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Sonus Fills BT's IMS Hole

Ray Le Maistre
11/9/2007
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By bringing Sonus Networks Inc. (Nasdaq: SONS) on board as a preferred supplier for its £10 billion 21CN project, BT Group plc (NYSE: BT; London: BTA) is solving one of its more thorny next-generation network problems -- continuity of service as it migrates towards its new network and switches off its PSTN. (See Sonus Gets BT 21CN Win.)

It also gives Sonus a role it was expecting to be handed more than two years ago.

Sonus announced late Thursday that it will provide BT with its ASX access server, which performs the Access Gateway Control Function (AGCF) in the IP Multimedia Subsystem (IMS) world. And that's a function that has been causing BT some procurement issues.

The AGCF communicates with media gateways at the edge of the network, using a protocol such as H.248, and interacts with other IMS network elements using SIP (Session Initiation Protocol). It enables a carrier to emulate PSTN and ISDN services in its IMS by mapping the services into SIP. (See Tispan: IMS Plus.)

In BT's 21CN network, the AGCF will sit between the multiservice access nodes (MSANs) and the carrier's new IP network elements.

It’s a vital cog in BT's network transformation strategy because it will enable all service providers that use BT's network (of which there are hundreds) to have access to the same set of services, whether their customers are using legacy services or new IP services.

As Joe Kelly, the communications director for the 21CN project, says, "Simply put, it helps build a bridge between the 20th century network and the 21st century network, and means that all service providers will have the same level of capability."

That's important to BT's Wholesale division because it is required by U.K. telecom watchdog, Ofcom , to deliver equality of service to all the operators that hook into, or ride on top of, BT's infrastructure.

Despite its vital role in the 21CN, BT had been struggling to find an AGCF product to meet its needs.

During an IMS presentation at the NXTcomm show in Chicago in June this year, BT executive Malcolm Wardlaw, one of the 21CN's five principal architects, noted that there were "limited vendor opportunities [to source AGCF functionality]. What I have seen only goes half way -- there is always something missing."

So which of BT's announced 21CN preferred suppliers should have been meeting BT's AGCF needs? Ericsson AB (Nasdaq: ERIC).

The AGCF is one of the functions BT specified for the 21CN's Intelligent Nodes (i-nodes), designed to manage voice services in its new network. And when the carrier announced its list of preferred vendors in April 2005, Ericsson was named as the sole i-node supplier. All other parts of the 21CN had more than one supplier. (See BT Unveils 21CN Suppliers.)

Ericsson, though, has been unable to meet BT's AGCF requirements, even though it said it would work with third-party suppliers to deliver to BT's i-node specifications. (See Ericsson to Bring Partners to 21CN Party.)

And according to sources, BT has having a few problems sorting out its 21CN voice service challenges. (See Upheaval at BT's 21CN?)

So now Sonus is an i-node preferred supplier, too -- and that's a role it was expecting to win back in 2005.

At that time it was a partner of Marconi, which had been widely expected to land MSAN and voice service support roles in 21CN. But Marconi was frozen out of the 21CN deals, and, ultimately, broken up, with the majority of the company acquired, ironically, by Ericsson. And that left Sonus without its expected 21CN gig. (See Analyst: Marconi in Line for 21CN , Marconi & Sonus Team for Next-Gen, Marconi in Turmoil, and Ericsson Buys Bulk of Marconi.)

But while Sonus is excited about the renewed opportunity to play a role in 21CN, it still has to prove itself. BT's Kelly explains that "Sonus will be required to do a degree of development work so that its technology works appropriately for BT. Sonus needs to make its product compliant with the unique regulatory requirements" placed on the 21CN.

And will Sonus be BT's only AGCF supplier? Kelly is a bit more coy about that. "Sonus is the only company we have signed a contract with," he says, while acknowledging that there are a number of vendors in the market with AGCF capabilities. Vendors other than Sonus known to have developed AGCF functionality include Alcatel-Lucent (NYSE: ALU), Thomson S.A. (NYSE: TMS; Euronext Paris: 18453)'s Cirpack business, and Huawei Technologies Co. Ltd. . (See Alcatel Embraces Tispan's IMS Cirpack Unveils IMS Gear.)

No financial details were announced, but the deal is expect to be worth several tens of millions of dollars to Sonus over a number of years.

— Ray Le Maistre, International News Editor, Light Reading

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Toad680
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Toad680,
User Rank: Light Beer
12/5/2012 | 2:58:56 PM
re: Sonus Fills BT's IMS Hole
Did anyone at BT explicitely state that Ericsson was the vendor displaced by Sonus? I ask because I am still hearing pretty clearly that ALU was the losing vendor in this decision and that Ericsson is still in where they were last week, albeit looking pretty shakey. While it does seem to fall under I-node, which we all know to be Ericsson, I note that in your piece you point out that ALU did have a solution, or at least vaporware, for features similar to Sonus' ASX solution. Curious if you are getting the Ericsson displacement from the horse's mouth, or inferring it based upon what you know about I-node from when BT first announced it.

I am also curious about the information you have for the size of this deal. 10s of millions seems low to me. Sonus' CEO said on the conference call about the ASX ASP that it runs $30-$60 per subscriber, depending upon configuration. With 30 million subscribers, it would seem the addressable opportunity to be somewhere in the $900m-$1.8bn range.

Sonus says it is the preferred vedor. I would suggest that for Sonus to be brought in at the preferred spot at the last minute like this implies that vendor number 1 still didn't have a working solution. That leaves Sonus with a pretty big opening to address the bulk of this opportunity. I'd argue that the contract is worth hundreds of millions of dollars and not 10s. Why are our impressions so far off?

Thanks.
Toad680
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Toad680,
User Rank: Light Beer
12/5/2012 | 2:58:56 PM
re: Sonus Fills BT's IMS Hole
At BT specifically?
jasanz
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jasanz,
User Rank: Light Beer
12/5/2012 | 2:58:56 PM
re: Sonus Fills BT's IMS Hole
I understand that ALU has had one flavour of the 5020 (ex-Alcatel) as AGCF for a year... so it was not vapourware.
digits
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digits,
User Rank: Light Beer
12/5/2012 | 2:58:56 PM
re: Sonus Fills BT's IMS Hole
Hi Toad860

Ericsson had (now past tense) sole responsibility for supplying i-node capabilities, and BT lumped the AGCF in the i-node. So it was part of Ericsson's brief to deliver - it didn't have to be an ERIC product, but it was due to be the supplier, even if it was Sonus or any other company's technology.

So it is a displacement in terms of being the lead vendor supplier of AGCF capability as Sonus is now a direct 21CN vendor. Now Ericsosn is sharing i-node responsibilities.

Was Alcatel-Lucent considered? BT checked out a number of companies. I don't know if AlcaLu was in the driving seat at any point and lost out. Note that BT will say only that SONS is the only vendor with which it has currently signed an AGCF deal. Further deals could follow, including with ALU or Huawei, or (potentially) any other AGCF vendor.

As for the value as things stand at the moment -- 10s of $ millions, rather than anything as significant as 100s of $ millions, is the position as I understand it from a source with direct knowledge of 21CN affairs.

Ray
commsguru
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commsguru,
User Rank: Light Beer
12/5/2012 | 2:57:37 PM
re: Sonus Fills BT's IMS Hole
Ericsson has basically failed to deliver on voice for 21CN so you could argue that yes Sonus has replaced them. However it's not that simple and Ericsson have to be allowed to fail on their own terms and exit 'with grace'

Ericsson's failure to deliver has hit BT and the MSAN vendors (FTEL & Huawei) hard as the Pathfinder voice deployment in Wales was a joke and the voice roll out has now been scrapped in favour of Broadband for the next two years.

The questions we should all be asking BT now is (a) how far has the programme slipped to now? (rumour is that it's back to 2014) and when are you going to carry out mass migration of PSTN (rumour is never, and we'll drift on and on with no end in sight)

Bottom line is BT can't run a project of this scale anymore it simply hasn't got the skill set. Couple this with a need to shed 30% of the workforce as quickly as it can and we see problems.

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