Solution Brief Nortels New Voice Core for GSM and UMTS

Wireless Next-Generation 3GPP Bearer Independent Core Network Solutions It is clear that the global market for wireless services is rapidly commoditizing and this is the primary problem facing the industry today. Traffic volumes and their associated variable costs continue to increase, while the real price per bit continues to fall. The challenge for wireless operators in this 21st century commodity market is simple: How to stay in business?. Clearly operators must look at reducing their cost base for both the cost per subscriber and the cost per bit of traffic handled. However, with traffic levels continuing to grow, operators must also make sure that they can continue to scale up these operations without adding extra costs back in through additional growth-related complexity and inefficiency.

Introduction
Global wireless markets continue to grow at a breakneck pace for both subscriber numbers and for minutes of use. With 80 percent of the worlds population already under wireless coverage, the milestone of half of the worlds population using wireless services is already within reach. There is no reason to believe that this growth will not continue as handset prices and market tariffs continue to fall. However, the average revenue per user is at best flat in developed but still growing markets, declining in saturated markets and starting at already low levels in emerging markets. Traffic volumes for voice services continue to increase, driven by an ever-declining price per minute of use (see Table 1). Growth is always a good problem to have and it is certainly better than the alternative, but it can be just as challenging to cope with.

Wireless businesses, made simple

There are two key objectives for the Voice Core that must be met in a commodity market that is driving up ever higher traffic volumes at an ever lower price. First, the Voice Core must scale up to support massive traffic volumes and secondly, it must do it at a much lower cost for the operator. Even so, both of these objectives must be met without compromising the fundamental service expectations of quality and availability for wireless telephony. Voice and text services globally must continue to meet established benchmarks for service availability, call completion and quality. For Nortel this means combining the

2001 (mid) Monthly minutes of use Effective price per minute 350 $0.169

2005 (mid) 678 $0.081

Table 1. Declining wireless price per minute fuels wireless substitution (Source: Yankee Group 2005 North America Wireless/Mobile Carrier Tracker)

best technology of the old world and the best of the new to provide wireless Voice Core equipment which is fit for the 21st century. Consequently, Nortels new Voice Core addresses the problem by providing the ability to scale up network capacity without adding in unnecessary network complexity. It also provides the ability to simplify network operations and gain economies of scale without compromising the networks reliability and the revenue streams that depend on it. There is little point in lowering your cost base if it also means reducing your ability to do business at all. The key market requirements for the Next-Generation Voice Core can now be summarized as follows: Fewer, higher-capacity (but much more scalable) network elements and interfaces A much simpler and much more efficient network architecture Consistent operational processes for all service types delivered on one network Differentiation to defend against further commoditization of the service No compromise on product reliability

this to be possible though, the interfaces that connect these nodes together also have to scale up. Instead of using many low-capacity connections between many low-capacity nodes, next-generation networks use fewer but higher capacity connections between fewer highercapacity nodes. This is the fundamental principle that makes a next-generation network simpler (see Figure 1). Packet technology is what makes this possible as the problem of scalability using packet has already been solved. To illustrate this point, the combined voice traffic from the worlds largest wireless networks could theoretically pass through a single modestly-sized packet switch with ease. Packet network interface technology also scales such that the combined voice traffic from an entire wireless network could be carried by a single packet interface. Clearly the problem of capacity, scalability and network simplification is addressed through the use of packet technology for the wireless next-generation core network. Nortels wireless next-generation technology has been specifically designed to address this issue with the ability to scale up and down accordingly. Nortels MSC Server, Media Gateway and HLR products all utilize a blade-based architecture designed to scale simply by adding more blades. In this way, the number of nodes in the network can be optimized to achieve the most cost-efficient solution for an operators specific circumstances. Efficiency gains from this solution can be achieved in a variety of ways. Naturally, the consolidation of equipment can produce a wide variety of savings ranging

from floor space through to the number and variety of spares that have to be held. Similarly, operational costs can be reduced through optimal traffic routing and the consolidation of traffic onto fewer, more efficient transmission links. The range of possible cost savings and efficiency gains as a consequence of network consolidation are extensive, but operators should understand that not all of these will always be applicable to their specific circumstances. Nortel can help with the development of a business case tailored to an operators own circumstances.

Efficiency and operational consistency

One of the differences between the traditional PSTN and alternative wireless services is that for many people the PSTN is still a single service proposition, whereas wireless services are steadily becoming more and more diverse. The range of services that are being provided by the same wireless operator, over the same handset and billed onto the same bill, already include many fundamentally packet-based applications in addition to wireless telephony. This means that the wireless operator has a traditional circuit switched network running in parallel with the packet-based network used for packet services. Obviously running multiple overlay networks has implications for the cost of ownership and for the cost of operation. Consequently, it is a natural progression for multi-service wireless operators to consolidate all of these services, including

Capacity, scalability and simplicity

The fundamental problem with traditional TDM circuit switched technology is that there are real limits to how scalable these products can be made. Of course, it is possible to improve on anything, but by how much? With traditional circuit switching, once you reach the limits of that scalability, the only way to increase your network capacity is to add another switch, and then another and then another Ultimately this leads to a complex and expensive meshed network where every switch is connected to every other. The only alternative to this is to add another layer using transit switches, adding further cost and complexity and whats more, for no additional revenue earned. However, if a switch could be made to scale, then you wouldnt need to keep adding more and more nodes you could scale network capacity simply by making the nodes themselves larger. For
2

Figure 1. Consolidation through scalability leading to simplification and efficiency

Wireless Telephony, onto a single common packet-based infrastructure. One common network type using one common maintenance process with one common network management solution obviously has significant cost efficiency potential compared with multiple overlay networks (see Figure 2). However, this is not just about achieving cost efficiencies. A common network infrastructure also has consequences for the services that run over it. A common network means that all of the services using it can apply consistent operational processes for all of the underlying mechanisms such as quality of service and network availability. This means that an operator can apply the same business process to support quality of service for wireless telephony as it uses for other packet-based services. This has significant implications for the simplification of business processes within network operations but it also means that an end user can expect to see consistency of experience between the services that are provided from their network operator. With the introduction of further multimedia applications and their integration with traditional wireless telephony services, the implementation of consistent operational processes will become essential for the delivery of many of these new applications.

Packet management Packet services TDM signalling TDM transit TDM switched Enterprise data Common packet network

Figure 2. Consolidation of multiple overlays for operational simplification

analog AM and FM radio to digital audio broadcasts and podcasts. Video entertainment has gone from monochrome to color, from video tape to DVDs and from CRT televisions to high-definition flat panel screens. Yet when we look at telephony, how much has it really changed? One of the main reasons behind the longevity of narrowband audio in telephony has been the need to maintain interoperability between the huge installed base of legacy terminals and consequently, little need to handle anything other than narrowband speech using traditional circuit switches in the core network. However, next-generation technology is not limited to narrowband constraints and as wireless penetration rates soar and handsets are routinely upgraded, this limitation is no longer true. There is clearly a substantial latent need for service differentiation in wireless telephony. Nortel has addressed this problem with the introduction of the wireless nextgeneration network through the widespread application of voice quality improvement features. Nortel is a leader in the development of this technology with a wide range of Nortel-patented features already implemented in the current range of wireless next-generation networking equipment. If youd like to know more about this, about what well be doing next and how it can help you to differentiate your business, then just ask.

Reliability
An interesting aspect of human nature is the tendency to be excited by some things but bored by others. Exciting things often get our attention but boring things often dont. So much so that we are often quite content to let the boring things take care of themselves. That is, until something goes wrong, of course. When that happens we are outraged that no one took care of the boring thing. How could it possibly happen that the boring thing could be allowed to go so badly wrong, we ask ourselves? Users of some rarely used services may not even notice if the service is not available but they will notice if telephony isnt available. It has become so much a part of daily lives that users take it for granted that it is always there and can be appalled if it isnt. These things do always seem to happen at the worst possible time! Of course, users also dont really care if there was a good reason that it didnt work. It isnt even a good reason that new products or new technologies have to be introduced, even if theyre there to make things better for the user. Thats what they pay us for, they say. So of course somebody had better take care of the boring thing reliability. Even the most pessimistic forecasts show that the vast majority of operator revenues will continue to come from ordinary wireless telephony and for the foreseeable future. Naturally, the loss of any of

Service differentiation
Many parallels can be drawn between different industries for service differentiation, but in this respect telephony stands out as a monument to uniformity. Naturally, if the service that you provide is exactly the same as the service that is provided by all of your competitors, then the only thing left to compete on is price. Of course, this can only lead to the commoditization of the service as we have seen. However, if we look at other industries, the application of new technologies to drive service differentiation has been a key competitive battleground. Over the past century the music industry has gone from wax cylinders to vinyl records to compact cassettes to compact discs to MP3 downloads, from

this revenue while the network isnt available will also be noticed by your chief financial officer and can lead to all sorts of excitement. So when we want to introduce wireless next-generation networks, for all of the good reasons that we have talked about already, it still has to be reliable and the end user really shouldnt notice until you make things better for them. Nortel has been working on the boring things for quite a while, because we actually get quite excited by reliability. The software that drives our next-generation MSC Server is the same software that has been running stably on thousands of switches for years. Nortels media gateway technology started out in 1999

and now Nortels fourth-generation gateway technology is being applied in wireless. The benefit of many thousands of gateway shipments and from thousands of cumulative years in service combine in this technology to double the products reliability compared to the previous version. Nortels new softswitch platform used by both the GSM/UMTS MSC Server and HLR products has been no exception. This new Advanced Telecommunication Computing Architecture (ATCA) technology has already had the boring treatment from top to bottom. Nortels second-generation ATCA technology has been specifically hardened for operation and serviceability in the telecoms market, to create a truly hard softswitch.

Summary
Like it or not, things change. Your PC will eventually have to be upgraded. That great new car will eventually have to be replaced. Do you just buy the same model again or do you see whats new? We think that when the time comes for a better Voice Core, youll need one that works harder to keep you in business and that makes your life simpler and easier each day. After all, your customers are only going to get more demanding and your competitors are only going to get tougher. If this is what youre thinking too, then well be happy to tell you more about how we can help.

Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the worlds most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the worlds greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For more information, contact your Nortel representative, or call 1-800-4 NORTEL or 1-800-466-7835 from anywhere in North America. Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks. All other trademarks are the property of their owners. Copyright 2006 Nortel Networks. All rights reserved. Information in this document is subject to change without notice. Nortel assumes no responsibility for any errors that may appear in this document.

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