopia.

Of course there is a risk with any change to technology – and the closer that change is made to the core, the greater the risk of network disruption. It has already happened – a major operator knocked out its entire network for a short period when a new software release was uploaded to the HLR before sufficient interoperability tests had been conducted.

Episodes such as this make operators understandably nervous of introducing new vendors into their core network plans, even though traditional vendors could be significantly more expensive for switching than the new wave of IP specialists. Furthermore, in addition to greater capital expenditure, maintaining the legacy network and all the associated replanning and provisioning leads to higher operational expenditure too. All against the backdrop of decreasing revenues and increasing competition.

The developed European market has reached saturation. Number portability makes it all too easy for customers to move between networks. The operator faces a choice; to use innovative new entrant vendors and make savings early, or to wait for its existing vendor to make the technology available, but lose the chance for early cost benefits at lower risk.

Usage patterns have also changed, and operators need to ensure their networks are optimized to manage the new activity. The R4 core network must now process voice traffic with a radically different call model to that carried by the macro RAN.  Call holding times are significantly higher, as people use the mobile at home on a reduced or free tariff. Traditional MSC server products rely on low call holding times and traffic generation to be cost effective. Their proprietary hardware design is inflexible, meaning that additional processing power cannot be easily applied without purchasing a larger number of MSC servers.

New entrant R4 switching providers build their solutions on open industry processing platforms such as ATCA/Blade server technologies, which allow processing power to be applied more easily and in a more scalable way.  However, to use these new entrant vendor products to save money more rapidly, operators have to manage risk and successfully port services from the old switching platforms to the new. Cross-domain, cross-layer scenario planning is key to rapidly understanding the impacts in order to make the right choices.

Operators must look at the core network evolution holistically and consider the overall effects of deploying IP/MPLS transmission, R4 switching, and the evolution of the data core with new HSPA-enabled traffic volumes.

IP technology has the ability to permeate all aspects of the network, enabling the operator to reduce cost significantly in the key areas of access transmission and the core network, as well as opening the door to fixed mobile convergence. The problem is, these new technology possibilities pose ROI issues. Cost reduction in mobile networks is now at a point where for Europe-based projects to be approved, short RoI times are required. To significantly change the RAN transmission architecture requires careful planning and migration over a period of time, with investment in new IP transmission systems whilst writing off the under-depreciated capital held in the legacy TDM and ATM systems.
Significant cost reduction can be made by adopting an IP 'ring & tail' architecture in the RAN transmission network. This allows aggregation of data traffic and is essential for the cost effective roll-out of HSPA with volume traffic. The architecture is equally applicable to RAN sharing or single operator networks but requires careful cross domain, multi-layer planning. One issue is that although these new architectures can save significant OPEX, (up to 40%), the payback times can approach four years, due to the roll out of new technology and migrating from one architecture to the next.
New technologies and architectures can also save the operator significant costs. The advent of the femtocell changes the rules and cost curve of RAN deployment, offering a solution where the customer houses, cools and powers the RAN, and pays for all or some of it. Additionally, since a DSL broadband connection is used, the backhaul is also paid for by the customer. Nearly all the major operator groups are looking at femtocell technology and trials are either underway or planned in most European market regions. The commercial deployment of femtocells has taken another step forward following the adoption by the Femto Forum of a worldwide standard that defines the real-time management of femtocells within households. 

However, new technology comes with risk and often necessitates a change in supplier, architecture and process for the full benefits to be achieved. A risk averse nature, combined with the high inertia of the technology departments within the incumbent European operators often means that significant cost reducing and revenue generating programmes fail whilst simpler, lower potential programmes move ahead, often only to fail to deliver the financial requirements of the business.

Operators in Europe need to make greater use of scenario planning to consider the range of opportunities facing them. By considering network designs and evolution plans that are able to track the complex inter-dependencies between network layers and technologies, operators can gain a full assessment of their financial potential. Clearly there is a balance to be struck between risk, innovation and cost, both in the short term and long term. What is needed is a better understanding of risk management and mitigation for new technology introduction. Gone are the days when the mobile operators called the tune. Customers now have the power of choice – a power that they're ready, willing and able to exert in the new world order of mobile services.

Ian Goetz is Director of Core Network Solutions, AIRCOM International