BT deal a big plus for Tellabs

The announcement earlier this month that BT had selected Tellabs as a strategic supplier for managed Ethernet access equipment was significant in several ways for both companies. Tellabs now becomes part of BT’s 21^st Century Network transformation, and lands its largest wholesale deal for wireless backhaul equipment. BT gains the flexibility it needs to be prepared for whatever the growth in wireless data means for its wholesale business.

“The issue for us is that the mobile industry knows that they are about to enjoy significant levels of growth – but nobody can honestly predict when or how big,” said Joe Kelly, director of communications at BT. “That is the challenge: How do they find a solution that means they can gear their costs when the growth hits and for how far the growth hits?”

The traditional private-line approach to building wireless backhaul required building out a network in anticipation of growth, Kelly said, and that’s something BT wanted to avoid. “The growth in 3G was slower than expected – if you are going to build in advance, you face that risk.”

Instead, BT is using an Ethernet solution, based on Tellabs 8600 managed edge system, for greater flexibility, to deliver its Managed Ethernet Access solutions for mobile operators. Because the Ethernet services are part of the 21CN network, Tellabs went through the process of becoming a strategic partner.

“We’ve actually gone through the full 21 CN certification process – that’s a really good medal to have on our chest; it’s a very rigorous process,” said Ben McCahill, Tellabs’s director of mobile strategy. “It’s a very significant win for us. We have been winning a lot of business directly with mobile operators, but this is probably the largest deal we’ve won for wholesale.”

In addition to providing its equipment, Tellabs will provide consulting and support services. “We are already in trials with BT, and we are looking to go live very early in the new year,” McCahill said. “It’s equipment, management systems and professional services -- network consultation, project management, management of network integration. This approach is becoming the norm – we are not just moving hardware, we are working with the customer to insure the integration and timely turn-up of services.”

BT selected Tellabs because of its Ethernet experience, Kelly said. “We talked to a number of vendors [that had functionality BT wanted],” he said. “Theirs was a mature product.”