Orange Faces SDH Hurdle in All-IP Transition

France's Orange is carrying out trials of optical transport network (OTN) technology that could help it to realize its target of having an all-IP, "programmable" network in place by 2020, the service provider revealed earlier today.

Orange (NYSE: FTE) is among a number of European operators struggling to phase out legacy technologies as it invests in the IP-based networks of the future. (See Orange to Be All-IP by 2020, Says AMEA Boss.)

As part of its Essentials2020 transformation initiative, Orange is planning the rollout of software and virtualization technologies aimed at reducing costs and giving it the service "agility" of a web-scale player.

But a huge barrier in this process is the operator's range of PSTN-based legacy technologies, including SDH and ATM, according to Adam Deja, the head of Orange's corporate skill center for optics.

"These are not programmable and we need to do something with them," said Deja during today's Global WDM/OTN Seminar, an event organized by Orange and China's Huawei Technologies Co. Ltd. in Nice this afternoon.

Under Essentials2020, all of Orange's fixed voice and data traffic will move to IP, while transport networks will run on IP and WDM and be managed by an SDN controller.

Getting rid of the PSTN is easier said than done, however. When it comes to SDH, Orange currently maintains about 80,000 network elements from a diverse range of equipment suppliers. Deja says that some of the equipment is obsolete and some of the vendors are no longer in business.

"Experts who deal with SDH are going into retirement and it's difficult to maintain internally," he says. "All of this leads to very high opex."

Deja says Orange has been looking at three potential solutions to the SDH problem.

The first is to "do nothing," he says, and in emerging markets where SDH technology is still relatively new that appears to be the approach the operator has taken.

Elsewhere the choice is either to invest in IP-DSLAMs or to switch SDH over to next-generation WDM/OTN technology. That latter option seems to be gaining sway, particularly in markets where WDM equipment is already present and collocated with SDH.

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Orange has been carrying out trials in one area that featured 1,700 E1 lines, 150 different SDH network elements, 110 sites and WDM equipment approaching the end of its natural life. "That was important because the WDM equipment needed to be replaced," says Deja.

Taking the WDM/OTN approach, Orange was able to reduce power consumption by 67%, maintenance costs by 62% and the equipment "footprint" by 58% during these trials.

The return on investment was about four and a half years when taking into account the WDM and SDH costs, but just one and a half years when the WDM costs were stripped out, according to Deja. "If you are renting facilities you could probably save more," he says.

Besides helping Orange to reduce costs, the use of OTN technology could also bolster the business case for leased lines, says the Orange executive.

Essentially, the introduction of WDM and OTN in the metro network makes it easier for network operations center staff to set up services in a "plug and play" manner, he explains.

"Leased lines are no longer sophisticated services but a commodity and clients need to be able to get them quickly and at a low price," says Deja. "We can use OTN to have quick delivery of these services."

Orange has now embarked on a bigger trial and says it will expand the scope of the project depending on the results.

European operators including BT Group plc (NYSE: BT; London: BTA), Deutsche Telekom and Swisscom AG (NYSE: SCM) are similarly trying to complete the transition to all-IP networks in the next few years.

Germany's Deutsche Telekom AG (NYSE: DT) appears to be the most ambitious of those players. The operator has previously set a target of phasing out all of its PSTN systems by 2018 as part of its "pan-net" transformation. (See DT's Pan-Net Picks Up the Pace.)

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

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