"How do I enable my network to deploy IPTV?"
This question is keeping wireline service providers awake at night-and for good reason. From a strategic perspective, they are facing a rising tide of competition in their core voice businesses the likes of which they have never seen before. Wireless has already cut deeply into their voice minutes, and now the next generation of voice customers is spurning the wireline phone altogether and replacing it with wireless service.
The emerging threat of voice over IP (VOIP) may be more devastating. Competitive service providers such as cable operators provide a truly competitive and attractively priced wireline alternative, potentially severing a large percentage of customer relationships and eroding traditional margins. Against this backdrop, IPTV emerges as a powerful opportunity. Not only is IPTV a competitive weapon against the cable companies, it can also provide substantial new revenue streams and much "stickier" customer relationships.
The IPTV opportunity may sound promising, but the network architecture and capacity challenges can be daunting. A competitive broadcast lineup of approximately 150 channels requires at least an OC-12 or Gigabit Ethernet (GE) backhaul. As emerging services such as video on demand (VOD) and HDTV become increasingly important, the need to support multiple individual streams to the home may require multiple OC-48 or multiple GE connections worth of backhaul bandwidth. This is substantially more capacity than most networks, or legacy network equipment for that matter, can handle.
Then there is the challenge of getting the necessary bandwidth to the home. With today's encoding technologies, a typical home requires approximately 10-12 Mbps of dedicated bandwidth to deliver at least three discrete standard-definition video streams-independent of any high-speed data service requirements. With the proliferation of HDTV and multi-megabit high-speed data services, bandwidth requirements to the typical home will soon reach 18-24 Mbps. Attaining these speeds will require service providers to push fiber much deeper into the network-anywhere from 8,000 feet from the home today to potentially less than 4,000 feet in the future, or perhaps all the way to the home. |
In any event, the wireline service provider network needs to be dramatically transformed to support IPTV-copper to fiber, narrowband to broadband, and circuit to packet. Given that this transformation is no longer a question of "if" but a matter of "when," wireline service providers must address a more fundamental question: how do they facilitate this transformation while maintaining fiscal responsibility, continuing to support legacy services, exploiting technology innovation curves, and maximizing return on investment? Determining the right answer is critical, because getting it right can mean the difference between long-term sustainable success and near-term failure. The reason? Not only are wireline service providers transforming their networks, more importantly they are also enabling the transformation of their services model, and ultimately their business, from that of a voice-centric carrier to an integrated information, communications, and entertainment (ICE) service provider.
IPTV and Voice: Disparate Services Benefit from Integrated Planning
Proper strategic planning of this network and services transformation is critical for long-term success. High-bandwidth services such as HDTV are driving the need to implement new outside plant
(OSP) architectures such as fiber to the node (FTTN) and fiber to the premises
(FTTP). Simultaneous trends in less bandwidth-intensive but widely used services such as voice may have crucial implications for how this transformation is executed.
For example, wireline service providers will likely transition voice services from 64 Kbps TDM services to VOIP for operational and cost efficiency reasons. This transition will typically occur in two stages. First, many wireline service providers will begin to offer second and third voice line services by deploying VOIP internet access devices
(IADs) that work with high-speed internet service at the customer premises. VoIP will allow wireline service providers to compete with AT&T
CallVantage, Vonage, Skype, and cable operators while maintaining lifeline POTS as a primary voice service.
As the competitive voice pressure from wireless, non-facilities-based competitors and cable operators increases, loss of POTS share |
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will become inevitable, and price pressure to retain customers will squeeze voice margins. As this happens, the on-going operational cost of maintaining underutilized Class 5 TDM voice switches will drive a desire to both decommission the switches and collapse multiple Class 5 switching offices into a single softswitch central office. The result: H.248 softswitch controller signaling will convert legacy POTS delivered over copper and fiber access to VOIP.
Prudent wireline service providers will thus anticipate and plan for the need to terminate legacy POTS on central office and/or remote terminal platforms with a media gateway function that can convert
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POTS to VOIP. An FTTN overlay, a popular deployment model for service providers pursuing IPTV, will require a product with a voice gateway processing function that converts POTS to VOIP. Standalone equipment or multiservice packet access platforms can provide this function.
Simplifying Network Transformation: Basic Equipment Requirements
Access platforms designed and optimized for network transformation need to snap cost effectively into legacy access networks and facilitate the move from circuit to packet, narrowband to broadband, and copper to fiber. Ideal access platforms should have the following characteristics:
1) Protocol agnostic: the platform should be able to support legacy protocols today while being fully capable of operating as a native packet-switch access platform in the future.
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2) High capacity: in an environment where HDTV, on-demand services, and multi-megabit high-speed data services proliferate, the backbone must support in excess of a hundred gigabits per second.
3) Flexible: the platform must support multiple deployment scenarios and an access continuum; service providers should be able to seamlessly replace copper connections with fiber connections and even support hybrid copper/fiber service from the same chassis.
In addition, wireline service providers should make sure their vendors can provide reliable and proven network transformation solutions.
Network Transformation in the Real World
Ringgold Telephone in Ringgold, Georgia, which is located on the outskirts of Chattanooga, Tennessee, and Pioneer Telephone in Kingfisher, Oklahoma, outside of Oklahoma City, are typical rural incumbent local exchange carriers
(ILECS). And both are already well along the transformation path. Formerly copper-based providers of basic circuit-switched voice services, in a few short years they have become advanced providers of packet-based voice, video, and data services. For each, the writing was on the wall-they had to find new ways to grow their businesses. Like many independent telephone companies around the country, they saw their access line counts affected by competition and technology changes. Not seeing any growth in their core businesses, both ILECS had to look at other services to continue to make their networks viable and profitable.
In 2003, both companies purchased multiservice packet platforms to launch the triple play of bundled voice, video and data services in their legacy networks. Within about two years, both companies have leveraged their copper infrastructure, their customer relationships, and their powerful multiservice access platforms to deliver not only high quality voice and multi-megabit data services but also more than 165 channels of national and local digital programming, interactive features such as video on demand
(VOD), and high-value converged applications such as on-screen caller ID.
Customer response to Ringgold's "NexTV" integrated services offering has been tremendous; the ILEC currently has more than 1,500 IPTV subscribers, representing about 30 percent of homes the service passes. Pioneer has nearly 3,000 IPTV subscribers, and the company is now turning up over 100 new IPTV customers a week. Today, Ringgold and Pioneer are the predominant providers of broadband and entertainment services to their respective communities. Both have found that adding advanced services such as IPTV to their portfolios has increased the penetration of all ILEC services, leading to greater revenue and greater customer satisfaction. As the companies continue |
with their network transformation plans, they will push fiber deeper into their networks-in some communities all the way to the customer premises.
Meeting Today's Demands and Tomorrow's
Many factors influence the rate and timing of network transformation-competition, service demand, economies of scale, technology cost, and internal issues such as depreciation, capital management, and opportunity cost. For example, in many new-construction environments technology and opportunity costs dictate that many service providers will go directly to
FTTP. Wireline service providers need to view this transformation as a natural continuum, carefully selecting platforms that will let them make incremental changes without having to throw away too much legacy equipment or restart the transformation too often.
The service and network requirements of tomorrow will require access solutions with multiservice, multiprotocol packet architectures that are flexible enough to support legacy networks, facilitate the deployment of an advanced packet-based network infrastructure, and provide a clear migration path toward a pure-IP service delivery future. Multiservice packet platforms meet these requirements, allowing wireline service providers to proactively address the competitive marketplace while mitigating the risks of equipment obsolescence.
In today's competitive environment, failure to establish broadband connections with customers may mean surrendering not only potential revenues from high-speed internet service but also potential revenues from VOIP and other broadband-enabled communications and entertainment services. The ultimate result of transforming a traditional communications service provider into an integrated communications and entertainment services provider will be a broader portfolio of services, stronger customer relationships, and a network prepared to handle whatever challenges tomorrow brings. |
