Infrastructure ingredients

The wireless infrastructure divisions of Nortel Networks, Lucent Technologies, Nokia and Ericsson know that it will take more than just infrastructure to elevate the mobile Internet to an everyday reality. With this in mind, they have been altering the way they do business so that their carrier customers will be able to offer the services that third generation technology promises.

Though each vendor is going about its wireless infrastructure evolution in its own way, they all are taking similar paths to creating 3G solutions. While they remain true to core competencies, they see that they cannot always do it alone. Beyond networks and standards, they are looking toward application development and strategic partnering, hoping to create economical infrastructure solutions that fulfill expectations.

Inner strength

Nortel Networks' four key businesses — optical Internet, local Internet, e-business and wireless Internet — are the pillars on which the company creates a faster and more reliable mobile Internet. In June 2000, the company introduced its Wings of Light strategy by combining IP, optical and wireless Internet core capabilities to help its service provider bring wireless Internet services to market — and also make money, considering the high price carriers have paid for spectrum (Figure 1).

Nortel has emphasized solutions that are adaptable. “We have a sharp focus on maintaining economic solutions. Using technology from our personal Internet and core wireless Internet portfolios enables personalization,” says Mark Tharby, vice president of wireless Internet solutions marketing at Nortel. “The intelligent use of networking is critical to achieving success, and the ability to bring together personal technology and access is critical.”

Wings of Light focuses on how to get the most use out of existing equipment. “We have it… in mind to leverage products and deliver new technology that can take advantage of the installed base,” Tharby says. “Our strategy is to make sure we support existing customers while also moving them into new areas.”

Nortel's choice to play in three areas — TDMA, CDMA and GSM — gave it experience determining what is the best technology, Tharby says. Whether it's based on CDMA or GSM, the company's core 3G equipment uses common hardware, so it is flexible in terms of changing or re-using hardware, he continues.

“This gives operators the advantage of flexibility from a cost perspective, and by having an IP packet and optical core, we can better leverage existing equipment,” he says. “If everything works in a similar manner, then operators will not need to string along different vendors.”

Nortel has teams that look at the network core and determine how to optimize technology and create the best package for whichever carrier needs it. In December 2000, Nortel began shipping the e-mobility Internet Base Station, which supports all 2G and 3G digital wireless standards from one platform and enables the delivery of voice, data and wireless Internet services.

“There are benefits to both standards being integrated [so that] products can be deployed cost-effectively,” Tharby says.

Graceful steps to 3G

GSM and its evolution are at the core of Nokia's mobile Internet strategy. The standard's progression is something the company has tracked for a number of years, says Steve Ballard, director of marketing for Nokia.

“There are a lot of core competencies in GSM,” Ballard says. While the company's acquisition strategy has not been as active as its competitors', its in-house efforts have been, Ballard says. It has been running the first wideband-CDMA labs since 1992.

“We are at the point where we can take customers from a 2G system to 3G in the future in graceful steps,” he says. In the meantime, Nokia has been rolling out general packet radio service (GPRS) and it has roughly 50 networks deployed around the world, with half of them functioning, Ballard says.

Nokia introduced the UltraSite base station in September 1999. The triple-mode site supports 2G transceiver cards as well as EDGE and W-CDMA in one cabinet. Once the site is introduced into a network, the network can evolve to support 3G services, Ballard says.

“A carrier does not need to buy a new base station, making it easier and less expensive to upgrade to new technologies,” Ballard says. The additional components are built on previous equipment. “Nothing needs to be thrown away, saving on capital expense,” he adds.

Like Nokia, Ericsson prides itself on having followed 3G for several years. “If you look at the number of contracts awarded for 3G, Ericsson has the most,” says Lars Nilsson, manager of strategic marketing at Ericsson. “We have 22 out of the 30 that have been announced. We have been targeting this area for a number of years.”

‘There are benefits to both standards being integrated [so that] products can be deployed cost-effectively.’
— Mark Tharby, Nortel

To evolve with the times, the company has built a new base station factory with a focus on W-CDMA. It also created a new division last year called Data Backbone and Optical Networks. And like Nokia, Ericsson is also testing and rolling out GPRS, which supports all standards.

The softswitch bridge

Lucent also has looked to solutions that make sense for different standards. The company believes softswitch technology can equal cost savings and enable IP to the handset, says Jon Mechling, director of product management for Lucent's OPENet solution organization. “We focus on openness of standards. The softswitch platform takes advantage of the ability to evolve as standards evolve,” he says.

Like other vendors, when it comes to 3G, Lucent is trying to find a common core solution to bridge converging networks with varying 3G technologies.

“At the core, the elements can be identical and relate to all operators,” Mechling says. “The softswitch platform is a key technology for different networks, which we expect to become one [type of network].”

Softswitches are significant in the evolution of telecommunications networking in general, says Maria Palamara, distinguished member of the technology staff of Lucent's wireless network group. “With new 3G radio technology, carriers are expecting to see rapid ramp up of their data networks. With [voice over IP], the softswitch is a natural in terms of economics,” she says.

Lucent leverages the softswitch in wireline and wireless networks because of the increasing convergence of the infrastructure overall, Mechling says. “The softswitch can support new services regardless of access means.”

Can't always do it alone

Certain companies often do certain things better than others. Therefore, it sometimes might seem less time-consuming and expensive to acquire those companies rather than create the same capability in house.

When Nortel realized it needed the IP services layer on top of its evolving wireless Internet offering, it acquired Shasta Networks and Alteon WebSystems. “Bringing these companies together with our Preside Portfolio created a powerful solution,” Tharby says. “This is the key capability that separates Nortel from other vendors.”

Nortel since has combined its Intranet services technology with Shasta's product line to enable carriers to create a new generation of IP services. The Alteon product line, which is part of Nortel's content networking business, allows carriers to deliver information in a form that complements any type of access device, whether a PDA, mobile handset or traditional browser.

With messaging applications in mind, Lucent acquired Octel Communications a little more than two years ago. Until then, Lucent's messaging division had focused mostly on the small and medium-sized enterprise market. Octel gave it access to large enterprises and on the service provider market. “Messaging is one of the hottest apps,” Palamara says.

The company's purchase of Ascend Communications in January 1999 was another acquisition critical to Lucent's network evolution. Ascend, at the time a leader in WAN and ATM switch markets, helped Lucent expand its broadband networks group, which is composed of its data networking systems, optical networking and communications software divisions.

‘We are at the point where we can take customers from a 2G system to 3G in the future in graceful steps.’
— Steve Ballard, Nokia

‘With new 3G radio technology, carriers are expecting to see rapid ramp up of their data networks.’
— Maria Palamara, Lucent

Similarly, Ericsson acquired Advanced Computer Communications two years ago with the intention of integrating it into its datacom networks and IP services business unit, where it now is a part of the vendor's access product unit. Ericsson also plans to apply ACC's capabilities to its integrated voice and data enterprise solutions and use it to build the next generation of mobile networks, which will be based largely on IP, Nilsson says.

Ericsson's acquisition trend continued in March 1999, when it purchased Qualcomm's CDMA infrastructure division, boosting its product portfolio to include all digital cellular systems. One month later, the company brought Torrent Networks on board to round out its product portfolio in high-capacity network products and increase its ability to offer complete data network solutions.

Beyond infrastructure

But wireless infrastructure vendors won't get very far if they remained focused solely on equipment. Therefore, Nortel is executing its plan to enter the area of applications development for the wireless Internet. The company recently struck a relationship with AOL to collaborate on offering voice over the Internet.

“We can bring together new applications in the wireless space such as voice [activation] of Web information, which is a powerful tool,” Tharby says. The company is researching how services can be accessed via different devices by working with Hewlett-Packard, Research In Motion and Panasonic, Tharby says.

“We can make sure that there are new devices that can take advantage of the new services quickly,” Tharby says. Nortel is surveying RIM devices internally.

“While no one is quite clear which standards are coming and which are going and what they will be able to deliver, we manage the best we can to transition products and work with customers to transition to new products,” Tharby says.

The Alteon and Shasta acquisitions were critical to Nortel's evolution, Tharby says. But in the application area, outside partnerships are critical. Nortel's alliance program was set up to ensure that Nortel has an end-to-end solution.

Meanwhile, Nokia's focus beyond equipment is on IP. The company believes that IP is the future of wireless infrastructure, and the vendor is helping to write the IPv6 standard. “This is the future, and with it efficiency issues and cost advantages will follow,” Ballard says. Because IP was developed for computers and is running out of addresses, IPv6 could become the standard in the world of mobility, he says. “Adding mobility features and security features to IPv6 is important for the mobile world and the general IP world.”

Nokia formed the mobile Internet applications division last year, which calls for partnerships with companies that can help supply the necessary ingredients to drive the mobile information society.

“When we talk to operators, we talk about hardware, network components and platforms as well as delivering a full suite of applications,” Ballard says. “It will be the applications they will sell in order to drive revenue.”

Over the past six months, Nokia has begun to sell a chat application called Friends Talk and has started to work on e-mail and transaction-based applications. It also plans to launch location-based applications in the near future.

“Data is a whole new way of doing business, and there are so many parties involved. Everyone has to work with partners,” Ballard says. “Technology hasn't been the most challenging part in the move to data. The harder part has been learning new ways of doing business.”

Ericsson has been active in the application and content development space as well. Via its CyberLab locations in New York's Financial District and Silicon Alley, the company is building partnerships it hopes will result in new Internet products and services. Ongoing projects encompass e-commerce, sales support, broadband, content delivery, wireless and mobile Internet areas. Ericsson believes lab environments are critical as the industry moves on to the promises of 3G.

“We believe in the concept of finding an end-to-end solution: networks and phones and the content side of things,” Nilsson says.

The company currently has about 70,000 applications partners. In addition, Ericsson has a program through which it will connect content developers and operators and show them how to generate revenue from mobile Internet services.

Because the company recognized a need to get to market faster, it built up its services division and then reorganized it last July. “We recognized so much conversion so we wanted to have a single services division,” Nilsson says.

The company's Internet application division focuses on working with Web content developers to make their applications wireless. “We help them position themselves in the wireless Internet,” he says, pinpointing areas such as m-commerce and location-based services. Most of the company's efforts in this area are based on its relationship with third parties, Nilson says.

Meanwhile, Lucent has an organization that focuses on different carriers' technologies and approaches to 3G. The vendor's open approach has positioned it to partner more easily and offer wider solutions.

“The business model is changing drastically as we go toward 3G. It used to be that we would provide infrastructure to carriers,” Mechling says. “With 3G there will be room for more players, service providers and carriers, and it won't be the same. In a world like that, the ability to partner becomes critical for success. Openness of a platform like ours and its evolutionary [attributes] makes it easier for us to partner.”

Cooking up 3G

‘We believe in the concept of finding an end-to-end solution: networks and phones and the content side of things.’
— Lars Nilsson, Ericsson

Wireless infrastructure leaders know that building the perfect network for tomorrow demands more than just a focus on today's actual networks and the various standards on which they are based. Therefore, vendors are exploring more than the equipment that goes into the networks and looking at applications.

The wireless infrastructure divisions of Nortel, Lucent, Nokia and Ericsson are challenged to work with many wireless service providers so that customers can experience the mobile Internet as regularly as they experience a voice phone call. To do this, they need to keep a keen eye on applications development, seek out the acquisitions that can make their strategies stronger, form partnerships whenever they need to and offer solutions that are cost-effective for carriers. Their evolution is ongoing, and their businesses will continue to transform until their carrier customers offer high-speed services in high volume with relative ease.