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Powering Network Transformation

Over the past few weeks, I have collaborated with Alcatel-Lucent (NYSE: ALU) on a white paper addressing the challenges facing network operators in defining and executing a TDM-to-IP network transformation strategy.

One of the elements of this research addressed the basic power savings associated with TDM vs. IP networks. We estimated power costs for a 10,000-line legacy TDM switch and a two-frame compact IP Multimedia Subsystem (IMS) configuration based on North American kWh power costs. While the IP technology chosen – a compact two-frame IMS configuration – could effectively retire several TDM switches of this size, its power consumption profile was approximately one tenth that of TDM.

As my colleague Stan Hubbard noted a few weeks ago, "Energy consumption has clearly emerged as a major topic for telecom and data center network operations, and we are going to hear a lot more debate on this issue before the dust settles." He is right on the money. (See Spotlighting Energy Efficiency.)

Since then, I have been researching VOIP vs. circuit-switched line penetration globally to quantify the savings that lower power costs deliver. Based on initial estimates, the numbers are staggering.

In order to capture these costs, I started with input from Pyramid Research , which estimates that there were 160 million circuit-switched lines in operation in Canada and the U.S. at the end of 2008. Based on the cost assumptions defined in the white paper, each 10,000-line switch utilizes a total of 925,000 kWh per year, or $7.95 per line. Applying this cost per line to the 160 million installed lines results in an estimated annual power cost of $1.27 billion per year. It is also important to note that the costs associated with SS7 networks are not included, and would drive the figure even higher.

In contrast, the IP solution utilizes only 102,000 kWh per year for an annual operating power cost of $144 million per year – resulting in an annual savings of $1.13 billion at current U.S. kWh pricing levels.

In addition to the financials, the associated reduction in carbon-dioxide emissions would have to be off the chart as well. But I will leave those calculations and discussions to the attendees of Light Reading's upcoming Green Telecom event in Dallas on October 27.

While I don't expect this article to result in a sea change in network operators' attitudes and plans to replace TDM equipment, hopefully a few CEOs will start to view those orderly rows of humming TDM switches in a new – and more expensive – light.

— Jim Hodges, Senior Analyst, Heavy Reading

rwhitson 12/5/2012 | 3:29:39 PM
re: Powering Network Transformation This is a forerunner of times to come.

As in the IT world with servers, decreasing power requirements becomes more important from a financial perspective. You only have to look to the run to blade servers and virtualization to see the advent of power reductions as a financial measure.

These savings are substantial and foretell a major change in the telecom industry.

Substantial cost savings will drive the industry to change more quickly to an increasingly IP-based network as the cost savings will subsidize the cost of the technology. Once changed, the ongoing cost savings will contribute to the bottom line.

paolo.franzoi 12/5/2012 | 3:29:39 PM
re: Powering Network Transformation
So, I read this and I think you miss the biggest power problem.

There are two ways to look at it:

1 - Absolute amounts of power
2 - Power per bit per second

In your case with VoIP, this is one of the largest expansions of energy going. It has simply shifted location and responsibility. The consumer now has to pay for the energy to power the POTS port and the DSP engine to echo cancel the line. The consumer has to pay to the power to run the bits per second around at a much higher clock rate. All of this takes a lot more power. On top of that, the number of individual power converters means that there is a substantially larger conversion loss.

I think if you look today you will find a massive increase in the absolute power used. What you will find is that the power to transmit an individual bit per second has declined.

Also, you will find carriers pushing energy costs on consumers and corporations. Any of that really green?

seven
Mostly Harmless 12/5/2012 | 3:29:21 PM
re: Powering Network Transformation Yeah - what brookseven said.

I think this shows how little faith anyone can place in studies like this. I'm not saying the study is wrong - it's more like I don't know which data to trust.

Also, and I know this is a naive question, does the power consumption per MIP (or whatever the appropriate unit is) of CPUs actually fall at the same rate as Moore's Law?

Modern CPUs deliver huge processing power, but only a few years ago (the 486 era??) CPUs did not need a powered CPU cooler fan - a heatsink was good enough. So while the density of CPU power has grown exponentially, it strikes me that the power used per MIP might not be much less if you include all the data.

If that's the case, moving to IP solutions, which are processor-intensive...well, are we really going to see much power saving per "unit of service"? Some of the hosting companines I deal with are warning that they're not able to get enough power into their data centres. Something must be using all those Watts.

This isn't supposed to be a wise ass question - I actually would like to know.
fergussp 12/5/2012 | 3:29:17 PM
re: Powering Network Transformation TDM voice switches use many chips mostly designed at least a decade or two ago. The promise of VoIP has long blocked the business case for new chips there except where essential.
In contrast, IP platforms use mostly chips designed in the last few years.

Not so surprising then, that one silicon technology can beat another from decades earlier. The surprise is that the power saving improvement is only ten times, as mentioned in the article.

Who knows, maybe a modern implementation of a TDM switch would beat VoIP on power consumption? Of course we'll never do the comparison trial.
grunt 12/5/2012 | 3:29:10 PM
re: Powering Network Transformation I concur that it is not apples to apples comparison to look at a legacy POTS terminating switch to a soft switch with a residence powered CPE - however this is not the only savings to be found by upgrading to current gear over a legacy class 5.

There are significant savings just moving from these legacy class 5 switches to newer generation POTS and softswitches.
grunt 12/5/2012 | 3:29:10 PM
re: Powering Network Transformation I concur that it is not apples to apples comparison to look at a legacy POTS terminating switch to a soft switch with a residence powered CPE - however this is not the only savings to be found by upgrading to current gear over a legacy class 5.

There are significant savings just moving from these legacy class 5 switches to newer generation POTS and softswitches.
paolo.franzoi 12/5/2012 | 3:29:10 PM
re: Powering Network Transformation
Again, if you put line bays on the softswitch core the savings would not be 10x but 10%. That is the humor of all of this. The power is in powering the phones. Push that off to the consumer with a VoIP converter (like cable does) and you get big savings.

seven
grunt 12/5/2012 | 3:29:09 PM
re: Powering Network Transformation Power reduction by replacing a 20 to 30 year old switch with modern day equivalents (including CO located POTS) is substantial (in excess of 50%).

Power savings alone does not justify replacement (as HR points out) but it is one of the meaningful variables considered in the complex decision of removing a legacy switch.

The other things you mention are important considerations, but also get more grey and debatable...
grunt 12/5/2012 | 3:29:09 PM
re: Powering Network Transformation Power reduction by replacing a 20 to 30 year old switch with modern day equivalents (including CO located POTS) is substantial (in excess of 50%).

Power savings alone does not justify replacement (as HR points out) but it is one of the meaningful variables considered in the complex decision of removing a legacy switch.

The other things you mention are important considerations, but also get more grey and debatable...
paolo.franzoi 12/5/2012 | 3:29:09 PM
re: Powering Network Transformation
Significant savings in....what?

Opex? Capex? Feature Introduction?

seven
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