ip/mpls and ng-sdh enable the profitable path to ip generation · ip/mpls and ng-sdh enable the...
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IP/MPLS and NG-SDH Enable the Profitable Path
to IP Generation
IP/MPLS and NG-SDH Enable the Profitable Path
to IP Generation
Antti KankkunenCTO, Tellabs International
September 8SATNAC 20032
AgendaAgenda>Future Vision>Service Provider Challenges>Network Evolution>Service Provider Strategies>Profitable Network Evolution Path Towards
Converged IP Infrastructure>Conclusions
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September 8SATNAC 20033
The future vision of converged ICT services
The future vision of converged ICT services
IP over OpticsCore Net
Content Storage
End User
ResidentialBroadbandIP Access
Server FarmASP ‘Shop on the Web’
‘Web Site’
BusinessIP Access
DB
e-University
Entertainment
Business
3G Mobile
Softswitch
September 8SATNAC 20034
Service Provider ChallengesService Provider Challenges
Customer Needs
Shareholders& Investors
Government & Regulatory
Service Providers must successfully juggle the needs of multiple audiences – delivering
optimal quality, performance, and return on investment
$ $Capital
Constraints
New & Existing
Network Options
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September 8SATNAC 20035
Network evolution – Traffic viewNetwork evolution – Traffic view> Despite the dotcom crash
Internet traffic is still growing rapidly (forecasted growth 60 –80% per year between 2003 and 2006).
> The traffic growth is enabled by falling cost per bit of networking solutions.
> Falling cost per bit means that maintaining revenues requires higher bit rates. What used to be 64k has to become 1M, what used to be 1M has to become 16M, ...
Global Internet Traffic Growth 1999=1
0
10
20
30
40
50
60
70
80
90
100
1999 2000 2001 2002 2003 2004 2005 2006
Source: Tellab Estimates, RHK, Roberts et al, Probe ResearchAll estimates made during 2002
Low cost per bit in IP networks make the IP network an attractive connectivity layer for all future service offerings. "Internet acid" will eventually destroy legacy structures.
September 8SATNAC 20036
Network Evolution - Revenue ViewNetwork Evolution - Revenue View
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2002e 2003f 2004f 2005f 2006f 2007f
€M
ISDN (Business)Gigabit EthernetBusiness DSLIP VPNDedicated IP ConnectionATMLeased LineFrame RelayX.25
European Business Data Service RevenuesSource: Yankee Group 2003
IP/Internet Services
Infrastructure must support both legacy and next generation services
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September 8SATNAC 20037
Network Evolution – Profit ViewNetwork Evolution – Profit View
Source: CGEY/DrKW, 2002
Interviewed 50 corporate end users, 15 service providers and 10 equipment manufacturers.
The rollout and prospects for IP Services in Western Europe over the next 2 years.
Basic connectivity = Unmanaged service (LL, FR, ATM)Managed intranet = WAN connectivity + WAN routing operator provided
Cost efficient IP connectivity layer is the foundation of Cost efficient IP connectivity layer is the foundation of value added services, which enable higher profitability value added services, which enable higher profitability business for service providers.business for service providers.
0
10
20
30
40
50
60
70
%
BasicConnectivity
ManagedIntranet
Security QoS/SLA Storage &Hosting
Gross Margin Range
Price erosion is slower for higher value services.
September 8SATNAC 20038
Service Provider StrategiesService Provider Strategies
Optimize Enable New Growth
Leverage /Revitalize
• Focus on network operations
• Extend network infrastructure life
• Concentrate on core competencies
• Stream line processes
• Enable existing infrastructure to support new services
• Cap legacy platforms and grow existing services with solutions that enable migration towards new growth
• New Service Revenues
• New Technologies
• Higher Margins
• Value AddedServices
• Extend QoS to entirenetwork
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September 8SATNAC 20039
SDH / DWDM /
Dark Fiber
Networks
VoiceBasic+
VASICT VASInternet
Private IP(Intranet,IP M2M)
End userneeds
Services
TDMVoice
Fixed &MobileVoice
M2M = Machine to MachineICT = Information and
Communications Technology
VAS = Value Added Services
BandwidthWholesale
Future Network Architecture
TDMVoice
Fixed &MobileVoice
Storage
New StorageServices
?
?
StorageArea
Network
ATM/FRSwitched
Data
LeasedLines
ATMFR
IP/MPLS
ATMFR
Internet +ICT VAS +MPLS VPN
ATM/FRSwitched
Data
LeasedLines
Motivation: Carriers need to invest to a future proof and cost efficient network architecture.
Future Network Architecture
SDH / DWDM /
Dark Fiber
Networks
VoiceBasic+
VASICT VASInternet
Private IP(Intranet,IP M2M)
End userneeds
ServicesBandwidthWholesale
TDMVoice
Fixed &MobileVoice
M2M = Machine to MachineICT = Information and
Communications Technology
VAS = Value Added Services
ATMFR
ATM/FRSwitched
Data
LeasedLines
IP/MPLS
Internet +ICT VAS +MPLS VPN
8/29/20039
September 8SATNAC 200310
Enabling Value Added ServicesEnabling Value Added Services
End UserConnectivityApplications
ConnectivityServices
NetworkArchitecture
Roles
MarketSegments
L2 MPLS VPN
L3 MPLS VPN
IP routing and BB aggregation
IP/MPLS Edge Routing | Multi Service Switching
NG-SDH Access and Transport | Ethernet over MPLS Access
Managed CLE
Intranet Extranet Internetaccess
VoiceTransport
Value AddedServices
ENABLERS
SLA, QoS,Managed Intranet
ATM, FR,Ethernet
Consumer, SOHO, Small, Medium, Large, Top 100
EPLTDM LL
M2M IP
FirewallEncryptionVirus Checking
Multimediaand/or unifiedmessaging
Applications,Hosting,Content
IP Centrex,IP-PABX,
e-Commerce
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September 8SATNAC 200311
ATM and FRService Networks
Ethernet over MPLS
access domain
Core IGP+MPLS
domain
P
PP
P
PE
PE
PE
PE
IP/MPLS Core
PE
Service Edge - More strategic, more complex, and more confusing than ever before.
DSLAM
Residential/SOHO/SME/Branch Office
Copper Fiber (SDH, Dark Fiber or DWDM)
EthernetMux
MTU, Any End Customer Segment
Leveraging the legacyinfrastructure
Legacy ATM, FR or Leased Line Access
P PE
Service Edge
Extending Service Edge
to Local Exchange
BRAS
Ethernet over SDH
access
September 8SATNAC 200312
ConclusionsConclusions> All communications services are slowly converging towards IP
connectivity> To maintain and improve profitability service providers need to
shift revenue generation from dummy pipes towards higher value services
> Service providers need a profitable migration path from today's network to the future IP generation
> IP/MPLS infrastructure can cost efficiently support all packet and cell mode connectivity services
> NG-SDH provides support for TDM services and enables the existing infrastructure to support packet centric service mix
IP/MPLS and NGIP/MPLS and NG--SDH provide a profitable SDH provide a profitable migration path for network connectivity layermigration path for network connectivity layer
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