Tellabs Inspire Magazine: The Swiss Confederation

article reprint — TELLABS INSPIRE apRil 2008

The Swiss Confederation Fresh off the launch of 7.2 Mbps HSDPA, Swisscom sees 3G as an opportunity to launch a unifying network strategy. By Raymond Conway

The

Swiss Confederation

Fresh off the launch of 7.2 Mbps HSDPA, Swisscom sees 3G as an opportunity to launch a unifying network strategy.

Kurt Schmid, head of Swisscom’s wireless access platforms business

For Kurt Schmid, head of the wireless access platforms business at Swisscom, the migration from 2G to 3G is much more complex than just deploying new infrastructure. In a country perhaps best known for the accuracy of its watches, it should come as no surprise that Swisscom would focus not only on the big picture, but the smallest of details as well. The result will be a network that can shoulder the enormous load of bandwidth-intensive 3G services without sagging under the weight of too much OpEx and CapEx. For now, the 2G network and services of Swisscom — a carrier with more than 5 million customers — remain the company’s “cash cow,” according to Schmid. However, Swisscom already reaches about 90 percent of the population coverage in Switzerland with its UMTS network and has HSPA (both HSDPA and HSUPA) coverage throughout much of the country. Most users have mobile Internet access at up to 3.6 Mbps, but the carrier is now in the process of launching 7.2 Mbps access. Although HSDPA at 3.6 Mbps is competitive with DSL, doubling mobile broadband bandwidth will give Swisscom an advantage in the marketplace. Yet as competitors race to upgrade to 3G, a fundamental question looms: What will customers do with all that bandwidth?

Schmid readily admits how difficult it is to predict customer behavior. “What it comes down to is that we don’t know how the customer will behave,” he said. “We are getting our feet on the ground with all of this. Behaviors are different from country to country.”

Give and Take Recent shifts in usage offer clues as to what the future might hold. “We are seeing bandwidth demand growing on the HSPA network by a factor of three [in] the last 10 weeks,” Schmid said in late January. “We’re about to do 7.2 Mbps, and we are finding that as we roll out more bandwidth, the use of mobile data services increases. Right now, they can have the same experience with broadband service that they get in the fixed environment, and they are finding uses for it. There is reason to think this will continue with 7.2 Mbps.” This trend provides some comfort for incumbent service providers entering new territory. Like many mobile carriers, Swisscom became accustomed to predictable, annual 2G growth in subscribers and voice minutes. Now, in the era of mobile content applications, Swisscom is banking that some of its growth will come from thirdparty applications such as Napster MobileTM, which the company launched last summer. Users have access to more than 3 million tracks that can be downloaded directly to handsets.

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“Coverage everywhere — in trains and tunnels — is a commodity. Swisscom’s differentiation is quality,”

with higher data-rate ceilings also required rethinking its approach to overall network management, backhaul transport of increasing amounts of traffic, as well as new traffic types. “Bandwidth limitation in cellular networks is not just in the air interface, but in the backhaul portion too, and both factors must be addressed,” Schmid said.

Kurt Schmid, Bern, Switzerland

Swisscom relied on Tellabs to help address the broader network transition prompted by the move to 3G. Investing in Ethernet as a new backhaul solution was a major step in that transition, and it came after much discussion between Swisscom and Tellabs, according to Karl Erben, executive account manager for Tellabs. “We had been working with Swisscom for 10 years, had regular meetings with them and talked to them extensively about this kind of change,” Erben said. “They wanted to reduce transmission costs. They wanted to do that for the 2G services they already had, and we also talked to them about focusing on reducing the costs to support 3G because we knew that was coming.” In the 2G world of predictable bandwidth usage patterns, leased lines such as T1s and E1s have been the traditional mode for mobile traffic backhaul. The main advantage of TDM circuits is their reliability. The main disadvantage is expense: At hundreds of dollars per line per month, they can account for 30 percent or more of a wireless carrier’s OpEx. Another drawback is that leased-line TDM doesn’t scale cost-effectively as backhaul loads increase. E1s could also take weeks or longer to install, depending on the supplier, and once a carrier adds a new E1 circuit, it is paying for excess capacity until bandwidth growth fills the pipe. “The cost to add that backhaul bandwidth by adding more E1s is prohibitive,” Erben said. “It’s also too cumbersome to provide so many E1s in so many cell-site locations when you start to need more than a couple for every cell site.” These drawbacks have prompted Swisscom and other mobile carriers to view Ethernet as the solution with the scalability and flexibility necessary to handle 3G’s increasing but unpredictable growth. Ethernet is a much less expensive and more flexible technology to work with, supporting high-bandwidth scalability that can be brought online incrementally, with carriers paying only for what they use.

“Everything is an experiment now,” Schmid said. “We were so spoiled by our own success before. Napster Mobile is an example of what customers will do with 3G music downloads and is the type of service every operator has to support now. The customer does not want to wait tens of minutes for it; they want it more or less immediately.”

“For years we observed the situation with Ethernet technology, and we knew we could no longer wait,” Schmid said. “We had to evolve a flexible way to react to the growth in air interface bandwidth to 7.2 Mbps.”

Paradigm Shift

The Pseudowire Transition

As customers find new uses for 3G devices and establish new patterns of bandwidth consumption, Swisscom watches closely for the changes these trends will have on network and service quality. “Coverage everywhere — in trains and tunnels — is a commodity. Swisscom’s differentiation is quality,” said Schmid. “There’s a very high level of customer expectation.” As the carrier migrated to 3G, it recognized that the upgrade to a next-generation access technology

Despite the growing popularity of data services, the additional voice spectrum 3G provides remains a key benefit to network operators. But voice also happens to be Ethernet’s one perceived weakness. Combine this with the large numbers of existing 2G and 3G base stations that do not yet support Ethernet, and leaping directly from TDM to IP and from ATM and SDH gear to Ethernet isn’t an immediate jump many carriers want to take.

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That’s where Pseudowires come in. This standardized technology enables TDM traffic, such as voice, to be emulated over an IP network. It’s an increasingly popular interim approach to mobile backhaul that allows operators to make the most of their base station investments, while backhauling data and content traffic over Ethernet. “We saw Pseudowire as the hybrid approach to keeping more than one or two leased lines at a cell site,” Schmid said. “We keep the voice traffic on the traditional TDM E1s, and go into the IP world step-wise by keeping the high-speed traffic separate. It’s a smooth transition to all-IP backhaul.” This hybrid solution allows Swisscom to introduce IP into its network while avoiding further investment in non-IP equipment, such as ATM switches and SDH infrastructure. “An ATM switch is not futureproof,” Schmid said. “It’s expensive. Our future will be fully based on an IP core with metro Ethernet access.” Erben said TDM Pseudowire-to-Ethernet is just the solution some carriers need to embark on a major backhaul overhaul. “Carriers do not want a quality trade-off for moving to the scalability and flexibility of Ethernet, nor do they want to replace much of their existing base station equipment,” he said. “You need a technology that is able to translate those interfaces, and that is why you do Pseudowires.” Some of Swisscom’s competitors opted for SDH infrastructures and leased lines or microwave for backhaul, Schmid said. The hybrid approach gives Swisscom the edge in flexibility and cost savings that translates into more efficient response to customer demand.

Profitable Growth, Bit by Bit Some carriers are also concerned about how the move from 2G to 3G will affect profitability of their services portfolio. Will it decrease as they invest in each upgrade, from 3.6 Mbps to 7.2 Mbps and eventually up to 14.4 Mbps? According to Erben, that may be the case if operators don’t take steps to ensure the commercial viability of mobile data services. Swisscom addressed the issue in its backhaul migration strategy by selecting the Tellabs® IntegratedMobileSM Solution, which is designed to adjust to new traffic demands in a step-wise fashion while mitigating service profit erosion. Tellabs worked with its Swiss channel partner, Miracom, to deliver several network elements into Swisscom’s network, including the Tellabs® 6300 Managed Transport System, the Tellabs® 8100 Managed Access System and the Tellabs® 8600 Managed Edge System, which includes the Tellabs® 8660 Access Switch and the Tellabs® 8605 Edge Switch.

“The Tellabs IntegratedMobile solution was designed to help carriers move from 2G to 3G while making sure current services remain profitable and that new services are generating revenue,” Erben said. “When investment goes for new technology to deliver more bandwidth, revenue does not keep that pace of growth. We want to break that linear relationship between bandwidth and cost, and revenue per bit.” For Swisscom, deployment of the Tellabs 8600 series represented a key piece of the puzzle. The Tellabs 8605 switch operates as a cell-site aggregator that separates TDM voice traffic from IP data and content traffic, and the Tellabs 8660 switch enables an efficient traffic handoff to the RNC. Meanwhile, the Tellabs® 8000 Network Manager is capable of managing the Tellabs 8600 switch, Tellabs 8100 system and Tellabs 6300 system. “We now have the Tellabs 8100 system, the Tellabs 6300 system and the Tellabs 8600 series deployed, and the Tellabs 8000 manager managing all three systems,” Erben said. “Swisscom liked that capability to have one system manage all three because they didn’t need to retrain people on a new system or integrate it into their proven OSS landscape.” “We needed an upgraded network management system for this new structure, and Tellabs has a very operator-friendly network management system,” Schmid said. Swisscom technicians were already familiar with the equipment, which made for a smooth transition. The Tellabs solution proved better than those from several notable vendors, and Schmid said the battle between vendors was a competitive one. “We did our trials, and the products and the services supporting the products were what convinced us.” Erben added that Swisscom’s diligent evaluation of the Tellabs gear also helped the vendor incorporate new attributes into its roadmap of system capabilities. Some of the Tellabs 8605 switch’s unique features have been shaped by this process. The next step for Swisscom could be backhaul of its voice traffic over Ethernet, as well. Schmid is prepared for this eventuality, but Swisscom remains cautious when planning for the future. Moving traffic to Ethernet, he said, is “one more step toward an all-IP network. But IP is an evolution, not a revolution. It has lots of advantages, but it is also a tricky technology. When you can compare IP service quality to TDM service quality, that will be the right time to go all-IP.”

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article reprint — the swiss confederation

Acronym ADSL Asymmetric Digital Subscriber Line ANSI American National Standards Institute ATM Asynchronous Transfer Mode CapEx Capital Expenditures DSL Digital Subscriber Line ETSI European Telecommunications Standards Institute G.SHDSL Global Standard High-Bit-Rate Digital Subscriber Line HSDPA High-Speed Downlink Packet Access HSPA High Speed Packet Access (Uplink & Downlink)

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IP Internet Protocol OpEx Operating Expenditures OSS Operations Support System RNC Radio Network Controller SDH Synchronous Digital Hierarchy SLA Service Level Agreement TDM Time Division Multiplexing UMTS Universal Mobile Telecommunications System 3G Third-Generation 2G Second-Generation

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