Green packets and broadband

It's all about growth and transformation. Carriers are building infrastructure to reach more customers with new services. Old networks (some not very old) from the era of regulation, POTS and circuits need to be rebuilt for a new age of competition, broadband and packets.

Five global forces drive growth and transformation. They are at work everywhere, albeit at varying levels of intensity, and they will change the telecommunications world.

1. Circuits-to-packets (C2P)

   Carriers are rebuilding existing networks and building new networks on a new technology foundation: IP. An IP network can carry multimedia content — voice, data and video — in the form of packets on a common physical network. An IP network can carry more information than a network of circuits. Packets can be combined in clever ways to create new services with no marginal costs, while creating new and profitable revenue streams of packets. Wireline carriers are stuck with old circuit switches and copper outside plant that are, dare I say it, obsolete! All over the world, carriers furiously are building new fiber cables and packet softswitches. Once the new switches and cables are in place, carriers will move customers and services over to them and disconnect the circuits.

2. Broadband

   Telcos' local distribution networks are bottlenecks. They are mainly copper, and much of the copper, especially the large cables radiating from central offices (COs), must be replaced with fiber. This means the creation of thousands of new remote sites full of IP equipment at the end of new fiber cables. It also means upgrading thousands of existing remotes with new fiber and IP electronics.

3. Wireless

   In just 20 years, wireless carriers have sprung up everywhere and now dominate the voice business. They are migrating their networks from 2G digital to 3G IP, and they already are contemplating the next migration cycle to 4G broadband IP — it's called long-term evolution (LTE). Meanwhile, spectrum is opening up for WiMAX. LTE will require upgrades of most existing cell sites; WiMAX will spawn a wave of construction of new remote sites.

4. Survivability and reliability (S&R)

   This means moving many of the carriers' network elements out of COs and into remote sites. Remote sites are much harsher environments than COs and are much harder to reach when equipment requires maintenance. Remote sites have to stand up to the severe punishment of storms, power outages and other natural disasters. Remote control and management of unstaffed sites is crucial for reliable operation. More remote sites mean more connections to AC power, which must be maintained and backed up — and somebody has to pay the electric bills.

5. Green

   With oil at $110 per barrel, there is growing awareness and alarm that networks consume a lot of power, which costs a lot of money. Broadband IP networks will consume and cost even more. Broadband IP equipment is always on, not just when the phone is in use. One telecom power equipment supplier already has announced a new breed of green products, and there will be more. Long-term, carriers must turn to solar and other alternative energy sources. Perhaps some big telco should take the lead with a vigorous, proactive program to reduce its energy consumption — maybe call it “Project Light Ray.”

These five forces — C2P, broadband, wireless, S&R and green — are changing and unifying the world. IP technology has dissolved the technology boundaries that separated national markets in the 20th century. An IP product developed for Asia or Europe can work anywhere, even in Texas — and the sun shines bright in Texas. YEEHAH!

Kermit Ross is the founder and principal consultant for Millennium Marketing.