The Biggest Shift In Communications Is Just Around the Corner
Packet switching technology is starting to hit traditional Public Switched Telephone Networks (PSTN) where it hurts the most – in the wallet. Investment in circuit switching infrastructure is slowing down; Dataquest states that the telecommunications industry has grown a mere 8% in the last two years, compared to a staggering 23% growth in the data communications sector. Some areas have shown a 100% increase in growth, such as the Computer Telephony Integration (CTI) market.
This is mainly due to the enormous cost and functionality benefits by putting all communication applications – voice, email, business critical applications, and video – over one multiservice network using packet switching.
Analysts estimate that subscribers may expect as much as 40% off their existing phone bills by sending voice in packets (over a Frame Relay [FR] or the Internet Protocol [IP] network), rather than a dedicated point-to-point connection over the PSTN. These cost savings come from a more efficient use of bandwidth due to the packetization and compression of voice, together with sophisticated queuing mechanisms to ensure a high quality voice conversation.
Table #1: Bandwidth Requirements in IP
When using a switched circuit connection, the subscriber pays for the duration of the call, including hold time and natural pauses in a conversation. With packet voice, the subscriber only pays for “bytes”, (i.e. the amount of data sent), not the duration of the connection. Hold time and pauses are subsequently not chargeable. In addition, “redundant” voice information is removed by using sophisticated compression algorithms such as the ITU-T Standards, G.729A, and G.723.1. In these algorithms, real-time speech analysis will remove up to 75% of a conversation, then the remaining 25% is compressed.
A typical “before and after” comparison of a company that migrates to using packet voice will see a huge saving where phone bills will drop to a tenth the original cost, from 800 US$ to 80 US$ per month. Realizing financial benefits from voice compression is only the first step in convergence. Multiservice networks offer support for technologies above and beyond the traditional telephone network:
- Supports real-time applications such as voice & video as well as efficiently managing various flavors of data applications over a single, shared network.
- Simultaneous administration of World Wide Web (HTML) traffic, Computer Telephony (CTI) applications, and Unified Messaging in a single multiservice environment.
- Frame Relay [FR], Asynchronous Transfer Mode [ATM)] and Internet Protocol [IP] support as well as connectivity to Private Broadcast Exchanges (PBX), and the various circuit switched networks such as EuroISDN.
- IP, IPX, Business Critical Applications such as IBM SNA, Burroughs Poll Select, Airline Control Protocol, BSC, and various other Async protocols.
It is not only cost savings that make multiservice networks the savior which will likely take over the PSTN market in the next two years. A multiservice network can provide all the features of a traditional PSTN, such as call waiting and conference calls, plus meet the demands of carrying video, provide web access and link to unified messaging systems, and offer a single management platform for a single multimedia infrastructure.
The telecommunications industry is in the process of migrating from a proprietary industry to an open industry. This trend can be viewed from the perspective of how the PC industry had developed over the past 30 years. In the 70‘s companies such as IBM (International Business Machines) and DEC (Digital Equipment Corporation) provided end-to-end solutions, from the mainframe, to terminals, from cables to applications. The entire infrastructure was sourced from a single manufacturer.
As the PC industry took-off in the 80’s, an open industry began to emerge whereby manufactures offered one piece of the solution pie. One manufacturer would focus on PC sales only, another sold servers, another installed cables, and yet another specialized in value added services.
The PC industry evolved from the hierarchical networks to client server. When corporations needed to increase the size of their network then a bigger mainframe was required. Today, when we need to increase the size of the network we buy another server, and a few more clients (PC’s). This is an integral part to the success of client server architectures, in that network expansion is progressive, and is not financially discouraging.
Another dynamic is found in Moore’s law. We have enjoyed the 18 month half-life trend in the PC industry, but have not been privy to this trend in communications. For example, PC prices have decreased by half every 18 months, but our phone bills have remained relatively the same over this period. Typically the “half-life” of communication prices has been 5 years (See Figure #1). Thankfully, all of that is about to change due to convergence. As the new convergence industry takes advantage of traditional PC architectures as follows;
- CPUs (e.g. Motorola PowerPC and Intel’s Pentium)
- Bus (e.g. PCI, Universal Serial Bus [USB] and IEEE 1394 – Firewire)
- Operating Software (e.g. Microsoft Windows & LINUX)
The same “price erosion trends” will be observed, and Moore’s law will apply to convergence networks as well.
As routers evolve to multiservice, and proprietary hardware migrates to PC based hardware implementations, and as corporate networking solutions move to the commodity market, the benefits will be reaped by the end user. With the communications industry opening up to new providers, the market will become increasingly more competitive. Consumers will soon enjoy this cost cutting, and competitively aggressive market in our communication hardware and software.
Since the current trends in the communications industry are now mimicking the PC industry, the observations are in the fact that networks are moving from proprietary to open solutions, and mainframe solutions to client server. This also implies that intelligence is moving from the core to the edge of networks, whereby the edge, in this case, is represented by the ingress or egress communication device (See Figure #2 and #3). The Multiservice Access Device can be considered analogous to the client, responsible for security, quality, and reliability of communications. What now represents the server is a “gatekeeper”, responsible for bandwidth management, registration, administration, and status of the network, as well as management of traditional Telco services such as billing. The Gatekeeper and multiservice devices manage communications as servers and clients respectively, ensuring the end to end transfer of information.
Voice Network Characteristics:
- Intelligence in the backbone
- Mainframe Based Management (AIN: Advanced Intelligent Networks)
- Highly scalable to hundreds of thousands or even millions of users
- Monopoly based solutions (One provider per country)
- Circuit Switching
- Highly reliable and stable
- Poor support for Data transfer over the Voice network (e.g. non-guaranteed speeds of 56 Kbps V.90 modem communications)
Although client server will emerge in the new world of convergence, the mainframe concept will not diminish (For the same reasons mainframes have survived today in the PC industry; reliability and stability). To bring this into perspective, as client servers scale well for thousands to tens of thousands of subscribers, mainframes have traditionally scaled to hundreds of thousands of subscribers. Client server simply will not match the processing required for a full-scale voice infrastructure. For this reason, intelligence will remain in the core of converged networks (Voice networks will remain hierarchical as a whole), but client server will emerge, and add value at the edge of these infrastructures.
So, what is the impact to the subscriber? Simply, we will have more choices in the providers we choose, the connection type, the services we want, and even the level of quality for the traffic we will transmit. We will even have the choice of which wire type will carry our telephone calls (in the past we were restricted to a simple 2 wire copper pair). We could run our voice over standard Ethernet coax, home cable, over optical connections, or any flavor of copper that exists, such as unshielded twisted pair (UTP) or shielded twisted pair (STP), and all of the categories in between. To the Managers of Information Systems (MIS) this is a blessing in disguise.
Data Network Characteristics:
- Intelligence throughout the network
- Mainframe Management in the core, with Client Server Based Management at the edge
- Highly scalable Mainframe scalability to millions of users, Client-Server scalability to tens of thousands of users
- Open solutions for the subscriber (many providers per region offering various levels of services)
- Packet Switching
- Excellent support for voice and video over data networks (e.g. H.323 support with QoS)
In the past we have relied on one type of infrastructure, one type of connection, one type of telephone, and one provider servicing all our needs. All this is about to change. Not only will the industry change, but more importantly; the minds of the consumer. The bottom line will stem from the expanded ability of consumers choosing from a much broader range of products and services.
The Wireless Craze
As a society, we have evolved from radio to TV, from black & white photography to color from analog to digital networking. The next wave of change is wire-line to wireless communications.
The advent of Wireless Information Devices (WID) is being driven by the increasing demand for multi-media capabilities in all aspects of our lives. In response to this, Voice and Data providers respectively are investing heavily in the development of technologies that deliver mobile multimedia services. Generation 2.5 services such as GPRS (General Packet Radio Services), are the next evolution in the development of packet based wireless networks slated to provide data services to mobile phones and hand-held communication devices. UMTS (Universal Mobile Telecoms Service) Generation 3, will offer users an alternative in high-speed access for multimedia communications (See Figure #4). Web-based services will move to various hand-held communicators, allowing connectivity to the world, from any location on the planet.
These next generation wireless technologies are packet based rather than circuit switched. The communications industry has realized the potential of packet technology. Subsequently the investments in developing circuit switched infrastructures have ground to a halt.
The Need for Liberalization
With an existing investment to the amount of billions of dollars in PSTN infrastructures, it is not surprising that the ILEC’s (Incumbent Local Exchange Carriers) are reluctant to compromise their existing revenue streams. If Investment Protection is the name of the game, then providers will retain their pseudo monopolies across Europe for as long as possible, so as to enjoy existing tariffs in circuit switching communications, before packet technology is widely adopted. Nevertheless, emerging providers in convergence are beginning to enter the European market from the USA and the Far East such as:
- Competitive local exchange carriers (CLEC’s), such as Cable and Wireless in the UK
- Internet Service Providers (ISP’s), such as America On Line (AOL)
- Internet Telephony Service Providers (ITSP’s), such as Zephyr Communications
- and, Network Service Providers (NSP’s)
These competitors are giving the incumbents a run for their money, with their lower cost and high margin per call, lower initial infrastructure investment, while matching or even exceeding value added telephony features. The strategy of these players is to capture early market share before the incumbents have a chance to look over their shoulder. This is a conventional tactic in the competitive world of the IT industry. Smaller competitors, by default have the agility to dynamically align themselves to the requirements of the industry.
In the face of stiff competition, many incumbent providers will adopt packet technology, albeit with a much slower adoption curve, simply due to the massive momentum of large companies, making it harder to veer from an existing strategic path to a new one. However, once ILEC’s enter into the convergence race, it will be difficult for competitive providers to capture additional market share.
Corporations will be the first customers to observe the benefits of convergence. But, until the market is fully deregulated in Europe, the benefits of packet voice and multiservice networks will not be fully realized in the eyes of the consumer. The future of communications will most definitely be packet-based, though until the stronghold that the incumbent providers have is loosened, the spread of multiservice networking will be slower.
Getting the Quality You Expect
As deregulation in Europe continues, another parallel issue is in the quality of voice calls in data networks. Quality of Service (QoS) is the hot topic of discussion. It is most certainly the first issue mentioned when discussing the latest in Voice communications over data networks. Currently, the Internet is unable to handle the demands of real time traffic such as voice or video. Analysts predict that it will be three to five years before the appropriate changes are implemented.
In the interim, multiservice networking offers substantial benefits in private corporate networks today. The bandwidth requirements to send voice over a corporate WAN (wide area network) are dramatically lower in comparison to the demands of web browsing or file transfers. Moreover, quality of service enhancements can be realized more readily in this controlled and somewhat predictable environment.
How an enterprise customer implements quality of service depends on the transport protocol being used in the network. The choice at the moment comes down to two: Frame Relay or Internet Protocol (IP). Although analysts may argue that Asynchronous Transfer Mode (ATM) is a third alternative, ATM has yet to prove itself as an end to end protocol (with its’ minimum speed of 2 Mbps) in a world where 33.6 Kbps V.34 modem connections continue to dominate the last mile.
Frame Relay ensures quality of service in the core architecture of its standard. Committed Information Rate (CIR), Discard Eligible (DE), Backward and Forward Explicit Congestion Notification (BECN and FECN respectively), are parameters used to guarantee bandwidth, prioritize traffic, and minimize congestion, respectively. Additional intelligence is architected in Motorola’s Multiservice Access Device, which implements:
- Sophisticated queuing mechanisms to minimize delay between packets
- Provide prioritization enhancements, and
- Ensures consistent flow of real time applications.
For example, as real-time applications are prioritized over data packets at the access node, and as information moves along the virtual circuit from source to destination then Frame Relay ensuring that:
- Data is received with zero error at the expense of delay, and
- Voice is received with minimal delay, at the expense of errors
In essence, Frame Relay avoids much of the packet delay and packet loss that is observed in IP. Packet delay can occur with IP due to the protocol’s lack of flow control, lack of congestion control mechanisms, lack of queuing schemes, and lack of prioritization of packets. However, Quality of Service (QoS) techniques such as Differential Services (DiffServ), and IEEE 802.1p/q will provide workable solutions in the interim, until IP version 6 becomes available.
With the growth of the Internet, Intranets, and Extranets, in the past decade, IP has also become the default choice for networking. But, for a protocol which is over 25 years old, IP was clearly not designed for the demands of modern communications. This is a clear example of how a superior technology may not necessarily win the mind share of the consumer, or the market share of the industry. Case in point: The Betamax verses VHS battle in the 70’s, and the 1980’s battle between CISC processor (Complex Instruction Set Computing) vs. RISC processor (Reduced Instruction Set Computing).
Frame Relay, which was developed in the early 1980’s is currently the most efficient protocol in the world today. There is no communication standard today for Wide Area Networks (WAN) which can match the efficiency and flexibility of Frame Relay. Many enterprise “early adopters” have used Frame Relay, where possible, as the vehicle for real-time voice inter-operating with IP in the remaining locations. To ensure investment protection in these heterogeneous networks corporations have chosen multiservice access devices, which have the capability to connect to either Frame Relay, ATM, or IP, and ensuring that the proper QoS solution is supported to guarantee trouble-free network expansion in the future.
Inter-operating With the Rest of the World
For multiservice networks to be adopted on a large-scale, multiservice devices from different vendors must inter-operate Especially with the anticipation of how networks will look in the near future. We are in the process of moving beyond the simple phone-to-phone connection, to an entirely new communications market that is redefining the meaning behind “connectivity”. The industry is overcoming the following challenges as it works towards a single converged network:
- Merging of the Voice, Data, and Media Industries (See Figure #5).
- Connecting various ranges of IT Equipment, and ensuring transparency in connecting them together.
- Integrating a varying range of applications, with inter-operability, management and conversion between relative standards.
- Connecting a plethora of communication devices together in a single heterogeneous network, and making sure that the entire network is manageable.
- Connecting various Network Architectures, so that signaling is controlled, and stability is maintained.
To make these changes happen, the major industry must have a common goal of open standards. Initiatives such as the committee for Telecommunications and Internet Protocol Harmonisation Over Networks (TIPHON) and other international bodies on inter-operability testing, such as iNOW (Interoperability Now) are critical to the success of convergence.
Despite the enormity of the foreseeable changes, it is clear that convergence is in the embryonic stage of its life cycle, when viewed from a historical perspective. But the changes will be observed at a much faster pace than ever before. To bring this into perspective, the rate of change in communications which we have observed over the past 30 years will be compressed into the next 5 years.
TIPHON is a European Telecommunications Standards Institute (ETSI) initiative set out to connect existing networks to a single managed network connected via IP. TIPHON will utilize existing standards where available, and specify standards to fill any gaps. The aim is to ensure global network inter-operability between various communication devices. TIPHON consists of 7 Working Groups, responsible for developing various aspects of inter-operability such as Signalling, Management, Wireless connectivity, etc.
An integral piece of this initiative is the ITU (International Telecommunications Union) H.323 telephony standard. Extensive work has been done on this specification which provides a platform for multimedia communications over packet technology. Although the adoption of H.323 does not guarantee interoperability between third party devices, customers should ensure that the manufacturer is closely working with accredited standard bodies such as TIPHON and iNOW.
An awareness of the issues, has brought on a realisation that vendors must work together to ensure a common standard, in order to ensure success in this convergence initiative. Stopping at standards and considering the issue closed is unacceptable, since this very much distinguishes between the “thinker” and the “doer”. Through initiatives such as TIPHON, the industry has taken the additional step of looking at the interoperability concerns to ensure that standards are implemented properly.
Communications for the Future
Over the next two years, the convergence players will proactively work towards a common goal in solving quality of service issues, specifically focusing on interoperability. We will then see a large number of organisations moving to capitalise on the cost and functionality advantages of multiservice networks. Personal communications will unite mobile voice with laptop data into a new breed of integrated multimedia devices. The consumer mass-market implementation is just around the corner.
We have already seen a number of communications players, such as Lucent/Ascend and Bay/Nortel, joining forces in preparation for the market explosion. International Data Corporation’s (IDC) prediction is that by 2002, packet voice revenues will equal that of the PSTN. Motorola is already in a strategic position to offer converged solutions today with over 60 years experience in voice and over 37 years in data.
With the tectonic shift in the communications industry today, do not be surprised by the change in your Telecom Provider’s logo on next year’s phone bill.
- CDMA Code-Division Multiple Access
- CPU Central Processing Unit
- DOCSIS Data Over Cable System Interface Spec.
- FTP File Transfer Protocol
- GPRS General Packet Radio Services
- GSM Global System for Mobile Communications
- HTML Hypertext Markup Language
- IEEE Institute of Electronic and Electrical Engineers
- IP Internet Protocol
- IPX Internet Packet Exchange
- ISDN Integrated Services Digital Network
- Mbps Megabits (millions of bits) per second
- MPEG Motion Picture Experts Group (ISO)
- NMT Nordic Mobile Telephony
- PCI Peripheral Components Interface
- PCM Pulse Code Modulation
- PSTN Public Switched Telephone Networks
- SMTP Simple Mail Transfer Protocol
- SNA System Network Architecture
- SS7 Signaling System 7
- TDMA Time-Division Multiple Access
- UMTS Universal Mobile Telecom Service
- URL Uniform Resource Locator
- xDSL Digital Subscriber Line
 Moore’s law was invented by Gordon Moore in 1965 based on the observation that the number of transistors on computer processors double every 18 months. As the PC industry emerged two decades later, Moore’s law had been reinterpreted to represent the processing power of computers doubling every 18 months. When applied to IT finance, then we observe that the price of IT has a half-life of 18 months. For example, a 200 MHz Computer purchased at 2000 US$ on January 1st, 1998, will be sold for 1000 US$ on July 1st, 1999.
 The overwhelming proof of IBM’s mainframe reliability is in their written guarantee of a 30 year MTBR (Mean Time Between Reboot) for the 390 mainframe series. Compare this to a Windows NT server, which typically requires several reboots per year.
 An example of First Generation, Circuit Switching Analog Wireless networks is Nordic Mobile Telephony (NMT) originating from Scandinavia. Second generation wireless networks are based on Circuit Switching Digital technology such as GSM.