DT's Pan-Net Picks Up the Pace

Like much from the past, old technologies attract their fair share of dewy-eyed enthusiasts, but Axel Clauberg is far from nostalgic when assessing Deutsche Telekom's hodgepodge of ageing European networks. "All that country-based production is quite ugly," said the operator's vice president of aggregation, transport, IP and fixed access, during a keynote at Light Reading's Big Communications Event in May. "We want to change the picture."

The process of doing so is starting to gather pace. In the next few months, Deutsche Telekom AG (NYSE: DT) will open a data center in Hungary that will support customers across 11 European markets. A plain old email service will go live sometime between July and September, but more sophisticated offers are set to follow.

Through its "pan-net" project, the German telecom incumbent, which provides fixed and mobile services across a total of 13 countries in central and eastern Europe, is replacing the legacy operations that have catered to individual markets with a single European network. The aim is twofold: to reduce operating costs through the shutdown of national facilities and platforms; and to develop the kind of service "agility" that is commonly associated with web-scale players like Google (Nasdaq: GOOG) and Facebook . (See DT Plots Pan-Net, 'Answers' B2B OTT Threat.)

The overhaul necessarily entails plenty of centralization, although Sven Hischke, pan-net's managing director, resists the use of this word to describe Deutsche Telekom's plans. "I don't like this term because it often means in one place," he tells Light Reading. "We are developing an infrastructure cloud with more locations than one."

Indeed, the Hungary data center will eventually be joined by two others outside Germany, ensuring the distance between facilities and customers is never so great that latency becomes an issue. Deutsche Telekom is proceeding more warily in its domestic market, where the size of its fixed-line business and services portfolio makes the transformation much riskier.

But the need to be regional and local at the same time is perhaps Deutsche Telekom's greatest challenge. The broad objective is to stop developing services on a country-by-country basis and produce service components that local subsidiaries can piece together to create tailored offerings. Deutsche Telekom believes it can reduce the number of service platforms it maintains across Europe from 650 to just 50 through its pan-net transformation.

On the technical front, the operator has yet to overcome several hurdles. Due to local needs, for instance, it cannot just replace the packet core installations it has deployed in individual countries with a centralized function. Instead, it has been urging the vendor community to develop a "split packet core," said Clauberg at BCE. "We can centralize the control part and have the user part distributed across the countries where all the data handling is done."

While Deutsche Telekom claims to have recently carried out demonstrations of split packet core technology with Cisco Systems Inc. (Nasdaq: CSCO), Clauberg says the industry at large is "not yet there" with this kind of functionality. "We need similar architecture across our multi-country footprint for most classical core services," he said.

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