New Revenue Opportunities for Operators with Multiservice over IP

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New Revenue Opportunities for Operators with
Multiservice over IP February 2003
Gil Biran gil_at_axerra.com www.axerra.com
Rager Ossel rager_at_intouch.nl www.intouch.nl
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State of IP Services Today

• IP Backbone networks arose because of explosive
  growth of data traffic (fueled by the Internet)
• Based on the cost and performance of GSR and ESR
  technology
• With business models based on continued Internet
  growth
• Many providers are depending on the added
  revenues promised by emerging IP services (e.g.,
  IP-VPNs, VoIP)
• Challenges to mass deployment of new services
• Incomplete service level interoperability and
  service assurance
• VoIP and softswitches still cannot offer full
  complement of features
• Most new IP services require new CPE/CLE
• Missing a rational migration strategy for large
  enterprise customers
• Meanwhile, IP Backbone network remains under
  utilized

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State of Carrier IP-VPN Business
Source Yankee Group

• Revenue from IP-VPN services projected to grow
• But, for example only 16 of IT managers plan
  to convert their F/R networks (representing only
  3 of locations)
• Conclusion
• Deployment is following classic
  technology-adoption curve
• IP services will take off, but not overnight
• Meanwhile legacy services revenues continue to
  grow and must be supported

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Success of Legacy Services
Worldwide Leased Line revenues
Worldwide Frame Relay revenues
21.0
18.2
15.4
12.7
10.7
Source Vertical System
Source Vertical System

• Demand for legacy services remains high
  worldwide
• IP-VPN services still lag legacy service revenues
  (913M vs. 38.8B in 2001 and 2.8B vs. 45.2B in
  2003)
• Market sustains a price premium of 30 for
  Leased Line and Frame Relay compared to emerging
  IP services (result good margins)
• Legacy vs VPN should not require an overlay
  infrastructure!

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Introducing Multiservice over IP (MSoIP)
Leased Lines
Metro-Ethernet, IP, and/or MPLS Core Network
Frame Relay
ATM
PCM Voice
IP/PPP, IP/FR, VoIP
T1/E1 ChT3/E3 Ch STM-1

• MSoIP enables any service over any IP transport
• Enables legacy services (including circuit
  emulation and TDM voice) plus emerging IP
  services
• Utilizes QoS and CoS mechanisms that are
  already installed
• Is Scalable and is becoming Standardized

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Comprehensive Set of Services

• Layer 1 and Layer 2 Service Adaptation over IP
• Leased Lines Circuit Emulation Service over IP
  (CESoIP)
• Frame Relay Emulation of Frame Relay PVC / FR
  VPN over IP (FRoIP) per FR DLCI
• HDLC Emulation of the entire HDLC frame over IP
  (HDLCoIP) used for delivering traffic such as
  IPX, SNA, X.25
• ATM Emulation of ATM PVC over IP (ATMoIP)
  per ATM VC/VP
• PCM Voice Circuit extension using CESoIP or
  DB-CESoIP (Dynamic Bandwidth CES)
• Native IP aggregation for
• IPoFR, IPoPPP, IPoC-HDLC
• Over any IP transport
• Multiservice over PoS, Multiservice over IPoHDLC
• Multiservice over Metro-Ethernet
• Multiservice over MPLS

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Generic Application
PoP/CO/CoLo
PoP/CO/CoLo
T1/E1 T3/E3
T1/E1 T3/E3
PoP/CO/CoLo
T1/E1 T3/E3
IP or IP/MPLS Backbone
TDM Access Network
TDM Access Network
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Multiservice Provisioning

• Fast, simple provisioning
• Single-box solution
• MSoIP technology scales from one E1 to multiple
  Channelized STM-1s
• Single platform for all the various service
  bundles
• Only one new platform added to existing IP
  backbone network (two hour installation in POPs
  with GigE connection)
• Leverages the advantages of managing a unified IP
  network
• Standards-based SNMP, CLI, EMS
• Easy training of craftspeople
• Open architecture facilitates integration into
  umbrella management (HPOV) and one-touch
  provisioning systems
• QoS facilitated by simply enabling DiffServ or
  802.1q at network edge (or by over-provisioning
  bandwidth)
• Result Any service _at_ any rate _at_ any location
  within 48 hours

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InTouch IP MSoIP End-to-End Assured IP
IP Backbone

• MSoIP enables all existing services to run over
  IP network, but with End-to-End Assurance of
  legacy services
• Example, use CESoIP to emulate point-to-point
  Leased Lines
• CESoIP is bit-transparent and protocol-independent
  
• CESoIP even transports clocking and
  synchronization

• MSoIP can also offer additional service
  adaptation
• Example support any-to-any connectivity for FR
  applications via FRoIP
• Another example native IP aggregation

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InTouchIP MSoIP End-to-End Assured IP
IP Backbone

• Benefits for the Operator
• Enables incremental revenues from services not
  previously supported
• Leverages capacity of IP Backbones and
  performance of GSR/Backbone Router technologies
• Enables any service _at_ any rate _at_ any location
  within 48 hours from a single, unified IP
  infrastructure
• Empowers provider to offer a migration strategy
  towards IP-VPN services
• with an opportunity to up-sell advanced services
  in the future

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InTouchIP MSoIP End-to-End Assured IP
IP Backbone

• Benefits for End Users
• Continued use of familiar services for both
  voice and data
• Same quality, reliability, security
• No change in applications or CPE
• Use of operators Ethernet and IP infrastructure
  enabling a seamless migration path to new
  services

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Status of MSoIP Technology

• Implemented and tested in top-tier vendor
  products (examples for CESoIP Ericsson, Axerra,
  RAD)
• Being incorporated into off-the-shelf Silicon
  (example Zarlink)
• Becoming standardized
• PWE3 (Psuedo-Wire Emulation Edge-to-Edge)
  originated as an informal Birds of a Feather
  group
• Officially recognized as an IETF WG in March 2001
• Examples of service-specific sub-working groups
  Circuit Emulation, SONET/SDH, Frame Relay, ATM,
  Ethernet
• All over IP and over MPLS
• General Requirements IETF Draft has been accepted
  as a PWE3 WG document
• Benefits
• Multi-vendor interoperability
• Scalability (a broad range of interoperable
  platforms)

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Axerra Family Scalability Table
Includes 16x T1/E1 or 1x T3/E3
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Business Case Studies
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Models for Attracting New Enterprise Customers

• Existing enterprise networks incur monthly cost
  using Leased Lines over TDM/SDH
• Model for todays monthly cost based on actual
  quotes from many service providers
• Pricing confirmed with various analysts and
  industry consultants
• Pricing is highly variable depending on location
  and distance
• Operators can easily attract customers with
  pricing that is 40 lower
• Note all equipment configurations based on
  retail list price
• Simple conversion rate used 1.0 Euro 1.0 USD
• Decision criteria payback of 12 months or better

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Case Study 1 E1 Leased-Line

• Network topology
• Total of 8 E1s to headquarters site
• 1 E1 from each of 8 regional sites (PoPs or
  Enterprise Locations)
• MSoIP hardware scales to support much larger sites

Enterprise Site or PoP

• Suitable for one or more multi-national
  enterprise customers with headquarters in
  Amsterdam
• All service prices are end-to-end, consistent
  with the way Leased Lines are priced
• Service to other continents will be priced even
  higher

Single E1
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Implementation with InTouch Multiservice over
IP
8
AMS
1
AXN100
1
IP Backbone Network
1
Single-port (E1) MSoIP Adapter
1
1
Enterprise Site or PoP
1
1
1

• New service edge
• Clear-channel E1s are emulated over IP using
  CESoIP
• 8 regional sites connected via single-port MSoIP
  IADs (E1 to Ethernet)
• AXN100 supports up to 16 E1 ports
• AXN100 connects to IP Backbone using GigE, FastE,
  or PoS (STM-1)

• Leverages multi-vendor interoperability of MSoIP
• Single-port MSoIP IADs are available from a
  number of vendors

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AXN Configuration and ROI Analysis

• Low start-up cost
• Price for AXN 100 includes
• Forwarding Engine with GigE Network Interface
• 8 channelized Multiservice T1/E1 ports
• 8 10/100 BaseT ports
• Chassis with redundant power supplies

AXN100 Multiservice IP Concentrator
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Case Study 2 Pan-European Multiservice

• Todays network topology
• 5 PoP sites
• Each PoP can provide multiple services to
  multiple customers
• However, old method would require multiple
  overlaid networks

3
3
3
3
3
3
3
3
3
3
Frame Relay Overlay Network
4
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Implementation with InTouch Multiservice over
IP
12
NUE
AMS
12
4
4
IP Backbone Network
AXN100
12
12
DUS
4
PoP Site
MUC
4
Leased Line E1s
12
4
Frame Relay E1s
FRA

• New service edge
• 5 sites connected via 5 x AXN100s
• Leased-Line E1s are emulated over IP using
  CESoIP
• Seamless Frame Relay service is provided using
  Frame Relay over IP (FRoIP )

• Interface to IP Backbone using PoS (STM-1) or
  GigE
• Each network interface can be configured for
  flows to one or multiple destinations

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Example PoP Configuration
Enterprise Router
IP Backbone
PABX
GigE, FastE, or PoS
E1/FracE1

• Any E1 port or DS0 channel can be configured to
  deploy
• Leased-Line service
• Frame Relay service
• HDLCoIP service
• Native IP aggregation service
• Result additional revenue opportunities!

• Up to 16 E1 ports on each AXN100
• Other AXN platforms scale to support much larger
  sites

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AXN Configuration and ROI Analysis

• Price for each AXN 100 includes
• Forwarding Engine with GigE Network Interface
• 16 channelized Multiservice T1/E1 ports
• 8 10/100 BaseT ports
• Chassis with redundant power supplies
• Result a flexible, multiservice revenue generator

AXN100 Multiservice IP Concentrator
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Application OpEx Savings for GSM Operators
MSC-MSC and MSC-PSTN
BTS
PSTN
EO
MULTIPLE T1/E1s
CESoIP
SONET/SDH
MSC
BTS
EO
MSC
MULTIPLE T1/E1s
UNIFIED IP or IP/MPLS NETWORK
EO
EO ILEC End Office
(or BSC in GSM Networks) BTS
Base Transceiver Station MSC Mobile
Switching Center
MSC
BTS
EO
Last-Mile Solution

• Axerra MSoIP platforms furnish
• Carrier-class redundancy
• Scalability to support up to 192 E1s or 12
  Channelized STM-1s
• Details available at info_at_axerra.com

• Two distinct opportunities on one slide
• MSC-MSC interconnect
• Last-mile over wireless Ethernet
• Offers a dramatic reduction in monthly recurring
  costs!
• Why IP? IP-based infrastructure is ready for 3G
  migration

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Benefits of MSoIP to the Enterprise

• Provides same End-to-End Assurance as Leased
  Lines
• Furnishes compatibility with applications and
  protocols already in use by the enterprise
• Supports both voice and data traffic requirements
• Furnishes compatibility with CPE already
  installed
• Enhances network flexibility
• Can be a dramatic reduction in monthly recurring
  costs

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Benefits of MSoIP for the Operator

• Furnishes new services to drive incremental
  revenue streams
• Enhances ability to capture new customers no
  new CPE and no changes to the enterprise
  applications
• Leverages service providers lightly utilized IP
  backbone network
• Enables any service _at_ any rate _at_ any location
  within 48 hours from a single, unified IP
  infrastructure
• Enables the offering of a smooth migration to
  value-added IP VPN services

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Thank You