MCI Launches IP VPN Broadband Service

MCI announced the immediate availability of its new IP VPN Broadband service for linking remote locations, such as retail outlets, to a company's corporate resources via a broadband connection. MCI is offering IP VPN access through its own DSL network in 55 major markets, or a company could also use its own DSL or cable broadband service from another provider. MCI will manage the VPN equipment.
http://www.mci.com

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New Edge Networks Helps SAVVIS Expand IP Network

New Edge Networks will provide SAVVIS Communications with DSL reach from more than 1,600 central office locations throughout the U.S. New Edge Networks will provide the expanded reach through its national multi-services platform backbone network and existing inter-carrier agreements with other broadband providers.
http://www.newedgenetworks.com

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IEEE 802.17 RPR Draft Moves to Sponsor Approval

The IEEE 802.17 RPR Working Group has forwarded the RPR draft standard for Sponsor Ballot, the penultimate step in the standardization process. The fully ratified IEEE 802.17 RPR Standard is expected to be published in mid-2004.


"The Working Group has worked diligently for more than two years to create an RPR standard that meets the needs of today's metro networks," said John Hawkins, chair of the RPR Alliance and senior marketing manager of Optical Ethernet for Nortel Networks.


"As the telecom industry continues its recovery, carriers are increasingly considering standardized RPR a cost-effective solution for the delivery of carrier-class voice, data, and video over existing SONET/SDH rings," said Martin Green, vice president of marketing for the RPR Alliance and product manager at Cisco Systems.


The RPR Alliance is an industry advocacy group promoting RPR technology and its standardization by IEEE.
http://www.RPRAlliance.org

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Aruba Debuts Mid-range, Centralized Wi-Fi Switch

Aruba Wireless Networks introduced a mid-range, centralized Wi-Fi switch for dense building environments. The Aruba 2400, which extends the company's existing family of centralized Wi-Fi switching systems, provides Wi-Fi switching, Wi-Fi security appliance and Wi-Fi IDS functions simultaneously. The Aruba 2400 switches and processes both native Ethernet (802.3) and Wi-Fi (802.11) packets. The Aruba 2400 is also optimized for supporting voice communications over wireless. To ensure no degradation in service quality, low latency (sub-10 millisecond) handoffs happen in the Aruba switch. New software enhancements add call admission control and active call management for voice traffic. Aruba also provides flow classification to ensure that voice traffic is prioritized on the wire as well as in the air.
http://www.arubanetworks.com

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Qwest Commits to Lucent's Accelerate Technology

Lucent Technologies announced a three-year agreement to supply its Accelerate portfolio of next-generation products, services and software to Qwest Communications. Specifically, Qwest will use Lucent's new 5E-XC switch technology - a key component of the Accelerate portfolio of products - to replace older technology, consolidate end-offices and lay the groundwork for migration of its network to VoIP. Lucent Worldwide Services will provide integration, engineering and installation. Qwest will also use Lucent's new intelligent media gateway to connect standard phones to either the traditional voice network or a VoIP network. Lucent said the new gateway supports up to 10,000 lines in less than three bays and can be controlled by the 5E-XC switch or the Lucent Softswitch. The intelligent media gateway also offers emergency standalone capability, allowing the unit to continue to switch 911 and intra-community calls if there is an interruption in the line to the host switch. Financial terms were not disclosed.
http://www.lucent.com

• Last month, Lucent Technologies introduced a new 5E-XC high capacity switch featuring more than triple the call handling capacity of its flagship 5ESS platform. Lucent is also supplying a 5E-XC VoIP packet trunking solution.

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Lucent Unveils its "Accelerate" VoIP Initiative

Lucent Technologies introduced its "Accelerate VoIP Solutions," a re-working of its product portfolio to support the convergence of traditional voice services with multimedia services, including Web-based features. The Accelerate initiative is aimed at helping wireline and mobile operators gain the efficiencies and cost-savings of IP networks. It is also aimed at consumers and enterprises new voice and data applications such as unified communications, multimedia messaging, location-based services, IP Centrex, and voice and data VPNs.


Major elements of Lucent's Accelerate portfolio include:

• the Lucent Softswitch,


• the Lucent 5E-XC switch products and applications,


• the iGEN Compact Switch,


• a new Lucent intelligent media gateway,


• the EBS Multimedia Portal,


• the PacketIN portfolio of applications and services including MiLife solutions for mobile operators,


• the Flexent portfolio of mobile networking solutions,


• the AnyPath Messaging System and AnyMedia Access System,


• the iMerge Gateway, APX Universal Gateways, MAX TNT Universal Gateways, PacketStar (PSAX) Multiservice Media Gateways,


• the Lucent VPN Firewall and Access Point IP Services Routers,


• Navis iOperations software and Lucent services.

Lucent is grouping its Accelerate products into a number of vertical sets, including Enterprise Solutions, Mobility Solutions, Voice/Data/Video Over Broadband Solutions, Local Network Solutions, Service Provider Trunking Solutions, and Next Generation Applications Solutions.


Lucent also said the Accelerate solutions would built on industry standards and offer multi-vendor integration for interworking with third-party application servers and voice gateways.
http://www.lucent.com

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AT&T Supplies FR/ATM Network for Georgia Pacific

AT&T was awarded a multi-million dollar integrated networking contract to connect 300 locations across the country for Georgia-Pacific. The network is based on Frame Relay to ATM Interworking, which supports applications running on Georgia-Pacific's corporate intranet, from email to manufacturing, inventory control and warehousing. The three-year agreement significantly expands AT&T's existing relationship with Georgia-Pacific.
http://www.att.com

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Intelsat Turns to Level 3 Team for New Video Delivery Network

Intelsat and Level 3 Communications will launch a new video delivery network to serve North American broadcast customers. The new Intelsat-operated network, scheduled for launch in the beginning of 2004, will be deployed using Level 3's fiber network and collocation facilities. It will initially consist of PoPs located in many of the largest U.S. media centers, such as New York, Los Angeles, Washington D.C., Denver and San Francisco, with fiber interconnects into additional North American locations. TANDBERG TV is supplying its 3rd Generation MPEG-2 equipment.


Intelsat said its new network will complement its global satellite fleet, existing terrestrial network and recently announced occasional use television partnership with Television New Zealand (TVNZ). Through a connection to one of the new Intelsat Video PoPs on the Level 3 network, broadcasters located in many of the top media centers in North America will now be able to transmit high-quality video content to/from other cities in North America, as well global locations, via the Intelsat network.
http://www.intelsat.com

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Agilent Adds WLAN to Network Analyzer

Agilent Technologies announced a centralized monitoring and analysis application for 802.11a/b/g networks. The new capabilities enable Agilent's Network Analyzer to be used for troubleshooting layer 1-7 of LANs, WANs, and WLANs from a central location.
http://www.agilent.com/comms/WLAN

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MCI Wins $250 million Contract from Virginia

The Commonwealth of Virginia selected MCI to provide advanced voice, data and Internet communications for its statewide COVANET, which connects state agencies, local and county governments, public universities and schools. The four-year contract, with six one-year renewal options, is valued at up to $250 million. The state expects to save 12% on its annual communications costs.
http://www.mci.com

• In April 2003, MCI/WorldCom relocated its headquarters from Clinton, Mississippi to Ashburn, Virginia.

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Marvell Reports Quarterly Revenues of $215 M, up 12% Sequentially

Marvell reported record quarterly sales of $215.3 million, an increase of 58% over net revenue of $135.9 million for the same period last year and up 12% compared to the previous quarter. Net income under generally accepted accounting principles (GAAP) was $12.0 million, or $0.08 per share. The company said the growth was fueled by market share gains in the data storage market and by its Gigabit Ethernet solutions.
http://www.marvell.com

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KT Responds as Fast Subscriber Growth Ends

Korea's overall telecom market (wireless + wireline) has grown at double digit rates for the past 5 years, said Jeong-Soo Suh, CFO of KT, speaking at the UBS conference in New York. But the fast growth is now over and the market is only expanding at a low, single-digit pace.


Korea's telecom regulatory environment has been changing over the past years, including new requirements for local loop unbundling and local number portability, but so far these have had minimal effect. Suh said KT is too big and too dominant to avoid the impact of regulations. The question is only how smart they can be in responding to change.


Suh attributed much of KT's rapid growth in the past few years to tariffs for voice and DSL that have been far below its international peers. For instance, he cited these figures for DSL:


Monthly DSL Rates (US$/month)

• Telefonica: $102


• France Telecom: $63


• Telstra: $61


• BT: $52


• BellSouth: $51


• KT: $29

Because of the low tariffs, KT's competitors have had a difficult time depreciating the cost of their networks. The low tariffs have also made it difficult for competitors to launch new services, such as VoIP, because there is not much room for margins.


Suh said KT is moving aggressively to cut its costs. The company recently announced a 13% headcount reduction across the company. By the end of 2004, KT expects to have 38,200 employees, down from 58,000 in 1997 and 46,000 in 2000.


Competition and new growth opportunities are transforming the company. In 1998, Korea Telecom held 100% of the local voice market, 91% of the domestic long distance market, and 70% of the international long distance business. In 2002, KT held 32% of the wireless market, 47% of the broadband business, 96% of the local voice business, 85% of the domestic long distance market and 66% of the international long distance business.


New growth opportunities for KT include new enterprise services. In the past, KT has focused more on residential services because the large Korean conglomerates have traditionally operated their own networks. Suh believes there is an opportunity as more of these conglomerates outsource their networks. He sees a second growth opportunity in converged and bundled services. One idea is to combine satellite TV services with IP multicasting over broadband. Two other future growth areas are telematics and home networking of consumer appliances. KT is also working on a 2.3 GHz "portable Internet" application for PDAs.


KT's CAPEX is falling as a percentage of sales and is expected to be just under 2.1 trillion won for 2003. KT is spending on VDSL now but in the long-run would like to move to fiber access.


KT's 2004 - 2007 CAPEX Breakdown

• FTTC/FTTH -- 23%


• NGN -- 19%


• New business initiatives -- 19%


• Regular maintenance -- 39%

http://www.kt.co.kr

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China Telecom Sees Favorable Conditions for Growth

The fundamentals of telecom growth in China are very good, said Chang Xiaobing, President of China Telecom. Whereas annual GDP growth in China has been running at over 7.5%, telecom growth has been much faster -- running at annual growth rate of over 15.7% for the past five years. Chang predicts that the central government's commitment to aggressive overall economic growth will be especially favorable for telecommunications.


China Telecom is the dominant service provider in the country's most developed areas, where average incomes are double the national average. The process of urbanization is a major trend in China Telecom's territory. Dispensable income per capital is on the rise in these areas, leading to additional potential revenue for telecom services.


China Telecom's overall local line count has reached 65.8 million, including 13.2 million public and business lines, and 7.7 million PHS line subscribers. Total voice traffic volumes grew by only 3.9% during the first half of the year, due to wireless substitution. As of the end of September, China Telecom had 3.52 million broadband users.
http://www.chinatelecom.com.cn

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Intel Predicts PC Economics will Revolutionize Telecom

The telecom market has reached an inflection point where equipment designs based on proprietary silicon and software will soon be overtaken by systems built using standardized silicon, software and modules, said Howard Bubb, Vice President and General Manager of Intel's Communications Infrastructure Group, speaking at the UBS conference in New York.


Intel is pursing 2 basic strategies in this regard.


1. Bring communications into computing. Bubb observed that the deepest level of industry convergence is happening at the silicon level, where microprocessors, memories, baseband components and RF technologies are being combined on the same silicon die.


2. Bring modularity into the communications infrastructure. Intel is seeking to apply the same high-volume economics that have revolutionized the PC industry to the telecom business. Bubb predicts that by building standardized modules for use in a variety of telecom hardware devices, Moore's Law will finally apply to the communications industry


Bubb said all free and sizable markets move towards standards-based technology as they mature. They also modularize. He believes the telecom business has been slow to move in this direction because of the historic relationships between governments, incumbent carriers, and preferred equipment suppliers in countries around the world.


As evidence for this trend, Bubb said DoCoMo is now requiring that new platforms must be based on modular standards. Two other forces are also driving the trend. First, economic necessity requires that carrier move to cheaper and more open platforms. Second, everything is moving to IP.


Bubb predicts modularization will happen very rapidly on a global scale. New platforms will be built around carrier-grade Windows and Linux, rather than in-house OSes. Network equipment suppliers will become more like system integrators. Instead of developing their own ASICs and code, they will outsource the processors, boards, fans, power supplies, chassis and optics that go into their systems.


Bubb said packet processors are key elements to Intel's communications strategy. Designs on its product roadmap will be able handle 10 to 40 Gbps at full-duplex rates. What the microprocessor did for the PC industry, the packet processor will do for communications. Intel is also tuning its Pentium and Xeon processors for long-lifecycle telecom gear, like billing systems, which previously have used RISC processors. Since it entered the optical market 3 years ago, Intel has seen prices plummet from $7,000 for a 10 Gbps transceiver to $500 for a 10 Gbps XFP module. And more is on the way.


Just like in the PC market, Intel will create boards and software, but will not be the complete system provider, said Bubb. Intel also has high ambitions for wireless. The first phase was centered on the Centrino initiative. Next year it will have full 802.11 b/g solutions in laptops and it will move to really low-power designs for handhelds. The next frontier will be Wi-Max -- "the wireless local loop." Bubb predicts Wi-Max will provide a third leg of competition to DSL and cable modems.
http://www.intel.com

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Verizon to Compete for Federal Contracts Valued Up to $330 Million

The U.S. General Services Administration (GSA) has authorized Verizon to compete to offer local voice and data communications services to federal agencies in twelve key mid-Atlantic markets. The two contracts have a combined potential value of over $330 million.
http://www.verizon.com

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BT Sets its Sights on OPEX Improvements to Improve Returns

BT's corporate strategy is based on four pillars, said Ben Verwaayen, CEO of BT, speaking at the UBS conference in New York. These are: defending its traditional business (which will eventually disappear), building its new business (broadband and mobility), eliminating the costs of complexity and failures, and cementing its relationship with customers by getting revenue streams under contract.


While most carriers are looking for CAPEX savings, Verwaayen said he is much more focused on OPEX because the cost of complexity in telecommunications is "horrendous." Re-engineering today's "plate of spaghetti" networks offers a historic opportunity to improve operational efficiency. Over the next 3 to 4 years, BT will collapse its many networks onto an IP/MPLS core that delivers any message-to-any-message transparently to users. Verwaayen believes this will yield operating savings of 30%.


On the revenue side, BT is experience a major shift from traditional services (-5% annual growth) to the new areas of growth (+23% growth). The company is also focused on debt reduction.


Verwaayen noted that BT's consumer broadband initiative is really taking off. Unlike the incumbent carriers in the U.S., BT never had a large business in second lines to homes, so the broadband growth has not come at the expense of another service. A large number of new consumer broadband accounts are sold with contract terms, which mitigates churn.


Verwaayen believes that ADSL currently is growing at a faster rate in the U.K. than in any other country, with the exception of Israel. BT claims over 50% of the broadband market. He believes customer satisfaction ratings will be a decisive factor in maintaining and growing that share. BT expects to have ADSL in 100% of its central offices by 2005.


Meanwhile, business revenues have been flat, said Verwaayen. BT's enterprise strategy will focus on customer loyalty rather than price, just like it is doing in the consumer market. The goal is to put customers under fixed contracts by offering them "loyalty plans." Verwaayen noted that BT's business activity is growing in Europe, even in markets where it has not traditionally had customers.


Regarding the company's mobile strategy, Verwaayen said BT is using its "full imagination in developing a Wi-Fi-enabled vision." For video services, Verwaayen noted that TV services in the U.K. are dominated by satellite. He believes it would be foolish to compete with BSkyB. However, he sees opportunity in augmenting the satellite service through BT's broadband network.
http://www.bt.com

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Sprint Focuses on Improving Network Efficiency

Sprint has made "dramatic improvements in its financial strength and flexibility" during 2003, said Robert J. Dellinger - Executive Vice President & CFO at Sprint, speaking at the UBS conference in New York. Sprint is using its free cash flow to pay off its debt, which is down by $3.9 billion so far this year. Short term loans have been paid off and the company's credit rating has improved.


Dellinger shared an optimistic view of 2004, noting that operations at the company's FON and PCS divisions are improving and that both groups will be introducing new services. Sprint PCS just launched its "push-to-talk" service. Dellinger conceded that growth opportunities outside of wireless "are more constrained" but that Sprint's FON group continues to see gains in UNE-p lines. He believes the long decline in enterprise long distance voice may be bottoming out. Wireless substitution continues as a major trend affecting the wireline long distance business, but Sprint PCS benefits from the trend.


Dellinger also said that recent FCC decisions -- or lack thereof -- have created significant regulatory uncertainty. Given its mix of local, CLEC and wireless network assets, Sprint is pushing for "regulatory clarity."


Going forward, Sprint's capital spending programs will focus on providing a more "competitive cost structure." The company has undertaken 41 separate projects aimed at eliminating $1 billion in annual operating costs. The initiatives include a streamlining of the company's management and an outsourcing of certain IT operations.


Regarding MCI's imminent emergence from Chapter 11, Dellinger noted that Sprint will have less debt than the new MCI. He also said Sprint's EBITDA margins are higher, putting Sprint in a better competitive position.
http://www.sprint.com

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Taiwan's Chunghwa Telecom Selects Nortel Networks for VoIP

Chunghwa Telecom, the incumbent service provider in Taiwan, has selected next generation network VoIP and multimedia solutions from Nortel Networks. Specifically, Nortel Networks was awarded a contract to upgrade the network under Chunghwa Telecom's Class 5 Packet Telephony Service System tender. Full network deployment is expected to be completed by September 2004.


Chunghwa Telecom's NGN network will be based on Nortel Networks Succession Communication Server (CS) 2000-Compact superclass softswitch and Nortel Networks Multimedia Communication Server (MCS) 5200. Financial terms were not disclosed.
http://www.nortelnetworks.com

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Qwest Posts 5.4% Revenue Decline in Q3, Will Launch First VoIP Next Month

Qwest Communications reported Q3 revenue of $3.6 billion, a 5.4% decrease from Q3 2002, which the company attributed to competitive pressures in local voice and wireless services. These declines were partially offset by growth in data and long-distance services within the local service territory. Net income was $1.8 billion, which includes a gain of $2.5 billion following the completion of the second phase of the QwestDex sale.


"While the industry environment is still challenging, we are seeing signs of stabilization in our business," said Oren G. Shaffer, Qwest's vice chairman and CFO. "We continue to focus on growing profitably and pursuing opportunities to improve our financial strength."


Some highlights from Q3:

• Qwest reduced its total debt by $1.2 billion during Q3



• added long-distance service to 572,000 access lines in its local service territory.



• began using its own network to carry long-distance traffic within its local service territory.



• added 41,000 DSL subscribers, giving it a total of 577,000 in-region DSL subscribers



• signed strategic marketing agreements with EchoStar and DIRECTV to offer bundled video services



• signed a wholesale agreement with Sprint PCS for wireless services

Qwest also confirmed that it will begin offering VoIP services to a select group of consumers in Minnesota starting in December 2003. This initiative marks the company's first step in a phased deployment of VoIP services that will continue into 2004.
http://www.qwest.com

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Agere Provides Traffic Management DSLAM Solution to Huawei

Huawei Technologies is using Agere's DSLAM traffic management solutions. Huawei ranks second worldwide in sales of DSL equipment and has installed 5.2 million ports of DSLAM in more than 25 countries, according to industry sources.
http://www.agere.com

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