Lucent's SBC Win: Confusing News
The news raises more questions than Lucent or SBC can answer.
Disappointingly little information is available on the size, scope, or exclusivity of the SBC deal -- if, indeed, there is a deal. All Lucent will say is that it's "getting revenue" from SBC's use of the 5E-XC. An SBC spokesman says, "We will be installing the switch as the demand exists within our 13-state region," but no details are being released. SBC has been a longstanding Lucent customer.
It also turns out the 5E-XC isn't really a new switch, even though Lucent announced it as a new product in its own right. All the elements comprising the platform have been available to carriers for months now, as upgrades to Lucent's existing high-end circuit switch, the 5ESS.
So what's really new here? The announcement's chief significance is to focus on how Lucent has improved its existing circuit-switching gear -- and what that improvement says about the vendor's strategy.
By any yardstick, the 5E-XC is impressive, at least on paper. It can support more than a third more trunks than today's 5ESS -- up to 258,000, Lucent claims. Further, where today's 5ESS switch takes up 12 cabinets for 92,000 trunks, the 5E-XC consumes just one to support the same level of traffic.
In one of Lucent's press statements today, SBC's VP of network planning, Andre Fuetsch, says the new gear will improve SBC's efficiency and reduce its operating and maintenance costs.
But carriers might have to wait another year for some of the more compelling circuit-to-packet capabilities of the 5E-XC. In order to support the Session Initiation Protocol (SIP), which links circuit- to packet-based traffic in telecom and multimedia networks, customers will need to have a special "IP card with SIP software," which isn't due for release until the fourth quarter of 2003.
Without that card, customers won't be able to perform so-called packet trunking, replacing complicated meshes of TDM links with high-speed packetized trunks extending from the voice switch in star configurations.
The 5E-XC beats out at least one key North American competitor, Nortel Networks Corp. (NYSE/Toronto: NT), in terms of sheer size. But Nortel has SIP capabilities built into its DMS-200 and DMS-500 switches.
At least one other tandem-switch vendor, Siemens AG (NYSE: SI; Frankfurt: SIE), offers size and functionality that rival Lucent's, according to Chris Nicoll, director of infrastructure analysis at Current Analysis. But that vendor doesn't have the traction Lucent enjoys with North American incumbents.
Nicoll thinks it's a mistake to judge Lucent too harshly for not having SIP in its 5E-XC today. "It's much too early to talk about IP -- it does Lucent a disservice to talk about IP," he says. "This makes traditional voice networks better, faster, and smaller."
Other analysts seem puzzled by Lucent's announcement. "I do find it interesting that Lucent would come out with a new Class 5 circuit switch just as the demand for such products is waning -- the number of ILEC phone circuits is in decline," writes Dave Passmore, research director at the Burton Group, in an email today.
"Lucent said, 'Let's see where the softswitch market is going,' " says Sam Greenholtz, senior analyst at Communications Industry Researchers Inc. Since the company seems to have determined it's going nowhere (see Lucent Clarifies Product Strategy), it's decided to add to existing facilities and see where the market goes from here, he says.
— Mary Jander, Senior Editor, Light Reading