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Carrier Services
EMBARQ ups the network ante
Sets focus on IP-based data communications
by Sean Buckley
Jim Hansen, senior vice president of network services at EMBARQ, thinks
the telecom service provider industry needs to change their mentality of
simply just selling pieces of the network.
“That’s my pet peeve if you take a look at our industry,” Hansen
said. “We are very good at selling DS3s, T1s, DSL, or pieces the
network,” he said. “What’s going on now is the new growth has to come
out of the services.”
With two years under their belt as an independent company, EMBARQ,
the former local telephone division of Sprint, continues to roll out new
services, including its latest Smart IP Enterprise.
As a telecom executive with over three decades of experience, Hansen,
who spent his formative telecom years working for the old Indiana Bell
during the Bell System days, knows that like Embarq's Tier 2 telco brethren
(Century Tel and Windstream), they have a number of challenges on their hands.
Like all of its ILEC brethren, EMBARQ faces the inevitable landline loss
challenge coming from both cable companies and wireless substitution.
In Q2 2008, Embarq's overall telecom revenue was driven by a 7.8 %
decline in access lines, leading to a 7.2 % decline in voice revenue, which
was partially offset by high-speed Internet revenue growth of 13.2 % and
5.9 % growth in data revenue.
Ongoing landline loss prompted the Tier 2 ILEC to recently cut between
500 to 700 jobs and around 300 contract positions, all of which
of are coming out of its Network Services division.
To stay competitive, EMBARQ continues to enhance its network to deal
with the data and packet-centric world.
Increasing the IP footprint
With the recent debut of its Smart IP Enterprise service, and the
subsequent deployment of MetaSwitch’s softswitch platforms, Embarq is
indeed making good on its promise to leverage next-gen business
services. (see: EMBARQ launches all-size business IP communications package and EMBARQ gets punchy with packets)
But while EMBARQ’s Smart IP Enterprise may be a new development, the
service provider is no stranger to voice and data packet transformations.
In late 2002, Embarq, then known as Sprint LTD (Local Telephone
Division), set out on an ambitious Circuit to Packet (C2P) transition
program to upgrade its aging TDM Class 5 voice switching network.
In a project nothing short of audacious, Embarq has scaled its C2P
transition for voice back in recent years by concentrating on key areas,
or what Hansen calls “triggers.”
These so-called triggers, which could be anything from an aging Class 5
voice switch or a Digital Loop Carrier (DLC) that lacks DSL broadband
capabilities, are all targeted at “building out the right thing that makes
good business sense with leading edge technology — but not bleeding
edge.”
But the Circuit to Packet (C2P) migration is just one part of EMBARQ’s
overall packet vision.
Since June, EMBARQ announced other core and last mile network
upgrades to support more data and packet-based services with both
ADTRAN and Alcatel-Lucent.
“They are both built around the fact that we’re seriously pushing to
become a data company,” Hansen said. “Anybody who is going to be a
player is doing that. We’re putting out a much more aggressive data
network portfolio.”
With ADTRAN, Hansen foresees that the TA5000 could be deployed in
any number of ways: as an aggregator, IP DSLAM as well as a plain old
IP-enabled DLC. What’s more, the device has an option to change out a
card and switch from ATM to an IP link to increase the IP footprint.
Meanwhile, EMBARQ is also deploying Alcatel/Lucent’s 7750, the 5750
Subscriber Services Controller and the Service Aware Manager to
support ongoing consumer data service growth.
And while EMBARQ has a lot of Juniper and Cisco routers in its network,
Hansen believes the Alcatel-Lucent gear is a better fit to support its
growing DSL subscriber base. Already, the Alcatel-Lucent routers are
supporting 50 percent of its network.
“The reason we picked Alcatel-Lucent is their router recognizes that
most of our current business is consumer data and how do you handle
data out there with the 9,000 DSLAMs out there that I am trying to
manage,” said Hansen. “You probably don’t think of Alcatel-Lucent as a
routing company, but they differentiated themselves because some of
the router vendors think in terms of data network needs; they are not
thinking of 59s reliability or of single points of failure. Alcatel-Lucent has
been able to bring that to the mix.”
Outsourcing voice
Another key element of EMBARQ’s overall packet and data network
transformation is the outsourcing of its voice network operations centers
(NOCs) to Nokia Siemens Networks (NSN).
Relying on a telecom vendor and their professional services team to run
part of a telecom network, while not embraced universally by all service
providers, is seen by some as a sound way to streamline operations and
cut costs.
For EMBARQ, the driver to outsource their voice network to NSN was to
basically free up its already strained capital. As one of the first of Nokia Siemens Networks’ major U.S.-based outsourcing deals, Hansen believes that NSN will make a big push into
the other Rural ILECs (RLECs).
It’s possible that other RLECs that are facing their own packet network
upgrade dilemmas could also turn to NSN to perform a similar function.
At the same time, the operator will withhold control over its data NOC.
Such an idea is not that far fetched. Nokia Siemens Networks, while
certainly present in major cable MSO and even RBOC networks for voice
and other related products, this deal could get the eyes of other service
providers as a proof point that may be considering their own outsourcing
plans.
“You’re going to see that new entity make a hard push offering that
service to all the RLECs,” Hansen said. “As we rebadge, we took that
particular functional business unit and Nokia Siemens Networks is adding
a good injection of capital to really improve the systems that that
function relies on, which is nice because now we can divert that
investment towards our other needs.”
Still, despite the promise that EMBARQ sees in outsourcing its voice
network, most carriers seem to be divided on the networking outsource
issue.
Outside of the U.S., network outsourcing has also become an emerging
trend with European carriers as well. While “3”, a Greenfield 3G operator in the UK, has employed Ericsson to run its network other operators like Vodafone are only doing it in smaller markets and MTC is not considering outsourcing network elements at all.
(see: Vendor argument for cost savings can’t pull in Tier-1 operators)
Bulking up broadband
With over 1 million DSL lines and counting connected to residential and
business customers, the independent ILEC continues to expand its
overall broadband footprint.
At the core of EMBARQ’s broadband expansion strategy are two different
drivers. One is what Hansen’s engineering team calls “Operation Bigfoot.”
Through “Operation Bigfoot,” the goal is to expand its broadband
services footprint to address more than 20 percent of its customer base
it currently does not provide broadband to. (see:
Audiocast: EMBARQ bulks up on broadband) Hansen is quick to add that the focus is on how to deliver it
economically.
“We’re still very targeted in our approach and we’re not going to deploy
broadband to places where we’re going to loose money,” said
Hansen. “We’re focused on getting that footprint established where
there’s lack of competition.”
Not surprisingly, the second leg in EMBARQ’s broadband expansion effort
is to up its networking speeds.
While he would not reveal specific plans, Hansen said it is working on
two new DSL offerings: one 10 Mbps service and a possible 20-25 Mbps
offering using ADSL2+ and VDSL2.
Similar to other carriers like Qwest and AT&T, EMBARQ remains focused
on a Fiber to the Node (FTTN) architecture. The ongoing plan will be to
bring more fiber to DLCs where the demand dictates new traffic growth
to justify the investment.
“Its table stakes — you got to increase your speeds,” Hansen said. “1.5
Mbps, which we were soo thrilled about two years ago, is quickly
becoming the dial up of the DSL world.”
Fighting the common enemy
While EMBARQ is certainly putting in the right network and operational
pieces in place to stay competitive, the carrier still has to deal with the
reality that unlike AT&T and Verizon, EMBARQ lacks a wireless service
component.
And while Hansen freely admits EMBARQ sees wireless substation as yet
another threat to their landline empire — it shed its earlier MVNO
agreement with its former parent Sprint this spring and has yet to
engage in another wireless partnership — he believes Embarq could still
provide a relevant wireless experience.
“We’re trying to figure out how to converge the capabilities of the
wireless handset with landline, the computer and the various devices to
that extra value comes and we’re able to start generate more money
beyond selling pieces of the network.”
Still, what it does have in common with the RBOCs is one common
enemy: the cable operator.
What Hansen is set on doing is continuing to work with the RBOCs and
other providers to see how they can share resources and perspectives.
“Verizon and AT&T are still doing their own thing,” said Hansen. “They
have helped us understand common issues, since our common enemy is
not between us, it’s the cable guys.”
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