In its bid to overtake Ericsson AB (Nasdaq: ERIC) and become the world’s top radio access infrastructure supplier in terms of revenue, Nokia Networks believes its approach to all-IP flat architecture on 3G networks will give it an edge. (See Rouanne Has Ericsson in His Sights.)

Nokia Siemens says operators do not have to wait for so-called 4G technology, Long-Term Evolution (LTE), to get the benefits of an all-IP architecture, and it is the only vendor that currently champions a flat 3G radio access network (RAN) approach.

“We’re evangelists about flat IP architecture, and we’re not waiting for LTE,” says Nokia Siemens CEO Simon Beresford-Wylie.

As mobile data traffic continues to surge, operators are considering how to adopt flat, all-IP architectures in their 3G networks before the advent of 4G in order to gain lower latency, lower cost per bit, support for multiple access networks, and preparation for next-generation networks. But there are different ways to implement such architectures, and just how operators arrive at a flatter data network architecture is hotly debated. (See Data Prices Fall, Usage Booms, All-IP Architectures Square Off, and 4G Drives All-IP Mobile Networks.)

Nokia Siemens has put its money on a flat RAN approach for high-speed packet access (HSPA) and the coming HSPA+ standard, in addition to its support for the Direct Tunnel architecture.

In a flat RAN architecture, the radio network controller (RNC) is integrated into the Node B so that the base station communicates directly with the Gateway GPRS Support Node (GGSN).

“It’s a way to pump traffic right out of the base station and directly into the network,” says Marc Rouanne, Nokia Siemens head of radio access.“You don’t have to wait for LTE and WiMax.”

But there are as many benefits as drawbacks to flat 3G RANs, which makes it a controversial approach, according to the recent Heavy Reading report, "Flat IP Architectures in Mobile Networks: From 3G to LTE."

With flat RANs, some of the benefits include lower latency for data applications, lower operational costs due to fewer nodes to maintain and manage, augmented data capacity through a data network overlay, and good preparation for so-called 4G LTE/SAE (System Architecture Evolution), which uses a similar functional architecture. Also, costs won’t grow in line with data traffic growth, because operators won’t have to deploy extra RNC and SGSN capacity as traffic increases.

“It’s a good idea, but there are hurdles,” says Gabriel Brown, senior analyst at Heavy Reading. “The question is: Does it give you enough benefit for the disruption it causes? It’s a logical thing to do, but for operators that have already built-out 3G it’s a big change and might not be worth the effort, especially in the short term.”

Also, it may be challenging to integrate the RNC into a Node B. RNCs are critical to supporting macro-diversity in mobile networks, which enables mobile handsets to communicate with multiple base stations on the uplink and allows operators to deploy fewer base stations. NSN’s flat RAN architecture supports this feature, but in an unorthodox way, according to the Heavy Reading report.

So far, Nokia Siemens has three customers using its Internet HSPA (I-HSPA) flat RAN solution: Stelera Wireless and TerreStar Corp. in the U.S. and T-2 in Slovenia. And Mobilkom Austria AG & Co. KG recently trialed the solution. (See NSN Deploys HSPA and Terrestar Picks I-HSPA.)

Nokia Siemens’ Rouanne explains that flat 3G RANs aren’t necessary when there is just “medium” data traffic, but are best suited when operators have big data traffic volumes. “Those networks that are starting to be under pressure with traffic are coming to us and wanting to direct traffic directly to the Internet,” he says.

Even though Nokia Siemens is the only vocal supporter of flat 3G RANs right now, Brown says the strategy isn’t risky, but it’s “forward-looking.”

“This is an attempt to align 3G networks with the growth in data traffic, and initial feedback from data-centric, greenfield operators is very positive,” he adds.

And a flat 3G RAN can set up an operator to be ready for the shift to LTE with its inherent flat architecture.

“NSN argues that a flat 3G RAN architecture aligns with LTE,” Brown says. “That looks good on paper, but it has to have inherent value for 3G networks on its own.”

Rouanne recently stated that his goal is to make his company the No. 1 radio access vendor by revenue. The company’s flat 3G RAN product is one of the assets that Rouanne thinks will contribute to reaching that goal. He believes Nokia Siemens can take over as top dog because it has a good customer base on which to build and the right combination of technology and products: a flexible base station product portfolio, flat IP architecture technology, and a focus on operations support systems and business support systems. (See Nokia Siemens Gets Ruthless on R&D Focus and Nokia Siemens CEO Slams 'Silly Pricing'.)

— Michelle Donegan, European Editor, Unstrung