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NGN Network (ETE 521 L10.2)

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  • 1. ETE 521: TelecommunicationBusiness and ManagementLec 10: Next Generation Network
  • 2.  The market for information and communicationstechnology is currently undergoing a structural change. The classic telecommunication networks were planned andimplemented for the transfer of specific data such astelephone calls or pure data packages. The recent growth in competition, new requirements forthe market and technological developments havefundamentally changed the traditional attitudes of thetelecommunications industry. The present industry is characterized by the rapid growthof broadband connections, the convergence processes ofvarious network technologies and the emergence of auniform IP standard for individual and masscommunications.
  • 3.  Traditional telecommunications operators findthemselves confronted with a host of newchallenges. In particular, their previously successful fixed-network business is coming increasingly underpressure. New communication possibilities, such astelephoning via the Internet, and also growingmarket shares in mobile telephony are causinga great deal of concern.
  • 4.  To counteract these losses, the networkoperators are investing more strongly in thegrowth driver, broadband. The bundling of phone, Internet and television –known in the telecommunications industry asTriple Play Services – has moved into thelimelight of these new business models. The traditionally familiar market boundariesbetween fixed networks, mobile telephony anddata networks are disappearing more and morequickly.
  • 5.  This gives the customer the advantage that hecan call on an extremely wide range of services,regardless of his access technology. This development requires a meta-infrastructurebeyond the existing, subordinated networks – acore network for all the access networks. This new network is called the NextGeneration Network. The Internet Protocol is the most significantintegration factor because it is available globallyand, at least in principle, it can use almost all theservices and applications in all the networks.
  • 6. Next Generation Network:Definition The International Telecommunication Union (ITU) – aglobal organization dedicated to technical aspects oftelecommunications – regards an NGN as a network withan end-to-end service for voice, data and multimedia. The deployed transmission technologies must permit ahigh quality of service. At the same time, the provided service functions areindependent from the basic transmission functions. All the services are based on the Internet Protocol (IP). The advantage of IP networks is their flexibility and thesimple integration of new applications.
  • 7. System Architecture: The basic premise for NGN is an architecture on severalindependent levels. These include the access area, the corenetwork area, the control level and the service managementlevel. The connection of subscribers and terminals to the NGN canbe achieved with various access technologies. The information and transmission formats of the variousnetworks must be converted into information that iscomprehensible for the NGN. This calls for Gateways for the connection of business andprivate customers. The core network of the NGN is an IPnetwork. This is a standardized transport platform consistingof various IP routers and switches. The connection control of the individual components is carriedout by the control level. Standard and value-added servicescan then be provided via the service management level.
  • 8.  The aim of an NGN is to operate the current wide range ofaccess and communications technologies under a commonumbrella in the future network on IP. This convergenceallows a transition from a vertical to a horizontal serviceintegration. In vertical network structures, services (e.g. phoneservices, TV services) can only be received with suitablenetworks and the relevant end devices. With a horizontal approach, on the other hand, users infuture will be given the possibility of using the desiredservices – regardless of the platform and the technology –with a single end device.
  • 9. Technologies for Subscriber Access: The prerequisite for the efficient use of the NGN is a networkaccess with high bandwidth for the subscriber. It is to be expected that access networks in the future will beable to provide bandwidths of up to 100 MBit/s for privatesubscribers. For business customers, transmission rates inthe gigabyte range are conceivable. The possible options foraccess to the IP backbone would include copper, cable, fiber-optic and wireless connections. Copper connections: The bandwidth of DSL via copperlines is restricted to 16 MBit/s for ADSL2 (AsynchronousDigital Subscriber Line) and to 52 MBit/s for VDSL (VeryHigh Speed Digital Subscriber Line). Speeds decrease inrelation to the distance to the access Gateway. The Gatewayconnects the respective network to the backbone.
  • 10.  Cable connections: The Hybrid Fiber Coaxial Networks(HFC) are networks that consist of a mixture of fiber-opticcables and coaxial cables. As a rule, they are networks forcable television. Fiber-optic lines (FTTX): Fiber-optic lines can transportlarge data volumes at extremely high transmission speeds.In practice, bandwidths up to 155 MBit/s are possible. Thedifferent types of fiber-optic connections are referred togenerically by the acronym FTTx (Fiber to the x). Wireless connections: Radio Access Networks (RAN) areradio-based access networks. They can be implementedwith a wide variety of technologies such as 3GPP, 3GPP2(UMTS), WiFi or WiMAX.
  • 11. Motivation for NGN: The heterogeneity of the infrastructure, thegrowing competition and the falling call sales canbe regarded at present as the primary threats tothe telecommunications industry. Established network operators are findingthemselves forced to rethink their businessmodels and to convert their infrastructure to afully IP-based platform – the Next GenerationNetwork. The overall aim is to reduce costs and to createnew sources of income
  • 12.  Heterogeneity of the TelecommunicationsInfrastructure. The modern telecommunications networks consist ofsatellite and mobile phone networks such asGSM/UMTS, public phone networks and wireless localtraffic networks such as wireless LAN and Bluetoothnetworks. The latter connect devices in the personalwork environments such as PDAs, laptops andcellphones. There are also cabled fixed networks suchas Ethernet and also fiber-optic networks.
  • 13.  The growing number of services has led to an increase inthe platforms needed to provide them, which in turn hasincreased the complexity of the overall infrastructure. The problems of interoperability between the varioussystems are becoming more serious, and this growingcomplexity is also placing greater demands on staff.Maintaining these platforms involves high annualoperating costs for the network operators. Established network operators often maintain 15 to 20different platforms with hundreds of central switches,which inevitably leads to extremely high staffing costs.
  • 14.  Growing Competition from Other Sectors. As a rule, networks such as mobile telephony, datanetworks and fixed networks are dominated bydifferent suppliers. Providing services and productsin these networks requires an interaction of various,complementary elements. In this sense, it is necessary to differentiate betweenvalue-added levels such as hardware, networkaccess, applications and content. The increased use of IP-based networks for theprovision of applications and services is allowing thedevelopment of new, digital value-added chains.
  • 15.  Falling Call Sales. The increasing competition due to the liberalization ofthe markets and the arrival of market participants fromother sectors are causing great concern to the operatorsof former state monopolies. The classic telephonebusiness, known as a Public Switched TelephoneNetwork (PSTN), is particularly unsatisfactory. The golden age of the high-margin business withrevenue in the billions based on classical phone calls isclearly over.
  • 16.  Planned Targets – Cost Reductions andNew Sources of Income. Established network operators are pursuing twobasic goals with NGN. On the one hand, the optimization of the networksand technology should open up excellent potentialfor cost savings. On the other hand, they intend toexploit new income sources with the future network. The plan is to create an entirely new form ofcommunication for the customers.
  • 17. The Market – Convergence Approaches andNeeds of the User:Initial Convergence Approaches. The market already features individual examples of ageneral trend toward the convergence of varioustechnologies, communications channels and media. Particularly remarkable is VoIP, which has developedstrongly in the last two years, with its use of the Internetfor phone calls (which was not actually designed for thispurpose). It is not clear to the user that he is using a differentnetwork infrastructure from previously for this voicetransmission service. This also allows entirely new service features to beoffered, such as e.g. the setting up of phone connectionsfrom WWW applications.
  • 18. At the end of the day, the network convergencewill also lead to a convergence of the enddevices, depending on the actual needs.Multimedia-compatible computers will be giventelephone and video communication functions,data services will be available by telephone andInternet access via the television (browsing usingan Internet-compatible setup box) and thecellphone will be common.
  • 19. Market Needs in Terms of Convergent Services:Beneficial Effects for the Customer. The interaction of man and technology plays acrucial role in the introduction of previouslyunknown technologies on the market. The essential prerequisite for the success ofinnovative information and communicationssystems is their acceptance by the customers. Characteristics such as the perceived systembenefit and the user-friendliness of thetechnology are extremely important.
  • 20.  One of the desired goals of NGN is the possibilityof adapting the services better to the needs ofthe customer. Due to the future restriction to a single enddevice – equipped with a wide range ofapplications and services – the customer will inmany ways enjoy improvements on the currentsituation. At present, customers expect applications fortelephony and conferences. This sort ofapplication should be independent of the networktype. Customers also want to have more controlover their services.
  • 21. Conclusion and Outlook: The market for telecommunications services inEurope has developed extremely dynamically sincebeing liberalized. However, a weakening of the average annual growthon the various markets is to be expected by the endof the decade. The business with broadband connections is beingtreated as particularly lucrative in order tocompensate for the market- share losses of the fixednetwork in particular. The network operators are attempting to provide amore efficient and cost-effective provision of serviceswith the current conversion of the entire networkinfrastructure to IP technology.
  • 22.  The aim is to unite fixed, mobile and datanetworks together and so to provide variousservices via a transparent network – the so-called Next Generation Network. The core of all communications services willthen be a single platform, based on theInternet Protocol. The established network operators in particularare hoping for operating-cost savings ofseveral billion euros per year from thereduction of the many different platforms.
  • 23.  Some fixed-network operators are currentlypresenting initial approaches to personalizedcommunication services, which can be usedindependently from the network structure, withthe Fixed Mobile Convergence business model. The subscriber can then be reached with asingle phone number at both stationary andmobile locations. As well as FMC, the business model of so-called Triple Play is also moving more andmore into the limelight.
  • 24.  The customers receive voice, Internet, television and videoservices in a bundle via a single line. Two important prerequisites for the transmission of thesenumerous new services are high bandwidths with excellentreliability. Given investments of several billions, it is primarily thecable-network and DSL operators who are competing witheach other on the Triple Play market. While telecommunications companies regard the marketingof Triple Play services as an important factor for sales andrevenue in the medium to long term, analysts such asForrester and Ovum doubt to what extent increases in salesin this field are really possible.
  • 25.  Moreover, the transformation process will haveconsiderable effects on the value-added chain andthe competition in the telecommunications industry. Traditionally, the added value in telecommunicationshas been integrated vertically, but the transfer toall-IP networks will lead to a horizontally integratedvalue-added structure. Standardized protocols and interfaces will alsopermit the entrance of new market participants fromother sectors on the individual levels of the value-added chain.
  • 26.  New services are emerging thatcombine features from variousareas such as entertainment,television, etc. Thanks to convergence, there arenow more suppliers in competitionwith each other who used tooperate in entirely separatesectors.
  • 27.  Finally, there are still general doubts about howthe successful business models of the future willlook. A decisive factor will be the clear superiorityof convergent end devices and services comparedto the existing offers. The selective positioning of convergent services onthe market will be crucially important to convincethe customers of the added value. The successful development of NGN willpresumably depend primarily on the closecooperation between network operators, systemmanufacturers and research institutions.