Capacity
Capacity
VOL 18 ISSUE 2 FEBRUARY/MARCH 2018 VOL 16 ISSUE 5 AUGUST / SEPTEMBER 2016
Big interview STC VP for Wholesale Alan Whelan on the carrier’s renewed vision propelling it to new heights Business intelligence for the global carrier industry
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5G
data Capacity
onslaught
Special Report Mobile & IoT Special Report Enterprise & WAN capacitymedia.com
Capacity
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CONTENTS Capacity magazine, February/March 2018
VOL 18 ISSUE 2 FEBRUARY/MARCH 2018 VOL 16 ISSUE 5 AUGUST / SEPTEMBER 2016
Big interview STC VP Alan Whelan lets us know what the carrier’s renewed vision is propelling it to new heights
NEWS & ANALYSIS
65 EXECUTIVE NTERVIEW
04 MIDDLE EAST
David Burns, group managing director international and global services, Telstra
Business intelligence for the global carrier industry
08 EQUINIX AND ORACLE
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10 AFRICA
5G
data atta ata Cover image: iStock
onslaught
Special Report Mobile & IoT
ON THE COVER 5G: Are you ready for the data onslaught? page 27
FEATURES
41
Google sends a text on RCS
16 LATIN AMERICA
Is the carrier community ready for the data demands of 5G?
44
The big interview: Schachne of BICS
20 EXECUTIVE INTERVIEW
32 LET AI TAKE THE STRAIN
Phill Lawson-Shanks, chief ‹Â?Â?‘˜ƒ–‹‘Â? ‘Ƽ…‡”ǥ †‰‡ ‘Â?Â?‡
‘™ ™‹ŽŽ ÂƒÂ”Â–Â‹Ć¤Â…Â‹ÂƒÂŽ ‹Â?–‡ŽŽ‹‰‡Â?…‡ improve automaion in the carrier sector?
47
Executive interview: Huawei’s Ding
50
Why carriers must court partners
27 5G: ARE YOU READY FOR
12 EUROPE
THE DATA ONSLAUGHT?
Special Report Enterprise & WAN capacitymedia.com
21 CARIBBEAN
41 GOOGLE SENDS A TEXT
23 NORTH AMERICA
ON RCS
24 METRO CONNECT 25 ASIA-PACIFIC
The mobile industry is excited about RCS, the smart replacement for SMS. But the industry has been here before.
Capacity
STC’s Alan Whelan talks to Capacity about the company’s vision to propel it to new heights
ENTERPRISE & WAN special report INNOVATION
after page 53 special report after page 29
STRATEGIES
50 SMART ROUTES TO
18 EXECUTIVE INTERVIEW Paul Scott, presidentC&W Networks
A closer look at the opportunities for carriers to work with others on
55
Shaping up for SD-WAN
22 OPINION
55 SD-WAN SHAPING
57 58
Opinion: Colt
62
It’s a WAN-derful world
SMART CITY BUSINESS
THE BIG INTERVIEW page 30
MOBILE AND IOT special report after page 39
TÊlÊcoms Sans Frontières
ENTERPRISE NETWORKS
30 THE BIG INTERVIEW
Is traditional MPLS networking dead?
Alan Whelan, vice president for wholesale, STC
62 MARKET DATA
34 THE BIG INTERVIEW
�–‡”’”‹•‡ ”‡’‘�†‡�– ‹�•‹‰Š– ˆ”‘� the WAN Summit in London
64
Frank Rey, director of global network strategy, Microsoft
Five top SD-WAN solutions
64 FIVE TOP SD-WAN
65
The big interview: Telstra’s Burns
SOLUTIONS
36 THE BIG INTERVIEW Wagner Rapchan, chief executive ‘Ƽ…‡”ǥ ‡–‡ŽŽ
44 THE BIG INTERVIEW
A look at just some of the SD-WAN ‘ƥ‡”‹Â?‰• ƒ˜ƒ‹Žƒ„Ž‡
PEOPLE & DIARY
MikaĂŤl Schachne, vice president of mobile data business, BICS
66 APPOINTMENTS
47 EXECUTIVE INTERVIEW
The bleeding edge
Ryan Ding, head of carrier business, Huawei
The big interview: Zayo’s Caruso
68 ACT LOCAL 68 MARKET WATCH Developments to keep an eye on
THE BIG INTERVIEW page 34 Frank Rey, director of global network strategy at Microsoft, says that carriers need to work together
capacitymedia.com
57 OPINION Mirko Voltolini, head, network ondemand, Colt Technology Services
58 THE BIG INTERVIEW Dan Caruso, chairman ƒÂ?† …Š‹‡ˆ ‡š‡…—–‹˜‡ ‘Ƽ…‡”ǥ ƒ›‘
SPONSORS 09 ARYACELL 38 RETELIT
THE BIG INTERVIEW page 58 Dan Caruso, chairman ƒÂ?† ‘ˆ ƒ›‘ –ƒŽÂ?•ǥ ƒ„‘—– bout bringing back energy and ambition to the company
Capacity
editor’s letter | 03
Edge-to-edge interconnection
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e often talk about ultra-low latency, high capacity and availability but the emphasis is truly on further upgrading and extending backbones to create edge-to-edge interconnection today. The important role of network intelligence within mobile backhaul will need to quickly evolve and will continue to become ever-critical to support roaming connectivity as more and more connected devices emerge. Mikaël Schachne of BICS answers whether mobile networks are ready for the 18 billion IoT devices forecast by 2022 (pages 44-45). As we go to print, MWC is about to kick off again in Barcelona, which is just one city highlighted in our Smart City feature (pages 50-51). Key themes there will of course be mobile and the internet of things (IoT), but how are carriers taking advantage of these opportunities? 5G will successfully enable technologies such as IoT, connected cars, apps and devices, but the partnerships carriers create, the widespread deployment of small cell nodes and the acquisition of millimetre wave spectrum will determine the success of next-generation networks. Is the wholesale market ready for the data onslaught (pages 27-29)? Microsoft’s Frank Rey tells Capacity that carriers today need to rise above ‘best effort’, collaborate, share information and create standards for mission-critical services (pages 34-35). Capacity Businesses are struggling with data-intensive content and connectivity issues in the face of surging bandwidth demand. Many have initiated digital transformation programmes, including moving applications to the cloud, and increasing numbers are looking towards SD-WAN to treat the network as an asset to enable global expansion. Our Enterprise & WAN special report, includes: a big interview with CEO Dan Caruso about Zayo Group’s January launch of its own SD-WAN product (see pages 58-59); an executive interview with Dan Burns about Telstra’s enterprise strategy (page 65), and some statistics from our very own WAN series of events (pages 62-63). The Capacity Middle East and Latam events are upon us and we hear from STC’s VP of wholesale Alan Whelan and Netell CEO Wagner Rapchan (pages36-37) about their companies’ roles within their respective regions.
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Executive editor Alan Burkitt-Gray alan.burkitt@capacitymedia.com Skype: alanbg Twitter: @alanburkittgray Deputy editor James Pearce james.pearce@capacitymedia.com Twitter: @jamespearce87 Reporter Natalie Bannerman natalie.bannerman@capacitymedia.com Twitter: @nitnat1989
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Subscription enquiries Customer services customerservices@euromoneyplc.com tel +44 20 7779 8610 fax +44 20 7779 8602 Printer Stephens and George, UK Next issue April/May 2018 Published on 23 April 2018 Directors David Pritchard (Chairman), Andrew Rashbass (CEO), Colin Jones, Sir Patrick Sergeant, Andrew Ballingal, Tristan Hillgarth, Imogen Joss, Tim Collier, Kevin Beatty, Jan Babiak, Lorna Tilbian Freelance writers Gareth Willmer Sue Tabbitt Guy Matthews
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04 | middle east
STC BEGINS CONSTRUCTING “LARGEST NETWORK OPERATION CENTRE IN MENA”
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audi Telecom Company (STC) has started constructing what it says is “the largest network operations centre in MENA”, at the King Abdulaziz Telecom Complex in the Al-Mursalat district, Riyadh. The centre, which is expected to be completed in 2019, includes smart control and operation methods for all network components, information systems and modern data centres established by the company in different regions. “The new national network control centre is an important investment in the future of technology in our country,” said Dr Khaled Biyari, STC Group CEO.
“STC has prepared itself in the best way to serve the company’s customers from corporate and individuals.” The centre is expected to increase the efficiency of customer and business services and enhance the company’s position as a regional provider of internet, data and communications services. The facility is set to enhance the company’s strategy for digital transformation, enabling digital services and enriching experience of individual and corporate customers in alignment of the Kingdom’s 2030 vision, its plan to reduce Saudi Arabia’s dependence on oil,
TALIA PARTNERS WITH NEWTEC TO INCREASE CAPACITY ARABSAT 5C KA SATELLITE Talia has purchased a Newtec Dialog platform to provide Ka-band High Throughput Satellite (HTS) services to Afghanistan and Iraq. The collaboration between the two will enable access to multiple transponders on Arabsat’s 5C Ka-band satellite, which is located 20 Degrees East. Jack Buechler, Talia’s VP of business development, said: “We are delighted with the performance, flexibility, manageability and reliability of the existing Newtec Dialog platform covering the whole of Africa. This new platform will service both broadband users utilising low-cost, self-install 75cm antennae, as well as enterprise and carrier-grade services at much higher bandwidths.” The HTS Newtec Dialog platform uses small VSAT antennas to create lower price points for Internet access in the region. In turn this lower for hardware and services
increases the number of people able to connect to the internet, which is all in line with Talia’s CSR mission to support Capacity communities and economies. “Talia is a longstanding partner of Newtec and has always been at the forefront of providing its customers with high-speed efficiency and reliability. The purchase of this latest Newtec Dialog platform will see our cooperation move into a multitude of new services and we applaud Talia on its innovative market approach,” added Thomas Van den Driessche, CEO of Newtec. The Newtec Dialog platform uses innovative setup guides so that customers can self-install the terminals with an app – either on Apple’s iPhone or Google’s Android devices. The company says that this ease-of-access and reduced upfront cost will allow more users to take-up these new Ka-band HTS services.
ETISALAT LAUNCHES AN PAYMENT SERVICE FOR UAE’S SMB RETAIL SECTOR Etisalat has announced the launch of its Mobile Cashier service for the Small and Medium Business (SMB) segment in the country giving them free on boarding and affordable mobile point-of-sale service that enables these businesses to accept card payments from their customers. Etisalat’s Mobile Cashier service helps transform merchants’ smart devices like phones or tablets into business-grade point of sale terminals, enabling them to accept debit, credit and pre-paid cards in a secure
and simple-to-use environment, it claimed. “Technology and innovation are key drivers of financial inclusion and especially today with mobile penetration rates continuing to grow there is immense potential to tap into finding more ways to converge payments with mobile,” said Esam Mahmoud, acting senior vice president, small and medium business at Etisalat, who said it would enhance the value of businesses. “We believe all SMBs should have access to digital payments.”
diversifying its economy and developing its public sector. Go to pages 30-31 to read our interview with Alan Whelan, wholesale VP at STC.
STC’s MENA operations centre set to launch in 2019
STC’S VIVA IN $133M DEAL TO UPGRADE AND EXPAND KUWAIT NETWORK Kuwaiti operator Viva is to borrow the equivalent of $133 million to upgrade its network. The five-year-deal, for 40 million Kuwaiti dinars, is with Boubyan Bank and includes a Murabaha facility, which conforms with Islamic custom. According to Reuters, Boubyan Bank is a financial institution that provides banking and investment services in accordance to the Islamic Sharia principles through a network branches across Kuwait. “This strategic partnership with Boubyan Bank is a robust ground to further expand and develop Viva’s operations by investing in its network and its high quality of services, products and technical solutions,” said Viva’s CEO, Salman Bin Abdulaziz Al Badran. Al Badran said: “Our strong competition in the Kuwaiti telecom market through meeting our customers’ aspirations and ambitions, proves our leadership and promotes our capability to deliver the best.” Boubyan Bank CEO Adel Abdulwahab Al-Majed said the deal will “help fund the company’s expansion plans and reflect positively on the company’s clients and help achieve the company’s domestic expansion targets”. He added: “Over the past years, Boubyan Bank succeeded in achieving remarkable growth rates in its corporate credit portfolio by attracting a number of operational companies known for their financial and economic creditworthiness while continuing to maintain the highest standards of credit quality, studying and diversifying risks.” february/march 2018
Capacity
06 | middle east
SES SET TO LAUNCH FOUR MEO SATELLITES TO ENHANCE O3B FLEET
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our O3b medium earth orbit (MEO) satellites will be placed in orbit nearly 8,000km from Earth, four times closer to the planet than geostationary satellites. O3b-_ThalesAleniaSpaceThe new satellites, which have arrived safely at the Guiana Space Centre in Kourou, French Guiana, in preparation for launch by a Soyuz vehicle in March 2018, will enable SES Networks to meet exponential demand for reliable fibre-like connectivity worldwide. Back in September 2017, SES announced its newest offering in cloud-scale connectivity and high power data services, a network system that will provide high performance network communications from 2021. The Ka-band satellites will offer low latency, fibre-like connectivity to people and businesses in the growing mobility, fixed data and government markets. The launch of the new satellites, which have all been built by Thales Alenia Space, will augment SES’s fleet of 12 O3b satellites. The four new spacecraft have improved connectivity capabilities and increased
performance, and will serve to seamlessly scale the existing O3b constellation. Together, they will enable SES Networks to offer more capacity, enhanced coverage, increased efficiencies and greater reliability while delivering carrier-grade services including MEF Carrier Ethernet 2.0 certified services, to telcos, mobile network operators (MNOs), enterprises, internet service providers (ISPs) and government customers. “The uptake of our O3b fleet and capability has been breathtaking. From being the fastest growing operator in 2015 to our customers demanding for more O3b services today, we are now approaching peak capacity across a number of regions,” said Steve Collar, chief executive officer at SES Networks. “As the only operational low-latency, broadband constellation in the world, we are developing our network aggressively to deliver cloud scale Capacity connectivity and solutions. Our managed end-to-end network services are comparable with terrestrial networks, empowering our customers to
Steve Collar, CEO, SES Networks
offer high-performance connectivity on a truly global scale.” Martin Halliwell, chief technology officer at SES, added: “In addition to the O3b satellites’ throughput capabilities and low latency, a unique feature of the O3b constellation is that it is easily scalable and is designed to be expanded in response to demand. Demand for reliable fibre-like connectivity has never been higher, and we are excited that our satellites can play a key role in connecting people, communities, and improving their lives.”
ZAIN GROUP, CISCO REACH IP/MPLS NETWORK MILESTONE
TCI SET TO SHARE ITS NETWORKS WITH ISPS
The news sets up the network for future opportunities and new business models, as well as allowing Zain’s network, which serves 45 million customers across the Middle East and North Africa, to meet the ever increasing demands of devices and growing connections. “The demands of the digital era means that we must prioritize improving speed and efficiency, defining a growth strategy based on new services, and ensuring security,” said Henri Kassab, managing director of international wholesale and roaming at Zain Group. “These are the building blocks of our innovation that support our transformation in becoming an integrated digital lifestyle operator. With the support of Cisco’s leading technology, our future-ready network architecture positions us well to drive tangible business outcomes and meet the evolving demands of our customers.” Zain Group is using Cisco’s advanced segment routing platforms and WAN automation bringing distributed intelligence and centralized control to its network. In addition, the cloud-scale and
Telecommunication Company of Iran (TCI) has entered into two agreements with Shatel and HiWeb, the local internet service providers, to share its networks with them In July 2017, Iran’s Communication Regulatory Authority (CRA) ordered TCI to share its infrastructure with private companies through its initative called the ‘Wholesale Bitstream Access’. The July regulation is aimed at boosting competitiveness in the market and enabling local firms to use the telecom infrastructure to the full extent. TCI’s fibre-optic network will be shared with fixed communication provider permit holders and get rid of the state-owned company’s monopoly over the sector. AsiaTech, Pars Online, Saba Net, Psihgaman, Helma Gostar and Afra Net, are all said to be considering signing similar agreements with TCI, said the Financial Tribune. With over 30 million landline subscribers and 4.8 million internet subscribers, it is hoped that the news marks a change in the telco landscape in Iran.
automation of the product will deliver next-generation network capabilities to the Zain Group enabling simplification, scalability and open innovation that drive business results. The move represents a move towards network automation and a more resilient network that delivers high bandwidth, improved application intelligence for 5G and a better end user experience that defines the network of the future. As well as simplified operations, programmability, scalability and increased network availability. Ali Amer, managing director of global service provider sales at Cisco Middle East and Africa, added: “The capabilities of Cisco’s segment routing, automation and our best of breed routing engines enable Zain Group to implement a programmable network that allows them to rapidly adapt to future customer needs. By fast tracking their network automation, Zain Group are future-proofing their network with an agile, scalable and secure architecture that supports their growth strategy and enhances their competitiveness.”
february/march 2018
International WHOLESALE Services
Connecting your world As a leading global provider of integrated communication solutions, Telefónica provides customers with high quality connectivity, digital platforms and a wide range of innovative, end-to-end solutions. When combined with our extensive international network, cutting edge infrastructure and global footprint, it means we are where you need us to be with the services you expect. Telefónica International Wholesale Services provides services to fixed and mobile operators, service providers, wholesale carriers and OTT-Media companies. With particularly strong presence in Latin America and Europe, our global portfolio includes new digital platforms and solutions for enterprises, as well as more established carrier services: • Voice • Network Services • Mobile • Satellite • Security • Cloud • IoT • Big Data wholesale.telefonica.com
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08 | news analysis: equinix and oracle
THE MIDDLE EAST: A GROWING HUB OF CLOUD ADOPTION CLOUD CONTINUES TO GROW ON A GLOBAL SCALE, PARTICULARLY AS ADOPTION INCREASES IN NEW MARKETS. NATALIE BANNERMAN SPEAKS TO ORACLE’S JOHN ABEL AND EQUINIX’S MICHAEL WINTERSON ABOUT WHERE THE MIDDLE EAST RANKS ON THIS LIST
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racle recently announced that it is launching its services to 12 new data centre regions, expanding its new enterprise cloud platform into Asia. Of the 12 new locations, Saudi Arabia is the one that caught everyone’s attention, making Oracle the first major cloud player to launch a data centre in the Middle Eastern country. But what is it that makes the Middle East an appealing proposition for new cloud services? According to Cisco’s Global Cloud Index 2015-2020, by the year 2020, cloud data centre traffic in the Middle East and Africa, will grow 4.4-fold to reach 304 Exabytes per year, at a compound annual growth rate of 34%. Of that, consumer will represent 68% of this cloud data centre traffic. And by the same year, 95% of all workloads in Middle East and Africa will also be processed in the cloud. Speaking exclusively to Capacity, John Abel, head of technology and cloud for UK, Ireland and Israel at Oracle, says: “What we’ve done is keep our breadth of solutions across the globe and effectively what we’re doing is taking the site to the competition.” As former senior business director of Oracle EMEA, Abel knows first-hand about the Middle Eastern market and when questioned about the specific opportunities the market presents, Abel optimistically replies: “Why is the Saudi Arabia announcement amazing? Because a lot of the mineral, oil and gas industries can get huge benefits from cloud because they want emerging capabilities and solutions. If we can develop a solution that means you can get world-class technology – like artificial intelligence, machine learning and new capabilities etc. – you don’t have to find that skilled resource.”
He goes on to say that “if Oracle releases a new piece of capability into the cloud and all these countries can use that capability it showcases that the adoption of that technology is faster than ever before”. Echoing this sentiment, Michael Winterson, managing director of Equinix Services, added: “Through Oracle’s ‘Cloud at Customer’ offering we can deploy a small element of the Oracle cloud physically in our data centre, and it can be Capacity managed and operated by Oracle as it were the public cloud. It makes getting cloud services into 195 countries around the world, in the next to five years or so, actually quite feasible.”
telecommunication regulators need to adopt and embrace an open concept, but in a lot of cases regulations aren’t built that way,” explained Winterson. Though pushing for change, Winterson is still confident the Middle East can change its market environment for the better, in the same way other countries have. “If you look at were Singapore was 15 years ago to where it is today, it’s gone from a highly regulated, highly insular market to now a regional leader and hub in south-east Asia,” continues Winterson. “So If I were a Middle Eastern country I would look very carefully at how Singapore managed not only to grow through deregulation but to absolutely excel.” Overall “people underestimate the adaptive nature of that region”, says Abel. “They have a very big mobility culture, they are very good at adapting to new technology and I think that a lot of their industries require this adaption - mineral, oil, gas, financial services etc., and they’re all adopting new technologies at speed.” Also because the Middle East doesn’t have much legacy technology, it is in the best position to embrace the cloud. “They don’t have a lot of the legacy technology typically see in the UK market,” continues Abel. “So if there’s a region that’s hungry, then that region would be adopting cloud.” As our conversation draws to a close Abel says why Oracle’s competitors are so far behind in the Middle East, believing they are “slightly longer out” in terms of deploying their own technology but regardless they are “deadly serious about being the cloud leader in this area”.
The mineral, oil and gas industries can get huge benefits from cloud because they want emerging capabilities and solutions” John Abel, head of technology and cloud for UK, Ireland and Israel, Oracle
Equinix has a huge market share, operating in more than 175 data centres in 44 major metropolitan areas in 22 countries on five continents. Looking specifically at the Middle East, the company has its own data centre in the region called the DX1 – its Dubai-based Internet Business Exchange (IBX). As someone equally versed in the region, Winterson says that there’s still a lot of work to be done in order to create the ideal market conditions for cloud adoption. “The big issue is that cloud adoption requires a vibrant and open telecommunications market space. Domestic financial, technology and
february/march 2018
SPONSORED STATEMENT
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ARYACELL NETWORK :
GREAT DIVERSITY, LOWER LATENCY AND REASONABLE PRICE ARYACELL NETWORK IS A NEW OPPORTUNITY TO CONNECT ASIA AND MIDDLE EAST TO EUROPE VIA SHORTER ROUTES WITH GREAT DIVERSITY for MRC and IRU requests. Aryacell network has very especial diversity that can provide services from four gateways in the Persian Gulf those connect to marine cables and can connect them to Europe via four different gateways in the North and North West countries such as Turkey, Armenia, Azerbaijan and Turkmenistan. Tell us about Aryacell? What is its footprint and relevant services? Aryacell is the result of partnership between Tavanir, State Electricity provider Co., TIC, State Telecommunication Infrastructure Co and Aryacell, private Co as investor and operator of the network under the License of TIC. Aryacell Network has 22000 Km of fiber optic and has right to use TIC’s 22 Capacity International gateways. Aryacell Network is a reliable substitute or protection for Suez Canal for connecting Asia and Persian Gulf to Europe with lower latency, huge capacity (thanks to 100 gbps Nozar Ebrahimi Lame’, CEO & Board Member, Aryacell Network DWDM technology), unique diversity and reasonable price. The initial installed capacity is 2000 gbps and will increase to 5000 gbps by the end of 2020. The Iranian market is opening up. What opportunities do this Now network can provide services between Iraq (two gateways), present to operators in Asia, Europe and the Persian Gulf? Turkey, Armenia, Azerbaijan, Turkmenistan and Chabahar, Iran is opening up its market in various fields, especially in ICT Jask, Bandar Abbas and Bushehr in the Persian Gulf. The transit sector. Based on the 6th Five-Year Development plan, Iran will technology is based on OTN/DWDM 100 gbps and is more than provide 30 Tbps capacity for transit by the end of 2022. Internet 3 years under operation. bandwidth usage in the last 5 years has increased very fast and reached beyond Tele Geography’s prediction, which is about What is Aryacell planning for the future? What is in the pipeline? 2000 gbps, more than 15 times the amount of 2013. Some great Aryacell has planned to expand its network to all existing projects in FTTX has started and continued. The fiber optic gateways. Providing services inside the country in the near future networks are expanding very fast too. Now there is more than is one of our goals to expand internal operation. Aryacell is 90000 Km of active fiber optic network that provides bandwidth interested to invest in the marine cables those will connect to Iran. for internal and International transit. The amount of International We also intend to enter the IP business in the coming years. bandwidth transit via Iran is growing rapidly. Then there are so many opportunities in IP business for Asian, European and Middle Eastern companies for Regional and International bandwidth transit via Iran, Investing opportunity in FTTX projects and many other opportunities for startup companies. What are the key benefits of Aryacell Network’s new terrestrial route running through Iran? Why is this route important for international bandwidth carriers? Aryacell Network is the second largest fiber optic network in Iran and that is the result of cooperation between three big companies (two state-owned and Aryacell). Aryacell terrestrial route is running on OPGW network with very low latency, easy to repair and very rare cuts in the network. Aryacell Network is dedicated for regional and International bandwidth transit and provides connection at the border points via TIC International gateways. Aryacell Network is fully protected and provides International level SLA for customers. Aryacell, as a private company, having good relation with TIC, as the major government decision maker, can offer reasonable price capacitymedia.com
10 | africa
53 NATIONS SET UP PLATFORM TO KEEP TRAFFIC WITHIN AFRICA
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he Smart Africa Alliance – backed by 53 African countries – has taken a major step to set up a roaming platform across the continent, with the aim to reduce mobile costs. The alliance has signed a memorandum of understanding with Seychelles-based
Patrice Baker, president and CEO of GVG
revenue assurance company Global Voice Group (GVG) to set up an African Regional Traffic Exchange and Financial Settlement (ARTEF) platform. Patrice Baker, president and CEO of GVG, said: “The ARTEF is a revolution in not only traffic exchange within the One Africa Network – lowering costs and improving quality – but a significant milestone in Smart Africa’s bold vision to stimulate economic growth by breaking down the barriers to communications on our continent.” The decision to back ARTEF was taken at a meeting of the African Union in Addis Ababa. Hamadoun Touré, the former secretary general of the International Telecommunication Union who is now executive director of Smart Africa, said: “By keeping Africa’s traffic in Africa, the ARTEF platform will enhance the
MARINE SURVEY STARTS FOR 60TBPS Capacity KENYA-PAKISTAN SUBSEA CABLE Huawei Marine has started marine survey work for a new subsea cable that will link Pakistan with Kenya and Djibouti. The first phase of the cable will be 6,800km long but the backers – Huawei Marine and Tropic Science – are looking to extend it along the African coast to South Africa and along the Red Sea towards Europe, taking it to a increased length of 13,000km. Huawei confirmed to Capacity that the initial research – which began in November – is complete. “The marine survey – a process to verify the initial research – is now underway. After the marine survey will start the system installation,” a Huawei official said. The first phase of the cable, called
Pakistan East Africa Cable Express (Peace) is due to be ready for service early in the fourth quarter of 2019. It will connect Gwadar and Karachi in Pakistan with three countries – Djibouti, Somalia and Kenya – which are on the east African coast. Huawei said that the cable will use 200Gbps DWDM technology and will provide up to 60Tbps design capacity. “The Peace system will provide a new information expressway for the interconnection among Asia, Africa and Europe by connecting with the existing land and subsea cables, greatly reducing the route length and latency between China-Africa and China-Europe,” the company added.
Map of the Pakistan East Africa Cable Express (PEACE) submarine cable route
affordability and security of communications across the continent while cutting the costs that operators incur to interconnect and carry voice, SMS and later on data and financial services traffic among African countries.” Smart Africa – which is chaired by Paul Kagame, president of Rwanda – said that the One Africa Network is a free roaming zone agreement that aims at establishing a harmonised African telecommunications framework to give African countries the potential to make significant leaps in development through lower intra-region communication costs. As traffic will be exchanged via regional nodes within the region, instead of being routed via carriers that take it all the way to Europe and back down to Africa, the ARTEF is also expected to have a positive impact on the quality of service.
LIQUID TELECOM LAUNCHES EXPANDED SADC FACILITIES Africa Data Centres, part of pan-African telecoms group Liquid Telecom, has launched newly-expanded carrier-grade data centre facilities in Johannesburg and Cape Town, South Africa. South Africa Data Centre (SADC) Johannesburg and SADC Cape Town, which are ISO 27001-certified and already home to nearly 100 customers, will provide leading cloud service providers, carriers and enterprises with additional rack space and colocation services to meet the rising demand for cloud-based services in Southern Africa. “As moving to cloud-based solutions becomes more commonplace, businesses across Africa require more carrier-neutral, open-access data centre space for their business-critical data and applications,” said Nic Rudnick, Group chief executive officer for Liquid Telecom. “Through continuous investment in Africa Data Centres, we are providing the foundations for leading enterprises and cloud providers to come and build their digital future in Africa.” Following the completion of the first phase of expansion, SADC Johannesburg now offers over 3,000 sq m of secured space for data servers served through a total power capacity of 7MW, while SADC Cape Town provides 1,800 sq m of secured rack space with 5.5MW of power, said a company release. february/march 2018
africa | 11
2018 PLAN IS TO “SELL, SELL, SELL!” SAYS ANGOLA CABLES
TELECOM EGYPT SIGNS $133M WHOLESALE AGREEMENT WITH VODAFONE
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Telecom Egypt has signed a three-year transmission and infrastructure agreement with Vodafone Egypt, valued at more than EGP 2 billion ($133m). Egypt’s wholesale agreement with Vodafone Egypt, to provide transmission and infrastructure services, took effect in January 2018 and will end in 2021. It guarantees a minimum revenue of EGP 2.37 billion for Telecom Egypt over the tenure of the agreement, while Vodafone Egypt will benefit from new technical and commercial terms. “We are pleased to sign this agreement, which supports the relationship between the two companies and reflects our eagerness to create strategic bonds with the local operators,” said Ahmed El Beheiry, Telecom Egypt’s managing director and chief executive officer. The agreement represents a new step to maximise the commercial cooperation between the two companies
ngola Cable’s CCO Artur Mendes talks to Capacity about the company’s South Atlantic Cable System (SACS), its data centre in Fortaleza, Brazil, and becoming a Microsoft ExpressRoute partner. According to Mendes the recently launched point of presence (PoP) in Cape Town is “going according to plan” and was ready to go towards the end of December. As for the decision to deploy this new PoP, Mendes says: “For us it’s a complement to our existing services”. “We started with our first PoP in Teraco, Johannesburg, and we had a lot of customers asking us for a second position so we could offer them choice in delivery and that was our main objective in building the second one. Also because Cape Town is an important spot for the landing of cables on the west coast of Africa,” continues Mendes. Angola Cables also joined the same
Artur Mendes, chief comercial officer, Angola Cables
ranks as Liquid Telecom by becoming one the few Microsoft ExpressRoute partners in the region. “It’s always important to be connected to a company like Microsoft, and their sites,” says Mendes. “But from our position it’s also to guarantee that we have efficient routes and we create ExpressRoute partnerships because the access time on that route is faster.
Capacity
12 | europe
LINX PARTNERS EPSILON TO LAUNCH LINX NOVA IXP The London Internet Exchange (LINX), has partnered with Epsilon to offer service providers with access to the LINX NoVA Internet Exchange Point (IXP) in the Northern Virginia and Washington DC area. The partnership will see the two provide Epsilon’s service providers with direct connectivity to LINX NoVA from Infiny, Epsilon’s on-demand connectivity platform. In addition to allowing service providers to connect to IXPs globally, Infiny also supports remote peering and other services related to voice, data and global cloud connectivity. LINX NoVA is a community owned exchange as part of the London Internet
Exchange, it benefits from a growing number of peering partners at it exchange while Epsilon continues to add IXPs to its platform. Commenting on the partnership, Jerzy Szlosarek, CEO of Epsilon, said: “We are on a mission to make peering at exchange points across the globe simple and efficient. Our partnership with LINX NoVA will give our Service Provider partners access to new peering partners in the US and help them to use peering to deliver an optimised end user experience. LINX NoVA is one of the most unique IXPs in North America and we look forward to collaborating and growing together.”
OPEN FIBER BUILDS 200GBPS ROMEFLORENCE LINK
VEON SIGNS UP TO NGENA TO LAUNCH SD-WAN IN RUSSIA, GEORGIA AND UKRAINE
Italy’s Open Fiber has begun a commercial trial of a 200Gbps connection between Rome and Florence as part of its Zion backbone network. “Where typically the big fibre links stop at 40Gbps in Italy, we are the first in Italy and among the first in Europe to achieve these performances,” said Stefano Paggi, Open Fiber CTO. The system uses reconfigurable optical add-drop multiplexers and Flex Grid technologies from Huawei. In addition, the fibre is software-controlled and can be scaled down to 100Gbps or up to 400Gbps. Richard Jin, president of Huawei’s transmission network product line, said: “Huawei built an elastic 200G OTN [optical transport network] for Open Fiber to provide an optimal user experience and to help Open Fiber succeed.” Once live the service will support future ultrabroadband applications, including high resolution video, virtual reality, augmented reality, tactile internet, real-time gaming, autonomous driving, as well as 5G mobile network innovations.
Stefano Paggi: Open Fiber is the first in Europe to achieve these performances
VEON has signed up to the Next Generation Enterprise Network Alliance (ngena) in order to deliver global softwareCapacity defined wide area networks to its base in Russia, Georgia, Ukraine and Kazakhstan. ngena currently has over 15 international members join the partnership, VEON is its latest sign-up. Together ngena’s partners share their networks, cloud infrastructure and know-how in an effort to develop a global SD-WAN managed by a central platform. This would result in a new
Jerzy Szlosarek: “We’re on a mission”
enterprise network that is easy to use, highly scalable and fast to deploy, ngena claims. Alessandro Adriani, managing director at ngena, said: “We are really delighted that VEON, one of the telecommunication service market leaders, is joining ngena to offer our SD-WAN services to its enterprise customers. VEON can leverage the ngena solution in many interesting geographies, thereby offering their enterprise customers secure, easy to set-up and rapidly deployed business networks.”
UK 5G SPECTRUM AUCTION SET FOR APRIL AFTER COURT REJECTS THREE’S BID FOR LOWER CAP The UK is likely to press ahead with an auction for spectrum for 4G and 5G services in the next few weeks following a court decision. The Court of Appeal in London rejected the final bid by Three in February for a 30% spectrum cap to be imposed on any bidder. A spectrum auction is likely to begin in April and some of the spectrum will become available shortly after. Ofcom originally imposed a total cap of 37% on how much any one operator may hold at the end of the auction, a move opposed by BT, which owns EE, today the largest spectrum holder with 45%. BT last year went to court to try to block any move for a cap, but lost its attempt in December. At the same time the High Court told Three it was wrong to ask for a 30% cap – and that decision was held up by yesterday’s Court of Appeal decision. So the 37% cap will stand.
Ofcom: This will help prepare for 5G
Speaking on the decision, Ofcom, the UK regulator, said: “We welcome this decision, and will now press ahead with releasing these important airwaves. This new capacity will allow mobile companies to offer more reliable reception, and to prepare for future 5G services.” In January Ofcom set out its rules and timetable for the auction – warning at the time that the schedule might be disrupted by the appeal court. Ofcom will now start the process of formally qualifying the bidders. february/march 2018
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hina Telecom Global (CTG) has announced the launch of the first 100G cable service via their terrestrial system, and in collaboration to with Russian operators, for utchison Global answer the soaring demand Communications (HGC) big-bandwidth connectivity and Telenor have signed between Asia and Europe. an of IPX-peering agreement On the back of the launch at with the aim of enabling ITW, Silk the Super TSR (Transit mobile operators and carriers served Road), an ultra-low latency two to exchange IP traffic. by the terrestrial route via the Services will be extended China-Kazakhstan Gateway, to a greater population of diversifies further initiative mobile end this users, who will be able along to roam CTG’s product portfolio carriers seamlessly across IPX route. to discuss future of platforms run to support IP demand the Europe-Asia Swissôtel of 100G by HGC and Europe capability is andvia Asia giving Telenor, at the new option Thistop ban bandwidth Sunday Sund 00G 100G on extended coverage and meet CTG announces better voice strengthened by cross-border Industry leaders and data. the transmission systems via TURN TO PAGE 2 2 Furthermore, the collaboration TURN TO PAGE China-Russia, Chinawill enable HGC and Telenor to INSIDE deliverINSIDE greater reach to mobile operators via their IPX networks in Asia and Europe. Carriers, multinational corporations The IPX-peering agreement will and enable
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arriers owned by SK Telecom and KPN have shared live commercial international voice over LTE (VoLTE) over their multiservice IPX networks for the first time.
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14 MEGAPORT’S ENGLISH TALKS SDN POWER
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14 | europe
GTT BUYS INTEROUTE FOR $2.3 BILLION
G
TT Communications has entered into a definitive purchase agreement to acquire Interoute, one of Europe’s largest independent fibre network operators, for $2.3 billion. The all-cash deal is set to bring a number of benefits for the global cloud networking provider including: increasing the scale of the company, expanding GTT’s Tier 1 global IP network with one of Europe’s most extensive fibre footprints. Which at present includes over 400 points-of-presence, spanning 24 metro areas and interconnecting 126 cities across 29 countries. GTT says it raised its funds through debt financing and committed equity financing of $250 million from The Spruce House Partnership and Acacia Partners. The deal is due to close in three to six months, subject to the usual regulatory approvals. “This combination creates a disruptive market leader with substantial scale, unique network assets and award-winning product capabilities to fulfil our clients’ growing demand for distributed cloud networking in Europe, the US and across the globe,” said Rick Calder, GTT president and CEO.
Rumours of the acquisition began swirling in the October 2017. When Capacity questioned Williams on the claims, he said: “No comment here. We remain focused on building the business.” But this time round Williams isn’t holding anything back, saying: “This is an exciting next chapter for Interoute, GTT, our customers and our team. The combined assets and strengths of our two companies create a powerful portfolio of high-capacity, low-latency connectivity, and innovative cloud and edge infrastructure services to support our customers in the global digital economy.” At the time Interoute was valued at roughly $2 billion, not far off its current $2.3 billion price tag. GTT raised its funds through debt financing and committed equity financing of $250 million from The Spruce House Partnership and Acacia Partners. “Following our successful, proven acquisition model, we expect to complete this integration within three to four quarters post-close and achieve a postsynergy multiple of seven to eight times Capacity Adjusted EBITDA or better on a pro forma basis,” added Calder. The deal has been strongly supported by
ROSTELECOM PICKS ZTE TO UPGRADE ITS NETWORK
OFCOM DRAFTS FULL-FIBRE BROADBAND RULES
ZTE has won a 70% share of the first stage of the access network modernisation project with Russian operator Rostelecom. Rostelecom is to build the first stage of the project using ZTE’s Multi-Service Access Network (MSAN) product which leverages VDSL. The second stage of the build will use high-speed technologies as G.vectoring and G.fast, which are currently being tested by Rostelecom. Under the scope of the deal, ZTE will offer up its advanced optic/copper integrated product equipment, the C350M/C300M MSAN. According to ZTE, the solution lowers Rostelecom’s capital expenditure while meeting the need of increased network speeds. In addition, it also allows evolution towards the FTTx network, enabling Rostelecom to directly deploy the C350M/C300M MSAN product on its next-generation optical network. The company says the need to upgrade its network has been driven by the growth of IP Internet services and the need for general high speed internet access.
Ofcom, the UK regulator, has released a draft outline of its rules for full-fibre deployment in the UK. Under the new rules, BT must make its telegraph poles and underground tunnels open to rival providers, in order to make it quicker and easier for them to build their own full-fibre networks. “Ultrafast speeds will allow people to download entire films, or businesses to
the Sandoz Family Foundation, Aleph Capital and Crestview Partners - GTT’s shareholders - particularly in its wider strategy to create a player with significant scale and international presence. “The acquisition of Interoute represents a major milestone in delivering on our purpose of connecting people, across organizations and around the world,” concluded Calder. The deal is due to close in three to six months, subject to regulatory approvals.
Interoute acquisition represnts “a major milestone” for GTT, says Rick Calder
share huge files, almost instantly. Full fibre will also underpin exciting technology like remote healthcare diagnostics, 5G mobile and connected devices,” said Jonathan Oxley, Ofcom’s competition group director. In addition, Openreach will have to repair faulty infrastructure and clear blocked tunnels so providers can access them. And give access to its competitors so they can plan where to lay fibre.
WIND HELLAS ENHANCING WHOLESALE SERVICES AMID €500M NGA PLANS Wind Hellas is deploying its own fibre-optic network, enhancing its existing retail and wholesale services in several areas throughout Greece, amid €500 million plans. The company is now offering its end-users ultra-fast internet services over its own deployed fibre-optic network in Greece, which is part of the Wind Hellas’ five-year investment plan for nextgeneration access (NGA) networks, expected to reach a total of €500 million in infrastructure investments. Currently Wind’s NGA wholesale
services is available at speeds of 30/3 50/5 - 100/10 - 200/20 and they are implemented by combining two different architectures (FTTC and FTTH) and three different access technologies (VDSL SuperVectoring, G.fast & xPON). The deployment of the new fibre-optic network in many cities around Greece will also provide the physical path for wholesale capacity services offering up to 1G speed. Wind plans to complete the rollout of the new fibre-optic network in Greece by mid-2019. february/march 2018
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16 | latin america
EDGECONNEX EXPANDS INTO BUENOS AIRES
Clint Heiden: We’re thrilled to extend the edge into South America
E
dgeConneX has expanded its network into South America with the launch of its first Edge Data Centre in Buenos Aires, Argentina.
The new data centre will provide underserved regions in South America with high-quality, low-latency content delivery, cloud access and international interconnectivity in an N+1 and carrier neutral facility. The facility is to be built in partnership with the Argentina Investment and Trade Promotion Agency (AAICI), Silica Networks, and an operated with an extensive network of ecosystem and peering partners. This includes Claro Argentina, Internexa, IPLAN, Metrotel, Telecom Argentina, and access to regional Internet exchanges. “We are thrilled to extend the Internet’s Edge into South America, specifically into the Buenos Aires market,” says Clint Heiden, chief commercial officer, EdgeConneX. “As we continue to expand the edge globally in partnership with our customers, we look forward to enhancing the Internet in Buenos Aires by facilitating the fastest Capacity and most reliable delivery of cloud, content, network and other services closer to their end-users.”
GLOBENET LAUNCHES IXP IN FORTALEZA GlobeNet has created a new internet interconnection point in Fortaleza, Brazil an increasingly important landing point for cables to North America and Africa. Fortaleza will join São Paulo as the second internet exchange point (IXP) for Brazil, connecting traffic for the north and north-eastern part of the country in a deal with Brazil’s Network Information Center (NIC.br). “A country with continental proportions like Brazil cannot rely anymore on a single IXP for its critical traffic exchange,” said Milton Kaoru Kashiwakura, special projects and development director at NIC.br. “Network operators willing to exchange traffic are welcome to connect.” GlobeNet was chosen due to its strong and solid infrastructure established in the north-eastern part of Brazil, and also because of the level of availability of data-centre services, a reliable dual ring-protected fibre subsea cable system that connects North and South America, and neutrality. “The implementation of the new, regional Fortaleza point of interconnection highlights GlobeNet’s commitment to helping our clients expand into new markets and improving access to the internet for end-users in Brazil,” said Eduardo Falzoni, CEO of GlobeNet.
TE SUBCOM TO BUILD 10,000KM CURIE SUBSEA CABLE
INTEROUTE EXPANDS CLOUD INTO BRAZIL
TE SubCom has won the contract to build Google’s Curie subsea cable system, which will connect the US to Chile and includes a branching unit for future connectivity to Panama. TE SubCom will design, deploy and launch the submarine cable system for Google between North and South America and the Curie submarine cable will link Los Angeles, California, and Valparaiso, Chile, via a high capacity intercontinental cable. “We’re proud to provide comprehensive services to Google on this project. Leveraging existing TE SubCom infrastructure through our SubCom Global Services (SGS) options put us in position to be a true partner to them. Our role in the continued growth of global connectivity and information sharing is a point of substantial pride for the TE SubCom team,” said Sanjay Chowbey, president of TE SubCom. The Curie system will add dedicated capacity to Google’s global network, enabling interconnection to other infrastructure in the region. It addition it make Google the first major non-telecom
Interoute is expanding its global footprint by launching new services in São Paulo, Brazil. The new site in the region will become the cloud and network provider’s, first in South America delivering a range of connectivity solutions with local partners as well as host a new Interoute Virtual Data Centre (VDC) zone. The decision to make São Paulo its newest site is due to being an entry point into the emerging markets in South America. Services will go live in H1 2018. “The economic powerhouse of South America is increasingly important to our global customer base, with São Paulo in particular becoming a magnet for cloud and SaaS. Strategically, this is a significant development for the Interoute Enterprise Digital Platform as it brings our cloud and SD-WAN capabilities to a whole new continent. Our platform helps enterprises optimise the performance of applications deployed from SaaS providers and hosted in dispersed data centre locations around the globe; regional presence is key to accelerating that performance across our low-latency SDN core network,” said Mark Lewis, EVP of products and development at Interoute.
Sanjay Chowbey: TE SubCom is proud to provide services to Google
company to build a private intercontinental cable and its due to go live in 2019.
february/march 2018
latin america | 17
GSMA: SPECTRUM POLICIES IN LATAM IMPACTING QUALITY
T
he GSMA says that spectrum policies in Latin America are having an impact on the quality of mobile services in the region. In a recent report, the GSMA looked at pricing of spectrum across 15 countries in Latin America. It found pricing decisions by regulators can have a negative impact on mobile deployments and quality of service. Average spectrum prices are around 60% higher in Latin America than they are in Europe, according to the GSMA, while the amount of spectrum allocated to mobile operators in the region is much lower than in Asia, Europe or North America. The report makes a link between the total spend on spectrum and the price of data, arguing that adoption of new services can be driven by lowering the cost of spectrum. “Latin American countries that do not
Sebastian Cabello: Some Latam countries are holding back their economies
make spectrum available for 4G and 5G networks and artificially inflate the price are holding back their digital economies, not closing the digital divide and hurting consumers,” said Sebastian Cabello, head of Latin America, GSMA.
Capacity
ARGENTINIAN TELCOS PLEDGE MORE INFRASTRUCTURE Following the loosening of local regulations, Telecom Argentina has pledged to invest $5 billion to boost infrastructure in Argentina. The telco has said that it will invest $1.3 billion to expand connectivity in 2018, with the remaining $.37 billion to be spent in 2019 and 2020. It will focus on driving fibre-to-the-home (FTTH) connectivity across the country, whilst also bringing IPTV into homes supported by Cablevisión, which it merged with at the start of the year. It will increase the reach of hybrid platforms like Flow and Arnet, which integrate video-on-demand (VOD) and other advanced TV features. “It will enable us to deliver not only our own digital content, but third parties’ content, with more quality and faster speed,” said Telecom Argentina. Telefónica has also pledged $2.6 billion into the country, according to a report from iProfesional. Telefónica is funding a major infrastructure push in 4G and fixed broadband infrastructure as.
18 | executive interview: paul scott
C&W NETWORKS SAY IT IS BUSINESS AS USUAL C&W Networks has officially been split off from Liberty Global to create Liberty Latin America, president of C&W Networks Paul Scott speaks to Natalie Bannerman
2
017 was a big year for C&W Networks. Despite winning numerous awards for its performance and innovation in the pan-Caribbean region, it was the more recent news that the company was spun off from its parent company Liberty Global, into a new entity called Liberty Latin America that has been its biggest news of late. The announcement was formally made in January of this year with Mike Fries, executive chairman of Liberty Latin America and CEO of Liberty Global, saying: “The split-off of our Latin American and Caribbean operations from Liberty Global will ensure that this new company will have access to the capital and resources necessary to achieve superior financial and strategic growth.” Speaking to Paul Scott, president of C&W Networks, he too thought the same as Fries, saying that the new division will create a number of benefits for the company and its customers.
on the Latin American region, adding: “I see tremendous opportunity to bring world-class technology, innovation and scale to our operations, expand our network coverage, and deploy exciting new service offerings to our residential and business customers.” Scott appears to be on the same page as Nair, agreeing with this idea of leveraging new technologies adding that there’s untapped potential for growth in the Latin American region, both organically and inorganically. Capacity “This newly-listed company is wellpositioned to leverage world-class technology, innovation and scale. Latin America has huge potential for broadband, connectivity and services which are underpenetrated,” explains Scott. “The new company expects to take advantage of organic and inorganic opportunities for growth across the region.”
The new independent operation called Liberty Latin America will not affect the operations of Cable & Wireless Communications” Paul Scott, president, C&W Networks “The split-off will allow the new company to have access to the capital and resources necessary to achieve superior financial and strategic growth,” explained Scott to Capacity. “Also, it will be able to bring more world-class technology, innovation and scale to the operations, expand network coverage, and deploy exciting new service offerings to residential and business customers across the region.” Also commenting on the decision, Balan Nair, president and chief executive officer of the newly-formed Liberty Latin America, said that the split creates an independent company focused squarely
Regardless of the parent company C&W belongs to, Scott is keen to reassure us that its operations remain unaffected and its business as usual for C&W Networks. “Liberty Global’s split-off of its Latin America operations, known as LiLAC, into the new independent operation called Liberty Latin America will not affect the operations of Cable & Wireless Communications (C&W).” Despite what Scott says, with over 50,000km of subsea fibre, more than 60 subsea cable stations and 38,000km of terrestrial fibre in the Latin American and Caribbean region, C&W Networks has
plethora of network assets that has the potential to be affected by this organisational change. As a major player in the submarine cable sector, I caught up with Scott at the 2017 Subsea Connect Americas conference, where we discussed a number of topics affecting the industry surrounded by over 220 delegates. The biggest was the growing number of OTT-backed subsea cable projects appearing in markets, but less so in emerging ones, to which he replied: “We certainly haven’t seen OTTs invest in the Caribbean with subsea cable yet. I think quite simply the eyeball is on other continents and other parts of the world and they are preoccupied with that first. Notwithstanding the fact that there’s several hundred million people in the Americas region, but I think we’ll have to wait and see.” We also touched on the idea of subsea cables forgoing the cable landing standing and connecting directly into the data centre, an idea that Scott again says only really works in developed markets as opposed to the emerging ones where C&W plays. “I think in developed countries, there’s a greater density of data centres to even consider that but let’s face it in some of the emerging markets there’s not an abundance of ready-to-go-data centres sitting in an appropriate location suitable to land a cable in,” he explains. “In fact to the contrary, so I don’t think it’s either or, it’s what does the landscape look like at a given country.” C&W Networks will once again be in attendance at our Capacity Latam conference in Rio de Janeiro, taking place on the 20 and 21 March, and may perhaps further update us all on this development. But whatever happens next for the company, C&W will undoubtedly continue to do what it does best which is to “continuously push the envelope, do better, and provide more” because as Scott says: “That is in our DNA.” february/march 2018
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20 | executive interview: phill lawson-shanks
EDGECONNEX: EXPANDING THE EDGE INTO SOUTH AMERICA As EdgeConneX starts rolling out its Edge Data Centers (EDCs) across South America, Phill Lawson-Shanks, chief innovation officer at the company, speaks to Capacity about its Latam plans What are your key developments for 2018? In 2018, EdgeConneX plans to continue expanding the Edge to South America. We are headed to Argentina first, placing an Edge Data Center (EDC) in Buenos Aires. This location was selected in collaboration with our customers, along with the Argentina Investment and Trade Promotion Agency (AAICI) and Silica Networks. As with all of our EDCs, we are thoughtful about creating a robust internet ecosystem at the edge and this market is shaping up to provide the region with an outstanding group of connectivity partners. In addition to Silica Networks, we have partnered with Claro Argentina, Internexa, IPLAN,
What new opportunities do you predict for the wholesale sector in Latin America over the next few years? Right now, Latin America is poised for growth as an increasing number of broadband networks, cloud services and OTT providers increase their investments in the region. Leveraging Capacity new levels of connectivity and bandwidth, Latam is now a hotbed for innovation as it gears up to meet the growing demands of enterprises and end-users around the region. In addition, Latin America is ripe for an explosion in the IoT sector as it becomes increasingly capable of supporting a vast network of wireless and wireline communications technologies.
The introduction of Artificial Intelligence (AI) technology throughout the region will provide Latin America with a sustainable solution for economic growth as it brings greater levels of innovation and productivity” Phill Lawson-Shanks, chief innovation officer, EdgeConneX Metrotel, Telecom Argentina and offer access to regional Internet exchanges. The Buenos Aires EDC will provide underserved markets in South America with high-quality, low-latency content delivery, as well as cloud access and international interconnectivity, making it an attractive location for enterprise investment while boosting the regional economy. It’s our hope that this will be the first of many EDC deployments in South America.
The introduction of Artificial Intelligence (AI) technology throughout the region will provide Latin America with a sustainable solution for economic growth as it brings greater levels of innovation and productivity. EdgeConneX is ready and excited about the opportunity to be the Edge Data Center provider that facilitates the fastest, most secure delivery of content, cloud and applications to users across the country.
What technology or service do you think will help drive the industry over the coming years? Open compute infrastructure standards - like Open19, along with the next generation of internet exchanges and distributed ledgers. Server, storage and network platforms are converging and becoming commodities. You will be attending Capacity Latam 2018, what are you hoping to achieve at this event? While at Capacity Latam, we are hoping to continue spreading awareness and understanding of the importance of expanding the Edge of the network to South America. EdgeConneX is dedicated to creating purpose-built, edge-of-network infrastructure solutions that extend the Internet’s reach, providing many underserved markets with the bandwidth and connectivity they require to thrive in today’s digital landscape. Our new Buenos Aires EDC will serve as a new gateway to North America and beyond, providing an alternative to the NAP of the Americas. We want to ensure that our team is onsite and available to share our news and answer questions about our entry into the region. We hope to make some new connections within the Internet ecosystem, while also connecting with our existing customers while they are all gathered in Rio for the Capacity Latam event.
february/march 2018
caribbean | 21
ICE PICKS TELIA CARRIER FOR BACKBONE SERVICES
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elia Carrier has been selected by Costa Rican telco Instituto Costarricense de Electricidad (ICE) to provide dedicated internet access to its customers using Telia’s global backbone. State-owned ICE, the largest over-the-
Edison De Leon: ICE has climbed to the next level with Telia Carrier
SHAREHOLDER IN JAMAICAN UNIT SUES CABLE AND WIRELESS Eric Jason Abrahams, a shareholder in Cable and Wireless’s Jamaican arm, has launched legal action against the company, claiming financial transactions to its parent company have impacted the regional unit. Abrahams holds 60 million shares in Cable and Wireless Jamaica (CWJ) but is seeking to launch derivative action against C&W in a Florida court, according to reports from Jamaica. The action will be in the name of and on behalf of CWJ, alleging that both the parent company and some of its directors both past and present acted in breach of fiduciary duties to benefit C&W. Abrahams is seeking $500 million in assets to be returned to CWJ’s books, the Jamaica Gleamer claims, citing his legal team. The lawsuit would help boost the value of the local unit, argues Abrahams in a filing. “If the derivative claim is successful, the directors and/or CWC UK will likely be required to pay hundreds of millions of US dollars to CWJ,” wrote Abrahams’ legal team from Hart Muirhead Fatta in a letter seen by Gleaner Business. capacitymedia.com
top (OTT) operator in Central America, has experienced significant growth in demand for broadband services. The Costa Rican operator said it will leverage Telia Carrier’s global IP backbone to launch its first 100G IP transit services for operations in Central America, offering lower latency and more flexibility for its customer base. “ICE has climbed to the next level in the market by connecting its internet backbone to Telia Carrier’s 100G services. This capability marks an important step in meeting the growth of market demand and ensuring the development of telecommunications in Costa Rica,” said Edison De Leon, regional director of Latin America and the Caribbean for Telia Carrier. Telia Carrier’s global backbone, which is built on a redundant architecture, reaches the Maya-1 Cable system – an important gateway for Central American operators. This system, together with Telia Carrier’s IP transit services in the US, are a key Capacity reason for why ICE picked Telia Carrier, the firm claims.
DIGICEL GRANTED 700MHZ SPECTRUM LICENCE IN PANAMA Digicel has won a block of 700MHz spectrum in Panama after approval from the National Public Services Authority. The operator is due to pay $22.5 million for 2×10MHz blocks of 700MHz spectrum in the 738MHz748MHz/793MHz-803MHz bands, and the frequencies must be put in use within the next 12 months. The decision was approved by Cabinet Resolution No. 142 (dated 13 November 2017) and green-lit by the regulator towards the end of January. The spectrum was awarded after Digicel triggered a clause that made up part of a concession contract in 2008 to obtain further spectrum if needed. The clause was part of Panama’s National Frequency Allocation plan, said ASEP. The request was approved in November 2017, one month after Digicel submitted the petition, with information on technical and legal details. Digicel Panam launched operations in 2008, followed by America Movil’s Claro unit in 2009, ending a long-standing duopoly of incumbent Cable & Wireless Panam and Telefónica-owned Movistar.
LIBERTY LATIN AMERICA TO ACQUIRE CABLETICA Liberty Latin America is to acquire an 80% stake in Cabletica, the Costa Rican cable operator, which has been valued at $250 million. Cabletica, which is part of Televisora de Costa Rica S.A. (Televisora) will be purchased by Liberty in an all cash transaction and at the time of closing Cabletica is expected to have a net debt of approximately $125 million, while the current owners retain the remaining 20% interest. Speaking on the acquisition, Balan Nair, president and CEO of Liberty Latin America, said: “The acquisition of a leading cable operator in Costa Rica is an exciting move as it adds further scale to our growing platform and diversifies us into one of the region’s most attractive markets.” The company says that it will finance the purchase through a combination of incremental debt borrowings and existing liquidity. The transaction is due to complete in the second half of 2018 subject to the standard closing conditions and regulatory approvals “This transaction is a prime example of our consolidation ambitions, leveraging our unique subsea and terrestrial
footprint, in a region that remains highly fragmented and continues to be both underpenetrated and underserved by high-speed data services,” added Nair.
Balan Nair: The acquisition is an exciting move as it adds further scale to grow
22 | opinion: télécoms sans frontières
When the wind blows...
YOU’LL FIND TÉLÉCOMS SANS FRONTIÈRES! I
n September 2017 the attention of the world was focused on the Caribbean as a series of powerful hurricanes swept the region, the strongest storms seen by some of the islands in 30 years. Powerful winds knocked out communications networks; torrential rains caused local flooding and storm surges at the coast inundated homes. To make matters worse, it seemed that just when one storm passed, another arrived, disrupting the initial recovery efforts. For Télécoms Sans Frontières these series of events presented a number of challenges. While there was advanced warning that the hurricanes were on the way, allowing TSF to pre-position a team in the region, the exact landfall of each storm wouldn’t be known till they actually arrived. And the impact could be highly localised. One island could be devastated, with almost all its infrastructure disrupted or even destroyed in a few short hours, while a neighbouring island, only a dozen miles away, could be spared the worst of the damage and destruction. This was exactly the case TSF faced as they deployed a team from France to Guadeloupe on 7 September in response to category 5 hurricane Irma. The teams were on the ground in the region within 24 hours following the passage of hurricane, but the conditions in Guadeloupe were stable and the island was spared the worst of the impact from Irma. However the nearby islands of SaintMartin and Saint-Barthélemy (St. Barts) were hit hard. The challenge was getting on to the islands as airports were closed and commercial shipping companies could not reach the island due to the sea conditions and state of the country’s ports. TSF finally obtained access on 10 September and worked throughout the night to set up a first satellite connection in the island’s Coordination Centre. TSF, along with Instant Network volunteers from its partner Vodafone, then went on to provide satellite connectivity in all of the island’s key coordination hubs, helping relief workers to coordinate medical evacuations, bring in supplies,
Capacity Télécoms Sans Frontières (TSF): Immediate and ongoing relief work on the ground
assistance and emergency accommodation. TSF didn’t just provide a vital communications infrastructure for the immediate aid effort but also Wifi service to the families waiting for repatriation and medical assistance, by giving them access to social media and instant messaging in the otherwise out-of-coverage zones.
Right behind Irma, here comes Hurricane Maria While the teams were still dealing with the aftermath of Irma, on the 19 September, another category 5 hurricane - Maria - hit the island of Dominica. Extra resources were mobilised from the headquarters and once again teams were pre-positioned in Guadeloupe. But here again there was no transportation to reach the island. Still the team was undaunted and successfully deployed with a small boat taking humanitarian provisions to Dominica. TSF deployed to support aid coordination and to offer calls and internet connections allowing isolated communities to reconnect with their relatives. However the work of TSF is not just confined to the immediate and urgent relief efforts. Five months after the destructive hurricanes, communications are only partially restored in some parts of the
island and TSF remained in place supporting reconstruction until midFebruary. The Government had identified TSF as key in the on-going efforts, officially requesting the continued support in the most remote areas. Moreover, TSF is also helping Dominica in strengthening its emergency telecommunications response capacity by donating VSAT kits and organising the training of officials to help them to be the best prepared for future emergencies. This on-going support isn’t just about the big picture. It’s also about individuals, and the impact communications technology can have on their day-to-day life. As Leila, a resident of the isolated community in Dominica, explains: “I live in Penville, a village on the northern part of the island, and I have to travel nearly 15 km to go to school every day in Portsmouth. Thanks to the connection installed by TSF, I have access to the Internet so I can do my schoolwork and do researches to better understand what I am learning at school.” For most children in a developed western country, what seems such a simple thing would be unremarkable, but for a child on a hurricane-ravaged remote island it can make a huge difference, not just for today, but also for their future. february/march 2018
north america | 23
CROSSLAKE SET TO ANNOUNCE NEW SUBSEA PROJECTS
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he backers of Canadian company Crosslake Fibre are planning to announce two new non-repeatered subsea cable projects, one in North America and one in Europe. Crosslake already has two North American projects, and the company is going to announce another in the “next
Mike Cunningham: ‘Looking for places to deploy capital’
month”, said company founder Mike Cunningham in January. Speaking to Capacity just before the opening of the Metro Connect conference (see opposite page), Cunningham said Tiger Infrastructure will fund the third North American project as well as a follow-on to the Ireland-France project. Tiger is already backing Crosslake and another Cunningham project, the Ireland-France Subsea Cable (IFSC). Crosslake’s first project, across Lake Ontario from Canada to the US, will be under way this year, he said. The company expects to announce its suppliers shortly. The second Crosslake project will be to link New Jersey and Long Island along the shore of the Atlantic, bypassing Manhattan. That and the still-to-beannounced third project will be installed in 2019, he said, as will IFSC. He was coy about giving any hints about the third Crosslake project – even whether it was in salt or fresh water – or the Capacity successor to IFSC. Funding is in place from Tiger Infrastructure, he added. “We’re looking for places to deploy capital,” he said. Nothing will be announced about the new projects until the feasibility studies are complete “and we’ve made sure the business case is working”.
NEW JERSEY-BASED CROSS RIVER FIBER COMPLETES ROUTE INTO NJFX Cross River Fiber has completed its new latency-sensitive fibre route that connects to NJFX’s Tier 3 colocation campus in Wall Township, New Jersey. The new route will offer enterprises and the international carrier community a robust interconnection option between the NJFX campus and financial exchanges and carrier hotels in both New York and New Jersey. The completed route deploys all new fibre, as well as a path that is diverse from other legacy infrastructure options. “We are excited to enable the global business community through our highcapacity, latency-sensitive and diverse network,” said Vincenzo Clemente, CEO of Cross River Fiber. The route connects into NJFX’s 64,800-square foot purpose-built data centre, which offers direct access to multiple independent subsea cable systems that interconnect North America, Europe, and South America. capacitymedia.com
Gil Santaliz, CEO for NJFX, said: “This marketplace allows subsea operators and US fibre-based providers to interexchange their capacity, ensuring network diversity through transparency.”
Gil Santaliz: We ensure ‘network diversity through transparency’
AT&T PLANS 5G FROM LAMP POSTS AFTER $207M FIBERTOWER ACQUISITION AT&T has acquired substantial millimetre wave spectrum for 5G by buying a company called FiberTower. The $207 million deal gives the company an average of 375MHz of spectrum in the 39GHz band in what AT&T described as “the top 100 markets” across the US. AT&T said it “plans to use the millimetre wave spectrum obtained in the deal to help meet its goal of being the first US company to introduce mobile 5G in a dozen markets by late 2018”. The small cells will deliver centralised radio access networks (C-RANs), sometimes called cloud-RAN. The deal to buy FiberTower and its millimetre wave spectrum is intended “to assist in the execution of this vision”, said AT&T, which added: “We plan to install small cells on light posts and other infrastructure in the urban core of San Francisco. We’ll use a C-RAN architecture approach to build them.” FiberTower, which was in chapter 11 bankruptcy protection, originally held 24GHz and 39GHz spectrum, and it gave up the 24GHz spectrum as part of a resolution of a dispute with the US regulator because it had not built out the network by the required deadline. It’s likely that the FCC will be able to offer 24GHz licences to new bidders.
EQUINIX CEO QUITS OVER ‘POOR JUDGMENT’ Steve Smith has resigned suddenly as CEO of Equinix for what is described as “exercising poor judgment with respect to an employee matter”. Equinix has done no more to elaborate on the reason, and the company has promoted a business-as-usual message by replacing Smith with executive chairman Peter Van Camp as interim CEO. Smith had been expected to take part in the Pacific Telecommunications Council conference in Hawaii in January. Bevan Slattery, founder and chairman of Superloop and Megaport, took Smith’s place on a panel with Bill Barney, CEO of Global Carrier Xchange, and Carl Grivner, CEO of Colt. Van Camp – who was CEO from 2000 to 2007 – said in the official press release that “this action was not related to the company’s operational performance or financial condition, both of which remain strong”.
24 | news analysis: metro connect
NEXT MOBILE GENERATION ‘WILL TRANSFORM MARKET’ FOR METRO FIBRE T he imminent arrival of 5G in the US will be a powerful driver of the next phase of fibre deployment across the country. It will encourage consolidation among fibre companies, delegates heard at Capacity’s Metro Connect conference in Miami Beach in January. But the cost of building new fibre has come down in many areas and so 5G is likely to be accompanied by a new wave of construction for fibre companies. One of the first is Ray LaChance, CEO of ZenFi, which is building what he called “dark fibre 2.0” to connect cloud radio access networks (C-RANs) for 4G and 5G. “It will require a re-architecting of networks,” he said. ZenFi is operating in the five boroughs of New York City. “We are working with two of the four operators plus a non-traditional operator,” he said. “We have to build hundreds of thousands of feet. Our goal is 10,000ft by the end of 2019.” It’s not just street corners, he said at the conference. “Every floor of every office building needs an antenna.” And other cities, such as Chicago, Boston and Philadelphia, “have that kind of density” and will need dense networks. “Transformation” and “densification” were the commonest two words at the conference, in which 575 people took part. Density is needed because 5G will start with millimetre wave spectrum, which carries only 200-400 metres, explained Dave Mayo, SVP of technology at T-Mobile US. “It’s going to take a long time to do it with millimetre waves,” he warned, “which is why we’re on to a good thing with 600MHz.” That part of the spectrum has a range of “six to seven miles”, he noted. “We’re building a national 5G footprint right out of the gate,” said Mayo.
every street block. A 500-route-mile metro build is not something you pull off easily – it’s 2,000-3,000 small cell nodes in a metro area.” Greg Ortyl, SVP of sales at Uniti Fiber, in St Louis, added: “If you’re bullish on more fibre build, 5G is transformative. There are plenty of opportunities for greenfield fibre, including small blocks with a cell in each corner.” He was cautious about how fast such networks can be built. “If we expect 500 route-miles to be built in 12 months we’re fooling ourselves. It’s a multi-year programme that you have to start today.”
Capacity Once in a lifetime Miss it now, and you’ll miss it forever, warned Everstream CEO, Brett Lindsay. “If you start building the small cell market it’s a once-in-a-lifetime opportunity. If you don’t have fibre you’ll never get that opportunity again. For anyone who is building a fibre network, 5G will be the most transformative thing. Make sure you are in as many places as possible.” Some wireless carriers, particularly Verizon, will build some of their own fibre networks, said Bob Udell, president and CEO of Consolidated Communications. But there is an opportunity for wholesale fibre suppliers. “If you’ve got the fibre
deployed you’re in a good position to pick up the business.” Consolidated is “in a great position”, and its requests from wireless customers. “They have done the research. They know where they want to go.” There will be mergers, said Lindsay, and what Udell called “tuck-ins”, as carriers tried to fill gaps in their coverage. However, Marc Ganzi, CEO of Digital Bridge, warned merger enthusiasts: “You can build 60,000-80,000 route miles of fibre cheaper than buying.” You need a long view, Lindsay added, “a longer view than traditional private equity – five to 10 years, [by] extending networks [and] investing in greenfield, which is more than traditional private equity does. It’s opening up a lot of opportunity.” Vincenzo Clemente, CEO of Cross River Fiber, grumbled that one of the biggest impediments to fibre and 5G projects was the diversity of rules across different towns, cities and counties: “All have different regulations,” he said. “When you talk about densification you have to act fast. There’s not a template for deployment. You have to be creative.” It’s similar in Europe, said Eurofiber CEO Bart Oskam. “Every municipality is organised in a silo. It’s a vertical view but it needs a horizontal vision.”
Thousands of nodes Andrew Lipman, chair of the telecoms practice at law firm Morgan, Lewis & Bockius, said: “I think that 5G is going to be transformative. None of these [fibre] networks exist today for 5G. We’re seeing RFPs [requests for proposals] for nodes at
Bart Oskam of Eurofiber (left) complains about cities as Dave Mayo of T-Mobile looks on
february/march 2018
asia-pacific | 25
SINGTEL TO BOOST 4G TO 1GBPS AFTER ERICSSON TRIAL
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ingtel and Ericsson have reached speeds of 1Gbps on the Singapore operator’s mobile network, and plans to offer this service later this year. Singtel will focus the investment on key
Mark Chong: Leveraging spectrum assets and mobile tech ahead of 5G era
high-traffic locations, but the speed will be available only on certain handsets. Mark Chong, CTO of Singtel, said: “As the world prepares for the 5G era, Singtel is leveraging its spectrum assets and the latest advancements in mobile technology to optimise our network usage.” The companies are using Singtel’s newly acquired spectrum in the 2,500MHz band with quad-band carrier aggregation (CA) – which means each link uses four frequency channels at once to increase bandwidth. They are also using both frequency-division duplex (FDD), which is common to most mobile networks, and time-division duplex (TDD), a way of making better use of spectrum resources. “Singtel and Ericsson have a common goal of delivering the best mobile network in Singapore by seamlessly combining both FDD and TDD technologies in one 4G LTE network,” added Martin Wiktorin, Ericsson’s country manager for Capacity Singapore, Brunei and the Philippines.
TRAI AIMS FOR $100BN OF COMMUNICATION INVESTMENT BY 2022 The Telecom Regulatory Authority of India (TRAI) wants to attract $100 billion of investment in the country’s communication sector by 2022, it has revealed amongst its National Telecom Policy 2018 proposals.TRAI released its ‘Inputs for Formulation of National Telecom Policy 2018’ (NTP-2018) proposals, which also includes its vision that it would like to enable access for connecting to 1 billion loT/M2M sensors/ devices by 2020 and 5 billion by 2022. TRAI’s draft policies have been created after preliminary discussions with telecom service providers, telecom equipment manufacturers, industry associations, consulting firms, cloud service providers etc. “Digital communication has presented India an opportunity to overcome the impediments posed by deficiencies in its brick and mortar-based physical infrastructure and opened doors to new paradigms in all sectors of economy whereby the common man at the bottom of the pyramid is being served much more efficiently and at a fraction of the cost as compared to earlier days,” TRAI said.
OOREDOO MYANMAR ROLLS OUT 4G+ ACROSS 200 LOCATIONS NATIONWIDE Ooredoo Myanmar has successfully rolled out 4G+ across 200 localities as part of a major nationwide network and infrastructure project. Ooredoo Group said its Myanmar business now offers the “widest and fastest 4G network in the country” after significantly expanding its network to cater to over 15 million people and reach two-thirds of Myanmar’s townships, with up to three times higher data speeds such as 500Mbps. This upgrade, moves Ooredoo to the forefront of network technology in Myanmar, enabling customers to take
advantage of the extra speeds and smooth browsing to stay in touch with their loved ones, enjoy live broadcasting, stream their favourite music, watch on-demand ultra HD videos and take part in real-time gaming. “We are proud to have delivered this upgrade to over 200 townships in such a short amount of time, making the fastest speeds available a daily reality for our customers. We have big plans for 2018 and are working hard for network upgrade. We want our customers to be able to enjoy the best of the internet in a way that is personal and unique to them,”
said Vikram Sinha, CEO of Ooredoo Myanmar.
Vikram Sinha: Ooredoo Myanmar has big plans for 2018
CHINA UNICOM AND NOKIA TO DEPLOY CLOUD-NATIVE CORE NETWORK Nokia and China Unicom are partnering together to roll-out a cloud-native core network in seven Chinese provinces. The new network will use Nokia’s AirGile technology, providing the agility required for the delivery of high-quality voice services, and to lay the foundations for the future evolution to 5G. In addition, this new cloud-native network will enable China Unicom to offer capacitymedia.com
voice-over-LTE (VoLTE) and voice-overWifi (VoWiFi) services from a single platform, as well as new services such as ‘one-number, multi-devices’. Through this, China Unicom customers will receive high definition voice calling, faster call set-up, calls on multiple connected devices and seamless connectivity as they move between China Unicom’s 4G network and Wifi access points. Speaking on the collaboration,
Gao Bo, head of China Unicom’s customer business team at Nokia Shanghai Bell, said: “Nokia has the breadth of technology and services expertise to provide an end-to-end cloud native core for China Unicom. The network will deliver new capabilities and allow China Unicom to accelerate the launch of new services, while new agility will help enable a smooth transition toward 5G in the future.”
Capacity
market strategy: 5G | 27
Capacity
ARE YOU READY FOR THE
DATA ONSLAUGHT? ͱG, IOT, AND MORE DEMAND FOR MOBILE DATA MEANS THE CARRIER COMMUNITY COULD FACE A CAPACITY CONUNDRUM. IS THE MARKET READY? JAMES PEARCE INVESTIGATES
Image: iStock
5
G is coming. Earlier this year, AT&T and Verizon both pledged to make initial 5G deployments in the US by the end of 2018, with trials to be conducted across various states. Korea is also leading the way, while European operators are expected to make early deployments in 2018. Less than a decade after the initial rollouts of 4G, investment levels in previous mobile technologies are predicted to peak in 2020, as focus moves to the fifth generation of mobile. Ericsson, in its latest Mobility Report, predicts the number of 5G subscriptions will reach one billion by 2023. BICS CEO Daniel Kurgan, in a recent report, says: “The western world needs to invest in replacing outdated networks with new and improved infrastructure, such as fibre cabling, to support the high-
capacitymedia.com
bandwidth requirements of 5G roaming. There is still a great deal of work to be done on use cases and business models for 5G services, as well as a number of hurdles to overcome.” He continued: “Standardisation efforts being led by 3GPP will result in Release 15, which will specify a first version of 5G which is reliant on 4G systems. This version is expected to be available by the end of 2018, while the second ‘standalone’ version will be released in 2020.”
Wireless infrastructure Figures from SNS Research claim that, by the end of 2025, 5G networks will make up over 40% of spending on all wireless infrastructure – and that will be up from around 5% of spending in 2020. The growth is expected to be driven by developments in 5G New Radio (NR),
next-generation core and transport networking infrastructure across both fronthaul and backhaul. Revenues from 2G, 3G and 4G wireless infrastructure throughout the world amounted to nearly $56 billion in 2016, and in 2017 it is estimated that the market will see a 4% contraction basically due to a decline in spending on standalone macrocell radio access network (RAN) infrastructure. With that much money going in, there are two big questions for the wider telecoms industry: what needs to be done to make sure the investment is worth it; and what are the key benefits? To the former, a quote from Alastair Macpherson, PWC telecoms partner in its strategy consulting business: “5G has the potential to deliver an enhanced mobile broadband experience in terms of both
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speed and coverage, and even the potential to compete with fixed broadband networks in future.” Macpherson added: “5G also offers increased reliability and the ability to support the growth of machine-tomachine connectivity, used in the likes of driverless cars and internet of things devices. Getting security right will be essential to building consumer trust in these emerging technologies, so it’s important to make sure that they’re designed with security in mind at the outset. “To unlock 5G’s maximum potential for both consumers and organisations, we need to see enough devices in production to drive prices down, enough spectrum made available to enable cost effective network deployment, and a significant increase in the number of base stations near to customers – perhaps 10 to 15 times as many as we have supporting 2, 3 and 4G today – with a high speed fibre network to connect them.” Andrew Lipman, senior partner at Morgan, Lewis & Bockius, and chair of its telecoms practice, recently told a panel at Capacity’s Metro Connect event in Miami: “I think that 5G is going to be transformative. None of these networks exist today for 5G. We’re seeing RFPs for nodes at every street block. A 500 route-mile metro build is not something you pull off easily – it’s 2,000-3,000 small cell nodes in a metro area.” The importance of fibre to support the oncoming storm of 5G connections should not be underestimated. With more bits passing through the mobile networks, mobile backhaul needs to be more robust than ever. Brett Lindsay, president and CEO of Everstream, said: “5G will be exceptional. If you don’t have fibre you’re going to be left out. If you start building the small cell market it’s a once-in-a-lifetime opportunity. If you don’t have fibre you’ll never get that opportunity again. For anyone who is building a fibre network, 5G will be the most transformative thing. You need to make sure you are in as many places as possible.” ABI Research has warned that global telco cloud networks could reach critical mass after 2020, with the addition of 5G technologies. The research company believes that in order for telcos to continue and maintain growth, a new core network will likely be required in order to allow advanced concepts, such as network slicing, to be used. There will be no immediate need for
a new core network during the early adopter phase of 5G, as this will be focus more on enhanced mobile broadband, but as data volumes increase so will the need for a new infrastructure. Dimitris Mavrakis, research director at ABI Research, said: “Although telcos are transforming their technology and business platforms to become more agile
the cell network, 10Mbps/m area capacity, and 1ms roundtrip over-the-air latency. This would mean at least a 10-fold increase in throughput compared with 4G, 10-fold decrease in latency, and 100-fold increase in traffic capacity. These become even more critical when you consider the applications that are being linked to 5G, such as IoT or virtual reality and augmented reality. In a blog, Mavrakis explains: “Even with expected 4G improvements, those metrics will fall short when considering mass market AR and VR [augmented reality Rajiv Datta, COO, Colt Technology Services and virtual reality] uptake. 5G will not only improve, but will and to evolve past their monolithic also be a requirement for some of the most access-based business models, they are exciting AR and VR applications.” finding it much more challenging than He goes on to add that “use cases anticipated. illustrate the need for improvements in “Software, cloud computing and open capacity, latency, and network uniformity source are promising and will simplify that 5G will bring at new levels of cost operations but, in the short term, telcos and energy efficiency, without which the are preferring to rely on their trusted industry will not be able to build solid AR vendors to continue this journey.” and VR business cases. Moreover, new use Capacity Guidelines set by IMT-2020 claim 5G cases for AR and VR will manifest as the is set to deliver 20Gbps peak data rate, capabilities of 5G networks actualise”. 100Mbps data rates even at the edge of For the wholesale industry, that means a
5G is so different to 4G and so the requirements are totally different”
february/march 2018
market strategy: 5G | 29
massive influx of data being carried by networks that, in some places at least, may be ill prepared for it. Rajiv Datta, chief operating officer at Colt Technology Services, warns that the difference between 5G and 4G in terms of bandwidth, along with the speed at which users will have the ability to experience, is not an incremental one as it was in previous generations. “It’s a dramatic one,” he says. “5G is so different, and therefore the requirements for mobile operators are totally different in terms of the underlying network infrastructure they need to support it. This of course has a big impact on planning and investment.”
Image: iStock
Network challenges With more demands and more antennas – or in some cases cells – needed to support the demands that 5G will bring with it, carriers need “to understand that the fabric behind the RAN needs to change dramatically”, Datta adds. “One of the fundamental network challenges with 5G is the need for a far richer distribution network to provide a higher-level service to end users.” The front end of this, which the end-user is more likely to experience, is hundreds of thousands of small cells across urban areas supporting more and more connections. There are significant challenges, such as where to put these antennas, how to ensure the necessary connectivity and how to distribute 5G across urban areas. This also has an impact on backhaul – put simply, the need for more fibre. Says Datta: “Every small cell has a requirement of 100Mbps, and all small cells generally are fibre-connected back to the macrocell. In the case of 5G, microwave backhaul is not going to be an option. When you’re looking at deploying hundreds of thousands of fibre-connected small cells, that is a total change to the landscape.” Hakan Emregul, solutions manager at service assurance provider Accedian, warns the industry that in order to support 5G backhaul, there needs to be much greater flexibility in the entire network. This, at least in part, will be provided by virtualisation of parts of the network. “To properly support 5G and the massive increase in data volumes that it will bring, telcos need to change up their approaches to backhaul and the way that backhaul networks are operated,” he says. “The industry agrees that 5G backhaul will need to support exponentially more data than is the case today. Furthermore, it must be able to provision a controlled capacitymedia.com
told a Capacity Europe panel: “What we see in the networks is multiplication by two in IP traffic, driven by the number of connected objects – phones, wearables, your car, your fridge and other items connected to the internet. We are facing this and need to adapt to the continuously growing demand.” He explained: “5G is going to happen very soon – 2020 or even earlier. It is going to be a huge challenge for operators. Today 4G is a matter of connectivity and bandwidth, but 5G will provide a lot of services. You will have slicing across part of the network so you’ll have some services for cars, some for homes, some for medical devices. For operators that is going to be a huge, major change, accelerating the change from being a hardware company to being a software and application company.” So what does that mean for a carrier such as Orange? How does it need to Internet of things adapt in order to future-proof its business This explosion in data is even more model? For de Guillebon it is about extreme if you consider the internet of becoming more than just the physical things boom that is being predicted by layer provider: becoming a software operators, vendors and analysts. As more company, as he puts it. devices come with an embedded SIM-card “We have to become a software or mobile connectivity, the demand for company. We still have to provide the Capacity data grows. physical layer connecting homes, the To put this in perspective, take buildings, the antennas, but we have to Ericsson’s estimates for IoT. The Swedish become more and more softwareorientated, providing bandwidth on demand for example. On the retail side, Orange has already launched payment facilities and we need to change our organisation and find new skills in the market to shift to Pierre-Louis de Guillebon, CEO, Orange a software company.” International Carriers Mikaël Schachne, VP of mobility at BICS, tells Capacity in an interview that vendor claims there will around 30 billion can be read on pages 44-45, that operators connected devices in use by 2020, up from need to upgrade their backbone in order 14 billion in 2014. The term “connected to handle IoT and a sharp rise in data devices” includes fixed phones, mobiles, roaming. computers, short range IoT – which will “We’re seeing massive growth in data see a compound annual growth of 20% to roaming across Europe and there’s a reach 16 billion by 2020 – and wide area massive surge in data traffic as well, so IoT, with 30% CAGR to 2.1 billion. operators need to upgrade their backbone. All of these devices will use data, with In addition, they also need to look at their most wide area devices either powered by interconnections with other mobile narrowband IoT or LTE-M – but some networks to support that traffic with will be powered by 5G too.The global IoT enhanced quality of service capabilities to market is projected to grow from $2.99 make sure that critical services reach end trillion in 2014 to $8.9 trillion in 2020, users with the right quality,” says attaining a 19.9% CAGR. Schachne. IDC has previously estimated that the “It’s a work in progress. We saw a drastic world’s data will amount to 44 zettabytes increase in traffic thanks for 4G. And with by 2020, 10% of it from the IoT. This more IoT devices coming, more use cases, would mark a tenfold growth in a six-year more services requiring different types of spell between 2014 and 2020. SLA on the data side, we see much more Pierre-Louis de Guillebon, CEO of effort going forward. Especially as we Orange International Carriers, recently move towards 5G”
environment with near zero latency and near 100% guaranteed service connectivity. But what’s also critical is that 5G backhaul has greater flexibility and capability to, firstly, process data, and secondly, to control and visualise the entire network in real-time, to ensure that performance SLAs are met.” This is complicated by “the range of features and services that 5G will enable” which will put a far broader and more varied range of demands on the backhaul network. This is not just in terms of capacity, however, but also in terms of capability. “5G needs a new backhaul architecture that is more enhanced than the ones we have in place today. Backhaul could very well be what makes or breaks 5G’s rate of deployment and also its ability to fully deliver the services and connectivity that is expected of it currently.”
5G is going to be a huge challenge for operators”
30 |
STC: Leading from the front of the pack Saudi Telecom Company (STC) has appointed a new VP of wholesale. Jason McGee-Abe heard from Alan Whelan about Capacity STC’s vision to propel the carrier to new heights
What are STC’s main wholesale areas of focus in today’s increasingly digital market? In general, international wholesale carriers are facing substantial pressure and challenges that arise from the convergence of the telecoms and IT industries and the related trend of digitisation in addition to the decline of voice revenue driven by the OTT applications. The telecoms industry is functioning in a state of transition and needs to evolve towards new business models and service portfolio in order to unlock the new wholesale growth drivers in the digital transformation era. Data centres are becoming an increasingly important element of the overall business strategy of many telecoms companies. In 2017, STC Wholesale focused on the enhancement and monetisation of its MENA Gateway data centre - through the signing of strategic long-term agreements with international Tier 1 content providers. This development continues to gain momentum. Jeddah, with its strategic geographic location and the expertise of our data centre partners, will make
MENA Gateway in Jeddah an important hub for many key carriers and industry players, as it will enable the provision of optimal peering arrangements, IP connectivity, hosting/colocation and value-added services, including cloud computing and content delivery. It is very clear that traditional wholesale margins have been in persistent decline over the past few years, and this has put substantial pressure on carriers to accelerate their rollout of new services. The explosion of data traffic is offering vital alternatives to the wholesale business, in addition to the emergence of new demand channels from retail providers of various stripes (cloud providers, MVNOs, OTTs, MNCs). Therefore, operators must transform their business in order to survive, and STC has engaged in the last two years in a massive transformation program in all areas - including in the wholesale business. STC’s wholesale business unit serves a number of functions. It is regarded as a customer facing unit which serves other licence operators and international
enterprises, and at the same time it serves all other STC businesses for all of their international requirements and needs. We also operate all of STC’s international infrastructures – including STC’s participation in the various submarine projects and consortiums, border crossing facilities and international points of presence (PoPs). The wholesale unit today has eight general managers that look after three business segments - global data services, carrier voice services and national wholesale services.
To what extent are you provisioning 100Gbps IP transit connectivity in the Middle East, and with whom? Through our partnership with Tier 1 internet providers, STC has significantly enhanced its internet global backbone connectivity through peering and IP transit arrangements. These partnerships are being further leveraged by the activation of 100Gbps IP Transit connectivity which improve our ability to meet growing market demands with february/march 2018
the big interview: alan whelan | 31
itself from other players? STC has embraced the new App model of business by incorporating such features into our networks as on-demand provisioning and activation, made simple via software-defined networking (SDN) and network function virtualisation (NFV) technologies. These technologies and trends have been enabled through our latest deployments of fully protected mesh Nx100G optical facilities based networks and our 4G/5G mobile networks deployments. Customers’ demands for services flexibility and optimal pricing are being achieved by incorporating such new technologies in our services offerings. In addition to SD-WAN, cloud-based XaaS offerings, our portfolio includes SDN/orchestration-based optical transport network (OTN) and Ethernet services and solutions. We are working with industryleading developers and innovators to build APIs to our information rich corporate data providing opportunities for B2B, B2C and B2G type of big data/analytics and AI apps.
How has SEA-ME-WE 5 enhanced STC’s offering? The SEA-ME-WE 5 submarine cable Capacity system, with its advanced 100Gbps technology, enhanced STC’s efficient connectivity with the lowest latency and further enhancing the network diversity and resilience. STC is currently engaged in advanced discussion with other parties in relation to other projects such as Africa-1.
excellent QoS and reduced latency which has tremendously improved the customers experience rating and reflected positively on customer loyalty, higher retention and increased revenues.
Update on your CDN offering in the Middle East STC has collaborated with top tier IP services/content providers to enable terabyte level CDN caches and streaming close to our customers in the region. In addition we have to our own content aggregator subsidiary (Intigral) in the region. Our latest submarine cable systems, Tier 4 data centres and cloud facilities add further reliability, redundancy and diversity to our CDN offering in the region. STC is establishing international IP related PoPs for interconnecting with partners/providers globally, thereby offering optimal top tier service levels to our customers.
How is STC embracing new technology to differentiate capacitymedia.com
What carrier opportunities will you leverage from the Kingdom’s 2030 Vision. How has this shaped STC’s DARE strategy? The Kingdom 2030 vision has identified certain programmes that support national leadership in industry and financial markets, strengthen national identity and bolster national culture, arts and entertainment. One of these programmes is motivating more than 100 national companies that have promising chances in regional and international leadership and working on enhancing their statuses in a way that positively reflects on the Kingdom’s image and economy. Based on this STC is worked hard during the past few months and adopted a three-year strategic plan (2018-2020) called the DARE strategy that focusing on deliver shareholder value and support KSA’s Vision 2030 (D Digitise STC, A Accelerate performance of core assets R Reinvent customer experience to worldclass standards and performance of core assets and E Expand aggressively scale and scope. As part of this strategy our Wholesale objective is to be the premier regional hub for global and carrier
services, providing bandwidth and connectivity for the efficient movement of bulk data traffic throughout the region, enabling regional and global clients.
The Ministry of Communication and Information Technology signed an agreement with STC to execute a broadband initiative, how is STC deploying this? In line with MCIT’s efforts to realise Saudi Arabia’s Vision 2030, and the associated initiatives of the National Transformation programme 2020 dedicated to the ICT sector – which aims to develop this vital sector and inspire the digital infrastructure through high-speed fibre-optic broadband services to all urban areas in the Kingdom, STC is executing the agreement to expand the deployment of fibre-optic broadband services to houses and vital government facilities in all the urban areas of the Kingdom. The signed agreement is part of the ICT sector plan to expand the deployment of fibre-optic broadband services to houses and vital government facilities in all the urban areas of the Kingdom. The number of targeted houses in high-density urban areas is estimated at 405,000 houses, which will raise the percentage of coverage from 44% currently to 80% in 2020, while the number of targeted houses in the urban areas is 1,730,000, raising the percentage of coverage from 12% currently to 55% in 2020.
What will you be announcing at Capacity Middle East? With the recent establishment of an STC node in datamena, STC is pleased to announce to its tenants that it is offering the fastest route from datamena to Europe. This is only possible through STC’s extensive node network in Europe and its nodes are linked over terrestrial protected connectivity and border crossings to datamena. Connections to datamena are also protected with a submarine path for added diversity and redundancy. Our newest submarine cable (SEA-ME-WE 5) adds huge capacity and the lowest latency to Europe. Using this route customers can expect low latency in the 70-100ms range depending on which city in Europe they are connecting to. STC has also signed an agreement welcoming PCCW Global as the latest tenant in its MenaGateway data centre. With this hosting, PCCW Global will have access to the Saudi and regional market taking advantage of Jeddah’s unique location. Menagateway, with access to multiple submarine cables with short distances to Europe, Asia, and Africa, is truly a gateway to the MENA region.
32 |
Let AI take the strain ǧ
ÇĄ
LEVEL OF AUTOMATION. GUY MATTHEWS REPORTS
I
t is early days for the real-life deployment of artificial intelligence (AI) in carrier networks. That doesn’t mean that there aren’t large numbers of wholesale telecoms providers looking seriously at AI for a range of use cases. There are ongoing AI trials across the industry in areas such as cyber-security, the monitoring of networks and their usage, predictive maintenance and the automated optimisation of networks under dynamically changing conditions. Even if AI is not yet integral to day-to-day operations, it clearly has a big future in a sector which generates in abundance the wealth of detailed data that is the lifeblood of any sophisticated AI model. “I foresee that AI will improve network analytics, allowing carriers to protect the quality of service across the network, analyse network utilisation and review historical trends,� believes Ravi Palepu, vice president and global head of telco solutions for consulting firm Virtusa. This, he expects, will enable carriers to optimise network use by building predictive models that can signal when a network is likely to suffer degraded service: “The great advantage of AI is that it can then conduct self-remediation to automate this optimisation,� he says. “Algorithms will be able to crunch vast amounts of data that allow businesses to improve network planning and decision making and maintain network health.�
Aria Networks is a pioneer in the field of AI as applied to networking, its software platform adopted by names like Verizon, Level 3 and BT. One of the platform’s roles is to simulate network behaviour, and thus aid the design of networks and services that are optimised for factors such as latency. “In the last two or three years, AI in telecoms has become a hot topic,� observes Jay Perrett, CTO at Aria Networks. “We’ve been through a wave of Big Data and analytics. What’s happening now is moving beyond just the analysis of the data to decide what to actually do. A dashboard that’s going into the red is useful to know – but what action should I Capacity take? AI can help you arrive at some interesting conclusions to questions that are otherwise just too hard to answer.� AI, says Perrett, is the missing part of the software enablement puzzle: “SDN and NFV are really just tools to monetise the network,� he claims. “Big Data gives you insights, but what’s missing is how to use that insight. AI helps you create real value out of the great resource of SDN and NFV. AI will make those technologies fly.� He says Aria has already worked with Facebook on an IP optical network for the webscale’s inter-data centre communications: “Our job was to come up with an optimal design for the
network to meet the need they had set for it,� says Perrett. “They had already done this for themselves, but when we did it we managed a 25% improvement in costs over their effort. We’ve worked with China Mobile too who had a plan to move to an SDN-enabled network. They
feature: intelligent networking | 33
wanted us to give them a way to predict LTE traffic over a period so they could dimension that network appropriately. They needed to be able to respond to demand in fractions of a second.” Carriers though should visualise AI as more than a supercharged network analytics tool. It has many other budding applications within a carrier business, say its backers. It is likely for example to have a role in improving service assurance and service management. An AI-based business automation platform could examine service tickets to get a picture of the type of requests customers are making, then identify patterns, run tests, spot false positives, diagnose issues and resolve problems automatically.
The fight against crime Battling the cybercrime that currently deprives carriers of so much revenue is another emerging AI use case, says Katia Gonzalez, head of fraud prevention operations and services with BICS. “We look at fraud on different services, particularly voice which causes the most financial damage in the industry,” she says. “We are working on SMS fraud too, which causes less damage but is annoying for subscribers. There’s signalling and IPX security too.” Despite several trials that are ongoing in these areas, nothing has yet gone live in serious daily use in the BICS network, admits Gonzalez: “But we believe AI will bring great benefits,” she says. “At the moment, security is very manual work across all areas of the industry. It takes a lot of time. If we can apply even basic algorithms to see, for example, if it makes basic sense for a packet to be coming from a particular network or not, that would be a great gain in efficiency. The same for analysing voice or SMS traffic. It could enable us to look into a lot of small things, which we can’t do at the moment as we’re so focused on the big things.” BICs is also alert to other fields where AI could apply, such as in pricing or routing: “We could use AI to make out services better from a quality perspective,” she believes. “Carriers like BICS will be able to use AI to deliver much more for mobile operator and social networking customers.” Dr Donal Daly is a best-selling author on the use of AI in the workplace, and co-founder of Altify which provides capacitymedia.com
technology for the retraining of sales teams to help them succeed better in the robot age. “The old ways telcos managed things like customer retention are no longer relevant,” he says. “They have huge reserves of data, which is the prerequisite for some forms of AI, like machine learning and pattern recognition. This is connected to both to what they are selling and how they manage capacity. As you move up what I’d call the knowledge curve, and into what telcos are doing increasingly which is selling value added services and digital transformation services, telcos need to think about the people who engage with customers – sales people and marketing people. These people can leverage AI to augment what they do. That’s why I call this ‘augmented’ rather than ‘artificial’ intelligence.” There are tasks, says Daly, that machines will always be better at: “They don’t get depressed or come in hungover or take vacations,” he points out. “But when you’re into areas that require knowledge, judgement or creativity, then the job of AI
customer and the firm that creates a trusted and personal relationship,” he says. “Algorithms can store historical data sets and mimic the human brain to learn how to respond to questions in a natural way. Alternatively, chat bots powered by scripted decision trees can reiterate staff knowledge and insight to answer customer questions.”
Power to propel carriers
Looking to the future, Mike Wilkinson VP international at Edgewater Networks, a vendor of network orchestration solutions, expects AI to take on a telco’s most critical activities: “We’ll see machine learning using vast pools of nodes,” he says. “Similar to the Boeing ‘engine as a service’ model, whereby airlines rent engines on an ‘hours in the air’ basis with the engine manufacturer monitoring it whilst in the air, we will see vendors run vast numbers of nodes on behalf of service providers. Vendors will then use the pool of performance data to fine tune efficiency, quality and reliability - significantly improving the user experience of the service.” Ultimately, AI has the power to propel carriers into Capacity new markets that they currently can’t reach because they can’t support them economically. The use of AI can thus become a major differentiator. The roadmap from now until then will be a Dr Donal Daly, co-founder, Altify steady progression rather than a major leap, says Matei Zaharia, chief technologist at big data processing specialist is to uncover patterns that make the job of Databricks: “Organisations will begin the human sales team more effective, exploring AI approaches to specific rather than replace them.” business problems, and the successful ones He says Altify has worked with names will propagate throughout the industry,” like BT, Telus and Telstra on making their he predicts. “No provider will immediately sales teams more customer focused: “AI jump to being ‘AI driven’ in all business can take away some of the repetitive grunt processes, but more and more processes work that makes it hard to interact with will start to benefit from AI over time. In customers,” he explains. “The old days was an organization with a robust data about trying to sell the customer what you infrastructure, it doesn’t take a dramatic wanted to sell them. We provide a way to amount of effort to try AI and machine guide the customer to the solution that learning for individual business problems actually solves the problem they have. We and then pursue them in more depth if can help the sales person to make the right the results seem promising.” decision for that customer. On their own, If carriers are not automating in creative the sales person’s natural tendency is to set ways, they will go out of business. If a themselves the task of selling a particular carrier is not empowering their customers solution.” and creating efficiencies through Chris Proctor, CEO Oneserve, a technology, then they are effectively developer of field service management redundant. They need to keep on working software, believes there are ways in which with technology, not to find better ways of AI can revolutionise the customer doing what they area already doing but to experience, for example through the come up with new ways of doing business. harnessing of real-time AI-powered chat That’s what digital transformation is all bots: “These are an instantaneous, about. And AI is one of transformation’s open-all-hours connection between the most powerful engines.
Machines don’t get depressed or come in hungover or take vacations”
34 |
Time for the
industry to
rise best effort
above
‘Best effort’ is a term carriers have used for decades when they talk about the service they provide customers. Now, Microsoft’s Capacity Frank Rey tells Alan Burkitt-Gray, they need to work together to share information and create standards for mission-critical services
A
senior executive at one of your biggest customers is leading a move to persuade you and all carriers to document your networks better. As Microsoft’s director of global network strategy, Frank Rey is in charge of buying connectivity from carriers around the world. He’s doing what he can to get carriers to work together, and with their biggest customers, to share information and create standards to help keep mission-critical services going. He was one of the star speakers at the opening session of our Metro Connect conference in Miami Beach at the end of January. That was a private session, for carriers to meet among themselves and discuss issues of importance to the industry. Afterwards he was happy to talk to Capacity about the issue confronting all carriers. First, though, some context from other participants at the three-day event, speaking over breakfast and lunch and during coffee breaks. It’s clear that resilience is becoming an issue that carriers and some of their
major customers are worrying about. Executives try to ensure, for example, that they have diverse routes into a carrier hotel or data centre. And then they’re shocked to find that, a mile down the street, two of their cables run down the same duct. It takes seconds for just one back-hoe loader to cut both, as well as all the other carriers’ cables at the same time. Some of the large internet companies, say knowledgeable CEOs of major carriers, are starting to insist on five diverse routes into each location, so that if two go down there are still three to pick up the load. But they have to be really diverse.
True diversity That means the customers need information so they can be sure they’re getting true diversity. For that to happen, carriers have to be transparent with them about their routing. That was Rey’s aim in speaking at Metro Connect. “I was very encouraged at the response. I was pleasantly surprised,” he says. “Everyone related to an experience they had. But it’s one thing to talk about, and one thing
to do something. There are the challenges.” Microsoft has given this its fullest support – and, in a conversation after the event, he was clear that he wanted that message to come across. “We have commitment at corporate vice-president level in Microsoft,” he says, speaking to Capacity at Metro Connect. “This has visibility up to senior leadership level in Microsoft.” And who in the carriers should be involved? “There needs to be a top-down approach,” he says: people at chief operating officer level with the ability to dedicate time and resources. Accidental fibre cuts are one thing to be concerned about. “We do such a good job at predicting what people are going to do next, and we should have the ability to see the next outage and be better prepared,” he says. “It’s about how quickly we can react and mitigate against it.” Those cuts can be inconvenient and they can cost money, but sometimes outages can threaten lives. He recalls last year’s wildfires in California. Mobile services went down and so the firefighters “lost their access to mapping”, he says. “They went back to february/march 2018
the big interview: frank rey | 35
2001
Delivery and procurement director, Tinet
2011
VP of capacity management, Hibernia Networks
2013
Principal strategic network coordinator, Microsoft
2015
Director of global network acquisition group, Microsoft
2017
Director of global network strategy, Microsoft
membership is free. Is TIP the right forum? “We’ve discussed this with friends at Facebook,” says Rey. “We wouldn’t need to reinvent the wheel, and it’s not something that any one industry is driving. We need to present a unified voice. It needs to be addressed collectively.” Everyone deals with the issue in their own way, he says, “but we need to get together. We need to choose a forum and agree actionable items”. What was the response to his Metro Connect speech? “I received good feedback,” he says. “People said they would like to be a part of that. But the devil will be in the detail.” It will “absolutely” be a global initiative, he notes, and shakes his head: “The European market is so fragmented – but it
This has visibility up to the senior levels in Microsoft. We have commitment Capacity at corporate VP level”
Frank Rey, director, global network strategy, Microsoft
landlines.” That needs other solutions than multiple ducts out of a data centre, but it’s an issue that the industry needs to think about along with the other questions. “If you look at what’s needed, a lot of the infrastructure that’s built is best effort,” he says. “We need to know how it works – and we need it before the outage. It’s still happening that way, but too much is at stake. A level of transparency would help.”
Forum for discussion Is there a forum where these discussions can start? There is one candidate at the moment, the Telecom Infra Project (TIP), which was set up in February 2016 largely under the encouragement of Facebook. Aaron Bernstein, Facebook’s director of connectivity ecosystem programmes, is on TIP’s board, but so are representatives of BT, Deutsche Telekom, Telefónica and Vodafone, and of Intel and Nokia. Microsoft is a member, as are a wide range of organisations in telecoms from Accenture and Bell Canada to Zain and ZTE – though not, according to the current list, AT&T or Verizon, even though capacitymedia.com
is a global issue. And it’s easy to say this is at the physical layer, but it’s not just layer 0, but layer 1, 2 and 3,” he adds. “The challenge is going to be getting everyone together and having a game plan that you can take action on.”
Carrier volunteers Work has already started. “We have some volunteers in the carrier space. We’re doing some peer reviews and getting grassroots traction,” he says, and after the conference “I’m going to go back to some of the folks”. Who do he and his colleagues need to talk to? “First and foremost the carriers, but also data centre folks. This could touch everyone with a role in providing communications. Technology companies are telling the carrier market that it needs to be solved. It’s about our mutual customers.” That expression “technology companies”, by the way, is Rey’s preferred term for the hyperscale internet companies, the over-the-top companies and the cloud companies: the big users of carriers’ capacity around the world and – if you look at some of the latest partnerships in subsea cables – an increasingly powerful investment force in the industry. The industry needs to
listen, seem to be what Microsoft is saying through Rey. “If we don’t collectively agree, [the industry] would go on down the path it’s on. We won’t be able to avoid incidents we’ve seen over the last five years. We have a lot of customers doing mission-critical services and that’s what we owe them.”
Mapping the networks He draws a contrast with other industries. “Roads and sewers are well mapped out, but in telecoms we don’t have the same. “When we go in and ask a provider for a map of their route, we don’t always get access. They claim security and confidentiality.” He notes that consolidation can mean corporate memories can sometimes be lost. “There’s a lot of tribal knowledge in people’s heads,” he says. He accepts that “it’s a matter of time and resources”, but insists that some companies’ standards of documentation are inadequate. “When a service is delivered, you don’t have the same consistency across the different carriers. Documentation is the last thing people pay attention to.” And that’s one of the key achievements Microsoft is seeking: documentation standards. Not so much “knowing where your fibre is”, but providing information to customers so they can provide a service to their own customers. Microsoft’s distribution model has changed, he says. The company wants to use carriers “so everyone can use the services we’ve developed and will continue to develop over the coming years. What we’re needing is a better understanding of the infrastructure – the plumbing of these global networks”. He picks two stories from his career in the telecoms industry before he joined Microsoft in 2013. In one, the company had bought some metro fibre, and he was keen to see where it ran. Under a parking lot, he found: not ideal. The second story features a point of presence in a major city that his then company maintained. “Except it went offline every Monday at 9am.” He and his colleagues were mystified – “so we got a technician to sit in the room on Monday morning and wait”, he recalls. You know how this is going to end, don’t you? The cleaners came in at 9am and unplugged the kit in order to switch on the vacuum cleaner. So he and his team – as well as other content providers – need to work with carriers to help them plan. “We need to know where are the problems, where are the single points of failure. I accept it’s hard to determine where you think you might have problems,” he says. “It needs to be available all the time.”
36 |
Providing the
backbone for Brazil’s bandwidth
boost
Netell, a Brazilian fibre firm, has seen demand for connectivity explode over its 16 Capacity years. James Pearce spoke to CEO Wagner Rapchan about links to international partners and the impact of OTTs
A
s more and more international infrastructure has landed in Brazil, demand for fibre services within the country has continued to grow. The Latin American region is quickly catching up with the rest of the world in terms of telecoms, and it is Brazil that is leading the way. Several new subsea cables connecting into the country have been announced or have gone live over the last few years. 2017 saw Seabras-1 – which connects São Paulo to the US – go live, for example. One of the companies currently buying capacity on the Seaborn Networks cable is local fibre provider Netell Telecom. Wagner Rapchan, CEO at Netell, says: “We have a great working relationship, as Seaborn and Netell share similar business cultures as well as a commitment to customer service excellence. Both companies have a clear vision for its business and the future of the industry and it makes things easier when we are partnering. He adds: “Netell provides a diverse,
dark fibre backhaul solution from Seaborn’s cable landing station in Praia Grande as well as a dark fibre, mesh network solution to Seaborn’s points of presence in metro São Paulo. Netell has also purchased a substantial amount of capacity on Seabras-1, which it will use to serve its local, regional and international carrier and enterprise customer base.” Launched in 2002 as an internet service provider, Netell offers backbone services throughout Brazil. With more than 200 million people living in the country, it is not really surprising that the demand for such services is on the rise. “We are a competitive, entrepreneurial organisation built to serve our customers with seamless, high-performance connectivity in and around São Paulo. Netell has evolved into one of Brazil’s leading backbone network providers. Our experience as an ISP has taught us the importance of ensuring optimum end-user experience, and this has shaped our approach towards servicing enterprises, network operators and service providers without ever compromising on quality.”
So what are the main drivers behind the sudden burst of subsea and fibre deployments? Rapchan points to three key factors that he believes have seen demand increase to make it the seventh largest internet user in the world, according to Internet World Stats. The first, he claims, is similar to many other global markets – the demand for over-the-top (OTT) services and social media, such as Facebook. According to Facebook’s own figures, it had 111 million subscribers in Brazil as of June 2017, making up 52.5% of the population. “OTT players such as Netflix and Facebook are taking huge amounts of capacity on these cable systems going into Brazil as demand for their services grow,” explains Rapchan. “The OTTs are a key driver for more capacity coming into Brazil. We’ve had one provider asking for 1Tbps of capacity in Brazil just recently – it is a key factor in the growth of services in the country.” I ask if this is in response to demand from users, and he points to an example close to home to demonstrate how young february/march 2018
the big interview: wagner rapchan | 37
2002
PC&L Manager at Delphi Automotive Systems
2003
Founded NETELL Internet Service Provider
2010 2014
Founded NETELL Telecom
2017 2018
Founded NETELL Datahub
Founded NETELL Infrastructure
CEO - NETELL Group
signal, but the new cables include a straight path from the US to Brazil. The new cables have better technology and this allows them to go further and that reduces latency.” He also points to new transmission technology that allows for better connectivity in the country that can help meet the demand of subscribers.
Reaching 140 million The jump in internet penetration is sharp. If we go back to 2000, two years before Rapchan founded Netell, there were around five million internet users in the country according to the International Telecommunication Union (ITU). That was just 2.9% penetration in a population of almost 170 million. Five years later this had jumped to 14% penetration, and this has continued to grow every year after. By 2008, ITU figures show 67 million people had internet access, and the figure is now
Young people in Brazil are very keen to use new technology Capacity and Netflix is one of the key sources of TV services” Wagner Rapchan, CEO, Netell
people’s content consumption habits are influencing the marketplace. “I spoke to my daughters about traditional broadcast TV channels and they said they never watch them. The young people in Brazil are very keen to use new technology and Netflix is one of the key sources of TV services. It has huge penetration in the country.” Another reason for the drive in investment is sheer need for new, fresh infrastructure due to aged and creaking connectivity. A number of the existing subsea cables that have linked with North America will be approaching their twentieth year in service before long. This means they need to be replaced with newer, better infrastructure. “The cables that are being deployed have begun to age. There are some pretty old systems running, so we have a lot of new cables coming in from the US. Cables from the US have traditionally gone from Miami through Central America to Fortaleza, then Rio, then São Paulo. The distance between the points of presence in the US and Brazil meant you needed some replication of the capacitymedia.com
nearer 140 million a decade later. Netell’s customer base includes financial customers, enterprises, local providers and the international community. “Today a range of customers entrusts Netell with their bandwidth infrastructure requirements: from financial institutions requiring low-latency architecture through to international network operators that need reliable network infrastructure to deliver content seamlessly throughout Brazil,” Rapchan tells me. “For over a decade, we have grown organically by assisting local and international enterprises and service providers with deploying the highest-quality access in Brazil. He adds: “As demand for connectivity grows, we will always continue to match performance with proactive support so as to ensure the delivery of the best in quality of experience to all of our customers.” It currently runs a fibre metro network that consists of 400km of its own fibre, 18,000km of national fibre partners and over 40 points of presence across 10 Brazilian cities. It also has over 40,000km of long-haul network across Brazil which includes highly resilient bidirectional switched rings which are geographically
diverse, with the DWDM layer providing optical channels at 1Gbps, 2.5Gbps, 10Gbps and 40Gbps. It also has connections in data centres including Terremark, UOL-Diveo, Locaweb, ALOG/Equinix, GBLX/Level 3. Brazil is fast becoming a core transportation hub with new subsea cables landing there. What opportunities does this present for your company, I ask, and how do you plan to seize them? “We are committed to helping our partners be successful and delivering critical capacity that will support the growth of the Brazilian market,” he replies. “We own a unique solution connecting the CLS directly to any data centre in São Paulo with Express Routes. It means we are in the core of these hub of connectivity between Brazil and other countries and being a neutral boutique dark fibre-optic and telecommunications solutions provider represents an assured growth in the next years.” The likes of Seaborn, Facebook, Google, Telefónica, Sparkle, China Unicom, Angola Cables and many others are all investing, or have invested, in new subsea cable systems into Brazil. So I ask what he wants from the new wave of international partners that are entering the Brazilian markets? “We offer fibre infrastructure in cities across Brazil that help our partners rapidly grow their reach in the country. Companies from all over the world can benefit from our simple business model with high quality, low latency networking. We make it simple and easy to connect and be successful in local markets across Brazil.” Last year, Netell announced the completion of the shortest commercially available underground fibre network route between Praia Grande and São Paulo. It also completed a metro underground fibre ring, including new network paths to major data centres in São Paulo and another metro ring connecting the cable landing stations in Praia Grande. I ask what to expect from Netell in the coming year, and Rapchan points to fibre-to-the-home (FTTH) as a key element of the carrier’s strategy. “We now have a network footprint covering more than 26 cities and several enterprise campuses throughout the state,” he explains. “We now are focusing on the rapid growth of the FTTH business in these locations through our other companies under Netell Group,” he says. “We already have the fibre infrastructure and the IP that would be necessary to speed up our growth in the next decade.” With the rise in demand for internet services continuing in Brazil, you wouldn’t bet against it.
On the global stage
Now that it enjoys world class connectivity with the booming economies of Asia, Italian carrier Retelit is planning further growth as well as expansion of its service portfolio Giuseppe Sini, head of Retelit International BU
Following Retelit’s highly successful move into the global carrier services market in 2017, the Italian provider of data and infrastructure services is gearing up for the next phase of its development.
are very sensitive about resiliency and latency,” he says. “They are now the main dirvers of the capacity demand on the subsea routes because they want to control their backbones and get closer to their customers.”
With the launch last summer of the AAE-1 submarine cable system, Now he says Retelit is executing the next phase of its evolution: in which Retelit is a key stakeholder, the carrier is able to offer high “Stage one was about addressing the needs of inbound traffic cospeed connectivity between Europe and Asia via the Middle East. Capacity ming into Europe from the Far East. Now the next step is deliver Thanks to the landing station it has built for the cable in Bari on European traffic to markets like Singapore and Hong Kong. We’re Italy’s east coast, taking AAE-1 away from the route taken by many looking beyond just the selling of lots of bandwidth by moving to other Mediterranean cables, Retelit offers an important element of extend our footprint and build our value-added service portfolio.” diversity on the cable’s journey from Marseille to Hong Kong, touching 19 countries as it goes. Late in 2017, Retelit announced the first fruit of this new phase by signing a commercial agreement of a commercial agreement with “Thanks to our investment in AAE-1, we had a very successful a leading Asian telecommunications name. In a deal extending 2017, hitting our targets in terms of both volume and value of bufor over 20 years, Retelit will provide the carrier with 1.1 Tbps of siness,” says Giuseppe Sini, head of Retelit’s international busicapacity on AAE-1. The partnership will also give Retelit access ness unit. “Less than six months from starting to carry commercial to a wide range of services at competitive prices to complete its traffic on AAE-1, we have already been more successful than we international offer for the Italian market and will also see it pursue expected. Demand from Asia to Europe and vice versa is increasing its network and points of presence expansion strategy, starting with quickly. There has been pricing pressure, of course, but the volume the vital Asian hubs of Singapore and Hong Kong. of demand is mitigating a lot of that.” Retelit’s aim of moving beyond its strengths in Europe and repositioning itself in the global arena has been met: “The market now recognises us as a key player, and that was one of our main goals,” he claims.
Successful strategy Retelit’s international success, says Sini, has been built around delivering what customers really want: “Our strategy was firstly to invest in our infrastructure in Italy, including our landing station in Bari,” he points out. “We also developed an innovative backhaul service which gives us a single European network from Bari to anywhere on the continent with the same service level guarantee anywhere, including large European PoPs such as Frankfurt, London, Amsterdam and Paris. Our aim throughout has been to offer diverse alternatives to the market, with premium landing, safe and diverse routes and better latency.” He explains that the element of diversity is very important to Retelit’s carrier and content customers: “Content players and OTTs
“Our new Asian partner chose us in preference to others, not simply on price but for our ability to be flexible and because we own our own high speed network in Europe granting them the quality of service to access to European contents they need,” believes Sini. “They are now a partner that will also support us as we grow our businesses together.” This year will see Retelit activating a new ring in the Mediterranean and 150 Gbps on multiple links on diverse routes from Italy to Singapore and Hong Kong completing the Eurasia Ethernet MEF network with redundancy on three different paths. Furthermore, lightning the 100 Gbps network extension to Sicily over its own fibre to add further density in that region: “The Open Hub Med (of which Retelit is a stakeholder) and the Sicily Hub data centres in Palermo will be connected to our own fibre so that, by June, Italy will consolidate its strategic position in the centre of the Mediterranean as a landing for international traffic into Europe,” he says. “Our Marseiiles PoP also connected to Italy with proprietary fibre will be open for business in the first half of this year granting Retelit the exclusive possibility to offer a terrestrial protection to the Mediterranenan submarine portion to Marseille from Bari and from Sicily.”
special report
MOBILE & IOT
February/March 2018
CONTENTS 41 Google sends a text on RCS The mobile industry is excited about RCS, the smart replacement for the 25-year-old SMS. But the industry has been here before, warns Alan Burkitt-Gray, and there are still details to sort out, such as the business model, and whether Apple will join
44 The big interview Capacity
Mikaël Schachne, vice president of mobile data business at BICS, talks to Natalie Bannerman about the effect of mobile on the wholesale market and how prepared mobile networks are for 5G and IoT
47 Executive interview Millimetre wave ‘will take over backhaul’ as 5G networks come. Is 5G a big opportunity for fibre carriers? Not in the backhaul network, Ryan Ding, the head of Huawei’s carrier business, tells Alan Burkitt-Gray: it will be wireless
50 Why carriers must court partners Smart routes to smart city business: why carriers must court partners. Sue Tabbitt takes a close look at the opportunities for carriers to work with others on smart city projects
capacitymedia.com
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feature: rich communications service | 41
GOOGLE SENDS A TEXT ON RCS Capacity
The mobile industry is excited about RCS, the smart replacement for the 25-year-old SMS. But the industry has been here before, warns Alan Burkitt-Gray, and there are still details to sort out, such as the business model, and whether Apple will join
G
oogle has kick-started the latest attempt by the mobile industry to build a successor to SMS text messaging and – more important to carriers – a rival to Apple’s iMessage as well as Facebook Messenger, Snapchat, WeChat, WhatsApp and the rest: services the mobile industry still thinks of as depriving them of their revenue and customers. The trouble is, people across the messaging industry are still unclear about the revenue model for the so-called Rich Communications Service (RCS), which is expected to be launched during 2018. Some believe that RCS will be best for person-to-person (P2P) messages; others say its strength will be in application-toperson messaging (A2P). Some say it will be an alternative to the mobile web, searching for local pizza joints or buying tickets. Others hope it will become the new medium for mobile payments. It’s usually free to receive SMS messages, but capacitymedia.com
no one is sure whether the same will apply to RCS. That’s a clue, if ever you needed one, that there isn’t yet a clearly developed business model. Dean Bubley, famously cynical commentator with Disruptive Analysis, tells Capacity: “It’s putting the cart before the horse.” I phoned Bubley after he posted a list of reasons on LinkedIn why he was happy not to be going to Mobile World Congress (MWC) in Barcelona this year. “What, zombie RCS again?” he wrote. That “again” refers to RCS’s last outing at MWC, back in February 2013, when the GSMA, the trade association that runs the event, launched it under the name Joyn, with hopes it would become global. Soon Orange in France had Joyn, but I checked in August 2013 and it was still being shunned by the three rival French operators. In Germany Deutsche Telekom and Vodafone had adopted Joyn in August, but not O2 or E-Plus, then owned by KPN. There was better news
from Spain, where Orange, Vodafone and Telefónica’s Movistar offered Joyn, and from South Korea, where KT, LG U+ and SK Telecom were all enthusiastic. But that was just about it, and the industry let Joyn quietly disappear. Go to joynus.com, once the official Joyn website and directory of RCS services, and you get to the GSMA home page. Orange.com/ Joyn leads to the regular Orange home page. Nothing to see here: George Orwell couldn’t have done better. “RCS has been around so long and never got anywhere,” is how Nick Lane, mobile insight analyst at Mobilesquared, sums up the history so far. But we’re five years on, and something has changed. “Google had a great succession of attempts to create its own messaging, but they had largely fallen flat,” says Bubley. Apple has its own rich messaging service, iMessage, for its iOS operating system, but Google’s Android doesn’t have anything like it. I still have the Google
42 | feature: rich communications service
Hangouts app on my phone, which once handled SMS as well as voice and video calls, but the SMS function disappeared in late 2016. That’s because, in 2015, Google bought a New York company, Jibe, for an undisclosed sum with the idea that it could relaunch its messaging effort. “Google is taking up the mantle and is integrating it with Android messaging,” says Greg Collins, founder of market intelligence firm Exact Ventures. “It’s still early days.” Google has support from the industry, says Joanne Lacey, COO of the Mobile Ecosystem Forum (MEF, but not the former Metro Ethernet Forum, which uses the same initials). She lists “two or three carriers” as well as the GSMA and notably Samsung as organisations that “should be included in the revival”. Gregory Hoy, director of product management for RCS messaging at OpenMarket, says T-Mobile US and Vodafone are prominent supporters. Others point to Orange as having a significant influence behind the scenes. There’s some vagueness in the industry about how RCS will be introduced. Some believe that it can be added to handsets as part of an over-theair system upgrade but mostly it will roll out as people buy new phones. “Vodafone has an RCS-capable client on a majority of [new] handsets,” says Hoy. “Slowly Google has been introducing RCS to Android messaging and are signing up handset vendors,” says Collins. “Huawei is putting it on its handsets. It’s another way to solidify the Android ecosystem.” Android is the dominant mobile operating system across most of the world, with a market share that hovers around 82-87%, according to IDC, and Apple’s iOS picks up almost all the rest – with Microsoft’s Windows Phone lost in the noise at well under 1%. It’s different in the US, where iOS has around a 55% share, according to Statcounter. In Canada and the UK Android and iOS are more or less equal. But they’re unusual, even in developed countries: in France and Germany iOS is down at around a 32% share. That gives Google, as the patron of Android, the opportunity to put a native messaging function on its operating system – with the added hope that this will allow the company to win market share from the other messaging companies. If it can do so with the
existing phones. The potential strength of RCS, say the enthusiasts, is that it will become the natural messaging app on smartphones. “If RCS is in the native client, they will just start to learn to use What will Apple do? it,” says Hoy. “We’re just at the beginning, But the big question is: What will Apple but the RCS client is backwards do? Apple, of course, isn’t saying. Apple compatible so you could communicate watchers study the stars and try to deduce with someone who does not have it.” the future. One of those taking part in last That makes it unlike most rival November’s Messaging and SMS World messaging apps. If you want to send a conference, run by Capacity in association WhatsApp to someone, they have to first with the MEF, hinted that the GSMA is download WhatsApp. It’s the same with having fruitful talks with Apple. WeChat or Facebook Messenger or I followed up with David O’Byrne, the Snapchat. It means we have to carry a IP communications project director at the mental directory: “Is Alice on WhatsApp GSMA, who told me in January that the or WeChat? Is Bob still a Facebook trade association has had meetings with Messenger user or has he gone back to Apple about adopting RCS standards. SMS? What about Carol?” “There’s been lots of engagement with It’s changing. On my phone, Facebook them” since early 2017. “We know they Messenger now shows incoming SMSs, are getting the case for RCS.” Apple and for all I know it probably works in recognises it does not have 100% of the reverse, but I can’t remember when I last phone market so needs a technology that sent an SMS. I receive them only from my works across the industry. mobile operator, Three, to advise me of Another industry observer, who did not rates when I land in foreign countries, want to be named, says: “There’s been from Amazon and supermarkets to inform engagement with Apple about how it is me about deliveries, and from my dentist, doctor and optometrist reminding Capacity me of appointments – almost none from humans. For family and work, WhatsApp is the preferred platform. And that’s the challenge RCS Joanne Lacey, COO, Mobile Ecosystem Forum will have, not just to wean people off the 25-year-old SMS messaging going to play with RCS. Would it be a platform because, look, something better major breakthrough for Apple to join has snuck into the system. Though that RCS? Yes, no question.” sneaky introduction will also make it hard Others echo that, though Lane at for the industry to shout about it. Mobilesquared is more cautious. “Apple is “Why would I switch from WhatsApp?” reticent about joining the RCS asks Bubley. “I can’t imagine anyone bandwagon,” he says, but adds that it does transitioning from Snapchat.” have a problem when Apple users try to Nevertheless, Lane at Mobilesquared send an iMessage to others. They get a believes there will be 162 mobile operators plain, simple SMS instead. He believes offering RCS by the end of this year, and “60% of iMessages fall back to SMS”. 299 by the end of 2018. In 2022, 492 Rob Malcolm, VP of marketing and operators will offer RCS and there will be online sales at CLX, a messaging company three billion RCS devices in use, of which working with Google in the RCS 2.5 billion will be Android, he thinks. ecosystem, believes Apple will jump on the However, in the same 2022 only just bandwagon: “My opinion is they do want over 11% of A2P traffic will have moved to support open standards. In some to RCS, says Lane. countries, such as Brazil and South Africa, The rest will still be in SMS, a Android is dominant by some margin. If technology pioneered on 3 December RCS takes off in those markets then Apple 1992 when a 22-year-old developer, Neil will follow.” Papworth of Sema – now Mavenir – sent a How? By including RCS in a future iOS message to his client, Richard Jarvis of upgrade, say those in the know, that will Vodafone, saying “Merry Christmas”. be loaded in new Apple phones and SMS will see a fair few Christmases yet maybe added via an over-the-air update to before it’s finally laid to rest by RCS. support of the mobile operators and the GSMA, that would give Google an advantage that Facebook and the others don’t have.
Two or three carriers as well as the GSMA and Samsung are helping to revive RCS”
february/march 2018
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Capacity
44 |
BICS:
bridging the gap between the
internet and the telco worlds Mikaël Schachne, vice president of mobile data business at BICS, talks to Natalie Bannerman about the effect Capacity of mobile on the wholesale market and how prepared mobile networks are for 5G and IoT
T
he need for carrier-grade connectivity on a global level is the highest it’s ever been, says Mikaël Schachne, VP of mobile data business at BICS. With a 17-year tenure at BICS, Schachne describes himself as a real old timer with the wholesale carrier. Schachne was there when the company first moved from fixed-voice services to mobile non-voice services and he now works on the technical development of solutions to converge mobile offerings. According to him, as we move towards internet of things (IoT) and 5G, players like BICS play an even bigger, more fundamental role in these technologies than previously thought. Are mobile networks prepared for the 18 billion IoT devices predicted to be in operation by the year 2022? “If they are not ready they are certainly increasing the capacity on their networks to welcome as many IoT devices as possible,” says Schachne. “With all the enhancements and upgrades on LTE and 5G, I think
they will be ready to support that number of devices in terms of capacity.” He clarifies that right now, “the bulk of IoT devices don’t generate much data volume, so the network capacity of mobile networks are sufficient to support the existing IoT devices”. Where Schachne sees potential challenges is in the capabilities and functionality that these new devices will need. “We will need to see more options and flexibility on the mobile network side to really facilitate each use case,” he explains. “We need much more effort to make sure that all IoT use cases are fully monetised. It won’t be a one-size-fits-all model. We also need to make sure the usage of the network is fully optimised for IoT especially on signalling generated by the devices.”
Backhaul for 5G and IoT As for the backhaul, Schachne is equally concerned about the support needed for data roaming, not just 5G and IoT. “We’re seeing massive growth in data roaming across Europe and there’s a massive surge
in data traffic as well, so operators need to upgrade their backbone,” he says. Overall, it’s a “work in progress”. Schachne says that BICS is working on two avenues when it comes to enabling 5G. Firstly BICS is working on upgrading its IP backbone, to support roaming connectivity with ultra-low latency for mobile operators and virtual network operators (MVNOs). “When we talk about 5G we talk about super-low latency, high capacity and availability, and this requires the interconnection between the networks to be on the fastest path. So at BICS what we’re doing is extending our backbone to be as close as possible to the edge of mobile networks so we can have edge-toedge interconnection, with a regional or local breakout of traffic.” Secondly, Schachne says the company has launched in-house capabilities to enable any enterprise to become an MVNO through a service called ‘SIM for things’. “It’s a turnkey service where one connection with BICS enables any company to be a global MVNO, explains february/march 2018
the big interview: mikaël schachne | 45
1998
Radio design engineer, Mobistar
2000
Wireless architect, Winstar Europe
2001
International network engineer, Belgacom
2005
Product manager, Belgacom ICS
2007
Head of data product management, BICS
2011
Vice president, mobile data business, BICS
2017
Vice president, mobility solutions, BICS
with lots of preparedness on the part of the operators, so the backbone was able to handle these numbers. “So far we haven’t seen any issues on the mobile operator side or on the backbone, in terms of the ability to absorb this amount of data traffic because mobile operators took good measures to increase their interconnection to IPX providers which are carrying this mobile data roaming traffic.” With the cost of VoIP being much cheaper than traditional voice calls, traditional operators and players in the voice space, like BICS, have undoubtedly been affected. When questioned about what can be done to offset this shift, Schachne optimistically replies: “We see a lot of cannibalisation of traditional services (voice and SMS) as mobile users
Thanks to Telesign, BICS is able to provide new revenue streams to mobile operators so they can fully Capacity capitalise on their assets” Mikaël Schachne, VP of mobile data business, BICS
Schachne. “Today we support 2G, 3G and 4G capabilities and we’ll support 5G once the standards for 5G have been finalised.” The biggest news to affect the market of late, especially in Europe, was the decision by the European Parliament, the Council of Ministers and the European Commission to end roaming charges. It states that EU mobile phone users travelling within the EU will pay the same price as at home, with no extra charges. As a result, Schachne says: “There was a massive impact. In the summer of 2017 we saw a 600-800% increase in LTE data roaming traffic in the EU”. And despite those numbers, there’s even more to come. “Overall we noticed that not all end-users are benefitting from the new EU roaming rules. We estimate that around 20% of subscribers are not taking advantage of it. What that means is that there is more likely to be an even bigger increase in data roaming this year, as more end-users are aware of the advantage of data roaming and the attractive rates that are now on the market,” adds Schachne. But luckily the surge of traffic was met capacitymedia.com
have shifted towards more data. With the price of data being so low, it can open up new opportunities for mobile operators to provide new services to the end-user.” He thinks that there are a number of new technologies and assets that operators can take advantage of. “If we look at the overall decline in traditional services and the move to cloud-based solutions, we believe it gives mobile operators new opportunities to capitalise on their assets, which are the network and their subscriber base,” he says. “So as we see a global shift to cloudbased services, the need for connectivity that bridges the gap between the internet world and the telco world is drastically increasing and we are actively working on setting up that bridge so we can also create new business opportunities for mobile operators. In turn they can aggregate the traffic generated on the cloud back to their network and back to the end-users.” BICS recently completed the acquisition of Telesign, a communications platformas-a-service (CPaaS) provider, for an estimated $230 million. Schachne says:“With Telesign, we bridge two worlds. On one side we bridge the digital world
that Telesign is supporting through its security and messaging solution. On the other side is the fixed and mobile world, where we connect 1,000 mobile operators and fixed networks.” Thanks to Telesign, BICS is able to provide new revenue streams to mobile operators so they can fully capitalise on their assets which are their subscriber base and their network capabilities. “We see a growing need on the digital side, the cloud side, to generate more traffic, have more use cases, to enable new forms of communications and this requires building reliable access to mobile subscribers as the world is becoming more mobile year-on-year.” These very changes are forcing BICS and other telcos to ramp up security because “as more and more devices are adding IoT capabilities you see more and more threats and security risks in the access of those devices and what people can do with it”. BICS offers a private, secure and reliable environment for the exchange of IoT transactions between the mobile networks, the service providers and enterprises, he says. This enables them to “track every single IoT transaction.” He adds: “We can validate the relevance and eventually authenticate the end-users, to ensure we don’t have any malicious activity happening in this IoT environment,” thanks to its “roaming and signalling network, introducing big data, and ultimately machine learning and AI capabilities”. In addition “we’ve been very active on the anti-fraud and security side for voice, messaging and roaming. It’s about combining all the capabilities and all the experience we have built”.
RCS and beyond Rich Communication Services (RCS) have been a big talking point in the mobile sector (see pages 42-43). Its ability to enable features like those of Facebook Messenger, WhatsApp or WeChat means it could be a real game-changer. “Really it’s an evolution of our business where we act as the interconnection bridge, on the voice, messaging and roaming side. If RCS is definitely rolled out, on the RCS side as well. We’re likely to see more use cases on applications and machine-generated messaging as an evolution of A2P SMS.” He adds: “We are adding capabilities to help our mobile operators and our MVNOs to control their own roaming needs,” enthuses Schachne. “We are also extending our IoT capabilities, providing a really user-friendly, rich environment to set up and roll out any IoT business. Beyond that, preparing for the launch of VoLTE across the world as well as looking towards 5G.”
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executive interview: ryan ding | 47
MILLIMETRE WAVE ‘WILL TAKE OVER BACKHAUL’ AS 5G NETWORKS COME Is 5G a big opportunity for fibre carriers? Not in the backhaul network, Ryan Ding, the head of Huawei’s carrier business, tells Alan Burkitt-Gray: it will be wireless
M
illimetre wave wireless will be used for backhauling 5G signals – even spare spectrum that would be otherwise used for the last short hop from base station to customer. That’s the view of Ryan Ding, president of Huawei’s carrier business group, who believes this will be more efficient than dense new fibre networks. “In urban areas we recognise that 28GHz for backhaul will have the highest efficiency and the lowest cost,” says Ding. “In suburban and sparsely populated area you have a lot of available 4G and 5G spectrum, so you can use your existing network for backhaul.” That seems to be bad news for metro carriers that are hoping the arrival of 5G will be a new impetus for investment in fibre. Ding – his Chinese name is Ding
But they are shared, interestingly enough, by AT&T which (page 23) has just bought a company with 39GHz millimetre wave spectrum in order to roll out 5G in large cities in the US. That sharing of minds won’t do Huawei much good, however: it can’t sell kit to the big US carriers because the US government worries about its security.
Capacity 5G: new complexities Huawei believes that 28GHz would be a good option for 5G backhaul. The company has already carried out tests with SK Telecom in South Korea – though SK Telecom also has “a lot of fibre resources”. You can even re-use LTE, or 4G, spectrum, believes Ding. “You can use 4G backhaul without modifying the tower,” he says. “And in rural areas there is a plan
In suburban and sparsely populated area you have a lot of available 4G and 5G spectrum, so you can use your existing network for backhaul” Ryan Ding, president, carrier business group, Huawei Yun – was speaking to Capacity ahead of Mobile World Congress (MWC), which takes place at the end of February. He’s been with Huawei 21 years – having started off in research and development, something that gives him a good grasp of technology. It means that, as someone in charge of more equipment sales to carriers than anyone else on the planet, he knows what he’s talking about. His ideas for 5G backhaul is completely contrary to the view of fibre network operators at Capacity’s Metro Connect conference in January (see page 24), who were calling for significant investment in more urban fibre. capacitymedia.com
to use microwave for backhaul.” The arrival of 5G will have new complexities for operators, whether they’re using fibre or any sort of wireless for backhaul. The reason is the use of a technology called multiple input, multiple output (MIMO) or, even better, massive MIMO. For every mobile technology until now, there’s been one radio connection from handset to base station. With later versions of 4G and with all of 5G there is the ability to have steerable, configurable beams from multiple base stations to each handset, to increase available bandwidth.
Will there be new revenues to pay for all this investment. Ding says operators will be making 20% of their total revenue from the internet of things (IoT) by 2025. Last year telcos earned just 0.5% of their revenue from IoT, says the company. The company says that operators’ revenue from IoT will grow to $38 billion in 2020 from 3.8 billion connections and $400 billion in 2025 from 33 billion connections. Ding says the company is now working on IoT projects and services with 1,000 partners – a rise from 100 just a short time ago.
Driving IoT A list produced by Huawei includes companies from Honeywell and Philips to the Ofo bike-hire company. They are working in sectors such as water metering and farming. The arrival of 5G in the next few years will help to drive IoT, says Ding, but will also push up other uses of mobile. By 2025 there will be 40 billion connected devices that will generate 180 billion terabytes of data. By 2025 “85% of enterprise applications will be deployed in the cloud” and homes and businesses will need better fixed and mobile connections, he says. “There are still 870 million people who are unconnected,” he added, highlighting one of the company’s main focuses for the next few years. It has launched a programme called Rural Star 2.0, which has already seen 20,000 new rural cellsites offering coverage to 80 million users, he says. “This is the biggest growth engine.” And that means more opportunity for carriers and data centres, even if mobile operators handle the last bit of the backhaul with their own wireless spectrum. There’ll be more Netflix, more Skype calls, more IoT and more pictures of cats to deliver.
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SMART ROUTES TO SMART CITY BUSINESS:
WHY CARRIERS MUST COURT PARTNERS
Sue Tabbitt takes a close look at the opportunities for carriers to work with others on smart city projects
A
lthough 5G will be critical in unlocking many of the longer-term opportunities, smart city developments are already forging ahead, and there is no more critical a time for carriers to be staking their claim. But what does that mean in practice, and what kind of partnerships should carriers be courting to optimise their position and influence? A new report by SmartCitiesWorld in conjunction with Philips Lighting names Singapore, London and Barcelona as smart city role models. It highlights the role strategic alliances will play in connecting the dots and delivering transformational public services. “Collaboration is key,” comments Andreas Knobloch, alliance specialist at Philips Lighting. “We must think of
city-wide systems as one ecosystem working together. At the same time, we all – technologists, local governments, businesses, environmentalists and the general public – must help to build the investment case to enable cities to successfully implement Capacity smart city programs.” Smart Cities: Understanding the Challenges and Opportunities holds up Singapore for its forward-looking infrastructure that includes smart buildings and transport as well as intelligent use of underground space. London is commended for a community/partnership approach to the implementation of technology, while Barcelona’s progress is attributed to the influence of top-level government, which has been driving innovation and change. Other success factors include looking for short-term gains as part of the plan. The report cites telco-integrated street lighting in San Jose and smart LED streetlights in Los Angeles as good examples: savings gained from more efficient use of power can be ploughed back into innovation. For carriers there is a role in helping facilitate some of these savings, to release budgets for more ambitious smart city experimentation. “Telcos have strengths they can leverage against IoT smart city opportunities,” says Rich Karpinski, a research director specialising in IoT and mobile at 451 Research. They have networks and infrastructure that span cities and regions. They’re also better positioned to bring everything together because of their horizontal take on the opportunity. But carriers face challenges too, Karpinski adds. These include a relative lack of in-depth knowledge of specific use cases and business processes in areas such as street lights, public transportation or waste management. Which is where the right
partnerships could make all the difference. So why aren’t we seeing more creative collaborations? Carl Piva at TM Forum feels carriers are not being proactive enough and should play matchmaker, providing an app store-like model to present smart city options to customers. Beyond pure connectivity, telcos could branch out into value-added solutions and managed services based on data analytics capabilities. “Carriers have an opportunity to form ecosystems with smaller players as well as enabling other industries to access the smart city opportunity.” One possibility could be to blend private and hybrid cloud capabilities with IoT-type services, to help cities create vibrant data economies – marketplaces for data providers and data consumers. But this in turn demands a willingness to cooperate with other parties, and support for common standards. “This is where TM Forum is helping – to drive the business opportunity and technical architectures,” Piva says.
Trust and resilience For its part, Telia Carrier is capitalising on the mobile opportunity. “Business users need to be able to trust that mobile networks will provide the same levels of trust and resilience in their role sitting between smart city services, IoT devices and the IoT platforms connected over the international carrier backbones,” notes Matthew Jones, Telia Carrier’s UK managing director and head of mobile solutions. The company has built its own IoT backbone which separates IoT traffic from the public internet, connecting device management platforms to devices and IoT aggregation points in a single network hop, he explains. “A good example of this is our IPX february/march 2018
feature: smart cities | 51
network’s dedicated connection to the Ericsson Device Connection Platform.” Carriers with foresight will have the partnerships in place that enable secure, reliable and transparent connectivity for all sorts of IoT devices, he says. But these also need to be backed up with solid service-level agreements that talk specifically about IoT traffic and delivery expectations, he warns. And 5G will really focus the opportunity. “For international carriers, understanding 5G is the next significant milestone they must prepare for,” Jones says. “Not simply because it will enable technologies such as IoT, connected cars, apps and devices to take off in a way not seen before, but because it will dramatically change the way that consumers and businesses use mobile data services. How will that data shift across their networks, what are the worst-case scenarios, and therefore what are the partnerships they should build?” Ian Watterson, president of the Americas and Asia-Pacific at telco business support systems vendor CSG, points to Telstra, AT&T and Verizon as all having strong initiatives, though at different stages of development. He believes ideal partnerships are those combining infrastructure, sensor, hardware and technology to create solutions or bundles across a wide range of applications. These relationships might be based on revenue share or be more traditional vendor/customer relationships, he says, noting that the preferred model is typically low value, high volume risksharing based relationships which offer advantages in rapid pricing and variable cost modelling.
Image: iStock
Flexible cloud systems Flexibility will be central to success, he adds. “Rather than using heavyweight traditional systems, they need to look to flexible, SaaS-based cloud BSS – systems that enable rapid time to market and flexible business models combined with settlement with the partners across their ecosystem.” Above all, carriers need to place themselves at the centre of smart city ecosystems, “offering packages of services to cities rather than just connectivity, and treating smart cities like large enterprises which need multiple solutions”. But none of this is to downplay the criticality of connectivity in an intelligent city set-up. Success will also come from being innovative in bringing together different network technologies to meet diverse communications needs. “Telecom service providers have started preparing for large-scale IoT and smart cities, and this has been accelerated by technologies like Sigfox and LoRA,” says Phil Beecher, president of the Wi-SUN Alliance, a non-profit association capacitymedia.com
promoting global proliferation of interoperable wireless solutions for use in smart cities, smart grids and other IoT applications. “We are also beginning to see the deployment of NB-IoT,” he adds. “Network service providers may well miss out on major opportunities in the growth of smart city applications if they take a too conservative a view of network design,” Beecher warns. “Carriers could benefit by thinking laterally and looking towards other technologies that can complement their existing deployments.” For example, he suggests they should be approaching city councils and smart city developers to use existing street furniture, such as street lighting poles, as a basis to deploy a mesh network to interconnect with the cellular network. One of the less obvious opportunities for telcos is to share their own intelligence as a source of smart city value – again, as a means of offsetting the cost of expensive network upgrades and new rollouts. It’s a call to action championed by Chordant, whose smart cities platform makes it easier to unlock value from any data source.
Telco-owned data Vanja Subotic, its director of product Capacity management, believes there is scope for leveraging telco-owned data resources, data from other resources, and developing new apps/solutions based on data integration linked to telcos’ customer relationships. Linked to this, carriers also need to expand their targets for partnership to include local governments and public safety authorities as well as solution enablers for multi-modal journey planning, smart parking, payments, and so on. “Other great areas of opportunity lie in exposing network APIs to enterprises through 3GPP Service Capability Exposure Function capability, and taking advantage of the innovation that can be enabled through the sharing of telco and non-telco data,” she adds. Bengt Nordström, CEO of strategic consultancy Northstream, believes carriers need to carve out their markets quickly if they don’t want to be pigeonholed or left behind. For Nordström, pragmatic areas to focus on include network adaptation, particularly encompassing indoor coverage and developing platforms that enable services. They should look to others who are leading the way with the right kinds of ecosystem, such as AT&T in Dallas. “The right strategy is not to exclude any particular type of players and industries, but to include platform providers, solution and service providers with innovative ideas, public sector parties which are developing smart city frameworks and/or providing investment,” Nordström says. In AT&T’s case, this means it can enable and offer different types of services rather than
be limited to its own service offerings. Wojciech Martyniak, M2M/IoT product manager at software and services provider Comarch, points to advanced developments in Dubai as an indication of what’s possible when everyone comes together to deliver a shared vision. “The city has one platform, supported by the carriers, that delivers everything in one place – parking systems, billing, traffic monitoring, smart shopping and much more.” It’s this kind of preparedness to work with others towards something bigger that will separate leaders from followers. “Those ahead are those that are working together,” he notes. “Singapore and its Smart Nation initiative is a collaboration between Singaporeans, businesses (including carriers) and government. In order to truly build a smart city it needs to encompass many services, many technologies and many customers and partners. This means everything from healthcare services to energy and water monitoring to smart public transport fares.” But it does demand that all parties buy in to the bigger picture. “Commitment from government and city authorities is crucial for technological change to happen, so that data is shared, securely and with privacy considerations in place, between the stakeholders, and that common security solutions are put in place,” he says. “Citizen logins, contact and billing processes all need to be unified. The public and private sectors need to work together, each with their own responsibilities, to deliver a smart city. There is enough business for everyone. One enterprise, one carrier or one platform vendor cannot – and should not – deliver everything.”
Smart Romania Perhaps one of the best examples carriers can look to for joined-up thinking, leading to improved city services, is the Smart City Alba Iulia 2018 pilot project in Romania. In October 2017, Orange announced that it had completed the first stage of implementation of smart technologies, involving 14 different solutions, towards the creation of a digital infrastructure for the city. To date this encompasses 4G and 4G+, Wifi and LoRaWAN provided by Orange Romania. The comprehensive multitechnology network, which spans the whole city including public transport, has an open infrastructure based on open data. It means that applications, developed by partner startups, can readily connect the city’s authorities, residents and tourists as well as entrepreneurs. The idea is that the digital infrastructure facilitates new opportunities and better services for local citizens, while making optimal use of resources with expected benefits valued at €532 million over the next three decades. It’s a venture any carrier would covet a role in.
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special report
ENTERPRISE & SD-WAN
February/March 2018
CONTENTS 55 Shaping up for SD-WAN How is SD-WAN shaping up the changing enterprise network? Is traditional MPLS networking dead? Gareth Willmer reports
57 Opinion: Colt
Capacity
SD-WAN: The key to global expansion. More businesses are demanding agility and ondemand functionality from service providers. The growth of SD-WAN has begun to meet this demand. How is the enterprise market changing and how are carriers tackling this shift?
58 The big interview Dan Caruso has been rebuilding Zayo, the company he started 11 years ago. He’s replaced top managers and launched SD-WAN. He talks to Alan Burkitt-Gray about bringing back energy and ambition into the company
62 Market Data 48% of enterprise respondents at the last WAN Summit event in London said they had plans to implement an SD-WAN service, but were either in the process of selecting a partner or yet to begin the selection
64 Five top SD-WAN solutions A look at five SD-WAN offerings available
65 The big interview David Burns, group managing director international and global services, Telstra
capacitymedia.com
Capacity
feature: sd-wan | 55
SHAPING UP FOR SD-WAN
Capacity How is SD-WAN shaping up the changing enterprise network? Is traditional MPLS networking dead? Gareth Willmer reports
Image: iStock
A
utomation and the move to cloud services are driving the roll-out of SD-WAN, with a view to modernising network infrastructure, reducing costs and getting to market faster. That is all having a significant effect on carriers and their enterprise businesses. “What’s happening in enterprise networking is huge,” says Josh Goodell, VP of edge solutions at AT&T. “What used to be strictly ‘it would be great if ’ scenarios are now realistic outcomes for business committed to digital transformation.” Some in the industry have voiced concerns in recent years that SD-WAN may cannibalise MPLS revenues. But even though SD-WAN is on the rise, carriers often tend to say they view it as just one part of their service offering. The new technology can, in fact, work well in tandem with traditional technologies such as MPLS and even increase the appeal of it in particular cases, they say. So at least for now, the role of MPLS seems generally to be changing rather than being phased out of carriers’ product offerings. “We’ve never thought that SD-WAN and MPLS should be an either/or conversation,” says Goodell. “[Businesses] will have all kinds of sites, but MPLS will capacitymedia.com
be at the core of a lot of these networks.” He says it’s possible that some customers will substitute MPLS with SD-WAN and alternative access technologies, but they are considering a mix of choices for optimal results. SD-WAN will become even more desirable as data consumption evolves over time and more capabilities emerge, says Goodell. For example, he says, more deployments could be carried out as virtualised network functions on general purpose white-box customer premises equipment rather than purpose-built grey-box CPEs. On its website, industry consortium the MEF, meanwhile, cites a report that it published with Vertical Systems in January 2017 that surveyed service and technology providers. In that, just 4% of respondents viewed SD-WAN as a competitive threat to their existing connectivity services such as MPLS, while 45% viewed it as a strategic opportunity and 37% as both an opportunity and a threat. These statistics indicate that the “doom and gloom” scenario is not necessarily the case, says Ralph Santitoro, distinguished fellow at the MEF – and he expects, if anything, that the proportion of those who view SD-WAN as an opportunity will have grown from last year. He says he is
not seeing MPLS being replaced or reduced in bandwidth, but organisations may choose to bring up new sites with SD-WAN rather than a new expensive MPLS circuit. “I’m seeing SD-WAN as augmenting existing MPLS,” says Santitoro.
Not dead “I think it’s very unlikely that SD-WAN will kill off MPLS, because ultimately the way that SD-WAN works is it kind of builds upon infrastructure that’s already there,” says Neil McRae, chief architect at BT Group. “I actually think they’re technologies that will live off each other for a very long time,” he says. McRae says SD-WAN caters well to certain use cases, such as for connecting to cloud platforms, or if a business has a lot of stores or branches in many places around the world and wants to get them connected up quickly – or, for instance, launch a pop-up store over Christmas. But this can vary in other situations. “For your own data centre, your own HQ, for some of your own mission-critical traffic, where you want to absolutely be sure that you’ve got the right service levels, MPLS still has a huge part to play,” says McRae. For the moment, he says, he very much has the sense that the two
56 |
technologies are complementary. In addition, he believes that SD-WAN is still unproven in terms of some of the bigger security challenges the industry will face over the coming years – so MPLS can step in here too. “Security still sits at the top of the list of CIOs’ concerns and issues, and MPLS networks have a really strong track record of being able to cope with that,” says McRae. He points out, meanwhile, that BT’s SD-WAN product Agile Connect, launched last September, has been deeply integrated into the company’s MPLS platforms so that it can take advantage of things like the service’s security solutions and huge PoP base across the globe. In turn, the automation benefits of SD-WAN can feed back into improving the performance of MPLS. The overall result is that many of BT’s customers are running a hybrid of technologies such as MPLS, SD-WAN and internet, depending on what works best for different parts of their business, says McRae. “I genuinely believe that the days of lining up products on a shelf for businesses don’t exist any more.” BT does not seek to promote single technology solutions over others, he says, but the best set of services for solving a particular customer’s needs – which, at the end of the day, is what they’re really interested in. Verizon similarly sees SD-WAN as just part of the equation. “If you look at SD-WAN, we really see that offering as being part of a broader portfolio which we are calling our virtualised networking services,” says Peter Konings, director of enterprise networks and managed services at Verizon. “In our world, there is never going to be one solution which provides the answer to all questions.” Konings points out that 90% or more of its sales opportunities are now in virtualised networking services, but 75% of Verizon’s implementations nevertheless still include MPLS as part of the solution and the company continues to see its MPLS bandwidth grow.
services, this gives enterprise customers and wholesalers a variety of options for deploying in collaboration with Verizon, tapping further into the flexible, “mixand-match” ethos of virtualised services. Konings says, meanwhile, that by expanding the service to wholesale partners, it opens up the service’s reach to more customers than Verizon would traditionally have interfaced with and enables it to gain a broader geographic reach. “I think what makes Verizon attractive as well is the fact that we have built out an ecosystem where we are not going to a partner and saying ‘my solution is this hardware-software combination’,” says Konings. “You can pick and choose what makes most sense.” Separately, Telefonica believes that some traffic that customers have over MPLS will migrate to the internet, but that intelligent splitting of traffic for different uses can create a richer hybrid service and thus be ultimately better for Telefonica and its customers. “The big difference comparing the networks that we have now and the networks we are going to have with SDN and SD-WAN is the intelligence,” says Capacity Eduardo Guardincerri, CMO at Telefonica International Wholesale Services. “If you have the right intelligence and you have both accesses – internet and MPLS – there is no problem. You just have to configure your network and make it happen.” On top of that, there is an opportunity for Telefonica and its customers to create new virtual security services required for the new wave of networks and functions, says Francisco Santos, head of wholesale services at Telefonica International Wholesale Services. “We see really that the network is going to evolve in the future to a more dynamic network using these technologies,” he says. “So we are 100% committed with this transformation, because it’s going to be key for the network evolution of the future.”
Adding flexibility
Meanwhile, Bob Schroeder, vice president of enterprise product management at Spectrum Enterprise, believes that multi-system operators such as Spectrum Enterprise without a traditional MPLS customer base are well-positioned to provide fibre internet and broadbandbased SD-WAN services as an alternative to telco incumbents with MPLS. “Spectrum Enterprise is beginning to see requests-for-proposal [RFP] inquiries from enterprise clients seeking to replace legacy MPLS networks with SD-WAN deployments,” adds Schroeder. The company demonstrated its SD-WAN
Verizon made some significant moves last year to open up and add further flexibility to its SD-WAN offering, firstly by adding whitebox options on top of its universal customer premises equipment (uCPE) portfolio. This service moves towards eliminating the need for enterprises to invest in separate hardware appliances for virtual network functions and towards open hardware, open source architecture rather than vendor-specific platforms. Then, near the end of last year, Verizon launched an SD-WAN service for wholesale customers. Added to its other
Evolving market
proof-of-concept last November and has since announced field trials with existing clients – with plans to move to general availability of its managed SD-WAN service later in 2018. Schroeder agrees that hybrid WAN will extend the life of MPLS for some years, but believes this will pose its own challenge for incumbents because a “tremendous amount” of internal resources are needed to migrate pure MPLS to a hybrid model. Separately, Mark Lewis, EVP of products and development at Interoute, says SD-WAN is shifting some of the contract value of a service away from local access and towards smart on-premises devices and cloud capabilities, which benefits players like Interoute. And Interoute is seeing additional opportunities open up, such as customers with local enterprise networks asking to leverage the company’s cloud and backbone outside their footprint. To move towards a truly effective SD-WAN environment, though, there is still work to do in standardisation. With regard to that, the MEF is working on educating the market and coming up with specifications towards the end of the year. Once standards come into the market more, says Santitoro, then the focus can later start to move towards interoperability. There is no doubt that the enterprise market is changing significantly with new agile services – and carriers are often providing hybrid offerings to meet these needs. Recently, Orange Business Services has, for instance, seen a major transformation among customers, which are moving their applications to the cloud and increasing their use of Software-as-a-Service (SaaS) applications, says Laurent Perrin, marketing director for application driven networks in the company’s Connectivity Business Unit. “Flexibility is really needed by our customers,” he says. “They need a network that adapts.” There’s “tremendous growth” in this area, adds Hussein Khazaal, VP of marketing and partnerships at Nuage Networks, which works with carriers such as BT and Telefonica on SD-WAN. That, he says, is driven by the need of enterprises to not only boost what they do today, but also to evolve into the future. And Goodell highlights how he thinks a mix of options will be key for players such as AT&T. “Hybrid connectivity is essential. One size rarely fits all,” he says. “Businesses want to be able to manage their networks more easily. They want the flexibility to mix and match connectivity based on their site-specific needs – application, performance and reliability.” february/march 2018
opinion: sd-wan | 57
SD-WAN: The key to global expansion More businesses are demanding agility and on-demand functionality from service providers. The growth of SD-WAN has begun to meet this demand. How is the enterprise market changing and how are carriers tackling this shift?
F
or global companies, operations in multiple countries and sites have become the norm. Nestlé has 418 factories in 86 countries, while GE has operations in more than 170 countries. Even relatively young companies have pursued aggressive international strategies. It’s paying off. Earnings from tech giants have been bolstered by international expansion, with Netflix reporting profit from its international operations in Q4 2017, and Amazon seeing a strong international sales trajectory. London-based Transferwise raised $280 million to expand to Latin America and Asia. Different countries are vying to attract the best companies in the world. Berlin, Hong Kong, London, Amsterdam and Dublin have all been picked out as cities that are ripe for expansion, boasting advantageous corporate tax rates, developed infrastructure and well-educated and talented workforces. In its predictions for the year, analyst firm Forrester described the dynamic of the market as one that will favour the bold. It predicted that this will force companies to decisive action, following the lead of Amazon and Google. For many enterprises, much of this control is related to costs, the need for efficient business models, and the ability to scale up and down according to business needs. According to IDC, at least 50% of global GDP will be digitised by 2021, with growth driven by digitally-enhanced offerings, operations and relationships. Yet many global businesses are already struggling with connectivity issues, faced with a growing demand for bandwidth. This is driven by a number of trends including the dramatic shift in the number of enterprises moving applications to the
capacitymedia.com
cloud, and the proliferation of dataintensive content such as video. There is an increasing need for bandwidth across enterprises, with demand rates soaring by 20-30% a year. These companies are also struggling to get a handle on maintaining Capacity increasingly complex and diverse networks in a cost-efficient way. Global business power International companies must prioritise connectivity to ensure that they are operating cost-efficiently. Much of that is targeting the part of the network that is simply not seeing enough return on investment: the wide area network (WAN). For many, the WAN has become one of the most expensive portions of the network to maintain, far ahead of the data centre or network security. Despite the growth in bandwidth need, the majority of WAN budgets are not growing at the same rate. Moreover, for expanding global companies, many WAN offerings do not afford the necessary agility they need, making it difficult to add new sites, increase bandwidth, or change connectivity settings. In order to overcome these challenges, network infrastructure must no longer be an afterthought. Most IT investment is allocated to applications, which are kept closely aligned with the business model. Meanwhile, considerations for the wider network are retro-fitted once the core business strategy is in place. Instead of continuing to see the network as a cost, enterprises can use technologies such as software-defined WAN (SD-WAN), which will allow them to treat the network as an asset to enable global expansion. Industries such as automotive, finance and transport/travel are fast waking up to the power that true SD-WAN offers. For
OPINION
Mirko Voltolini Head Network on-demand Colt Technology Services
today’s companies with sites across several countries, including a number of remote branches, SD-WAN provides a better way to expand in a cost-efficient way. It uses commodity hardware to host virtualised network functions (VNFs), enabling fast deployment of additional capabilities such as security and WAN acceleration. SD-WAN has a logical SDN structure without the constraints of the physical network, allowing a global business to dial its presence in a particular region up and down depending on market needs. For example, if an opportunity presents itself in Germany, companies can easily ramp up connectivity for a trial period. Agility and dynamism Most enterprises recognise the ability to do business at a global level in 2018 demands an unprecedented agility and dynamism which can only be powered by SD-WAN technology. Yet with many enterprises undergoing network refreshment every three to five years, we are still some way from an SD WAN-first model. In the meantime, the necessary scale and agility needed can be achieved by a hybrid SD-WAN model that gives enterprises the best of every world – the cost effectiveness of public internet links; the security of MPLS private lines for confidential data; the flexibility that comes with being able to self-configure where and how data should travel and the security policies applied to the network. And the precaution of having a backup in place should it all go wrong. An aggressive international strategy presents huge growth opportunities. If market conditions are to indeed favour the bold, those who treat the network as an asset in their international expansion will be at a distinct advantage.
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Putting the
zest
back into
Zayo
Dan Caruso has been rebuilding Zayo, the company he started 11 years ago. He’s replaced top managers and launched SD-WAN. He talks to Alan Burkitt-Gray Capacity about bringing back energy and ambition into the company
D
an Caruso has emerged from a period when, by his own admission, he had trouble sleeping at night. It was not that Zayo, the company he founded and still leads, was in trouble, but he felt that something had gone out of it. So he replaced most of his colleagues at the top, people he’d started Zayo with. “It was hard – coming to the realisation that we were going to have to rebuild a lot of our senior team,” he says. The newcomers aren’t significantly younger, and many of them – like those they have replaced – used to work with him in companies such as Level 3 Communications. But, having gone through the process over the past year or so, he says, “the energy, ambition that Zayo always had has returned. The zest has returned. Let’s take that to the next level”. He’s surprisingly critical, both in a speech he made to Capacity’s Metro Connect conference in Miami Beach in January and, the following day, sitting at our booth at the same event. “We had to
rebuild the executive team. It was beginning to stagnate,” he says. Zayo needed a team “that was looking to the next five years”. There was no animosity, he suggests. “We have a close relationship. Some of them made a lot of money. The core group made $10-$20 million or more than that. And they had a lot to show for it – new houses and new cars.” Now, “most of them are on the golf course, one way or another”. Some are “on a couple of boards in some nice areas”, he adds. “They’re all a very talented team – saying maybe they should do something like Zayo.” The new team features people such as Matt Steinfort, who became CFO at the end of 2016. He used to work at ICG Communications and Level 3 Communications – as did Caruso. There’s Jack Waters, the CTO, who was CTO of Level 3 Communications for many years. Andrew Crouch was appointed COO in April 2017, having previously been Level 3’s regional president of Europe, Middle East, and Africa. “Jack Waters started at Level 3 a month
after I started there,” says Caruso. “The reassembled team were people that worked together.” It didn’t always work smoothly. Ed Morche, formerly Level 3’s group VP of sales, became Zayo’s president of sales in May 2017, only to resign to return to Level 3 a few weeks later. And the new chief revenue officer is Phil Mottram: he’s a Brit, like Crouch, but hasn’t worked for Level 3. Instead he’s had senior positions at Vodafone and used to head CSL, the Hong Kong mobile operator, when it was owned by Telstra. Before that he was at BT and AT&T.
Thinking at scale “Now things have changed pretty dramatically,” says Caruso. “Now 2018 is just about simple execution.” What’s new about the new team? “They’re more global, more used to thinking at scale.” Mottram managed 3,000 people at CSL, he adds. The newcomers can handle a “more complicated sales strategy”. Zayo is “much bigger now, with more business units. It’s more global. Now we go outside the february/march 2018
the big interview: dan caruso | 59
1986
Manager, Ameritech (Illinois Bell)
1992
SVP, MFS Communications
1997
SVP, WorldCom
1997
Group VP and co-founder, Level 3 Communications
2004
President and CEO, ICG Communications
2007
Founder, chairman and CEO, Zayo
comes into place.” He adds: “It doesn’t necessarily change or expand our aspirations. It’s just the progression of getting better and better at serving our key customers.” When Zayo announced its SD-WAN plan in January, the company said it was “an integrated extension” of its fibre-based IP/MPLS backbone offerings “that makes enterprises’ networks easier to manage, improves performance and enhances reliability and failover options”. As part of Caruso’s reorganisation of the company, with a new management team, he has split the company into five business segments, each operating globally. The carrier segment is the biggest, providing about 48% of Zayo’s revenue. Below that there is the finance and
The energy and ambition that Zayo has always had has returned. The zest has Capacity returned” Dan Caruso, chairman and CEO, Zayo
boundaries of where we have networks – to bring customers to Hong Kong, Sydney, Brazil.” One of the significant recent changes is a move into software-defined wide area networks (SD-WANs). “We have a few businesses that have to do with connectivity at both the Ethernet and IP layers, so we have a WAN business.” This “serves customers that are on our target list that have more locations, so the WAN could take different forms. It could be MPLS, IP VPN or Ethernet-type WANs”, says Caruso. “You also have the category where our key customers either connect to multiple public cloud environments.” They may want to connect to Amazon Web Services, Google and other cloud services. “That’s another area where the SD-WAN type functionality comes into place,” he says. “We view it as first and foremost having command and control of your infrastructure and your data. It’s paramount you do it in that way. How you turn up and turn down capacity, take advantage of automation – that’s where SD-WAN capacitymedia.com
professional services unit, with 16% of the revenue; media, content and commerce, with 13%; and cloud, software and infrastructure, also with 13%; and then public health and utilities with just 10%. But in an earnings call earlier in the year, Caruso reveals that just 10 customers – five global carriers and five webscale companies – produce 26% of the total revenue. He didn’t identify the customers, of course, nor put the carriers and the webscale companies into any sort of order. Zayo’s top 100 customers generate 57% of its total revenue, he added.
Opportunities in finance In that same conference call he said there were “big opportunities” in the finance sector, set up in 2017. “We’ve had multiple deals in Europe and the US with the same customers. It allows you to get deeper and broader with that vertical.” He added that 2017 “was a transitional year” for Zayo. “We developed this great platform that has global significance as the largest independent provider of communications infrastructure, but we needed a team of people and an organisational approach that was going to take us
forward not just through 2018 but for many years to come. We accomplished a lot in 2017 to position ourselves for long-term value creation.” So let’s turn back to Metro Connect, and his “reflections of an anxious chairman” – the term with which he introduced his keynote speech. Zayo has continued to acquire companies over the past few years, despite Caruso’s anxiety. One of the most intriguing acquisitions – and possibly his best recent bargain – was Spread Networks. If you’ve read Michael Lewis’s book, Flash Boys: A Wall Street Revolt, which came out in 2014, you’ll recognise Spread Networks as the dead-straight fibre from New York to Chicago that was designed to cut latency for high-frequency traders. The fibre – 827 miles or 1330km – allegedly cut the latency from 17ms to 13ms by being ultra-straight, to give traders connected to Spread Networks a 4ms advantage over their rivals. Lewis says in his book that the project cost $300 million. Zayo bought Spread Networks for less than half that: $127 million. Not so much high speed, as be patient and it’ll come to you. “We now have a business unit called Spread Networks by Zayo,” says Caruso. “We’ve just announced a cable from Minneapolis to Omaha.” He’s looking for other acquisitions – and Annette Murphy, the company’s former SVP for fibre solutions, who became managing director for Europe in Caruso’s great management reorganisation, will have a role in that. “We’re actually looking in Europe” for potential acquisitions, he says. “Annette has a really strong knack for finding opportunities. She is working with Ian Cunningham, the head of sales in Europe.” Cunningham joined in January this year after a year at – surprise – Level 3. He spent the previous three years at credit information agency Experian. Before that, though, he was at Vodafone and BT. Zayo is looking to extend the network “to Hong Kong, Tokyo, Singapore, Sydney”, says Caruso. And apart from the big potential acquisitions the company is working on, they are looking for small gap-fillers. “We call the small ones tuck-ins,” he says. “We like tuck-ins. I want to do lots at the same time.” And, having parted from so many former colleagues at the company, is Caruso determined to stay strong and stable in Zayo? “I don’t have the inclination to take my money and go off,” he smiles. “I don’t want to go and play golf. I’m not ready to hang up my spikes.” But, he adds, “I should have less of a hands-on role. I want to get to the point where Andrew and Phil are driving the business.”
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IT’S A WAN-DERFUL WORLD 48% of enterprise respondents at the last WAN Summit event in London said they had plans to implement an SD-WAN service, but were either in the process of selecting a partner or yet to begin the selection. The figures, taken as a part of a live polling session at the Capacity-ran event, highlight the growing opportunity that software-defined wide area networks offers to the global carrier community. A key driver behind pursuing an SD-WAN strategy was the reduction in costs, attendees said. 37% of attendees identified cost saving as the primary reason for their own, or their customers’, SD-WAN deployments, with a boost to performance identified as the next most popular reason (26%). The reduction in provisioning times was also highlighted as a key factor at the event, which had around 300 attendees. Figures released by IDC last year predicted a boom in the market that would see sales of SD-WANs grow at a compound annual rate of 69% over the next five years. IDC estimated the market would top $1.19 billion by the end of 2017 – a massive
growth from the $225 million in sales recorded in 2015. This will grow even further, hitting $8.05 billion in 2021. “SD-WAN offers compelling value for its ability to defray MPLS costs, simplify and automate WAN operations, improve application traffic management, and dynamically deliver on the cost and efficiency benefits associated with intelligent path selection,” IDC analysts Rohit Mehra and Brad Casemore wrote in IDC’s Worldwide SD-WAN Forecast, 2017–2021. When looking at vendors, 52% of enterprises identified a network operator as their preferred provider of the service, opting for a managed SD-WAN. This compares with 27%, who said they’d prefer to opt for a direct purchase from and SD-WAN vendor or supplier, and 9% who said they’d prefer to op for an outsourced network manager. So what are the key considerations when Capacity picking an SD-WAN vendor? Pricing again was the most common option – almost half of attendees picked that as the most important SD-WAN feature by vendor,. The deployment model (ie. hardware vs. virtual appliance) was also a
vital component, with 28% of respondents identifying it. 8% said the monitoring features were most important, while almost 7% went for security. Curiously, MPLS remains dominant for enterprises connecting to their cloud providers, with 46% of respondents identifying it as their most common network product for that purpose. Dedicated internet access (DIA) was the primary connectivity solution for 30% of respondents, whilst 11% said they use broadband most. This is perhaps no surprise given 63% of respondents said they still anticipate having MPLS services at most sites in their WAN in the next year – almost twice the amount who said no. WAN security was found to be primarily edge-based, according to a whopping 89% of respondents. Just 11% said they used cloud-based security services on their WAN. The live polling was conducted at this year’s WAN Summit London, part of the WAN Summit series which also includes events in New York, Frankfurt and Singapore, as well as the WANalysis quarterly newsletter, which is produced by Capacity Media.
Fig 1 | If you are an end-user, what best describes the stage you are in for adopting some type of SD-WAN service?
Fig 2 | Either for your company or that of your
Fig 3 | What SD-WAN service feature is most
typical customers, what tends to be the primary reason for pursuing SD-WAN?
18
5
1
15
important to you in selecting an SD-WAN vendor (or that of your most typical enterprise customer)?
8 17
59% 21 10
15 7
4
2 1o
26%
2%
9%
13%
Use alternative access technologies (broadband, LTE, etc.)
Other
Reduce provisioning time
Improve performance
Improve security
Increase capacity
Other
43%
8%
7%
28% Deployment model (hardware vs. virtual appliance)
18%
Security features
2%
Monitoring features
7%
Competitive service pricing
37% Cut costs
13% Have not yet seriously considered adopting SD-WAN service
19% Seriously considering SD-WAN service, but have not begun process
29% Currently planning/selecting SD-WAN implementation
35% N/A (I am a service provider or vendor).
Have already implemented SD-WAN service at least on part of the network
4%
1
26
5
4
february/march 2018
Capacity
64 | five top: sd-wan solutions
5 TOP SD-WAN SOLUTIONS S oftware-defined wide area networks (SD-WAN) offer a range of benefits that make it crucial for any network leveraging new technologies. As a number of applications move towards to the cloud there is a growing awareness that traditional WANs were never designed for an internet-based environment, a problem that SD-WAN solves. Low cost, increased agility, quick online time, enhanced security and better network productivity are just a number of the advantages SD-WAN has to offer. Here is a list of Capacity’s five favourite solutions in the SD-WAN space.
GLOBAL SD-WAN Compared to traditional MPLS, Aryaka’s Global SD-WAN solution offers faster cloud/SaaS connectivity and a lower total cost of ownership. In addition, the solution delivers: faster performance for mission and business critical applications - hosted on-premises or in the cloud, improved performance for cloud-based VoIP services, it can be deployed in 8-48 hours and comes with a guaranteed network uptime and quality of service. As a fully managed offering Aryaka says that its solution eliminates management hassles with a single vendor solution and reportedly saves companies up to 56% in costs. Versus a traditional MPLS connection, Aryaka’s Global SD-WAN performs at a 0.306 second application response time in comparison to the 3.97 seconds it takes over MPLS.
VIRTUALISED NETWORK SERVICES The Virtualised Network Services (VNS) solution offered by Nuage Networks
allows remote locations to be seamlessly connected with the data centre —without the need for expensive and cumbersome proprietary hardware. The offering comprises of three components. The first being the Vitualised Services Directory (VSD), this is the centralised policy engine, that defines, deploys and enforces the overall Nuage Networks VNS solution’s capability and delivers advanced service capabilities via a Network Functions Store. The second is the Virtualised Services Controller (VSC) that programs the customer premises equipment with the network overlay paths to form the topology for Nuage Networks VNS. And lastly there’s the Network Services Gateway (NSG) which provides service demarcation and Capacity network functionality at the branch, based on the x86 COTS hardware.
VIPTELA SD-WAN Since acquiring Viptela for $610 million in August 2017, Cisco has realigned its strategic direction away from its inhouse-developed IWAN offerings in favour of the Viptela offering. Viptela says that its SD-WAN solution is the most deployed SD-WAN solution among the Fortune 1000 Enterprises. The solution builds an overlay fabric which is carrier agnostic and transport agnostic, and as such customers get a consistent WAN built on MPLS, Broadband, 4G/ LTE or VSAT to name a few. As for security Viptela’s SD-WAN is built on a zero-trust model. This means that all components within the solution mutually authenticate each other and all of the edge devices are authorised before they are allowed on the network. The solution is cloud delivered and has been designed with open architecture in mind as customers have the flexibility of management interfaces.
TALARI – SD-WAN SOLUTION Talari’s SD-WAN solution creates a smart and responsive network, which adapts in real time to bandwidth demand and actual network conditions. As a result critical applications take priority and take the best quality path through the network ensuring uptime. Talari’s solution works across all MPLS, hybrid WAN, all Internet links - backed up with wireless or extended to the cloud, guaranteeing continuous availability and predictable performance. In addition, the solution supports enterprise data centers, remote offices and cloud services with a new model in which packets are routed at predetermined times, based on the bandwidth suitability of the packet’s needs. As for Hybrid WAN, with Talari’s solution all WAN locations have access to the full aggregated amount of bandwidth. And because of the policiesbased prioritisation protocol, quality sensitive applications such as VoIP get the highest priority which in turn ensures quality of experience.
SILVER PEARK SD-WAN According to Silver Peak ‘not all SD-WANs are created equal’ but the company says building it with Silver Peak has a unique set of benefits. The first is lower WAN operational expenditure and capital expenditure – using the Silver Peak SD-WAN solution you can now augment or replace MPLS connections with broadband internet services to connect users to applications and lower WAN costs by approximately 90%. It also features 256-bit encrypted tunnels, edge-to-edge between any sites in the SD-WAN, a component Silver Peak says it offers the ‘security of a VPN’ and offers ‘unrivalled’ flexibility and deployment options that is non-disruptively interoperable with most existing technologies using service chaining multiple layer 4 through 7 devices or enabling a “migrate at your own pace” approach to adoption. february/march 2018
executive interview: david burns | 65
TELSTRA: EVOLVING WITH ENTERPRISE Telstra has a A$6 billion services and solutions business for enterprise and government customers. Jason McGee-Abe sat down at PTC with David Burns, Group managing director (GMD) of global services and international in GES, who is also responsible for leading Telstra’s global enterprise and services business outside Australia For us as Telstra full stop, not just as an international business, our enterprise business is a very significant part of our company. It’s roughly about a third of the size of the total company and we see it as a great opportunity as a growth engine and as a value proposition. We’re very committed. I know some organisations waiver from that but it’s a crucial part to us as too is our international play. Internationally we have two customer sets. One is our more traditional longterm customer set which we call component buyers. They might be carriers, big OTTs, or buying dark fibre but they are ultimately the sophistication of the skills and people to manage those networks. Component buying, or wholesale, is a very big part of our business, but our enterprise clients outside Australia are also very significant, it’s nearly a 50/50 split. On a chart, our sweet spot for that customer set would be described as multi-national but our differentiation is if you exist in more than one country. Quite simply, if you were to go from Indonesia to Singapore or Japan to Hong Kong, our network diversity and presence gives us a real entry point to talk to our customers. You don’t have to be a big bank with a large presence to add value to us, it’s quite simply if you exist in more than one country.
Going up the stack It’s very aligned to our Australian strategy to enterprise. We have four major plays. The first is the network offerings in and around core backbone of our data and IP portfolio that now includes recent announcements towards what we call our Telstra Programmable Network. This is our SDN and NFV offering which we’ve launched to market and is both carrier and enterprise-grade. That’s a key offering to us. Secondly, going into security, we’ve recently relaunched our new set of security capacitymedia.com
offerings and SOCs in Melbourne and Sydney. We’ve got an intent to put those in key locations around the world. We’ve made it reasonably public that our next one will be in the UK. Collaboration is key and our third is around cloud stack, infrastructure, migration and enablement. The fourth is around network management, managing those technologies. We do this with consulting, Capacity enablement, resources, data migration, and we’ve made some acquisitions – for example with UK-based technology services provider Company85 - around those areas of skills set and a dev ops company that helps in those migration areas. Today, our major concentration of these is Australia-based. There are four major hubs outside of that for us: Singapore, Hong Kong, London and the US is a big market for us too.
8,000-mile 120Tbps linking Los Angeles to Hong Kong backed by the likes of Facebook and Google, is an agreement with one of the consortium members in this instance. It gives us both capacity and diversity. We are also looking at how we can further expand in the south transPacific area and I would say that you will hear further announcements from us in that particular region throughout this year. Our key strategy, from a network point of view, is still enhancing our interconnect between countries to build better connection between our cables and backhauls. Specific APAC countries we’ve increased our interconnect with are Taiwan and Japan. We have got no intention of building interconnection in new countries, so for example Myanmar is not on our roadmap as it is for many.
Subsea strategy
We are in the data centre business in and around Asia, and we also partner with many specific data centre providers. Right now we really like the data centre demand coming out of China. We have a data centre in Tianjin, just outside Beijing, through our PBS joint venture (JV) that we have. As a result of the Pacnet acquisition of three years ago, one of the jewels in the crown that we received other than its network, customers and presence was the JV. We are the largest foreign joint venture VPN provider in China. As a result, that gives us a unique value proposition that we can offer to customers. We’ve got great demand for that and we’re currently exploring options in other Chinese cities. We see China as a market of great interest and we also have a primary data centre in Singapore, which is a very good asset for us. Web services, cloud, OTT providers and how we can link in with their particular footprint and data centre strategy is something that is very crucial to us.
If you think of the history of Telstra outside of Australia we’ve spent 70 years in the undersea cable areas of the Asia-Pacific region and we’ve now gone back to our original heritage. About 30% of the lit capacity in the APAC basin is Telstra owned, operated, controlled so we consider ourselves as one of the network leaders in the region in the subsea cable perspective. We’re very committed to keep that leadership from a diversity play with key markets. Last year, we announced a new cable between Singapore and Perth called INDIGO - so the next stage of our significant investment is connecting Asia back to the US, we’re increasing the capacity and diversity.
Boosting connectivity options The mid trans-Pacific is a huge in-demand route. With the 6Tbps Hong Kong Americas (HKA) cable, which links Hong Kong to the US, we are one of the consortium members, and PLCN, an
Evolving its data centre assets
66 | appointments
Andrew Edison Colt Colt Technology Services has named former SVP of Level 3, Andrew Edison as its vice president of wholesale, reporting to its chief commercial officer Tom Regent and taking over from Tim Passingham. With over 25 years’ experience Edison’s most recent role was that of SVP of sales in Europe, Middle East and Africa, for Level 3. Prior to that he worked at AT&T for more than 20 years, most recently as region VP for EMEA. Regent said: “We are very pleased to welcome Andrew to the team. Andrew joins Colt at an exciting time in our company growth and will play a critical leadership role, enabling Colt to accelerate its ambitions of being the leader in enabling our customers’ digital transformation through agile, on-demand highbandwidth networking solutions.”
Mario Martin Telxius Telxius, the infrastructure division of Telefónica, has appointed Mario Martin as its new CEO, replacing Alberto Manuel Horcajo Aguirre. Martin’s most recent role was as Telefónica’s group director of the COO Office. In his new role Martin will oversee the Telefonica’s subsea cable systems, which includes MAREA and BRUSA, and mobile towers. His appointment was announced as part of an overhaul of Telefónica’s organisational structure that will see a new head appointed at its domestic unit and a split in its Latin American arm. The overhaul also sees María Jesús Almazor, up until now director of Southern Spain, take up the newly created role in the chief operating officer of Telefónica España. Natalia Sainz, who is currently director of financial planning and coordination will assume Martin’s previous role.
Vikram Shanbhag Coriant
Michel Combes Sprint Former Altice CEO Michel Combes has been appointed as CFO for Sprint, replacing Tarek Robbiati, who left at the end of January. Combes was removed from his position as CEO of Altice in November as the company was struggling financially and ended with the company being taken over by Nokia. Combes enters the role with numerous years of experience, prior to working at Altice he has held positions at France Télécom and at TDF (Télédiffusion de France), he was CEO of Vodafone Europe from 2008 to 2012. “Michel is an extremely capable and accomplished global telecom and cable industry leader and I know bringing him on board will help to accelerate our progress as Sprint begins the next chapter of our transformation,” said Marcelo Claure, CEO of Sprint.
Coriant has named Vikram Shanbhag as its new MD for AsiaPacific South, where he will be tasked with overseeing operations, business development and sales in the region, which includes India. Shanbhag has more than 27 years of experience in telecoms and technology, joining Coriant from Teya Ventures, a consulting firm where he was founder and director. Prior to this, he was VP of sales at FixStream Networks, while he also spent an eight-year stint as an SVP at Comviva Technologies. “We are excited to welcome Vikram to Coriant’s leadership team as we continue to focus on delivering next-generation communications technologies to customers in one the world’s fastest growing telecom markets,” said Homayoun Razavi, Coriant’s chief customer officer.
Capacity
Julius Erving GTT GTT Communications appointed former basketball player and NBA legend Julius Erving. Erving enters the role with over 40 years’ experience as a business executive and entrepreneur. In total Erving has generated $2.5 billion revenue and brand value for his partners and clients. “Julius brings significant board experience, including telecom and media, to GTT. He has a distinguished career as an executive in brand management, media personality, and community leader. His insights will be invaluable as we continue to grow the business and raise GTT’s brand profile in the market,” said H. Brian Thompson, executive chairman and founder of GTT.
Chad Milam PacketFabric Chad Milam has been appointed as PacketFabric’s new president and chief operating officer, and a member of the board of directors. Before joining PackeFabric Milam acted as CTO of NantWorks and Mox Networks. And prior to this he worked as the technical infrastructure and systems team lead at Teza Technologies, and the global infrastructure organization at Publicis Group. “With the proliferation of performance, security and capacity challenges, and adding on the recent development in net neutrality, the public internet is becoming an increasingly vulnerable venue for enterprise collaboration and service delivery,” said Milam.
Peter van Burgel AMS-IX AMS-IX has named Peter van Burgel as its new CEO succeeding Job Witteman who stepped down from his position in October last year, more than 17 years after he founded the Amsterdam internet exchange. Van Burgel joins the company from Westcon, a global valueadded technology company where he was most recently responsible for driving digital transformation. He will execute the renewed strategy and continue to ensure that AMS-IX maintains its role as one of the global leaders at the core of the internet. “We are pleased to appoint van Burgel who brings a wealth of both business and leadership experience to the table,” said Sylvie LaPerrière, chair of the supervisory board of AMS-IX.
Stephen Ho PTC Stephen Ho, CEO of CITIC Telecom, is elected to president and chairman of The Pacific Telecommunications Council (PTC). His appointment counts as his third term as president and chair at PTC and was timed to coinside with the recent PTC’s annual conference in Hawaii. “Stephen Ho has been unfailingly supportive of PTC’s vision, mandate and actions. His third term provides us with continuity and forward thinking, and his intimate knowledge of our Membership is invaluable,” said Sharon Nakama, CEO of the PTC. Ho takes over from Tony Rossabi, the chief revenue officer of TierPoint who will now serve as treasurer of the organisation.
Tell us your move
Capacity is keen to hear from readers about new roles and appointments in the industry. Send details to james.pearce@capacitymedia.com, with a high-resolution picture
february/march 2018
Capacity
68 |
ACT LOCAL
The bleeding edge
A
t the recent Datacloud UK conference, one of the sessions promised to tell me where to find the edge of the network. This was handy, I thought, because I didn’t really know where it was, but I hadn’t wanted to ask in case everyone laughed and pointed at me. Turns out I needn’t have worried, because even the panel disagreed about it. Matt Cantell, director of portfolio propositions at Colt, told us that for self-driving cars it was the phone mast, but for a Chinese OTT provider delivering service to Europe, it would be in metro data centres. Pablo Jejcic, the head of the cloud infrastructure centre of excellence at Vodafone, told us the edge was defined by the application’s latency requirements to reach the customer, so really it could be in lots of places at the same time. Farid Singh, the outgoing co-chair of the edge computing working group at TIP (Telefónica), put the tin hat on it. “There is no edge,” he said. I think he was joking but I couldn’t be certain, so I nodded, knowingly. As I considered the possibility of leaping from my seat, grabbing the panellists by the lapels, and shaking them roughly while screaming ‘for the love of switching just tell me where the bleeding edge is’, I was rescued by John Laban, the European representative for the OCP Foundation, who hijacked the discussion and flew it off in a slightly different direction, which (with the greatest respect to them) open source people rather tend to do when they are invited onto panels. Instead of trying to
CONFERENCES Russia & CIS 11-12 Apr, Moscow WAN Summit 16-17 Apr, New York ITW 6-9 May, Chicago WAN Summit 27-28 Jun, Frankfurt Capacity Europe East 2-3 Jul, Sofia For full listings, visit www.capacityconferences.com
Tim Phillips
locate the edge on a map, he assumed that, for carriers, it would usually be their central office, because that’s where they deliver services to their customers. So the only thing worth thinking about for them will be how to build the data centre in those locations that’s fit to do that job. This creates the non-trivial problem of how carriers can rapidly transform thousands of central offices, stuffed with proprietary equipment of varying ages, into a service delivery platform for the next-generation enterprise services (or indeed, mobile and consumer services). Clearing this out and installing a traditional data centre doesn’t completely solve this problem for carrier services, because the “north-south” bandwidth between the servers and the WAN router in those facilities would be relatively small compared to the “east-west” bandwidth between servers. Laban’s argument is that smart carriers will instead transform their central offices using an open-source project known Capacity as CORD. AT&T is already doing it in 4,700 of these locations, with what Laban claims is a 70% reduction in Capex. That’s because CORD uses commodity hardware and open source software to create an architecture that can be optimised for carriers who want to be service providers, in which the input and output connects directly to compute and storage. So these unloved buildings may become not just the edge of the network, but at the leading edge of technology too. “They will be within 4km of every user, which is a trivial
distance,” Laban says. “If I was going to set up a business today, it would be to install fibre to exchanges that need to connect to users, once they [the exchanges, not the users] have been converted to data centres.” CORD is one of the more remarkable fruits of an open source project that many people thought was too complex to work: OpenStack. This story began in 2010, when Rackspace and NASA donated the code that powered their data centres to a common repository, with the idea that one day, all cloud software would be open source software, and carriers (for example) wouldn’t have to use expensive proprietary technology. OpenStack would be to your cloud what Linux was to your server. Could it work? It was touch and go for the first few years, and as late as 2012 only five large IT companies were doing two-thirds of the development work, which compared unfavourably with the broad-based and enthusiastic Linux open source community. But look at OpenStack today, and there are 70,000 members of the community in 650 organisations contributing, with a much broader profile. We could debate where the edge of the network will be for self-driving cars, IoT and OTT apps for hours. Well, you could, I might drop off that particular call. It matters more that the edge is configured to deliver those services securely and economically. For carriers, maybe CORD has become the way to find that edge.
Market watch / March 2018 South Africa’s proposed single wholesale open-fibre network (woan) is intended to complete its industry hearings by the end of the financial year, 31 March 2018. The start of the court battle between AT&T and the US Department of Justice over the proposed AT&T/Time Warner merger is due to begin 19 March 2018. TIM are to reveal a brand new business plan in either February or March 2018, outlining its transition to becoming a “pure
digital player and not a telecoms operator”. The Hawaiki submarine cable system will install a cable landing in American Samoa in March 2018. The public hearing on whether or not MTN Uganda will be permitted to renew its licence is to take place on 26 February 2018. Guam, American Samoa and the Mariana Islands have until March 2018 to decide whether to accept or reject FirstNet and AT&T’s proposal for an
emergency service network. BT and Nokia will begin its UK trials of the first live public 5G in March 2018. The Avanti Communications’ Hylas 4 will be in service March 2018, several weeks earlier than originally planned. Russia & CIS, the only meeting uniting Russian and CIS carriers with international trading partners is taking place from 11 12 April 2018, Moscow. Go to www.capacityconferences.com/ Capacity-Russia-CIS to find out more.
february/march 2018
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-XO\ 6RͤD
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23 - 25 October 2018, London
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