Telco equipment makers will have to stretch operator dollars in 2014: NSN

Telecommunications equipment suppliers will increasingly squeeze more out of less to meet the increasing demand for bandwidth by mobile users, according to one vendor.

“We have got to reduce the cost of gigabyte of data getting on (to cellular networks) to two orders of magnitude,” says Phil Twist, head of portfolio product marketing at Nokia Solutions and Networks, in an interview predicting carrier trend for 2014. “We need to get smart with the technologies to keep up.”

The problem is simple: Thanks to ever-more powerful mobile devices and machine-to-machine communications, the amount of global mobile traffic is doubling roughly every year. Or, to put it another way, NSN believes that by 2020 traffic will be up 1,000 times over 2010.

Unfortunately, carrier revenues aren’t going up by nearly that amount — in fact, Twist said, for some carriers revenue growth is declining.

“That clearly puts huge pressure on everything that has to do with mobile broadband networks,” he said.

Among the things that carriers and equipment manufacturers will be doing in 2014 are:

–Consolidating. There are some 200 carriers in Europe, Twist noted, compared to four in the U.S. Look for mergers.

(He didn’t say, but in Canada there are five national carriers — Bell, Rogers, Telus, Wind Mobile and Mobilicity. Mobilicity, which has been given protection from creditors pending a restructuring, has been trying to sell itself to Telus. Industry Canada has twice said no. Wind’s main financial backer, VimpleCom, has let it be known it would like to sell its share of the company.)

As for equipment manufacturers, he noted that NSN itself used to be a partnership with Siemens AG. Last year Nokia Corp. bought out its partner, while Motorola sold its handset division to Google. In May NSN sold its optical networks business to Marlin Equity Partners.

–Sharing. Bell and Telus share a network. So do Orange and Deutche Telecom (it’s called EE). Look for more operators to share networks.

–Mash-ups: They’re not only for desktop applications. Network equipment makers will also create gear at the access layer that will do what handsets can: switch signals from the carrier to Wi-Fi networks, or between various frequencies.

–Shifting to LTE-Advanced: Already rolling out in South   Korea, this technology lets carriers stitch different LTE frequencies together into a single stream to give greater capacity, and faster download speeds.

–Clouds: Step one — Virtualize networks.

Network equipment makers will rely less on new hardware and more on software to take advantage of commodity servers. A typical core LTE network today has a number of blocks: A mobile application server, an IMS server, an HLR (Home Location Registry) server etc. If you want more capacity, add a server. But through a cloud infrastructure these applications can be shared.

Twist said NSN now has a proof of concept core network solution on industry standard hardware. The idea is operators can buy added computing power from a third party or their own private cloud. Standards are emerging for carrier network virtualization so this will be deliverable in the not distant future.

–Clouds: Step two — Software defined networks.

SDN will separate the transport layer from the core network, allowing a carrier ask a for a certain sized pipe from point B to point C when demand changes.

However, this is still a work in progres, Twist said. “We are not there yet for a fundamental reason: there is no standard yet on how an SDN will work with a transport network to give telco-grade quality of service in a multi-vendor way.”

He believe it could take another three years for industry to define the open APIs needed and how to migrate to a SDN network — an enterprise, he notes, can switch off an old network and move to an SDN. An operator can’t.)

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@]

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