[Strategy Analytics]: SDN can save MNOs more than $4B CapEx by 2017

   

A new study by Sue Rudd [pictured], Director, Service Provider Analysis, Strategy Analytics (sponsored by Tellabs) finds that "SDN can save mobile operators more than $4 billion in capital expenses by 2017. Savings stem from 5 key SDN applications for mobile backhaul networks [see below]".

The highest % of savings relates to Wi-Fi Offload and video redirect (over $1B). 

"The Tellabs Congestion Control Application, which it demonstrated earlier in 2013 [here], is one example of SDN in action. The application applies SDN to head off bottlenecks and reroute traffic in the backhaul network before users are aware of any problems with their service. For this demonstration, Tellabs’ approach was to add the SDN controller to its existing Tellabs® 8000 Intelligent Network Manager. This means that customers can deploy SDN seamlessly without the need to rebuild the network to achieve the advantages that SDN brings"

See "New Study Reveals: SDN Could Save Operators $4 Billion in Capital Expense by 2017" - here.

NI Deployments [210]: Vodafone [Ireland] Uses Tellabs to Analyze Network Data

  

Tellabs announced that "Vodafone Ireland is deploying Tellabs® Insight Analytics Services to analyze the network data contained in its multi-vendor 3G mobile network. The service provider will use the information to optimize network performance and provide a higher quality of service. It will also enable Vodafone Ireland to perform capacity management and root-cause analysis quicker and more cost-effectively".

On September 30, 2012 Vodafone Ireland had 2.2M mobile subscribers.

Tellabs Insight Analytics Services' Customer Experience Management (CEM) allows "operators to collect, correlate and deliver actionable information on subscriber behavior and network performance. This capability is enabled by Deep Packet Inspection (DPI). DPI provides effective access to the subscriber data flow at the higher levels of the OSI stack. Simply having access to data is not enough. The analytics engine  that consumes all this information is what turns the data into actionable information. CEM is about having access to the right data which is processed efficiently at the right time. With this capability, operators can measure the quality of experience of each subscriber within the context of network performance".

  

See "Vodafone Ireland invests in Tellabs® Insight AnalyticsSM Services to turn big data in the network into actionable intelligence" - here.

[Heavy Reading] - More on the PCRF/DPI Market

    

Ray Le Maistre (pictured) published some more details from  the recent Heavy Reading report on the PCRF/DPI market (see "[Heavy Ready]: 2011 Policy Management & DPI Market Reached $1B; TEMs Gain Higher Share" - here).

"In the policy server market, we believe that the major telecom equipment vendors saw faster growth, as a whole, than specialist vendors. ... Much of the momentum for these major vendors has come from their position as suppliers of core network equipment such as GGSNs, which has pulled through a lot of new policy business," notes the report's author, Heavy Reading Chief Analyst Graham Finnie"
 
"Those same large vendors, plus the likes of Cisco [here], Hewlett-Packard [here] , Juniper Networks, Tellabs [here] and ZTE now account for more than half of the policy server and deep packet inspection (DPI) sector covered by the report, a market that was worth more than $1 billion in 2011 and which is due to grow to about $2.7 billion by 2016 .. most specialists are also seeing robust growth"

See "Policy Specialists Squeezed by Vendor Giants" - here.

What a Wonderful Year was 2011: Everybody [says it] is Growing!

 
A wave of momentum press releases from private companies in our space has been published lately - each trying to show how good was 2011 for them (as non-public companies, they do not have to show all aspects of their business .. see at the end an example of a public company announcement). 

But be aware - according to Ovum principal analyst Matt Walker (pictured) "Slow growth ahead for telecom service provider revenues and capex" (here):

"service provider (SP) capex and revenues grew an estimated 12 per cent and seven per cent respectively in 2011, with capex reaching US$314bn and revenues US$1,962bn. However, the report forecasts that SP revenues will advance at a CAGR of 2.9 per cent over the 2010-2017 period, which is markedly down from the historic CAGR of 6.3 per cent achieved in 2004-2010. There is a similar slowdown with capex: capex expanded at a CAGR of 6.5 per cent in 2004-2010, but this will likely slow to 3.1 per cent in 2010-2017"

Back to the happy vendor announcements: 

• DigitalRoute - "DigitalRoute added more than 40 service providers to its list of more than 240 MediationZone customers during 2011. These include Tier-1 service providers in the USA and Europe that went into live operation with MediationZone within 6 months after project start. As a result of the recent success DigitalRoute has accelerated its revenue growth in 2011, achieving 59% year-over-year growth while also increasing profitability".
  
  See "DigitalRoute Increases Growth 59% with Tier 1 Customer Wins" - here
   
• BroadHop - ".. reported it has secured 23 Quantum Network Suite customer wins in 2011, doubling the number of customers from the previous year. Innovative Communication Service Providers (CSPs) in four continents have selected BroadHop’s next-gen policy platform as scalability and service velocity become increasingly critical for Tier 1 operators looking to compete in hypercompetitive markets and in the post “all you can eat” bandwidth world. Demand for Quantum Network Suite grew significantly in Europe, Middle East, Africa (EMEA) and Asia Pacific (AP) markets where the Company secured 15 customers in competitive wins. Further expanding its geographic footprint, BroadHop secured 7 competitive wins in North America".
  
  See "BroadHop Announces 23 Quantum Network Suite Customer Wins in 2011" - here.
  
  I asked BroadHop if they can name at least one customer, but the response was they can’t because of - "Competitive advantage…" (?).
    
• BTI systems - " With a global customer base of close to 400, packet optical expanded to more than 60% of BTI deployments in 2011, bolstered by customer demand for the Company's market-leading mobile backhaul, Ethernet business and Internet services solutions".
  
  See "BTI Systems Momentum Fueled by Content and Service Provider Demand for High-Bandwidth, Application-Aware Metro Network Solutions" - here.
   
• Orga Systems - "Orga Systems continued its revenue growth driven by investments in its products, services and sales coverage. The 2011 annual turnover has grown 30% higher over the past 2 years. The volume of year-end backlog for 2012 has almost tripled as compared to that for 2010. This excellent result is due to 18 months of extensive business transformation with more than 80m subscribers added on its systems".
   See "Orga Systems continues growth curve" - here.

On the other hand, Tellabs announced, due to challenging Q4 results, that "We will reduce expense and stop new development work on the Tellabs SmartCore 9100 LTE product, while continuing to support Tellabs SmartCore 9100 WiMax customers" (here). The 9100 is Tellabs' DPI enabled core router - see also "DPI Announcements: Tellabs New LTE SGW/PGW" - here.

Research Tells MNOs how to Increase Cash Return (Hint- Just Be Smarter!)

[posted on 11/11/11 11:11 JST]      
 

Research done by Chris Barraclough (pictured), MD and Chief Strategist, STL Partners/Telco 2.0 (commissioned by Tellabs) finds that "Mobile operators are missing a clear opportunity to double cash returns by following current network strategies .. Cash returns on invested capital for mobile operators today are typically 5.8%, in line with utility company stocks. The report concludes that mobile operators can more than double cash returns to 13.3% by delivering smart services. Smart services can improve operators’ share value and performance, turning today’s value stocks into tomorrow’s growth stocks."

"To achieve the 1.6% increase in cash returns enabled by moving to a smart network, the following elements are essential: [Items in bold are frequently discussed in this blog]

• Efficient network configuration
• Network security
• Device management
• Network sharing
• WiFi offload
• Traffic shaping
• Multicast and content delivery networks (CDNs).

To increase cash returns by a further 5.9%, the following smart services must be introduced:

• Delivering personalised and differentiated user services that leverage assets such as customer data
• Making additional operator assets, such as location, presence, payments, identity and authentication, available to users and other service providers [see "Tekelec's PCRF Used with Verizon's "Turbo Button" API" - here] 
• Implementing differentiated pricing and charging for users and upstream service providers based on customer segmentation and tiered service levels"

See more - "Mobile operators missing opportunity to double cash returns for investors" - here (press release) and here (report)

Tellabs ASN Gateway DPI Features Overview (Encrypted P2P & Skype Supported)

   

A new application note from Tellabs provides information on the DPI and traffic management features of its ASN (WiMax) gateway - the Tellabs® SmartCore® 9100 Platform (formerly the WiChorus SmartCore platform).

"Tellabs SmartCore uses DPI to inspect user traffic into Layers 5-7. Tellabs SmartCore DPI analyzes the full packet, including the Layer 7 payload, and correlates information across multiple packets within a flow to identify the application [see table below]. The ability to analyze multiple packets in a user flow is what makes this solution “stateful”— it is aware of the user’s state".

"DPI serves a number of functions depending on the information required and what operators plan to do with it. As an ASN Gateway network element, the Tellabs SmartCore 9100 uses DPI to manage traffic. It also performs line rate policy action to user traffic flows. These policies can block or rate limit certain flows, re-direct certain flows, or other provide other operator-defined actions".

See "Tellabs SmartCore® 9100 Platform: Deep Packet Inspection (DPI)" - here.

Study: "beliefs about rising costs and falling revenues are correct"

    

Tellabs published a new study: "Between November 2010 and January 2011, Tellabs created a study that analysed revenue and cost trends for carriers in Western Europe, North America and certain developed Asian markets .. Industry watchers accept that the cost of building and operating networks is rising and revenues are declining. This study aimed to develop timelines showing when "typical" carriers might expect to see costs exceed revenue"

See "Tellabs End of Profit study executive summary" - here and a press release - "Mobile operators profitability challenged within three years, says study" - here.

"The study showed that widely held industry beliefs about rising costs and falling revenues are correct. If the trends assumed in the model are followed, and carriers maintain their current modus operandi, carriers in each region can expect to see an end of profit within a four year window". See chart below for the results for the North American market.

See also "Ofcom: Mobile Data Volume +2234%, Revenues +90% (in 2 Years)" - here.

Rob Pullen, CEO and president of Tellabs said: “Mobile operators can spend themselves into a hole well before users run out of hunger for capacity .. Our study shows that simply adding capacity or ‘dumb pipes’ is an unsustainable business. To avoid the ‘end of profit,’ operators must bring intelligence to their networks – it’s critical to carrier survival.”

DPI Announcements: Tellabs New LTE SGW/PGW

 

Tellabs announced a "new LTE (Long Term Evolution) EPC (evolved packet core), based on the Tellabs® SmartCore® 9100 platform, advances the transformation to the smart mobile Internet. As an LTE SGW (serving gateway) and PGW (PDN gateway), the Tellabs® SmartCore® 9100 platform offers high performance at a lower cost per bit, decreasing the total cost of ownership. With its integrated deep packet inspection, granular quality of service and traffic management architecture, it enables operators to monitor real-time traffic, enforce advanced policy and charging models, and generate revenue from new sources.

See "Tellabs SmartCore® LTE solution advances the smart mobile Internet" - here.

Rehan Jalil, senior vice president of mobile Internet said: “.. customers need much more than a router with other functions bolted on; instead they need a purpose-built solution with content awareness integrated into the packet core, which enables customers to meet the challenging business and technical demands of the mobile Internet.”

"The Tellabs® SmartCore® 9100 platform for LTE networks is currently in trials with more than a dozen customers worldwide, and is expected to be generally available in the first quarter of 2011"

Barrett Xplore Will Use Tellabs for 4G Traffic and Service Management

 

Tellabs announced recently that "Barrett Xplore Inc will use Tellabs to power Barrett’s national 4G wireless broadband network. .. To ensure subscribers have high quality of service, Barrett Xplore selected the Tellabs® SmartCore® 9160 [GGSN/LTE PDN] platform to intelligently manage IP traffic and capacity as demand for services grows"

See "Barrett Xplore selects Tellabs to power 4G offerings" - here.

Barrett Xplore has interesting traffic management policies (here). Among the rules is the following: "Dynamic congestion policies, which respond to congestion in a part of the network by identifying those users in that part of the network who are consuming the most bandwidth and reducing their speeds to approximately half their maximum speed for a period of 15 minutes. At the end of 15 minutes, if congestion in that part of the network continues to be an issue, the system will once again calculate which users have been consuming the most bandwidth in the prior 15 minutes, and implement the speed restriction on that newly-calculated set of users". See also "CRTC Network Management Hearing (July 2009) - here"

Back to Tellabs PR: "Tellabs’ technology will act as the controlling intelligence in the network, linking Xplornet customers to the Internet by authenticating each individual user and assigning network resources according to the customer’s selected package. The Tellabs platform provides advanced analytics and monetization tools to enable Barrett to maximize its investment, and a flexible, open network architecture to support future growth"

DPI Market: Tellabs Acquires Zeugma Systems' IP

 

Tellabs announced recently that it "is adding key technology, intellectual property and IP (Internet Protocol) expertise from Zeugma Systems Inc., to create a new research and development office in Vancouver. Former Zeugma personnel will join Tellabs’ Vancouver facility to focus on developing Tellabs® Mobile solutions. Tellabs Mobile Solutions add intelligence to the wireless networks, so service providers can cut costs while delivering better user experiences on the mobile Internet"

See "Tellabs opens mobile Internet R&D office in Canada" - here.

Tellabs entered the mobile internet space with the acquisition of WiChorus in 2009 for $165M adding GGSN, Wimax and LTE products to its portfolio (see "Tellabs acquires WiChorus to revolutionize the mobile Internet" - here).

Originally Zeugma Systems planned to build an "intelligent BRAS" - (to be an edge router for fixed networks) with DPI based application awareness and value-added services (such as content filtering).

The current product, Zeugma Services Node, is described as "a service delivery router (SDR), uniquely combines massive compute resources with next-generation capacity, service awareness, and subscriber management in a carrier-grade, fully redundant system".

Zeugma has also a companion OSS product "The Zeugma OSS (ZOSS) is a powerful companion to the Zeugma Services Node.  Not only does it provide configuration and health management of the ZSN, it also extends the Zeugma Open Application Sandbox (OAS) with capabilities that may require database services and offline processing."

See current solutions - here.

“To help our mobile customers succeed, we’re adding more IP expertise to enable the smart mobile Internet,” said Rob Pullen, president and CEO. “Vancouver offers a unique talent pool that can accelerate our delivery of differentiated solutions to customers. We welcome our new employees to Tellabs.”