Business Case Analysis: Ericsson Router 8801 Distributed Subscriber Management

OTT traffic places huge demands on the backbone network. Three major trends are contributing to this: 1. Content moving towards 4K media streaming and requiring seven-times the bandwidth for each individual stream; 2. Increase in subscriber scale with the explosion of connected devices; 3. End users’ expectation of 24x7 connectivity with a high quality of experience to all of their favorite content from any location or device.

To address these trends, service providers must be able to satisfy consumers’ expectations and offer personalized services in a dynamic manner. To prepare the network to handle the relentless growth, service providers are reassessing their network and system architectures and building their content distribution networks based on a distributed network deployment model and disaggregated system architecture.

This paper will primarily focus on the shift in service providers’ requirements for the subscriber management function. It also discusses the disaggregation of functions in relation to subscriber management and distributed cloud-based networking.

Robert Haim of ACG Research conducted an analysis of Router 8801 deployment in a distributed subscriber management network architecture. The scenario compares Router 8801 to a leading second best alternative offering. The study found Router 8801 return on investment (ROI) levels of 299% for a single stack (IPv4 or IPv6 addresses) and 335% in a dual-stack (IPv4 and IPv6 addressing) mode over seven years. Total cost of ownership savings levels of 65% (single stack) and 66% (dual stack) were found during the same period.

Read more: ACG Ericsson Router 8801 Business Case.

Contact sales@acgcc.com for more information about developing your business case.


         Robert Haim
     rhaim@acgcc.com
       www.acgcc.com

The 5G Wave of the Future

Today, congestion plagues low-frequency below 6GHz spectrum bands, which, consequently, not only makes it very difficult to add more capacity but also limits the number of antennas used (no more than two or three antennas).

The landscape, however, is much different in the high-frequency bands, usually known as the millimeter wave (mmW). The channels are much wider, reaching even 250MHz and multiples thereof in some bands (such as E-band), providing the needed capacity for 5G access and backhauling. In general, the mmW can request a wide availability of spectrum, which is a prerequisite for both access and backhaul. More antennas can be used (ranging from 4, 16 or even 32), resulting into beamforming that as it advances to shorter wavelengths allows for smaller antennas (including arrays needed for beamforming and beamsteering). Antenna directivity is much better in high frequencies, allowing a high spectral reuse factor. High-frequency radios can widely be used today and demand will continue to grow, especially for E-Band (80GHz) in dense areas where high capacity is needed. ACG anticipates that the momentum for E-Band will continue and will be preferred for new 5G (by 2020 or earlier) deployments technologies. (One in five links could be E-band in 2020.)

Regulation is the main enabler for high-frequency solutions adoption because by applying different licensing models it could encourage better use of spectrum, weighing in factors such as frequency bands, geographic region, and local microwave hop density. Ericsson recently described the multiband booster method, which could maximize spectrum efficiency, add new technologies that can exploit unused spectrum, and upgrade the capacity of microwave backhaul networks up to tenfold. This is a great option that has been used for years from other leading vendors as well but in most cases is still restricted by regulation.

Introducing and allowing wider channels in less deployed areas would further encourage the use of multiband solutions. Leo Macciotta, Huawei’s Senior Marketing Manager, highlights that “the challenges in capacity and latency requirements posed by LTE-A and in the future 5G make this kind of equipment the best and most cost-efficient choice for a future-proof deployment. Continuous investments in component, system and antenna technology provide a clear and dependable road map of improvement in performance such that we are confident that E-band will become one of the key building blocks of the future front- and back-haul networks for 5G and beyond.”

For access, most vendors could offer high modulation, wider channels, and multiple antennas (MIMO). The capacity offer varies between 2 and 4 Gbps full duplex, although some vendors are testing solutions in the lab that could go up to 10 Gbps in a range of a few kilometers. The MIMO types used today in most cases are 2x2 and 4x4 but could increase much higher along the 5G spec. This is not the case for backhaul; although the MIMO feature is offered, there is no real demand yet, but that might change beyond 2020.

E-band has recently come into mainstream use for mobile backhaul, allowing capacities of up to 10 Gbps over link lengths up to several km (even more than 10 km when bundled with lower frequency bearers) and is currently shipping in volume. Regarding backhauling, Yigal Leiba, co-founder and CTO of Siklu, mentioned that “a capacity of 2 Gbps could be enough today and possibly for the next 2 years for Mobile Operators and specifically for network aggregation layers and major Macro Base Stations backhauling, while 1Gbps street level backhaul could serve effectively Small Cells.” Looking to the future, the industry shares a vision of using frequencies above 100 GHz, as they will enable capacities in the 40 Gbps range over hop distances of about a kilometer but mostly for access. Regarding 5G and backhaul, there is already pressure, and leading vendors and major Tier 1 operators are worried that backhaul requirements may not be kept in the right considerations.

Tying the whole industry ecosystem together is the ETSI mWT (Millimetre Wave Transport) ISG, a common forum for component, subsystem and system manufacturers, telecommunications operators, and regulator. The forum promotes understanding and acceptance of mmW worldwide. With endorsements from such respected groups the future of these technologies looks promising.

    

    Elias Aranvantino

    earanvantino@acgcc.com

    www.acgcc.com

Two Major Vendors Shift Risk Categories: 1Q 2015 Vendor Financial Index Results

Ericsson Jumps into the Med-Risk Category and ALU Moves from Medium Risk to High Risk

ACG Research has released its 1Q 2015 Vendor Financial Index report, which delivers independent information about the sustainability of a vendor or company to help providers assess the risk of selecting the right vendor to meet their business requirements and to ascertain a risk level on the stability of the vendor regardless of technology innovations.

Low-risk vendors for the quarter are Adtran, Brocade, Cisco, and Juniper. Characteristics of low-risk vendors include strong revenue outlook, high operating margins because of sales, solid gross margin and expense discipline, low debt dependency, and high receivable efficiency ratio.

Adtran’s performance is predicted to improve in 2015 as a result of higher carrier expenditure in U.S. and Europe. Tier 1 U.S. and Tier 2, Tier 3 carriers’ business is expected to grow. Broadband Access platforms will drive growth. Brocade’s SAN revenue is expected to be down by 8% to 11% QoQ. IP networking revenue is projected to be up by 3% to 11% QoQ. Global Services revenue is expected to grow 2%. Focus for new business is on large enterprises and cloud service providers. The firm is collaboratively working on Dell’s new open standard NFV platform. Cisco’s Vision is strong for Application Centric Infrastructure (ACI) and InterCloud. ACI and APIC are predicted to be the cornerstone of the next generation of networking architectures. The volatility in service provider and emerging markets will continue to be a concern. Order growth in SDN will add to revenue in 2Q15. Juniper’s strategy is focused on Cloud Ecosystems and High-IQ Networks segments. Partnership with Vmware will enable highly automated cloud datacenter solutions for both service provider and mission-critical enterprise network.

Alcatel-Lucent, which was a medium risk last quarter, Cyan, Ciena and ZTE are high risk, which is characterized by low inventory turnover ratio, revenue decreases and low value of equity to debt ratio. Alcatel-Lucent, soon to be called Nokia, saw a decrease in revenue in 1Q (21.5% sequentially) because of a decline in spending in the North America market and increase in cost of sales. The merger with Nokia will shift ALU’s priorities to include expanding Nokia-ALU’s optical networking portfolio with the introduction of high-capacity metro optical networking platforms and a scalable wavelength routing technology.

Ericsson, which moved from low risk to medium risk, is expected to see slow growth in its North American mobile broadband business. The company’s investment focus is in both core and new businesses in IP networks, cloud, OSS, BSS, TV and media to capture new markets.

For more information about ACG Research’s Vendor Financial Index service or other syndicated and consulting services, contact sales@acgcc.com.

Ray Mota

rmota@acgcc.com

www.acgcc.com

Reshaping System Architectures: Open at Every Turn?

Disaggregated, modular, mix and match, open, these are the sound bites of the emerging white box and open software ecosystems. Will they define the architectural thinking used throughout our information-driven world moving forward?

From the Open Compute Project in data center hardware to open source software such as Open Daylight and OpenStack, the principles of ‘don’t lock me in’ and ‘let me be in charge of components I need for my best-in-class solution’ are making a play for being the dominant drivers for solution designs in nearly every network and IT platform category.

Take Cavium’s just-announced XPliant family of terabit-scale Ethernet Data Center switches as a fresh example. Its Open Compute Project design foundation means, with OCP’s Switch Abstraction Interface (SAI) the switches can be used by any open networking software team to build functions that suit their needs – without being held back by the underlying hardware’s processing architecture. And, with its Open Network Install Environment (ONIE), solution designers can decide whichever network OS best suits their needs. 

Mix and match, open, see http://www.cavium.com/newsevents-Cavium-XPliant-Ethernet-Switch-Supports-the-Emerging-Open-Ecosystems.html.

In another closely related category, look at Ericsson’s Hyperscale Data Center System (HDS 8000) introduced at Mobile World Congress last week. To support an array of cloud-scale workloads, Ericsson determined it makes sense for the processor and memory elements in its HDS server ‘sleds’ (individual units) to be mixable in a manner customers decide are optimal for their needs. Each combination can be made available to the larger ‘pool’ of resources available and allocated as desired by the cloud management system in use. Each module is attached via an optical infrastructure to simplify storage and compute integration, again based on the workload’s needs.

Mix and match, modular, see http://www.ericsson.com/spotlight/cloud.

Does this ultra-modular perspective mean the era of integrated product and solution deliveries is dead? Not completely. They will be less prominent in the long run but unlikely to go completely away. For example, HP delivers its Helion OpenStack cloud computing platform as a whole system offering for which it is accountable to its customers. It includes HP and open community components. Juniper delivers its OCX 1100 Open Networking Switch as a platform full of choices about the OS a customer chooses to use in its data center for which Juniper is accountable. It includes Juniper and open community components. 

The increased role of open and modular thinking in solution deliveries is just an indication that the range of ingredients available to producers is increasing (these options were not possible 10 years ago) and the opportunity to bring them to customers in creative ways have expanded. In that sense, the line defining for whom a solution integrator works—a ‘whole system’ vendor (Cisco, Ericsson, HP); a professional services firm (Accenture, Tata); or an end customer (DT, Equinix, NTT)—is being drawn more flexibly today (and moving to the future) than was possible a decade ago. Each party can decide the amount of responsibility it thinks it should shoulder in delivering the end result. The range of options has increased.

Like many deeply rooted transitions, there are parts of this one that are sometimes messy and a bit fragile compared with the ‘certainty’ that integrated platform deliveries of the past have offered. However that fragility will likely subside in coming years as integrators of every type get more familiar with the open building blocks with which they are working, and the use cases they’re supporting put their real and natural pressure on where the boundaries of responsibility should lie for the solutions to be practical. The outcome will be a downshift in the unit cost of underlying hardware, an uptick in the amount of choice that solution integrators decide to use in their designs, and a rise in the value of the software in the solutions at every stage of deployments—from network nodes to server units to higher level applications—that support the services we decide we want to use.

That transition will undoubtedly have its jarring and its stellar moments and will take some time to occur. In the meantime as it unfolds, it’s worth paying close attention to the shifts being brought to market in line with that trajectory in offerings such as the Cavium and Ericsson solutions highlighted here.

For more information about ACG's SDN services, contact sales@acgcc.com.

Click here for more information about Paul Parker-Johnson.

Paul Parker-Johnson

pparkerjohnson@acgcc.com 

acgcc.com 

Ericsson: Adding Trust + Governance to Agility in the Cloud

Periodically advances are made that propel the state of the art to a new level and allow us to accomplish things that were just not possible before.  It’s a powerful experience and is the nature of real progress.

In the steadily advancing domain of cloud computing an improvement of this sort has recently been made that could help service providers increase the security and governance of their cloud-based services by an order of magnitude. Improvement in these areas has been a gating factor holding back adoption of the cloud in many operators’ environments, and strengthening capabilities in each of them is crucial for bringing cloud offerings to market with increased confidence.

In its Hyperscale Data Center System (HDS) and Cloud System announcements at Mobile World Congress last week, Ericsson demonstrated innovation and powerful insights for success in cloud-based offerings (http://www.ericsson.com/mwc2015/launches/hyperscale-datacenter-system-ericsson-hds-8000). HDS incorporates secure storage protections, mitigating concerns about data security in the cloud. Additionally its Cloud System software incorporates an elegant policy enforcement solution that ensures governance criteria for data and software management are enforced in both development (DevOps, PaaS) and operations environments.

These two sets of innovations come from a combination of investments Ericsson has made in the past year.  Secure cloud storage in HDS is made possible by technology from CleverSafe, for secure object storage in conventional data base and web-scale ‘NoSQL’ environments.  Additional storage protections in cyber attack detection and mitigation have been integrated from Guardtime. 

The Cloud System’s governance and policy control functionality is based on Ericsson’s investment in Apcera.  Apcera’s vision, based on its founders’ experience at VMware and CloudFoundry, is to embed a rich array of policy controls into a cloud service delivery platform (in both development and operations domains) as an inherent part of the underlying software.  Application modules can be prevented from communicating with each other, and production applications can be automatically prevented from operating in the wrong deployment geography, as just two examples of governance and compliance.   

The result of these innovations is a cloud platform that takes away obstacles in security and policy enforcement that have been holding back the adoption of cloud-based services in many operators’ deployments to date.   

Will these capabilities remain unique in the market as other vendors pursue their developments in parallel?  Maybe not.  But it’s worth noting the pervasive integration Ericsson has achieved for both secure data storage and cloud system governance is not a trivial accomplishment.  To deliver similar functionality in a full solution platform for NFV, XaaS and other cloud-based offerings will take a sizable commitment from any other firm, whether startup or established.  While the market may catch up over time for the moment it’s worth putting the spotlight on Ericsson’s achievement in bringing them to market now.  The added protection and compliance available in the Cloud System offering should accelerate adoption of the virtualized network and cloud-based services significantly.

For more information about ACG's SDN services, contact sales@acgcc.com.

Click here for more information about Paul Parker-Johnson.

Paul Parker-Johnson

pparkerjohnson@acgcc.com 

acgcc.com 

4Q Vendor Financial Index Results: Ericsson Jumps into the Low-Risk Category

ACG Research has released its 4Q Vendor Financial Index report, which delivers independent information about the sustainability of a vendor or company to help providers assess the risk of selecting the right vendor to meet their business requirements and to ascertain a risk level on the stability of the vendor regardless of technology innovations.

Low-risk vendors for the quarter are Adtran, Brocade, Cisco, Juniper and Ericsson. Characteristics of low-risk vendors include strong revenue outlook, high operating margins because of sales, solid gross margin and expense discipline, low debt dependency, and high receivable efficiency ratio. Adtran’s growth continues with new product launches, such as high- performance routers, momentum of TA 5000 and FTTN platforms, and new product wins in EMEA, which will contribute significantly to the company’s revenue in 2015. Brocade, which is focusing on efficiency, is targeting software networking investments, advanced fabric switches and datacenter markets. Cisco’s diversification strategy of relying less on specialized routers and switching devices and more on rolling SDN tools and security services will add to growth in 1H15. Juniper continues to pursue its restructuring plan, cost cutting initiatives and diversification of revenue with the goal of increasing efficiency in delivery of services and customer support. Ericsson’s sales in most regions are expected to increase sequentially in 1Q15 with rising demand for managed services, consulting and system integration.

Cyan, Ciena and ZTE are high risk, which is characterized by low inventory turnover ratio, revenue decreases and low value of equity to debt ratio. Cyan’s cautious ordering pattern by its customers will impact the revenue in 1Q15, which is estimated at $30.2 M. Ciena’s substantial segment of its revenue continues to come from sales to a small number of service providers. The firm is focusing on diversifying and broadening its customer base and increased spending on optical upgrades and higher number of international orders should positively impact its top line in 1H15. ZTE will continue to focus its efforts on major global carriers and government segments. Future growth will rely on flagship device range. 

For more information about ACG Research’s Vendor Financial Index service or other syndicated and consulting services, contact sales@acgcc.com.

Ray Mota

rmota@acgcc.com

www.acgcc.com

Worldwide Mobile IP Infrastructure Market Continues to Rebound

Wireless is fueling capex, which indicates continued positive growth in the second half of the year

The Worldwide Mobile IP Infrastructure market grew in 2Q and increased to $1.25 billion, 9.6 percent quarter over quarter. Evolved Packet Core (MME, PGW, SGW, and PCRF) also grew this quarter to $123 million, 7.2% quarter over quarter. Online video continues to fuel mobile data traffic and the industry expects a tenfold increase in five years.  

Cisco continues to lead in the Worldwide Mobile IP Infrastructure market with nearly 40 percent share. Tracking its dominance in core routers, Cisco leads the IP Backbone market with 67.4 percent share. Cisco was number one in Mobile IP Backhaul with 40.3 percent share and in first place in Packet Core with 29.7 percent share. Ericsson holds 2nd place position in Packet Core (MPC + EPC) with 25.7 percent and 3rd place in total IP Infrastructure market with 12 percent share. Alcatel-Lucent, which claims 75+ IP mobile core customers worldwide, is second in the total IP Infrastructure market with 15.8 percent share.

Mobile spending continues is increasing globally as carriers in developed countries vie for top billing for fastest carrier, fueling LTE spending. 3G remains strong and continues to grow as developing economies upgrade and invest in this technology. Mobile infrastructure will continue to be a highly dynamic market for the next several years as vendors and carriers work through new technologies. Vendors will need to have solid strategies and execution plans in this demanding environment.

For more information about ACG's Mobile IP Infrastructure services, contact sales@acgresesearch.net.

For more information about ACG's Mobile IP Infrastructure services, contact sales@acgresesearch.net.

Ray Mota

rmota@acgresearch.net

www.acgresearch.net

Cisco Captures Pole Position in 1Q 2013 WW Mobile IP Infrastructure Market

1Q 2013 Worldwide Mobile IP Infrastructure market grew to $1.2B as Mobile SPs continue investments in Mobile IP Backhaul and Packet Core networks, including significant CapEx spend shift to LTE networks. This phenomenon has been prevalent in NAM for 12 months and is now taking shape in APAC. EMEA Mobile SPs are beginning to confidently plan LTE investments as the regulatory environment becomes more favorable.

Mobile IP Infrastructure Worldwide Market Shares Q1/13
Company	Rank	Market Share
Cisco	1	42.0%
Ericsson	2	15.5%
ALU	3	13.0%
NSN	4	7.1%
Huawei	5	5.8%

Cisco has executed well with significant market share gains in 1Q 2013, achieving pole position to lead all three segments: Mobile IP Backbone, Mobile IP Backhaul, and Packet Core at total 42 percent WW Mobile IP Infrastructure market share. Cisco has also out-executed Ericsson’s stated “seasonal weakness,” taking the #1 position in the coveted EPC segment. Although Cisco has focused its Packet Core offerings with a high price/performance portfolio strategy, its sales execution within the US, Canada, and EMEA markets is yielding strongholds in key LTE markets with wins in Vimpelcom (Russia), SFR (France), select T-Mobile properties in Europe, as well as with mobile network expansions in Bell Canada, du, Bharti Airtel, Tata, and KDDI. Cisco’s core strengths in Packet Core and its deep LTE core network experience are a result of its large/incumbent position in AT&T and Verizon Wireless where it has acquired complex deployment experience in 3G migration, LTE capacity planning, subscriber policy management, and multimedia/video revenue creation models.

Ericsson, despite its 1Q 2013 weakness, maintains its “Game of Thrones” empire on LTE networks. Massive global LTE deployments and a high rate of trial contract conversions/expansions, will fuel growth throughout 2013 for Ericsson. LATAM Mobile SPs have already selected key LTE suppliers, with Ericsson winning a majority market share. Ericsson has also demonstrated the world’s first end-to-end LTE broadcast video solution and has commercial deployment endorsements from Verizon Wireless and Telstra. Ericsson's unique combination eMBMS, HEVC and MPEG DASH, three new standards, enables Mobile SPs to provide premium video services with guaranteed quality and cost-efficient delivery over LTE.

Market Trends/Predictions

ACG sees several trends emerging in Mobile SP CapEx outlays. 3G network CapEx in RAN and core segments has eroded, and ACG expects a decline of 20–30% Y/Y through 2013 across many regions. Mobile IP Backhaul CapEx will continue to grow in double digits through 2013 globally as operators continue to optimize cell site capacity and network operations costs. ACG expects CapEx spend to increase 15–20% Y/Y on mmW and NLOS technologies as these are optimal for small cells and provide deployment flexibility in metro zones where macro cell sites do not make economic sense. ACG expects EPC to grow at record pace, averaging 45–50% Y/Y in 2013 with the US and Canada undergoing national builds, and with APAC and LATAM driving additional LTE ‘deployment’ revenues.

Next Wave of Mega LTE Networks: India & China

For the LTE industry overall, ACG predicts the next wave of growth opportunities will come from TD-LTE builds in India and China. Although the timing of mass LTE deployments in India is questionable, as policy/licensing issues, as well as regulator/tax collector actions against the country’s top Mobile SPs continue to escalate and cause unfavorable investment climate. In contrast, 3G subscriptions in China continue to skyrocket, and demand for TD-LTE networks with its inherent cost/spectrum efficiencies is at its peak. For example, China Mobile will spend more than $7 billion in CapEx this year on its TD-LTE network build. China Unicom and China Telecom will make decisions regarding TD-LTE in mid 2013, with rollouts beginning as early as end of 2013. Tier 1 vendors such as Alcatel-Lucent and Nokia Siemens are tripling investments and resources in China to support accelerated TD-LTE build-outs.

For more information about ACG's Mobile IP Infrastructure services, contact sales@acgresesearch.net

Global Mobile Industry Continues to Invest, Profit, and Increase GDP

The mobile industry and its outlook is the envy of Wall Street and leads innovation in an era where wireline telecommunications generally has become a commodity business.

The global mobile industry continues to invest, profit, and increase worldwide GDP growth by 2 percent. Mobile operators worldwide have generated $1.5 trillion in revenues in the last 12 months, served 6.3 billion subscriptions and by 2015 will employ 10 million skilled workers.

The industry continues to invest heavily in LTE worldwide. Today, there are 90 commercially deployed LTE networks with 40 new LTE launches globally in Q2 2012. By year end 2012, there will be 150 commercially deployed LTE networks globally. The US, Japan, and South Korea today account for 9 of 10 LTE subscribers globally according to GSA. Within the next 12 months, these same markets will have completed deployment and enabled nationwide services. European LTE mobile operators are differentiating with speed-based tariffs. U.S. and Canadian mobile operators are focusing on enhanced services such as premium mobile video, RCS, and multi-device data plan pooling.

Looking forward to Q3 2012, areas to watch will be related to global development and mass usability/validation of voice, video, and rich content services over LTE networks. Apple’s release of iPhone 5 with much anticipated LTE support will create significant load and complexity on Verizon Wireless and other major operators with commercial LTE services. As the “iPhone effect” takes on LTE networks, vendors and operators will continue to focus on optimization, real-time network/data services management, and subscriber services awareness/differentiation.

Vendor	Rank	Market Share ($)
Cisco	1	40%
Ericsson	2	14%
Alcatel-Lucent	3	12%
NSN	4	9%
Huawei	5	7%

QUARTERLY TRENDS and DRIVERS HIGHLIGHTS

• Within five years, LTE networks globally will near one billion mobile subscribers.

• The US, Japan, and South Korea today account for 9 of 10 LTE subscribers globally.

• Europe is facing fierce competition in LTE, yielding some of the lowest data prices globally.

• As the “iPhone effect” takes on LTE networks, mobile operators will continue to fine-tune performance, capacity, and network operations.

• Q3 2012 will see mixed performance by vendors experiencing slow growth in 3G business as CapEx shifts to 4G.

For more information about ACGResearch’s mobility services click here or contact sales@acgresearch.net.

LTE Networks Driving Global Market Growth

The emerging markets are providing growth across mobile infrastructure as 3G networks upgrade to advanced technologies and LTE begins to make more inroads across the globe.

Cisco bucked the downturn trend for Q1/2012 posting gains in the Worldwide Mobile Infrastructure market in every area, specifically in EPC. Cisco continues to gain global traction with its ASR 5000 and reported 20% y/y growth, including huge growth in Japan. The company has 30 EPC customers, including Bell Mobility in Canada, Reliance in India, Meagafon in Russia and Telefonica. EPC contracts are accelerating from a year ago as Ericsson has reported it signed 14 new EPC contracts. Huawei, ALU, and NSN also all report gains.

We see increased penetration of EPC in 3G installations and in the growing market for LTE networks around the world (via new spectrum auctions or announced plans for build outs). The IP backbone segment continues to grow because of the increasing data traffic on 3G, 4G and Wi-Fi networks, which ultimately traverse the core router backbone. We continue to expect SP Wi-Fi to be a major driver of backhaul installations and upgrades for the next several years as vendors and operators are learning how to implement new coverage models using Wi-Fi ahead of carrier-grade service standards of 802.11u and ANDSF.

The IP mobile backhaul market for both routing and switching continues to grow as the new 1 Gig and 10 Gig systems upgrade the access layer of the network as well as add IP-MPLS for traffic management and control. MPLS wins the Phoenix award as the technology resurrects itself to deliver traffic management and control in an All-IP world. We are also seeing a shift in the reporting and deployment of edge systems. We are starting to see larger chassis installations, which allow for future expansion (possibly as a result of aggressive pricing to normalize the cost of the chassis). The expectation is that revenue will be recovered as the slots are populated. This is not a new strategy, but one we are starting to see again in the mobile access area.

QUARTERLY TREND and DRIVER HIGHLIGHTS

• The continued introduction of new smart phones, tablets and other devices with faster processors, more memory and higher definition screens continues to push the capacity limits of the network resulting in two significant changes to the industry: 1) Vendors are starting to quote EPC system performance figures based on a propose device profile for individual operators, and 2) Second generation Signaling platforms are coming to market, significantly up-scaling signaling support figures. 

• Service providers with existing LTE networks continue to upgrade their signaling and data capacities as more smart devices drive up demands on the network. TeliaSonera, Tele2 and Telstra launch LTE smartphone and tablet offers.

• TD-LTE and radio backhaul will expand the market for wireless infrastructure over the next three years, completing the demise of WiMax for most applications and providing the WiMax operators with a clear technology path to LTE. 

For more information about ACG Research's Mobile Infrastructure service click here  or contact sales@ acgresearch.net.

Chris Nicoll
cnicoll@acgresearch.net
www.acgresearch.net 

CTIA: A Report on AT&T and NSN

Chris Nicoll reports on Day 1 of CTIA.

On Monday AT&T took us to one of the most beautiful private homes in New Orleans for its digital home demo. Stately, beautifully decorated with nearly 150 years of history, it was a good setting for a home of the future presentation. Unfortunately, the message was marred by poor execution of the demonstrations. The tour was not well organized, the demos were simple, and the value proposition was missing. One presenter could not answer the simple question of what happens if the power goes out. Can you not get into or out of your house? (Apparently there is a battery backup). The electronic door locks are large and clunky, the electrical device have X-10-style units (NOT attractive). What has changed since the 1990s?

The house was beautiful, but not sure what was the unifying message or value to AT&T. There really was no mention of how this is bundled in with any other service, and one presenter went to great lengths to explain how this was an added service. You didn't need U-Verse or any other AT&T service to make it work. I didn't see a reason to give up ADT.

NSN

NSN has weathered a couple of storms, coming through really without having to do very much to make it happen. They were the happiest company at the failed AT&T/T-Mobile merger (other than Sprint) and now that T-Mo is having to play catch up in the LTE race, NSN, along with Ericsson, got the contract to provide the LTE network for T-Mo. My estimate at the the value to NSN?  $1B.  Now if someone could just come up with a LITTLE BIT more spectrum.

The second storm? NSN indicated that ALU is vulnerable now that the US is getting its LTE built-outs complete, and now that it's Europe's turn, NSN incumbency in the EU operators puts them in a leading position for their LTE networks. ALU has corporate restructuring ahead in worker-friendly France. NSN got favorable terms from the German unions and is well on its way to a new, smaller, dress size. NSN also feels like its plan to shed itself of noncore business units puts it in a focused position to move forward from one that is sustainable. I think they are correct on that regard. 

Huawei is probably the only company in the world with pockets deep enough to maintain R&D across it full range of products.  I don't think ALU is in the position to do that and will need to downsize to address cost issues in the future. So, in this area NSN is ahead but now it needs to work on upgrading/updating some of its core products. NSN is looking strongly at struggling partner Juniper, but other Juniper partners have moved onto their own platforms (Ericsson).

Chris Nicoll
cnicoll@acgresearch.net
www.acgresearch.net

Ericsson Smart Services Router: Scaling the Control Plane

Network bandwidth usage is growing at annual rates of 60 percent or more because of the rapid adoption of video and cloud services. Control plane traffic is increasing even more quickly as the Internet moves from serving fixed locations and fairly static information sources to one characterized by personalized, media-rich applications (app), and mobile services. Service providers that are already concerned with data plane scalability must also add control plane scalability to their list of network planning issues.

ACG Research conducted an analysis of the sources of growth in control plane traffic: increases in end-user connections, device types, apps, app policy and control requirements, and mobility management requirements.

This study projects data and control plane traffic growth at a typical packet core node and analyzes the scalability of the SSR 8020 IP service delivery platform and of a competing service router when configured to serve this traffic growth. The study finds that the SSR 8020 has lower total cost of ownership (TCO) by 66 percent and higher scalability by two to more than three times that of the competitor’s service router.

Click here to go to ACG's website to download the TCO.

For more information about ACG Research's business case analysis services, click here.

Michael Kennedy
mkennedy@acgresearch.net
www.acgresearch

Partnering or Vendor Outsourcing: Speed Your Time to Market

All major vendors offer some limited to complete outsourcing capabilities in either advanced services or outsourcing of management of the network operations center. The goal of outsourcing is to allow a provider to focus on other priorities like; customer acquisition, increase value to customers and deliver value add services such as cloud computing or other up-sell services.

Service providers are either true telco or a carrier and tend to be very slow to move to a new technology or offerings potentially missing inflections in the market. Their internal silos and sales teams are set up to sell connectivity and access and less able to sell the advanced offers, such as unified communications, cloud offers and video services, demanded by the market.

• ACG Research investigated nine companies with unique profiles and ranked them on their ability to address key factors:

• Communication and Unified Communication: Offers which build on connectivity and take IP communications and convergence to the next level.

• Technology Portfolio: Virtualization end-to-end portfolio and technology that creates value and customer stickiness.

• Multivendor: Capabilities to address service providers’ environment to deal with outsourcing all or part of their infrastructures.

• Connectivity Capability: Knowing what the outsourcer’s capability is in providing robust connectivity to meet demands of providers as a customer.

• Customer Service: The ability to create value for on demand, on time resolution and coverage in the markets the providers do business.

• Change Management: What are the processes to change the current do-it-yourself in-house provider IT to outsourcing or out-tasking parts of the network? Does the outsourcer have change management processes tuned to carriers?

• SP Specific Offers: The outsourcer’s ability to have a dedicated team and tune multitenancy offers to handle the environment of the providers.

• System Integration Skills: The ability for the outsourcer to offer system integration to customers of the providers or to the provider to address gaps in migrating a customer or provider to a virtualized infrastructure or process.

• System Integration Experience: What use cases and customer lists can the outsourcer cite?

• Cloud Vision: What is the outsourcer’s ability to outline the cloud reference architecture and deliver technology, thought leadership and understanding of the provider’s cloud opportunity?

• Cloud Experience: In looking to an outsourcer for quick time to market there are requirements that dictate that the outsourcer has done this before and in many instances. What use cases can the outsourcer cite?

Our Outsourcing report covers the following: Cisco, HP, IBM, Globecomm, Avaya, CSC, Ericsson, Alcatel-Lucent, and NSN. For more information about this document contact ACG Research at sales@acgresearch.net.

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Lauren Robinette
lrobinette@acgresearch.net
www.acgresearch.net