SPRINT DEVELOPS ITS OWN TUNNEL VISION

Sprint took the offensive last week in the battle for enterprise data customers by introducing three new services supported by the carrier's core IP network and designed to transition users of traditional packet services to IP.

The SprintLink offerings, called Frame Relay, Packet Private Line and Virtual LAN, are Layer 2 services that Sprint will emulate on its IP backbone by using Cisco Systems' Layer 2 Tunneling Protocol Version 3 (L2TPv3). Sprint's current customers can use their same edge equipment and continue running frame relay, ATM or private line connections.

After offering the service for about a month prior to formal introduction, Sprint has picked up seven customers. But the carrier admitted that it does not expect a massive migration.

“A lot of our customers are thinking about IP, but they're not ready to jump in yet. They're comfortable with frame relay,” said Steve Lacoff, senior product manager for SprintLink services.

Customers aren't the only ones comfortable with frame relay — carriers may not want to give it up, either.

“Frame relay service is the only profitable data service in the marketplace,” said Tom Nolle, founder and president of CIMI Corp., a networking consulting firm.

Worldwide frame relay revenue was $15.5 billion last year and is expected to be around $18 billion in 2003, according to Roger Ruby, senior product manager at Quick Eagle Networks and interim president of the Frame Relay Forum.

The new offerings should help Sprint retain its enterprise data customers while allowing it to get its feet wet running Layer 2 services over an IP backbone. Sprint also views the moves as an attempt to get out in front of the IP services market, despite being criticized by some for not using multiprotocol label switching (MPLS), as many carriers have done.

Using Sprint's L2TPv3-based hybrid network approach, customers can take advantage of IP network characteristics such as scalable bandwidth and intelligent routing, as well as the redundancy and security enabled by the protocol.

“Through L2TPv3, we've evolved SprintLink into a robust offering,” Lacoff said. This new portfolio of services is critical to Sprint's future as the world migrates to IP, he added.

Nolle agreed, but only to a certain extent. “Providing an IP VPN service that appears to the customer as a frame relay connection has always been the right answer,” he said.

But AT&T's IP-enabled frame relay service already does this, and Sprint is entering a market segment it knows AT&T and the RBOCs are already moving into with MPLS, Nolle said. “In a year or two Sprint will have no option but to either follow these other players — which will be harder to do as time goes by — or get bought by somebody,” he said.

The question remains whether Sprint is really getting out in front of IP services, or rather protecting itself against the perception that its offering — minus MPLS — may not be as strong.

Cisco is arguably in the most enviable position because the vendor supports both MPLS and L2TPv3. It helped develop the protocol in conjunction with Sprint but is a strong proponent of MPLS. “We have about 150 customers for MPLS right now, and we see more [carriers] getting interested in MPLS for both the edge and the core,” said Mario Mazzola, chief development officer for Cisco.

One of Sprint's competitors in the wide area data networking space, Equant, claimed that Sprint's move toward hybrid IP services is an acknowledgement that it was wrong in not deploying MPLS. Equant supports separate frame relay, ATM and IP network services today, as does Sprint, but the carrier feels that a gradual migration to IP is unnecessary.

“There doesn't need to be an extra step,” said Gopi Gopinath, senior vice president of data and IP products for Equant. “If you're going IP, you should [provide] all the benefits of IP and not just force IP networks to behave like proprietary networks.”

From an operational standpoint, IP-based VPNs are easier and less expensive to maintain than traditional packet services such as frame relay or ATM for both the customer and the carrier. Only through the operating cost reductions in the IP network can carriers hope to build survivable profit margins for data services, Nolle said.

However, despite the operational ease or cost savings, most enterprise customers are not as confident in IP as Gopinath. “Most customers will stick to legacy services with which they are comfortable,” Sprint's Lacoff said.

One of the knocks against L2TPv3 is that it doesn't support voice. However, with the challenges of implementing pure IP still formidable, adding voice to the mix is a concern about which some carriers may never have to worry.

Sprint may have missed the boat on MPLS but it isn't missing the opportunity to add Layer 2 services to its portfolio. And with the pace of technology change, MPLS itself might just sail off into the sunset before anybody boards.