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DT: Telcos Must Escape Vendor Prison

Iain Morris
5/24/2016

Germany's Deutsche Telekom has urged other telcos to join the Facebook-led Telecom Infra Project (TIP) to escape the "prison" that vendors have built around them.

The German incumbent is taking advantage of software and virtualization technologies to overhaul networks it operates throughout central and eastern Europe, but a senior executive has suggested that existing supplier relationships are preventing it from moving as quickly as it would like.

"Typically what happens is that a vendor approaches us with the latest and greatest part and says how many do you need, but if we want to produce efficiently at scale we need a different approach," said Axel Clauberg, Deutsche Telekom AG (NYSE: DT)'s vice president of aggregation, transport, IP and fixed access, during a keynote presentation at this morning's Big Communications Event in Austin, Texas. "We need to get out of that jail."

I Want to Break Free
Deutsche Telekom's Axel Clauberg urges telcos to get behind open-source efforts.
Deutsche Telekom's Axel Clauberg urges telcos to get behind open-source efforts.

Clauberg said telcos must stop being on the "receiving end" in their dealings with suppliers and could play a more disruptive role in the ecosystem through involvement with Facebook 's TIP initiative.

Launched earlier this year, and today backed by some of the world's biggest service providers and technology companies, TIP has been set up to develop open-source technologies outside of the data center. (See Facebook TIPs Telcos Towards Open Source Networks.)

Facebook's overarching aim is to spur the introduction of telco technologies that will lower the cost of connectivity and accelerate network rollouts in emerging markets, but Clauberg appears to believe that TIP could also help operators take the lead on technology innovation.

"This is really the way forward given the challenges we face and the pressure we are under on the ARPU [average revenue per user] side," he said.

Facebook is set to unveil details of new TIP members at the Big Communications Event today, but its current supporters include Deutsche Telekom, EE , Equinix Inc. (Nasdaq: EQIX), Intel Corp. (Nasdaq: INTC), Nokia Corp. (NYSE: NOK) and SK Telecom (Nasdaq: SKM). (See Facebook Lauds Terragraph Cost Savings.)


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Through its pan-net initiative, Deutsche Telekom is replacing a large number of legacy platforms serving individual country markets with more centralized, all-IP systems, which will increasingly rely on SDN and NFV technologies. (See DT Plots Pan-Net, 'Answers' B2B OTT Threat.)

Clauberg says the pan-net project has encountered a number of challenges -- both technical and cultural -- but is hopeful that open-source efforts such as TIP will make a big difference in the coming months.

He also praised the activities of Light Reading's The New IP Agency , which has been carrying out NFV interoperability tests in partnership with Germany's European Advanced Networking Test Center AG (EANTC) .

"Internet companies have DevOps and fully automated testing," he said. "We are not there yet and I'm really happy there are organizations out there like the New IP Agency that are focusing on automated testing."

Such flexibility should allow Deutsche Telekom to overcome one of the biggest challenges of the pan-net project, which is to ensure the introduction of a centralized production system does not hinder the rollout of services tailored to meet specific local needs.

Given those considerations, Deutsche Telekom has already pushed for what Clauberg calls a "split packet core," whereby a centralized control part of the core is separated from elements that can be distributed across the operator's 13-country European footprint.

"We are building both back-end and front-end data centers and we've demonstrated the first split packet core with Cisco, but at large the industry is not yet there," he said.

By shifting to all-IP platforms, Deutsche Telekom hopes to reduce the number of European service platforms from 650 to just 50 in the next few years.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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kq4ym
kq4ym
6/7/2016 | 1:06:03 PM
Re: Yes
If DT can pull off their plan of shifting to all-IP platforms "to reduce the number of European service platforms from 650 to just 50 in the next few years," that's surely going to make others take note and relinquish the dependence on vendor equipment. 
jayakd0
jayakd0
5/26/2016 | 11:19:42 PM
Re: Yes
True, but at the same time this so called "freedom", hope one cannot expect for FREE, if we wish to build (and maintain) always on, high quality services!
brooks7
brooks7
5/26/2016 | 5:57:56 PM
Re: Yes
Yes and no.

I think we are in primary agreement.  What I saw was a number of companies funded in the wake of the Telecom Act of 1996.  This list is the relatively successful list, but you would recall that there were a whole lot of companies that cratered (for example Copper Mountain and Mahi).  

What I saw was a blast of money that came in and a bunch of companies added to the pile.  After that, things slow down considerably.  My personal view (and the company that I worked at then) believed that things ended for equipment vendors in 2001 and that the power was shifting massively to the service providers. That is why we sold the company in 2004.  Things have played out that way.

seven

 
Duh!
Duh!
5/26/2016 | 2:59:46 PM
Re: Yes
I stand corrected.  But the point still stands. Just that I'm saying the glass is half full, and you're saying the glass is half empty.
brooks7
brooks7
5/26/2016 | 12:52:06 PM
Re: Yes
To set the record straight consider the following:
Essentially we have 3 buckets:
 
InterDigital - Public 1981
Extreme - public April 1999
F5 - public June 1999
Zhone - didn't exactly go public - it bought into public entities based on a $500M investment in 1999.
Sonus - public on May 25, 2000
Ceragon - pulic September 2000
Netgear - Spun off From Nortel 2002, originally part of Bay Networks
Sierra Wireless - public 2003
 
ShoreTel - public 2007
Infinera - public 2007
Dragonwave - public 2009
 
Ubiquiti - public October 13, 2011
Ruckus - public Novembe 2012
Cyan -public 2013
A10 - public March 2014
 
Most of these companies were founded in the 1990s.  
 
seven
Ivcash
Ivcash
5/26/2016 | 5:15:01 AM
forget it, and have a good sleep
What really expensive is not the hardware or even the software, it is the short list always is the same, few new players could join in.

Why? There is too high a wall for them to climb over, just think, before NFV, those new players are always dying for hardware, not enough investment in it, so not enough competence. After NFV, those new players could select COTS, but the wall is still there, for no enough human power to run a globle maintenance service. Even most telcos could not stand for the poor service from big sharks like Cisco or Ericsson,  for the tiny fish? You can imagine hot line is always busy or defect solving month long, bla bla bla. 

And there is poor investment in telecom industry, it is not a sunrise industry now, so much risk to put so much money for the tiny fish. And for the big shark? They are prison.

The golden sentence is "if telcos want to beat the OTT, be the OTT", DT is right, be the OTT, breake prison, good luck~
buzzkill2000
buzzkill2000
5/25/2016 | 10:40:41 PM
Another example
 

Read this about the Data Center Switching rip-off from traditional vendors !

http://www.networkworld.com/article/2988442/lan-wan/review-is-white-box-switching-the-future-of-networking.html

 

Cumulus is disrupting Cisco / Juniper / Brocade & Arista ! 

 

Facebook saved $2 Billion by using white box switches ; which now run 70% of their Data Center.. 

 

Telco's are bright enough to see that and realize how they are being ripped-off by their beloved vendors !

 
buzzkill2000
buzzkill2000
5/25/2016 | 10:18:00 PM
Here's an example of vendor prison
$50 worth of chips & plastic  +  $1300  worth of royal rip-off  =  $1350 Cisco Meraki MR-34 

http://store.cloudmanaged.ca/Cisco_Meraki_MR34_802_11ac_Access_Point_p/mr34-hw.htm

Go figure !

 

 
Duh!
Duh!
5/25/2016 | 8:41:25 PM
Re: Yes
Sonus, F5, Ubiquiti, A10, Extreme, InterDigital, Netgear, Ruckus, ShoreTel, Sierra Wireless, Ceragon, Dragonwave, Zhone... *

*Not 100% certain about the IPO dates on some of these.

 
brooks7
brooks7
5/25/2016 | 5:24:41 PM
Re: Yes
What equipment vendors have IPOed since 2002?  Only ones I can think of are Cyan and Infinera.  

seven

 
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