Deutsche Telekom has completed its migration off PSTN systems and on to all-IP networks in Croatia, bringing the number of countries in which it is now an all-IP operator to three.
The German incumbent had previously hit the all-IP milestone in Macedonia and Slovakia and is committed to shutting down all of its European PSTN networks by the end of 2018, making it arguably the region's most ambitious telco when it comes to all-IP transformation. (See Does BT Lag European Peers on All-IP?)
Table 1: All-IP Progress in Europe
|Operator||All-IP deadlines||Progress to date||Publicly stated goals/benefits||Notes|
|BT||2025||All-IP core network already built||Simplifying estate; replacing legacy networks; saving costs||Operator claims 21CN project achieved all-IP-to-exchanges target and that current initiative will take all-IP to premises|
|Deutsche Telekom||2018||Macedonia, Slovakia and Croatia are all-IP||Service agility; cost savings (€1.2 billion ($1.3 billion) by 2020 from use of cloud-based technology)||All-IP move is designed to support a major reduction in the number of service platforms Deutsche Telekom maintains across Europe, from about 650 before the process began to just 50 at its conclusion|
|KPN||N/A||>60% of connections||Optimization for very high data volumes; reduced complexity; faster time to market||"To support our best-in-class access services, we continue to move towards an all-IP network," said KPN in 2014 annual report. "Moving towards a single IP core is needed to ensure best-in-class integrated services."|
|Orange||2020||All broadband services in Mauritius are all-IP||Improved user experience; better scalability, security and energy efficiency; enabling development of new services||All-IP pilot under way in Mauritius, which was chosen, says Orange, because of its "size, the representativeness of the different markets, such as residential, enterprise and mobile, and the presence of all services and technologies"|
|Swisscom||2017||>25% of connections; >33% of customers||Enabling cost-effective use of new services; offering services irrespective of type of access technology||Has migrated data transport network to IP, commissioned IP-based telephony and multimedia platform and been offering IP-based services since 2009|
|Telecom Italia||N/A||N/A||N/A||Migration from PSTN to all-IP under way|
|Telefónica||N/A||N/A||N/A||All-IP forms a part of network transformation Telefónica is carrying out|
|Telekom Austria||N/A||All fixed voice customers in Austria on all-IP||To overcome the problem of technology obsolescence related to the use of legacy networks||Has revealed that another subsidiary will shortly make an announcement on all-IP conversion|
|Source: Goldman Sachs, operators, Light Reading.|
Deutsche Telekom AG (NYSE: DT) believes it can realize savings of about €10 ($10.6) per customer per year from the move but has also positioned all-IP as a platform underpinning investments in virtualization and SDN -- which are sometimes described as New IP technologies.
In the short term, however, the all-IP plan is forcing Deutsche Telekom to pump more funds into capital expenditure. The operator has previously indicated it will cost between €30 ($31.8) and €60 ($63.6) per customer to complete the all-IP migration.
In Croatia, where Deutsche Telekom currently maintains about 1 million fixed lines, that implies a total cost of between €30 million ($31.8 million) and €60 million ($63.6 million). But it should allow the operator to save about €10 million ($10.6 million) a year in the long run.
Deutsche Telekom claims to have spent about 400 million Croatian kuna ($55 million) on overhauling its Croatian systems over the last five years, which tallies with earlier estimates.
Its all-IP transformation has included the replacement of 72 old local exchanges throughout Croatia with just two state-of-the-art facilities -- one in the capital city of Zagreb and the other in the major seaport of Rijeka.
However, Deutsche Telekom also said it expects to continue making investments in this area in the future to improve its service capability.
"Such investments allow us to offer innovative products and the fastest top-quality services on the Croatian market," said Davor Tomašković, the CEO of T-Hrvatski Telekom (HT), Deutsche Telekom's Croatian subsidiary, in a statement. "In 2015, HT is to invest more than thirteen hundred million kuna [$180 million], which is 25% more compared to 2014."
In euro terms, HT spent about €123 million ($130 million) on capital expenditure last year. It has invested €109 million ($115 million) over the first nine months of this year.
Much of the investment in the future is likely to go into NFV and SDN technologies as part of Deutsche Telekom's TeraStream initiative, the name the operator has given to its next-generation network project.
TeraStream has already been piloted in Croatia and Greece and is aimed at allowing Deutsche Telekom to launch services with web-like agility and to improve overall efficiency.
The operator's ultimate vision is a pan-European network that will include a small number of production facilities serving multiple markets, instead of one "factory" for each country.
As a result of this current complexity, Deutsche Telekom now maintains about 50 platforms for each country in which it operates, or 650 in total (excluding T-Mobile US), according to a spokesperson for the company. "In the future, there will be just 50 -- including TV, messaging, voice and so on -- to offer across the footprint, instead of 650," he says. "So with more and more countries switched to IP, we are able to expand these new services step by step."
Table 2: Deutsche Telekom's All-IP Rollout
|Country/region||Total fixed lines in September ('000)||IP fixed lines in September ('000)||Percentage all-IP (September)||Status/target for completion|
|Note: Europe covers all of Deutsche Telekom's European subsidiaries bar Germany. Outside its domestic market, the operator has a fixed and/or mobile presence in Albania, Austria, Croatia, the Czech Republic, Germany, Greece, Macedonia, Montenegro, the Netherlands, Poland, Romania, Slovakia and the UK, through its EE joint venture with Orange. Source: Deutsche Telekom.|
Deutsche Telekom began trialing this approach in March this year, offering the same IP-based TV and VPN services across the markets of Croatia, Hungary and Slovakia. (See Deutsche Telekom Turns On Pan-European IP.)
The TV service includes a data analytics feature that allows Deutsche Telekom to make recommendations to customers based on their usage profiles, while the VPN is aimed at reducing time to market for business customers.
During the SDN & Openflow World Congress in October, Axel Clauberg, Deutsche Telekom's vice president of aggregation, transport, IP and fixed access, said the operator was planning on extending the pilot to a "broader footprint." He told Light Reading that feedback from customers had been very positive. (See DT, Vodafone to Launch SDN-Based VPNs.)
Deutsche Telekom has also been offering New IP-like services in the all-IP market of Macedonia, allowing customers to subscribe to a broadband service on tap without having technicians visit their premises.
In Croatia, meanwhile, it has developed an IP-based offer that it calls HP Business Connect, which it says allows customers to use a landline on a mobile device.
According to Hrvatski Telekom, call set-up speeds and quality are dramatically better across what it calls "post-migration services."
"It is much easier to connect customers -- changes to be made after a relocation, for instance, can be done in no time," says Deutsche Telekom's spokesperson in describing some of the broader benefits of the all-IP migration. "So the technical relationship between customer and provider is less complex."
— Iain Morris, , News Editor, Light Reading