Ericsson to Bring Partners to 21CN Party

Ericsson AB (Nasdaq: ERICY) landed a unique deal when BT Group plc (NYSE: BT; London: BTA) named its primary 21CN equipment suppliers last week: It was the only vendor awarded a network category (i-node) all to itself (see BT Unveils 21CN Suppliers and BT Picks Ericsson for 21CN).

But that doesn't mean it'll only be supplying Ericsson technology for BT's "Intelligent Nodes," where the carrier will house technology such as softswitches, IMS (IP multimedia subsystem) elements, and bandwidth managers. "We're supplying the core of the i-node, the Telephony Softswitch [a.k.a. Engine Softswitch]," but discussions are ongoing about the potential partnerships required to deliver other functionality, says Karl Thedeen, VP of Ericsson's wireline business.

For instance, he says that BT's bandwidth management requirements will be met by a combination of Ericsson technology, which will support QOS setups and service provisioning, and technology from as yet unspecified partners.

And Thedeen wouldn't comment on the commercial terms of Ericsson's agreement with BT: "All I can say is that it was a very tough and competitive process. BT has been very demanding on its cutting-edge technology demands, and has made its choice based on our technology and our financial stability."

He adds that Ericsson's "mobile competence made us a more complete partner for BT," which has stressed the importance of interactivity between 21CN and other carriers' mobile networks.

Ericsson's IMS experience was also a factor, adds Thedeen. "IMS was not an immediate selection criterion as such, but it was important that we could show a clear evolution path from what we are providing now to where BT wants to move to in the future. BT has evaluated that migration." (See Ericsson Provides IMS to Telefónica , Ericsson Grabs Sprint IMS Win, Ericsson Demos IMS, and Telecom Italia Picks Ericsson for IMS.)

Graham Beniston, Heavy Reading analyst at large, says Ericsson's selection for the i-node domain "underlines the impact of fixed-mobile service convergence on BT's thinking, and endorses the decision of the European Telecommunications Standards Institute Tispan group to base all NGN services on an IMS core. Ericsson clearly has a lead in being a major vendor of mobile switches whilst having a solid background in TDM telephony." (See ETSI Drives Convergence Standard and ETSI Creates Tispan.)

Beniston also reckons Ericsson, and the other preferred suppliers, will be getting partnership instructions from BT. "BT will be stipulating its required partners for technology such as trunk media gateways and session border controllers. They won't just accept the proposed partners -- that's not how this process is working. BT has chosen its big vendor partners, and will get them to financially underwrite the smaller vendors BT wants them to work with."

That means there's still an opportunity for companies such as Sonus Networks Inc. (Nasdaq: SONS), which had teamed up with unsuccessful bidder Marconi Corp. plc (Nasdaq: MRCIY; London: MONI), to get involved in 21CN, reckons Beniston (see Marconi in Turmoil).

Sonus is no stranger to BT, and its partnership with Marconi is believed to have been driven by BT's 21CN requirements (see HR Unties Sonus/Marconi Tie-Up and Sonus Gets BT Stamp of Approval).

Beniston's not alone in thinking Sonus may still have a role to play. Citigroup analyst Alex Henderson says the "door is open for further i-node vendors to be named in the future." In a research note he says Marconi's exclusion was "a clear disappointment for Sonus," but adds that BT says the i-node category "is very likely to see additional vendors named going forward."

— Ray Le Maistre, International News Editor, Light Reading