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January 15, 2007
BT Group plc (NYSE: BT; London: BTA) has firmly committed to the controversial new Ethernet technology PBT (Provider Backbone Transport) by announcing multi-year supply deals with Nortel Networks Ltd. and Siemens Communications Group . (See Nortel Wins BT Deal and Siemens Wins BT Deal.)
Light Reading believes BT plans to invest several tens of millions of dollars in the Ethernet technology.
The news is significant in that it confirms PBT as a carrier Ethernet technology to be taken seriously by advocates, opponents, and potential users alike. PBT is a new and disruptive alternative to MPLS in the carrier transport world that has attracted attention because of its familiar, SDH-like provisioning and management attributes. Key to its allure are claims that it's easier and more cost-effective to manage than MPLS.
Stan Hubbard, senior analyst and Ethernet specialist at Heavy Reading, says the choice of technology makes sense. "When you think about controlling transport costs in next-generation networks, keep in mind that the two technologies that have demonstrated the greatest performance-price improvements during the past decade are DWDM and carrier Ethernet. Nothing else comes close. This is why BT is investing in these technologies to complement the intelligence in its IP/MPLS core."
Today's news is hardly unexpected. BT has been a vocal supporter of the technology and Nortel's initial development work, and had even announced publicly in September 2006 that PBT was under consideration for the carrier's next-generation network, the 21CN. (See BT Likes Nortel's New Ethernet Flavor and BT Rethinks 21CN Core Strategy.)
That led to some industry wags referring to PBT as "Proposition for British Telecom." (See PBT Means What?.)
But BT isn't the only carrier that's interested. BCE Inc. (Bell Canada) (NYSE/Toronto: BCE) and Verizon Communications Inc. (NYSE: VZ) have also shown an interest in PBT, while Nortel has already announced China Telecom Corp. Ltd. (NYSE: CHA) subsidiary Shanghai Telecom as a PBT customer. (See Nortel's PBT Debuts in China.)
Despite the lack of shock value, news of BT's decision will likely kick up a storm among equipment vendors and attract other carriers to evaluate the technology.
Debate has been fierce at industry events, and on Light Reading's message boards, about whether this nascent approach to next-generation network backbone connectivity will eat into MPLS's presumed dominance -- especially as PBT is still in the very early stages of standardization. (See Poll: Opex Gives PBT an Edge.)
Interestingly, Matt Beal, director of core convergence at BT Wholesale, is quoted in Nortel's press release as saying that the "implementation of Ethernet also complements fully BT’s well established MPLS strategy within 21CN." A BT spokesman adds that it was "always BT's strategic intent to deploy Ethernet and MPLS" in the new, £10 billion ($19.7 billion) network, and that the PBT gear from Nortel and Siemens will be deployed during the next 12 months. (See 21CN: It's an Ethernet Thing and BT's Bross: Ethernet Will Deliver.)
BT also notes that today's contract awards mark the end of the current Ethernet ITT (Invitation To Tender). The carrier says other vendors had responded to the document, but declined to name them or the technologies they had pitched. It also declined to comment on the investment it will make in PBT technology. (See BT Issues 21CN Ethernet RFP.)
Today's news will give a massive marketing and confidence boost to Nortel, which had missed out when BT first named its 21CN key vendor partners back in April 2005. Today's contract award adds Nortel to the elite list of BT's preferred 21CN vendor partners, the carrier confirmed. (See BT Unveils 21CN Suppliers.) The Canadian vendor has been championing PBT, or PBB-TE (Provider Backbone Bridge Traffic Engineering) as it's known in the Institute of Electrical and Electronics Engineers Inc. (IEEE) standards process, since early 2006. (See Nortel Launches PBT.)
It says it has a five-year deal to supply BT with its 8600 Metro Ethernet Switch, which sits in carrier metro nodes, and 1850 Metro Ethernet Services Unit, which sits in customer premises or the basement of buildings.
Philippe Morin, president of Nortel's Metro Ethernet Networks division, says the deal is "great news for us and a critical milestone for carrier Ethernet." He says PBT is "a strong play in the metro core and access" because it's "the most cost-effective" transport solution available.
But Morin is keen to play down any PBT versus MPLS positioning. He says the deployment at BT shows how PBT and MPLS can co-exist. "It's not a case of PBT versus MPLS. PBT will be deployed in the metro core and interface back into BT's MPLS backbone network."
Morin says Nortel is "in discussions with other Tier 1 and Tier 2 accounts on a global basis," and "we're making progress with a lot of them," but declined to confirm whether Verizon or Bell Canada were among that group.
With BT's support, Nortel has brought PBT to the attention of the whole telecom sector, and has attracted big names such as Cisco Systems Inc. (Nasdaq: CSCO), while others, such as Alcatel-Lucent (NYSE: ALU), are promoting an alternative called Transport MPLS, or T-MPLS. (See Cisco Tracks PBT Standards Process.)
Siemens, already a 21CN preferred supplier, was one of the first vendors to join Nortel in promoting PBT, along with Tpack A/S and Extreme Networks Inc. (Nasdaq: EXTR). (See Siemens Unveils 21CN Partners and Siemens Picked for BT's 21CN.)
The German vendor says it's supplying Surpass hiD Ethernet switches, element management software, and system integration and support services as part of its contract.
Keith Harvey, Siemens UK's managing director for fixed networks, says PBT is "an exciting emerging technology that will form part of our global portfolio, and we're supporting it through the standards processes."
Harvey says Siemens will provide the carrier with "something that BT refers to as PBT lite" while the technology continues its way through the standards bodies. "The hardware is available now. Our products are currently capable of delivering PBT," he says in response to questions about commercial availability of Siemens's solution.
A full explanation of PBT, the vendors that support it, and how it fits into next generation networks, will be available in a new report, "PBT & the Future of Carrier Ethernet Services," the January edition of the Light Reading Insider. This report will be available from Wednesday, January 17.
— Ray Le Maistre, International News Editor, Light Reading
The report, PBT & the Future of Carrier Ethernet Services, is available as part of an annual subscription (12 monthly issues) to Light Reading Insider, priced at $1,350. Individual reports are available for $900. For more information, or to subscribe, please visit: www.lightreading.com/insider.
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