A look back on 2009

This is an article that I have written for print publication. Any feedback would be appreciated.

2009 has been a strange year for carriers providing last mile DSL access. Back in January in the midst of the recession there were worrying times being forecast for carriers as they struggled to get to grips with the financial downturn. With networks struggling to plug widening deficits, previously planned network expansion was put to one side, as capital was shunted to other areas seen as more important to stopping the rot.

At the turn of the year, there were 4 main wholesale DSL carriers: BT Wholesale, Cable and Wireless, the Carphone Warehouse Group and Tiscali. Due to the recession, BT Wholesale were stalling with the roll out of 21CN, Cable and Wireless were just re-entering the channel after a strategic exit only a few years back, Tiscali were involved in a very public tug-of-war between Sky, Vodafone and the Carphone Warehouse Group whilst the latter themselves had only just entered the wholesale market via their wholly owned subsidiary Opal Telecom. As the year progressed and we started to move towards a brighter financial climate, the industry took a marked turn for the better. Many people debate about the exact period when we started to look more optimistically at the future. However I believe that when Brown put the ball in the court of the Telco’s by stating that the infrastructure behind Digital Britain would spur growth in the economy, there was a paradigm shift, as the masses adopted what we had already realised; that telecommunications was a fundamental component to the kick-start of the British economy.

Throughout the course of the year, the broadband landscape has changed considerably. The main difference being the acquisition of Tiscali into the Carphone Warehouse group and their subsequent ambitious plans for 2010. Whether they will demonstrate the traditional pains of large scale acquisition traditionally felt by other large carriers such as Tiscali and C&W is yet to be seen. BT Wholesale has also started to gain traction with 21CN and in particular their WMBC offering. Cable and Wireless can also pat themselves on the back as having a fairly successful year, as they managed to win the Tesco contract, whilst deploying their much heralded MSP platform. However one of the big changes to the market has been the introduction of BE into the wholesale arena.

BE have always had a very compelling consumer offering; being the first to market with Annex M ADSL2+, whilst having one of the largest coverage areas of the tier 1 DSL networks. With a topology designed to underpin high bandwidth usage, they were setup from the onset to provide ADSL2+ to their subscribers. BE have entered in a very timely fashion. One of the key topics of the year has been the increased financial burden of bandwidth costs on service providers due to applications such as iPlayer and Pirate Bay. This has led to in depth debates including key industry and government personnel about how best to manage the use of bandwidth intensive applications. Solutions such as bandwidth caps, application charges and even application restrictions were mooted. Due to their mesh dark fibre-based VPLS core, BE can legitimately claim to provide solutions future-scaled to support the continued rise in bandwidth by end users. Also with a commercial model that alleviates central based usage charges, they’ve provided a low cost-of-entry into the ADSL2+ market for channel partners.

As we move into 2010, the wholesale broadband market is much changed from that of 12months prior. Both Carphone Warehouse and 21CN have ambitious growth targets planned for 2010. The latter introducing wholesale Ethernet-in-the-first-mile and fibre-to-the-cabinet trials. Many people have stated that the window of opportunity for new wholesale partners is fast closing due to this. However in my position, the consolidation in the industry has reached a natural plateau, with all the main DSL carriers now proving to be more mature in systems interface, product portfolio and commercial model used. Even BE as the new player can be seen to have an edge in some aspects of their proposition. By using ISAMs (Intelligent Service Access Managers) at the exchange with the capability of terminating Ethernet and seamlessly training the DSL to work at its optimum performance (known as seamless rate adaption) they have made the step to solidify their position as a force in the market both now and for the future. By also providing unparalleled visibility and control of their ISAMs to all service providers, they have allowed tecchies to fault find, diagnose and alleviate traditional 3rd line issues, which in turn has led to a vast reduction in the number of support tickets raised with them.

Even though this has been in the market for roughly 6months, already the features are proving compelling, even as compliment to a 21CN novation plan. With products such as bonded DSL and symmetrical DSL soon to be available from the port, they’ve positioned themselves as a prominent player in the next generation access sphere. Add into the mix backhaul capacity capable of supporting their lofty ambitions and the capital of their more illustrious parents, it’s no wonder BE are proving to be more than just an interesting alternative in the wholesale broadband market.

Leased line services on copper?

Over at FD Wholesale, we’ve been doing some trials in our R&D department bonding Annex M tails together and we’ve been able to get throughput normally associated with leased lines. We’re roughly 1.5Km from our local exchange, and when bonding 2 lines, the total sync rate was 26.7Mbps down and 4Mbps up. When we bonded 4 lines, we obtained 56Mbps down and 8Mbps up.

The applications for this are wide ranging. Consider having a client who lives 5Km+ from their local exchange. 1 DSL would offer them little throughput to sustain a number of users. Aggregate 2 or 3 together and suddenly they can start to look at IP applications that may improve business processes such as SIP or Video conferencing. Another example may be where a client can’t gain wayleave agreement to obtain a fibre run. In this instance, they can have a bonded Annex M service offeirng up to 80Mbps down and 10Mbps up. Obviously these are headline speeds and are dependant on quality of copper and line length, but in all but the worst circumstances, a bonded Annex M service can start to become a compelling alternative to EFM or FTTC. Using the BE network, this is also available immediately, nationwide. No waiting for 2012 to have a coverage of c.300 exchanges.

Currently this is something that all our channel partners are utilising, as it gives them a cost effective alternative to a leased line. Based on the Cisco proprietory protocol, traditionally the stumbling point has been the high initial price point associated with the routers. However, we’ve been conducting some trials with a manufacturer called Virtual Access using their GW7000 boxes, and they’ve been very successful in terms of throughput and stability. However, even more compelling is the fact that they lower the initial price point of the solution to sub £500.

Personally I feel that bonding Annex M tails, at the core is a lot more resilinet solution than trying to aggregate them at the client end, using an external aggregator, as it means that there is little overhead, lower packet loss and less latency. In my opinion, the main thing to take away from this is that even though fibre will still have it’s uses, the applications for DSL are ever increasing. Whereby traditionally a leased line was the only method available to provide large amounts of throughput, the landscape is ever changing to incorporate DSL.

How businesses evolve

It’s useful to understand how over the recent years, big businesses have reinvented themselves. I was reading an article recently on the departing Ericsson CEO Carl-Henric Svanberg, which gave an insightful account of the issues facing Ericsson after the dot-com bubble had burst. His model solely focused around consolidation, whilst others in their market either spread themselves extremely thin in looking for new markets to expand into (see Marconi) or acquired rivals to try and quickly expand (see Alcatel-Lucent). What Carl-Henric Svanberg did with Ericsson was to really consolidate, concentrate on their core business of building networks and inevitably cut costs. This worked, and he now leaves Ericsson today in the healthy position of having 40% of all mobile calls made on their network. I think a lot of companies get excited by the profits and market share available to them when they look outside of their domain. 2 large enterprises who are having mixed results are Google and Cisco. Although Google is still king of search, it’s increasingly more lucrative and more prestigious projects such as Google Books are starting to sap resources from it’s search empire. This has had the effect on competitors like Bing taking more market share.

It was also interesting to see how emerging technologies helped to spur growth in the ailing company. Although a large proportion of their spending is still attributed to legacy networks, opportunities increasingly present themselves to expand into so-called next generation networks. 3G networks are fast becoming their bread and butter, with customers such as Three (3) and T-Mobile in the UK having Ericsson infrastructure to power their data networks. Moving forward, with the advance of M2M, Carl-Henric Svanberg thinks that there is the potential for roughly   sim cards to be embedded into devices as seemingly mundane as fridges, microwaves and washing machines. This is where he envisages Ericsson’s next market shift. There’s no doubting the strength of the mobile data market. Whether it hits a natural saturation period or whether advance such as LTE will help it break through it’s glass ceiling are anyone’s guess. However one thing is certain. Due to the requirement for people to be connected on the move, this is definitely a market that will be key for a long time.

The grubby world of exhibitions

It seems like we have entered the grubby season of the exhibition. I say grubby as some of the exhibitions I’ve been to previously have consisted of nothing more than a myriad of stands of vendors who don’t understand what you do, trying to sell you something that you inevitably don’t really need.

With the recent ‘Margin in Voice and Data expo’, there seemed to be a distinct change in direction towards a more focused show. I personally saw it as a good time for event organisers to re-evaluate their expos. However with the economy showing signs of picking up, there has been a return to the scene of the big all encompassing show stopping exhibition. Last week I went to the IP expo. Usually filled with big stands with big companies with even bigger egos. However this year was different. I only went for a morning on the first day, but what I found was an exhibition with a clear theme; Virtualisation. Previously where there were 4 expos centered around different aspects of cloud computing. This had now been amalgamated into one big show. Personally it was interesting to have a chat with different network operators, followed by walking across the room to discuss compatibility issues with specific vendors and system application developers. I found this a lot more worthwhile and was able to get a good level of understanding as to how different vendors/suppliers plan to incorporate a cloud based service into their product portfolios.

I then recently went to the ‘Convergence Summit South‘ run by Miles Publishing. This is specific to the channel within the telecomms industry and by their own admission has been their most successful summit for a while. As exhibitions go, it was exactly as expected. However the shining light of the expo was the seminars. Personally there was a great debate early on between Tim Hubbard of BT Wholesale, Neil McArthur of Talk Talk and Steve Gallagher of Cable and Wireless about what constitutes a ‘Next Generation Network’, and how their respective organisations are striving to compete. In my view, the term NGN is extremely mis-leading and one used purely for marketing spin. To see these industry heavyweights vying with each other about their own USP’s, whilst surveying the potential future landscape of the telecomms market was exciting, as little more than 5 years ago, BT would not have had to defend against such strong competition. The expo also saw an interesting feature, whereby hosted VOIP providers were given 20 minutes to setup from scratch their hosted platform in front of a packed audience. The one that I saw was successful and proved the ease of use and speed of the platform.

In all, expo’s can provide a valuable insight into your chosen market. Going back to the convergence summit, it was interesting to see how many big mobile carriers were present, as they tried to embrace the shift to FMC by traditional voice and data integrators. It’s a shame that the example set by the ‘Margin in Voice and Data’ expo earlier in the year was not followed, and I’m sure that as we emerge from the recession, various exhibitions will only continue to get bigger and probably more brash.

BT Openreach reacts to Digital Britain report

Warning: this post contains a large number of acronyms!

Interesting news this morning about how Openreach is reacting to the recent Digital Britian report in providing universal 2Mb broadband services. Using a method called Broadband Enabling Technology, or BET for short (yet another new acronym), Openreach proposes to provide a stable broadband service at distances of up to 12Km from a client’s nearest exchange. For premises situated within a current ‘not spot’ (thank the BBC for that term!) this could prove a viable alternative to using a mobile network or satellite operator, as having a fixed line broadband service would prove a lot more consistent, and also would not be as susceptible to enviromental conditions.

At first glance, it seems that BT have taken the idea of SDH and applied it to longer distances. Looking at the way this is depoyed, it seems that BT Openreach is extending the reach of it’s SHDSL services past the previous 5Km barrier. Currently there is little technical information about how they will do this, bar stating that they have made some “modifications and the use of a repeater unit”. However, it’s interesting that they’re using what was previously thought to be an end of life product, superseeded by both EFM and Annex-M, to provide services to the out of reach.

Since the Digital Britain report, there has been a lot of talk about how to provide a nationwide service capable of providing a universal 2Mb for a number of applications such as BBC’s iPlayer, VOIP and VOD to name but a few. Many different access methods, such as HSPA, WiMax and even satellite links have been considered in rural areas not deemed capable of obtaining a traditional fixed line ADSL service. In their various guises, they have provided a large amount of competition to fixed line operators whose coverage does not extend to ‘not spot’ areas. However these efforts have been largely independant to each other, and despite the advancements in technology within the fixed line communications sector, there hasn’t been a lot of options for people out of reach of their exchange. HSPA has proved not consistent enough, with users depending on mobile network coverage. With recent news of the Orange and T-Mobile merger, this could be something that may improve moving forward. Satellite broadband still does not have a large enough market penetration rate to be considered as a viable nationwide alternative. And WiMax is often used in backhauling bandwidth to out of reach areas, as opposed to a last mile access method.

By BT bringing this product into it’s portfolio it will go someway into giving it’s wholesale partners options to provide their ‘out of reach’ client base with a solid service for extensive use. With speeds of 1Mbps both down and up on a single copper pair, this is a positive step by BT in the right direction.

However, this also raises a lot of questions. All the marketing info we’ve been fed with relating to 21CN has previously made us aware that providing ADSL2+ from all of their exchanges was something BT were looking at having in place by 2012. It will be interesting to find out whether (should initial trials be successful) this may impact the rollout of Bt’s 21CN network. Also it will be interesting to find out the costs to the end user for this, as if it is using SHDSL technology, I couldn’t imagine the price point being markedly different to that previously. BT Openreach have admitted as much by stating “If there is funding to help meet the additional costs involved in deploying the technology, BET could offer a reliable and cost-effective solution to assist the Government’s ambition of delivering a minimum 2Mb/s service to virtually all UK homes”. Also, apart from throwing more copper pairs into the mix, it’s not really a scaleable solution for future bandwidth use.

All in all, it’s nice to see BT finally providing something that seems born out of market pressure. As mentioned, trials are being conducted currently. It will be even more interesting to see whether this proves both a commercial and technically sound option moving forward.