Flipping Over the Switch

North of the Dallas metro area, innovative telecom companies once grew like so much sagebrush. Driving up and down the I-75 corridor between Richardson and Plano, you would have passed Northern Telecom (now Nortel), Alcatel Network Systems (now Alcatel USA), Ericsson North America (now a shell of its former self) and DSC Corp. (long since acquired by Alcatel), among others. The telecom market decline may have forced those companies to morph and shrink from what they used to be, but the expertise that defined them hasn't disappeared. It has just found its way into start-ups like Spatial Wireless.

The company, located not far off the Campbell Road Exit from I-75 in Richardson, was founded two years ago by four locals: Pardeep Kohli, Seshu Madhavapeddy, Mike Tatachar and Anuj Jain. The founding four spent the last decade working in switching and other technology areas for Nortel Networks, Alcatel and DSC as well as Sabre, the revolutionary travel industry software provider based in nearby Southlake, Texas.

Furthermore, Spatial's board of directors claims former PrimeCo CEO Ben Scott as chairman, as well as Wu Fu Chen, one of telecom's serial entrepreneurs. The advisory board includes Bo Hedfors, former president and CEO of Ericsson North America, and Alastair Westgarth, the current CEO of Navini Networks who was once a top executive in Nortel's wireline/wireless switching business.

Before this turns into too long a laundry list of job titles, rest assured that the litany of experience is beginning to amount to something. Spatial is playing in the quickly evolving wireless softswitch sandbox, though Madhavapeddy, the company's vice president of product line management and business development, said that description only hints at what's really going on.

“We are separating the call control plane from the data plane,” he said. “We're talking about a high-capacity distributed switching architecture for mobile.”

Spatial's flagship product, the Spatial Atrium, is a core-distributed mobile switching center that handles multiple radio access protocols and integrates the functions of a call server, media gateway and element management system. Right now the product could be classified as 2G or 2.5G architecture, but it can be easily upgraded through software installation to 3G or all-IP switching.

The Spatial Atrium supports all the applications considered de rigueur to stake a claim in the wireless softswitch market, including gateway MSC offloading of data traffic from voice switching; long-distance bypass; and wireless number portability. For the most part, these are the applications over which an increasing number of switching vendors are going to battle as they enter the wireless market.

Spatial claims to have been one of the first vendors in this market, along with Winphoria Networks. It suddenly has a lot of company: Traditional wireline softswitch vendors such as Sonus Networks, Telica and Nortel have entered the fray in the last few months, sensing that a new revenue opportunity may be breaking.

Kohli, Spatial's president and CEO, wants to know what's taken them so long. “The wireline guys were busy the last few years handling the CLECs because that was supposed to be the big market opportunity. But of course, it wasn't at all,” he said.

“Even when we were getting started in 2001 and the bubble was about to burst, there was no one else looking at this market.”

According to Madhavapeddy, what separates Spatial from rival vendors is the traffic separation capability of its architecture, which he said slashes the cost and complexity of managing a mobile voice and data network.

Now Spatial is well into its commercial rollout, having launched deployments with Teleglobe focusing on WNP and with Hong Kong service provider Sunday Communications spotlighting GMSC traffic separation. It also has garnered the attention of some significant partners, including Siemens.

“Separating switching and call control from data has the obvious benefit of reducing operational expenses for carriers,” said Bob Capps, vice president of sales and business development at Siemens Information and Communication Mobile. “We partnered with them because they are ahead of the competition.”

Madhavapeddy said the feeling is mutual. “Siemens is a heavy hitter, if I may say so,” he said, adding that Siemens will help Spatial gain traction among carriers that are ready to explore next generation packet switching options to overlay and extend their existing networks.

Spatial also recognizes the benefit of partnering with other companies on some switching elements such as the media gateway function. That's how it became aligned with Santera Systems, a wireline softswitch and media gateway vendor — and a Dallas-area neighbor — that was developing a wireless media gateway. Santera wanted a gateway that could support and interoperate with other vendors' wireless architecture rather than develop a complete architecture itself.

“We didn't want de-focus from our core value [in wireline] and do everything ourselves in wireless,” said Trish Nelson, director of product marketing at Santera. “Spatial was a first choice when we were looking for wireless partners.”

Madhavapeddy said that Spatial recognizes the need for broad interoperability with other vendors' products, but it only wants to pursue partnerships in situations where business is at stake — or where Spatial truly has something to gain in terms of capability for its overall architecture. “We don't want to do half-assed interoperability with everybody,” he said. “Completely integrating products on the operations, administration and management layer takes a long time — several months.”

Kohli added that Spatial intends to adhere to the specifications outlined in the Third Generation Partner Program, which is the only industry body working on wireless softswitch specifications.

Still, maintaining a laser-like focus on partnering only with the right strategic partners isn't necessarily going to persuade carriers to sign purchase contracts more quickly. The wireless industry is beset with business hurdles: Major infrastructure vendors like Nokia and Ericsson have been warning since early this year that their revenues from network gear will continue to dip. And just last month, Nokia let go about 10% of its networks unit work force.

Spatial officials, however, believe that there will be a movement among carriers to buy and deploy solutions that are targeted toward cost-saving applications and services that represent new revenue opportunities, such as wireless LAN and push-to-talk services.

“You could use this architecture to manage an integration of Wi-Fi hot spots into your network offerings,” Madhavapeddy said. “There is also immediate demand for push-to-talk as a service that creates new revenue. The call control logic of the old switches doesn't support the new service creation environments of XML and SIP.”

Ultimately, the company also sees itself at the center of major migration from today's GSM/GPRS networks to the wideband-CDMA or CDMA2000 networks many GSM carriers are planning for their next network evolution. That's because it has been working with Qualcomm to develop GSM1x, a network overlay that will allow carriers to retain their GSM core switching infrastructure — and keep that investment working for them — while marrying it to W-CDMA/UMTS or CDMA2000 radio access networks.

“It's a hybrid network that is the best of both worlds,” Kohli said.

“The marriage of the two technologies is natural because GSM switching is the dominant switching method, while CDMA's radio data capabilities are better,” Madhavapeddy added.

The GSM1x movement is the kind of aggressive innovation that Kohli believes the previous generation of big switch vendors — the ones that employed Kohli and many of his colleagues in years past — just aren't capable of driving in time to meet market needs.

“Traffic continues to grow in wireless. People forgot about this industry's potential,” Kohli said. “I think because wireless technology changes so quickly, other companies weren't prepared to innovate in this space. Many of them focused on developing new 3G infrastructures, and now they have a hole where the transition from 2G is happening more slowly and differently than they thought. Their only choice is to partner with us.”