More Capacity, More Intelligence are the Critical Requirements for Service Providers Worldwide

June 11, 2004

By Jason Deign, News@Cisco

In February last year, Canadian surgeon Dr. Mehran Anvari stepped forward to perform a routine anti-reflux operation on a patient - and made medical history.

In scenes straight from science fiction, the founding director of the St. Joseph's Healthcare Hamilton Centre for Minimal Access Surgery in Ontario carried out the whole procedure on a patient lying nearly 400 kilometers away at North Bay General Hospital.

The operation, dubbed the world's first hospital-to-hospital telerobotics assisted surgery, was notable not just because it highlighted the potential of remote working to extend the reach of expert healthcare to far-flung populations in Canada and elsewhere.

Within IT circles, it also served as a powerful demonstration of the types of highly-advanced applications that telecommunications service providers are being asked to support on their networks, increasingly based on IP technology from Cisco Systems®.

In his ground-breaking operation, carried out in association with a team at North Bay General headed by Dr. Craig McKinley, Dr. Anvari used a Computer Motion ZEUS® Surgical System connected not to a hospital network but to a VPN from Bell Canada.

This may seem like a far cry from a service provider's traditional fare of voice call minutes and basic data, but companies such as Bell Canada have experienced a sea change in their operations over recent years.

A long and well-documented fall in the profitability of basic connectivity-only service provider offerings have forced them to look at creating new services, generating new revenue streams and at reducing the costs of running their networks.

IP/MPLS-based networks

Happily, these objectives can be achieved by switching from traditional network infrastructures, based on technologies such as Frame Relay or ATM, to converged networks based on IP.

This makes it easier to carry different types of traffic over a single network, reducing the complexity of service provider operations and therefore their costs, while at the same time increasing the level of flexibility available to develop new services.

As a result, the last few years have seen a wholesale migration towards IP within the service provider sector. Bell Canada has stopped selling Frame Relay-based services and has committed to moving all its existing circuits to IP over the next three years.

The company's main competitor, TELUS Corp, meanwhile, has already moved all of its national long-distance traffic from time-division multiplexing (TDM) circuits to IP, using a Cisco next-generation network. And the phenomenon is not limited just to Canada.

Besides providing savings, IP provides the network with increased intelligence. One example of this is that packets of information can be inspected by routers and switches and then assigned a priority depending on their value to a business.

In practice this means that top-priority traffic can be assured of always arriving on time while low-grade information can be sent by the most cost-effective route, providing a combination of quality and cost-efficiency that is ideal for value-added services such as virtual private networks (VPNs).

IP VPNs

VPNs are currently big business for service providers. The Yankee Group says carriers believe transactional data from enterprise systems connected to IP VPNs will be the primary driver of core traffic growth among enterprise customers over the next five years.

In Canada, for example, the market for IP VPN services is growing at approximately three times the rate of the data market, while demand for Frame Relay and ATM is decreasing for the first time.

Bell Canada uses a Cisco IP Multiprotocol Label Switching (MPLS) VPN as the foundation for hosted telephony services.

And Lui Fogolini, service provider operations director for Cisco in Canada, says IP MPLS VPNs are one of the main technologies underpinning telecommunications suppliers' success in the country, along with managed services and next-generation networks.

Down in Latin America, "Projections indicate that IP VPNs will enjoy higher revenues than Frame Relay networks within the next three years," says Carlos Carnevali, who manages the Cisco managed services program in the region.

"The main reason is that when migrating to IP VPNs, companies can consolidate their contracts with a lower number of service providers, which helps them to cut costs and simplify the support, monitoring, and payment aspects of managing a network."

Valuable as they are, though, IP VPNs are far from the only new source of revenue that service providers are moving towards. IP telephony, wireless networking, managed services, security and video transport are all examples of applications that are increasingly yielding important profits.

But of all the technology developments currently having an impact on service providers worldwide, perhaps the most important is broadband.

Broadband access

Research from The Yankee Group ('Service Providers Define Requirements for Next-Generation IP/MPLS Core Routers') indicates broadband access will account for 34 percent of overall wire-line IP/MPLS core traffic growth in the next five years - more than any other type of service.

According to the analyst group, residential DSL subscriber-ship is poised to reach a five year compound annual growth rate of 30 percent, eclipsing 140 million users worldwide in 2007, with Asia-Pacific accounting for approximately half of this total.

More than a simple telecommunications access technology, broadband is being feted by service providers, governments and industry alike as a cornerstone of regional productivity and competitiveness everywhere from ScandinatM/&$@8VQAAustralian outback to Mongolia.

In Europe, government-backed moves to promote broadband adoption have gone as far as to create an entirely new category of service provider, exemplified by operators such as FastWeb or Lyse Tele.

These use broadband, frequently delivered over a Metro Ethernet network connected to an optical backbone, as the foundation for the delivery of a wide range of telephone, Internet and video-based services to consumers.

Broadband is also top of the agenda for traditional service providers in Europe and elsewhere.

In Spain, for example, the national carrier, Telefónica, has announced that it is about to complete a wide-scale upgrade of its RIMA IP network in order to provide better and more reliable broadband services based on Cisco Systems technology.

The company will deploy TR-059-compliant Cisco 10000 Series routers in every one of its points of presence in Spain.

With support from Cisco's Professional Services division, Telefónica is completing the transition in ten weeks at minimal cost and without any interruption in its DSL service.

"With demand for our residential and business-oriented converged broadband services growing at a rapid pace, year over year, we needed to move to a high-density, multi-service platform," said Enrique Carrsacal, senior vice-president of Infrastructures at the company.

"This migration to the newer Cisco 10000 broadband aggregation device allows us to offer more services to more customers with higher performance and better reliability."

Whether delivered by new arrivals or established telecommunications giants, it is clear that mass-market broadband is now a 'must-have' for a growing number of developed nations.

Telefónica's experience demonstrates that broadband has a price, however: it demands greater network capacity and network intelligence than anything service providers have been called upon to deliver before.

And perhaps nowhere is this clearer than in Japan, one of the world's leading territories in terms of broadband adoption.

There, the country's Ministry of Public Management, Home Affairs, Posts and Telecommunications is already consulting on how to deal with a predicted 1,024-fold increase in data communications over the next decade.

Japan has more than 14 million broadband subscribers, including 10.5 million on ADSL, 2.5 million on cable and 1 million on Fiber to the Home (FTTH). These figures are increasing by 370,000, 50,000 and 80,000 users a month, respectively.

This growth led Nikkei Sangyo Shimbun to report in March this year that: "The rapid advance of broadband connections will lead to the amount of Internet traffic exceeding capacity of the lines it travels over."

The paper quoted an NTT analysis as saying that the total traffic for Japan's three largest Internet exchanges would exceed 4 Terabits per second in a few years.

In the meantime, however, Cisco is adding significant capacity and intelligence to its network platforms, to allow service providers to cope with the demands of their changing markets and the explosion of bandwidth which will feed into the core of the service provider network.

The company's latest product announcement, the Cisco Carrier Routing System (CRS-1), has been specially designed with service providers in mind and represents the pinnacle of carrier routing technologies.

One of the fruits of an annual US$3 billion investment in research and development, the CRS-1 runs 40Gbit/s single-port OC-768c interfaces and features a modular version of Cisco IOS® software in a scalable, multi-shelf format.

It can support 640Gbit/s of system capacity and is scalable to multi-terabits through chassis interconnection. The modular IOS software means different router features are compartmentalized and can be upgraded individually without affecting others.

The CRS-1 is built to support not only today's service provider networks, but also those of tomorrow, giving operators all the network intelligence and capacity they could need for broadband as well as a myriad other value-added services into the foreseeable future.

Jason Deign is a freelance journalist located in Barcelona, Spain.