navigating complexity - the quest for true ipx
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October 2013
Navigating Complexity: the Quest for True IPX
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Navigating complexity: the quest for true IPXAs the internet moves more and more into the mobile realm, mobile in turn is moving more and more into the era of all-IP networks.
Key findings
Foreword IPX – not just a network to interconnect operators – also a cloud based platform to add new services
IPX connectivity growsThe majority of respondents (56%) say their company is connected to an IPX now – up from one-third in 2011.
LTE roamingLTE isn’t just about internet connectivity. Operators are also looking at new service/revenue opportunities enabled by that all-IP capability.
QoS on the RANFew telco have actually launched QoS on the RAN, and almost half have no plans to.
Future outlookMethodologyAcknowledgments
VoLTEVoLTE – still in the fledgling stage for most players – is being driven mainly by efforts to improve cost efficiency and quality.
LTE: it’s still about speedAlmost half of those surveyed have launched LTE and the key driver, not surprisingly, is higher data speeds.
RCSWhile RCS is commercially ready, operators have been slow to embrace it.
Navigating complexity: the quest for true IPX
0302Navigating complexity: the quest for true IPX
Contents
LTE NETWORkS are growing at an extraor-dinary rate as confirmed by more than 200 network deployments in just three years. Data networks were first deployed in order to promote demand for fledgling mobile data services, but how things have changed! These LTE networks are being rolled out to satisfy a tsunami of mobile data demand. A proliferation of smartphones, an explosion of mobile apps and a savvier mobile user, have all combined to create a shift in sub-scriber expectations towards truly personal and relevant interactions. These factors are all coming together to cause disruption in the telecom industry - for operators and all the companies in their business ecosys-tems. IP is changing the business dynamics, services, network deployments and sub-scriber expectations and IPX is enabling the way operators, networks and services inter-connect.
IPX enables three key aspects for an operator: a seamless roaming experience, scale and services. With a growing number of domestic LTE networks, the next biggest challenge for operators is to enable LTE roaming so that subscribers can take full advantage of the LTE speed and experience while they are on the move internationally. Operators want their subscribers to have a consistently great experience and so they should ensure that their subscribers con-nect to LTE networks instead of falling back to 2G/3G networks when roaming. As our operator ecosystem is moving into an all IP world, SAP Mobile Services is helping solve these challenges. We successfully enabled the first LTE roaming traffic flow between China Mobile, Hong kong and Globe Tel-ecom, Philippines enabling subscribers to enjoy LTE coverage whilst roaming. Over
IPX – not just a network to interconnect operators – also a cloud based platform to add new services
the last couple of years, we have seen the number of operators connected to IPX grow to a critical mass, and large scale IPX inter-connection is now looking more like a reality rather than a possibility.
The other key change with IPX is around peering. IPX peering is an essential develop-ment to expand roaming coverage and cre-ate a seamless LTE roaming environment. The recent LTE roaming Diameter peering agreement between SAP Mobile Services and Etisalat is a step in that direction. It enables us to grow the IPX community, al-lowing subscribers of Etisalat operator com-panies to roam on SAP Mobile Services’ IPX customer networks and vice versa.
As the first IPX service provider to launch cloud-based RCS services over the IPX connection, strategically, we see IPX not just as a network to interconnect op-erators in order to exchange data, signalling and voice traffic, but also as a cloud-based platform to add new services such as VoLTE and RCS. With this cloud-based approach, operators will be able to add new services quicker and at a lower cost.
Since the last global IPX report in 2011, there have been some significant changes in the IPX world. There is much greater clar-ity, activity and interest around IPX. The adoption of IPX has continued apace. As this year’s survey highlights, 57 percent of operators are now connected to an IPX net-work. Not only that, understanding of and expectations from IPX, have progressed too. We’ve essentially moved on from an indus-try trying to understand the basic benefits of IPX such as quality, privacy and security to one that has specific demands and ex-pectations from IPX implementations.
In this 2013 edition of the IPX Survey
“Navigating Complexity: The Quest for True IPX”, the aim was to gain further insights into subjects such as LTE, RCS and VoLTE deployments as well as into focussed topics such as QoS over RAN. Did you know that 30 percent of operators are not planning to launch VoLTE services? And more than half of the operators are going to launch RCS? What does this say for the confidence in VoLTE and RCS? Are these findings in sync with your own opinions? It is questions like these that this report seeks to address.
In order to delve into what the industry is thinking and how they see IPX networks evolving, Telecom Asia independently sur-veyed about 170 respondents from within the telecoms industry. To get to the heart of the business needs of IPX uptake, the report also includes insights from one-to-one dis-cussion with senior executives in this space.
This unique report is not only useful to those working with mobile services and wholesale providers, but also to those work-ing in the telecoms industry as a whole. The report aims to enhance the knowledge base of peers and customers and enable them to build sound strategies around IPX. The re-sults should provide you with a clear direc-tion and critical information, equipping you to drive deployments and revenue, generate new revenue streams, plan for LTE roaming through IPX and maintain competitive ad-vantage in an IP-based world.
John SimsPresidentSAP Mobile Services
Foreword
Introduction
04
AS THE INTERNET moves more and more into the mobile realm, mobile in turn is moving more and more into the era of all-IP networks. Much of this is being driven by the rise of LTE, which is ostensibly an all-IP proposition. More to the point, however, with worldwide mobile data traffic set to increase 13-fold between 2012 and 2017, reaching 11.2 exabytes per month, according to Cisco Systems’ Visual Networking Index, cellcos are under pressure to address data service delivery not only on their own networks, but beyond them via roaming services. Compli-cating the issue is the fact that most cellcos have to support roaming for all-IP services while also supporting legacy voice, SMS and data services at home and abroad.
The mobile industry’s default solution to the problem is IPX (IP Exchange), a concept spearheaded by the GSM Association that promotes common specs for end-to-end IP traffic delivery and quality of service that gives cellcos a cost-effective way to manage LTE services across networks.
When Telecom Asia first researched the topic of IPX in 2011, there was a lot of inter-
est in IPX but comparatively little activity. At that time, the majority of operators were in the planning stages of IPX, with deploy-ments expected in the next one to three years, pending the outcome of trials with partners, and to an extent depending on the progress of LTE rollouts, as many operators saw LTE as the major driver for IPX. Also, there was considerable debate over what counted as “true” IPX.
Things have progressed quite a bit in the last two years, as LTE rollouts have ac-celerated and as a number of IPX providers have arisen to help cellcos connect their LTE roaming traffic quickly without going through the laborious process of bilateral agreements.
In 2013 alone we’ve seen a lot of activ-ity surrounding IPX. In July, for example, PCCW Global launched an HD video calling service for enterprise customers and car-rier partners over its IPX. The month before that, BICS said it had performed the first intercontinental LTE roaming connection over IPX between Europe and Asia after enabling Swisscom’s LTE users to roam to
Navigating complexity: the quest for true IPX
South korea, while Tata Communications and Telecom Italia Sparkle implemented what they billed as the world’s first LTE roaming peering between two IPX provid-ers, enabling both carriers to exchange LTE roaming traffic on their respective IPX plat-forms.
SAP Mobile Services, which enabled the first commercial LTE roaming service between Globe Telecom and China Mobile Hong kong late last year, entered into an IPX peering agreement in August with Etis-alat UAE, the largest operator in the Middle East and Africa, to deliver LTE roaming traf-fic to all of its mobile operators.
Meanwhile, May was a particularly busy month for IPX activity: • The GSMA and i3forum launched a de-
ployment initiative involving live com-mercial pilots for voice traffic over IPX conducted by Deutsche Telekom, Or-ange, Telecom Italia, Telefónica, Telia-Sonera and Vodafone. Both organiza-tions said the pilots will “pave the way for the technical and commercial agree-ments necessary to use IPX to intercon-
• Over half of survey respondents say they are connected to an IPX.
• Many operators are still at least one to three years away from deploying IPX – partly because it’s too soon, and partly because the IPX services market is clut-tered with players sending mixed mes-sages over just what does and doesn’t count as an IPX connection.
• However, a number of operators feel 2013
Key findings
nect any voice services”, and provide “a major stepping stone toward interoper-able communications services such as VoLTE and RCS.”
• AMS-IX Hong Kong (established by Hutchison Global Communications and the Amsterdam Internet Exchange) launched an Inter-IPX service to allow IPX providers to peer IP traffic at the lo-cal level.
• TeliaSonera International Carrier (TSIC) launched its IPX service, with 200 PoPs and support for TSIC roaming and signaling and VoIPX, with LTE signaling services and “a comprehensive suite of additional IPX services” to follow later in 2013.
• Ooredoo in Qatar launched what it said was the first IPX enabled network in the Middle East using Tata Communica-tions’ IPX+ platform. Voice is the first app to be run on the IPX, with signaling, data roaming (GRX and IPX) and LTE roaming on the service roadmap.
will be the year IPX takes off as LTE prolif-erates, demand for roaming support in-creases and new services come online.
• Voice remains the most common ser-vice running over IPX, but other up-and-coming services include SMS, video and GRX.
• It’s still early days for LTE roaming and Diameter signaling, with a majority of operators looking at other options be-
sides IPX to handle LTE roaming.• Many operators see potential value in
VoLTE, and are more likely to use IPX as an interconnect solution but still see VoLTE as a near-future technology.
• Overall, operators have been slow to adopt RCS services, but deployments and trials are happening, and many see it as a potential source of new revenue and a ticket to competing with OTT ser-
vices. However, the key word is “poten-tial” – many operators aren’t yet ready to bank on RCS just yet.
• A number of operators are looking at offering QoS in the RAN for latency-sensitive services like VoIP and video, but almost half of respondents have no plans to implement it, as the technology is too new. And wholesaling RAN QoS to OTT players is, for now, right out.
With the bustle of activity on the IPX front, we decided to revisit the state of IPX in the mobile sector and gauge its progress. To what extent are operators taking advantage of IPX services? What value do they see in IPX? What services are they running on IPX? What services would they like to run on it?
And if they’re not using IPX, what are they waiting for (besides perhaps an LTE license)?
The short answer is: more operators are using IPX – but it’s still early days as opera-tors work out their LTE strategies and try to sort through what is, at the moment, a con-fusing landscape of IPX services.
Introduction 05Navigating complexity: the quest for true IPXNavigating complexity: the quest for true IPX
know claims more than 100 IPX connections because they include ‘IPX ready’ connections, instead of just real IPX connections. Some op-erators in Europe have told me they have 400 IPX connections – because they name all their voice connections as IPX-ready!”
Stone of Two Degrees confirms this is one reason why his company is “in a holding pat-tern” on IPX.
“We signed an SMS hub agreement with someone, and they said, ‘Fantastic, you’re con-nected to our IPX!’ And I said, ‘Well, no we’re not, we’re connected to your SMS hub’. ‘Oh well that’s over our IPX infrastructure!’ I said, ‘Look, let’s not confuse things. I’m connected to your SMS hub via an IP connection. That is a lot different from IPX’.”
Stone explains that it’s a definitional issue. “When I think of an IPX connection, I think of multiple layers of service, rather than a voice connection, an IP connection or an SMS con-nection as a standalone.”
IF yOU ASkED operators two years ago – as we did – if they were using an IPX network, the answer was more likely to be no. Ask the same question today, however, and the answer is more likely to be yes.
Indeed, the majority of respondents to our 2013 survey (56%) said their company is connected to an IPX now. That may not be a landslide in favor of IPX, but it’s a significantly higher number than our 2011 IPX report, which found that only a third of operators were using IPX.
Andrew kwok, president of international and carrier business for Hutchison Global Communications, and chairman of Conexus Mobile Alliance, says that interest in IPX has grown as LTE network deployments have also grown, thus driving greater demand for IPX.
“The industry’s been talking about IPX for over eight years now, but at that time the technology wasn’t mature enough,” he says. “But now, the technology requirement for IP is there, the customer desire is there and the local access network is there, and we’re not going to put that traffic on a traditional plat-form or some internet platform, because we need a higher standard of service quality and a well-defined network to carry different kinds of apps and services.”
kjetil Hanshus, VP of group relations at Telenor Global Services – which is building its IPX infrastructure now – concurs. “It’s been about six years since I first heard about IPX, but only this year am I seeing that it has gained more momentum. More operators are inter-ested now, and it will grow quickly now that there is greater demand for data connectivity, driven by end-user needs and expectations.”
Hanshus also predicts that some regions will naturally grow faster than others – espe-cially Europe. “In Europe, IPX has picked up speed due to LTE kicking off interest in it, and it will probably pass Asia Pacific.”
For those who are connected to an IPX, we wanted to know what services they’re deploy-ing over it.
By far the most popular IPX service re-mains voice (almost 80%) – which is only to be expected since voice was one of the first
It’s also a question of suffi-cient critical-mass coverage, Stone
adds. “The IPX world is about one point for many services, and we
haven’t really seen anyone create the critical mass where we can get
the reach we need from that provider. That’s important to us because once you
transit more than one IPX, you’re effectively doing off-net services. IPX-to-IPX is fine, but when you get three IPXs in the chain, it defeats the purpose of not having direct connectivity.”
Consequently, Two Degrees is “waiting for the IPX market to whittle its way down from the 50-60 people we see now to four, five or six large operators.”
GRX vs IPXkwok says one benchmark for determin-
ing real IPX-readiness is Diameter support. “We can install a DRA for a mobile operator so they don’t have to source their own equipment to connect with us. If you’re not IPX-ready, you cannot offer this. Otherwise you’re just offer-ing pure IP transport.”
The interest in running GRX traffic over IPX is significant because most operators expect to be running LTE side by side with HSPA/W-CDMA/EDGE traffic for quite some time – and that is contributing to the confusion over what counts as an IPX, because some operators want to connect to GRX hubs and do IP inter-
IPX connectivity growsservices deployed over IPX in its early days. Indeed, our 2011 IPX survey found that around the same percentage of respondents at that time was mainly running voice over their IPX network.
Voice still dominates IPXHowever, a number of other services are
fast catching up as IPX becomes more preva-lent. The second most popular service is SMS (45.5%), with video a close third (42%), and GRX in the No. 4 slot (almost 41%).
Interestingly, our follow-up interviews re-veal that many operators do have very specific requirements based on market expectations, and IPX service providers are responding to those demands. For example, kwok says that in addition to services like signaling, data roaming (mainly LTE), VoIP (VoLTE) and bilat-eral IP transport, HGC’s IPX service also sup-ports BlackBerry.
“That’s a service you won’t find in the GSMA’s recommendations for IPX services, but we put it there because there’s demand for BlackBerry roaming,” says kwok. “We take a market-oriented approach to IPX. If my cus-tomer is pushing me to do this, I will bend over backward to achieve that.”
A spokesperson for Telefonica Global Ser-vices – which has already rolled out its own IPX network – says that its catalog of services “is not huge, since as yet there are not that many commercial interconnection deals that use the IPX hubs.” However, he adds, “We have tested RCS, VoIP and videoconferencing on our IPX. We expect to see more activity in this space toward the end of 2013 and begin to build in 2014.”
Telenor’s Hanshus says that the carrier already has an SMS platform on its IPX and of-fers SS7 signaling service, and will migrate all its services onto IPX, including data roaming, voice, and even international administration services. “It is wise to connect our data cent-ers.”
Hanshus also says Telenor Global Services will interconnect with other carriers and fixed-line platforms.”
For operators that haven’t started LTE
connect there rather than commit to a direct IPX connection, says Bell of Telstra Global.
“That’s what a number of other people are doing – IP-enabling their GRX,” he says. “In es-sence you could define that as an IPX because you’re bringing virtual IP into the exchange. But when they did that, they were only get-ting 40-50 kbps connection speeds. And we showed them that when you connect on a na-tive IPX backbone that can distinguish differ-ent traffic types so you can protect high-value services for the operator, you can get around 10-12 Mbps.”
Bell says that GRX is okay for operators that don’t have all that much data traffic. “But if roaming is a big source of revenue for you, you don’t want your customers getting 40-50 kbps connections that are so slow that they stop roaming and switch to Wi-Fi, because then you’ve lost that revenue stream.”
That’s key, he says, because roaming traf-fic for many cellcos will be a mix of IPX and GRX traffic, in which case traffic differentiation becomes even more critical.
“Whereas it’s more difficult for a GRX to go up to IPX, it’s much easier for an IPX connec-tion to also support GRX,” Bell explains. “We can create dedicated tunnels for GRX connec-tions, and the operators that aren’t ready for IPX per se can get an IPX connection so they can test it, and run their GRX traffic on it in the meantime.”
Source: Telecom Asia/TelecomsEMEA
Figure 1
Has your company connected to any IPX networks?
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services yet, answers vary depending on lo-cal market needs. For example, Colin Stone, wholesale and interconnect manager for New Zealand’s Two Degrees Mobile – says voice isn’t of much interest because his company is primarily a mobile broadband access provider.
“We run a very small voice trading busi-ness, and moving that to an IPX takes away that arbitrage opportunity because of the direct connectivity you get,” he explains. “So we’ll be looking at moving our GRX, LTE roam-ing, SMS, MMS and maybe voice.”
Market confusionFor the operators that haven’t yet con-
nected to IPX, we asked them when they plan to do so. The most common response was “one to three years” (48.6%), with another 15% planning to wait even longer (four to five years). A little over 12% said they will connect to IPX this year. Almost a quarter said “never”.
Interestingly, our follow-up interviews shed quite a bit of light on the reasons that operators are holding back on IPX. For a start, many are still in the evaluation stage, such as du, based in Dubai, which tentatively plans to integrate with IPX networks and hubs after its DRA (Diameter routing agent) deployment, says Saleem Al Balooshi, du’s EVP of network development and operations. ”We are cur-rently evaluating multiple IPX networks as part of our LTE data roaming project and expect to offer this by Q1 2014.”
Even more telling, however, is the reason many operators give for still being in the evalu-ation stage – the IPX market is too cluttered and even baffling.
“At the moment there’s utter confusion,” admits Nathan Bell, head of marketing, port-folio and pricing at Telstra Global. “There are so many interpretations of what is an IPX, because the term tends to be rather loosely used. As a result, the experience with IPX right now is similar to the early days of online order-ing where you order something off the internet and when it arrives, it’s either not the color you expected or requires more assembly than you thought.”
kwok of HGC agrees. “One operator I
IPX connectivity grows
Figure 1.2Figure 1.1
If yes, what services have you deployed through IPX?
If no, when do you plan to connect through IPX?
Navigating complexity: the quest for true IPXNavigating complexity: the quest for true IPX
kwok agrees, saying that GRX providers that upgrade to IPX platforms will find it dif-ficult to keep up with LTE data demand com-pared to facilities-based IPX service providers.
The second shortcoming, he says, is the ability to support mission critical apps that de-mand high reliability and low latency. “I don’t think GRX operators have the ability to control that.”
Bell says that testing will help operators build up the experience and awareness of IPX. “Right now the key thing is to get operators to start testing it, experiencing it for themselves and showing them what they can do with it – ideally without an upfront commitment to it, so they get comfortable with it.”
Benefits: privacy, security, QoS
An important consideration in looking at the state of the IPX market is what operators think they’re getting (or will get) out of IPX. We asked operators to rank the top benefits by im-portance (i.e. most important, important, not important).
By far the highest ranked benefit was “pri-vate and secure network” – a point echoed by Fatiha el Afghani, head of VoIP and IP conver-gence for Orange’s international carrier divi-sion, in a follow-up interview.
“IPX is not the answer to everything, but it does address the need for quality and security in the IP world,” she says. “IPX is the answer to providing value-added services that operators need. There is always the public web for people who don’t care about or need security.”
A distant but strong second for “most important” was “support for different com-mercial models”, reflecting the fact that LTE operators are still trying to work out their op-timal business model for LTE-based services beyond the usual voice/data packages.
For the “important” category, LTE roaming was the top pick, as well as “support for differ-ent operational models”.
What’s not important? Commercial trans-parency and connection consolidation, though that depends who you ask. Stone of Two De-grees says that the ability to reach many differ-ent operators via one connection “is important to us, because we are a small company and don’t want to have 200 connections – we try to operate on four or five.”
Stone also emphasized QoS as a major
LTE isn’t just about internet connectivity. Operators are also looking at new service/revenue opportunities enabled by that all-IP capability. So we asked respondents about their various plans for LTE-related services.
benefit of IPX. “A key benefit we’re looking for is one point, many services, so theoretically we get a capacity decrease on our international, and the QoS depending on the service can be managed on that one point,” he says. “Also having QoS is extremely important to us in looking for a provider – how good are they with working with multiple customers, skillsets in terms of ease of deployment, and so on.”
Indeed, QoS is a recurring theme in the fol-low-up interviews. Telefonica Global Services tells us that “clearly the possibility of ensuring end-to-end quality of service in the IP connec-tion is the main benefit,” as well as hubbing benefits to make connections easier.
Byungki Oh, VP of business collaboration at the Group Corporate Center for kT, names “QoS guarantees and interconnection with multiple operators” as his top benefits of IPX.
For Alex king, general manager for IR, corporate messaging and premium services at Telstra, “greater control over quality” is a longer-term benefit, whereas “operational cost savings is the biggest benefit we see in the short term.”
ONE OF THE big questions for mobile op-erators for both LTE in general and IPX in particular is LTE roaming, as roaming is a significant cash cow for the operator busi-ness. We asked operators to tell us their roadmaps for launching LTE roaming once their LTE services are up and running.
(Note: for each of the questions our survey asked regarding LTE roaming, close to half of respondents told us they hadn’t launched LTE roaming yet. So the results in the following section should be read with that caveat in mind.)
In terms of readiness, around a third of respondents say they’re commercially ready to offer LTE roaming, and can do so at launch. Another 23% say they can launch LTE roaming within a year of launching LTE, while another 10% say it will take over one year.
Telefonica Global Services tells us that although it is carrying out a number of pilots for LTE roaming, “it’s currently still too early to offer this type of roaming”. Telefonica expects its first LTE roaming commercial agreements to be up and running at the end
LTE roaming
Nitipong Boon-long, VP and head of the in-ternational business department at Thai cellco DTAC, listed “ease of manage, cost improve-ment and guaranteed roaming quality”. He also noted that there could also be real benefits in content peering, “but I don’t see any operators viewing IPX as content exchange platform yet.”
Telenor’s Hanshus says that service level agreements are a key driver as well. “For us, the driver is being able to manage and control our services on a single platform rather than lots of interconnected platforms. We can of-fer SLAs. We also plan to offer services on the doorstep of business units – we can offer them end-to-end SLAs.”
Al Balooshi at du puts “guaranteed end-to-end QoS between operators” at the top of a list of IPX benefits, as well as a single point from which to connect to them all. Other benefits cited by du include reduced time-to-market for all LTE and IMS-based services, reduced opex, secure connectivity with roaming part-ners, flexibility in Diameter signaling routing options, and guaranteed Diameter signaling interoperability.
IPX connectivity grows 0908
Once you deploy LTE, when will you offer LTE roaming?
Main benefits of IPX interconnections
Figure 3
Figure 2
What percentage of your LTE roaming destinations are connected via Diameter hub?
Figure 4
Source: Telecom Asia/TelecomsEMEA
Source: Telecom Asia/TelecomsEMEA
of this year, and will see “a clear ramp up of LTE roaming activities” in 2014.”
One key point raised in follow-up inter-views is that operator plans for LTE roam-ing are in some cases determined by the business ecosystem in which they operate – particularly for cellcos that are part of a bigger telecoms conglomerate.
For example, Telstra has enabled LTE roaming with just one carrier to date – its Hong kong subsidiary CSL – and uses the IPX of Telstra’s international arm, Telstra Global, for that purpose.
Then there’s Telenor Group, which owns multiple LTE licenses covering Denmark, the Nordics, Montenegro and soon one in Asia Pacific (Myanmar), all of which will rely on Telenor Global Services for LTE roaming.
“We will be a global partner for these op-erations, and we will launch Diameter rout-ing, and also peering, that all of Telenor will use,” says Hanshus.
Hanshus says the carrier plans to start offering Diameter and peering services later this year, and will ramp availability as neces-sary. “In the Nordics, we aim to have those
Navigating complexity: the quest for true IPXNavigating complexity: the quest for true IPX
services in place by next summer.” Meanwhile, Orange says it is still in the
trial stage of LTE roaming, but has set no dates for when it will launch LTE roaming services. Fatiha el Afghani says that the car-rier is trialing LTE roaming and data signal-ing at an international wholesale level, but points out that LTE roaming is a complicat-ed undertaking, starting with the fact that it uses the new Diameter protocol.
“Operators need to adapt their equip-ment at the interconnection level to be able to support it,” she says.
The other complication is that, in the longer term, LTE roaming has to support more than just data connections, says yves Bellego, Orange’s director of European net-works (strategy & spectrum).
“In the future, there will be voice roam-ing and VoIP roaming. LTE roaming offer-ings typically offer no VoIP, and use circuit-switched fallback to handle voice roaming to ensure voice connectivity,” Bellego says. “It will take time to support VoLTE, but it’s a bit premature in existing networks.”
answer: not that much. Just over 21% said less than half of their roaming destinations were connected via Diameter, and 18% said none of them were. Only 7.5% said they were using a Diameter hub for all LTE roaming destinations.
Diameter hub usageThat includes kT, according to Oh. “Of
the eight operators with whom we provide LTE roaming service, all of them are con-nected via Diameter hub,” he says. “Diam-eter hub is installed on the edge of kT’s network for Diameter signal connection be-tween operators.”
By contrast, “less than 1%” of Telstra’s LTE roaming destinations are via Diameter hub, says king.
The results do reflect upon the fact that it’s still early days for LTE roaming, and that LTE roaming itself is complicated by issues such as coverage and fallback capabilities, observes kwok of HGC.
1110LTE roaming
However, adds, Philippe Lucas, VP of standardization and eco-system develop-ment at Orange, it’s not essential to offer VoLTE roaming right away, “as we have cir-cuit switched fallback”, and in any case there won’t be large developments for VoLTE roaming support in any region until at least sometime next year, when enough opera-tors have deployed VoLTE at home.
“The home operator must have VoLTE – it will take time for any Orange opera-tion to deploy it,” he says. “Also, even if the home operator has VoLTE, it doesn’t mean the destination operator is supporting it for roaming.”
Hanshus agrees that LTE data roam-ing will be the main driver in the immediate future. “VoLTE will be an add-on using the same infrastructure, so not the main driver for us.”
(We will cover operator views on VoLTE more in-depth in the next section.)
We also asked operators to tell us what percentage of their roaming destinations are connected via a Diameter hub. The
“Some LTE networks only have maybe 30 cell sites in the country, so
they’re not going to have LTE roaming yet,” kwok says.
Hanshus says Telenor Global Services is still in the process of implementing di-ameter hubbing. “All Telenor business units will be connected over time, based on which units need it most.”
Orange’s Lucas also points out that de-ploying an all-new roaming protocol is a sig-nificant undertaking in itself.
“SS7 has been used for 20 years, so it’s quite a challenge to move to a completely new protocol,” he says. “We have to ensure that there are no issues and that security is done right. That may delay it a bit, to ensure the technical competence is there. Experi-ence is building all the time. But I’m confi-dent we’ll have something on a large scale pretty soon.”
One of the issues LTE operators face when setting up roaming agreements with hubs is reach – how many destinations can the hub connect you to? Consequently, how many hubs would it take to get you connect-ed to the places your users want to roam?
We asked operators how many hub pro-viders they use to enable LTE roaming, and we received a healthy mix of responses. The most common response (18%) was one pri-mary and one secondary hub, but over 11% said they use only a primary hub, 9% said they use two to three hubs, and almost 13% said they use more than three.
IPX vs bilateralNitipong says that once DTAC acquires
an LTE license, it will look to a multiple-hub option to establish roaming coverage quickly. “Most likely we would just have an amendment to existing roaming agreement
Source: Telecom Asia/TelecomsEMEA
How many hub providers do you use to enable LTE roaming?
How will you run LTE roaming?
Figure 5
Figure 6
and use a few roaming hub providers to get fast coverage.”
This being an IPX survey, of course we asked operators to tell us their preference for running their LTE roaming – via QoS enabled by an IPX network, bilateral agree-ments, or some other method? And the re-sults suggest that IPX is not the most popu-lar choice overall.
To be sure, over 44% of respondents said they would run LTE roaming via an IPX network. Oh says kT uses IPX for its LTE roaming service. Telstra’s king says likewise
(although, as mentioned above, the com-pany uses its own IPX run by Telstra Global).
But 28.6% said they would go with bilat-eral agreements, and another 27% said they would use “another network”, which puts IPX in the minority – at least for now.
Still, cellcos that haven’t yet launched LTE are decidedly looking at IPX seriously. “To do outbound roaming, we will have to look at IPX providers, and that’s on our to-do list for later this year,” says Stone of Two Degrees Mobile, which is planning to launch LTE in the first half of next year.
LTE roaming
Navigating complexity: the quest for true IPX
WITH VOICE BEING a popular service for IPX, and with VoLTE now popping up as a commercial offering in LTE networks, we asked operators about their own VoLTE plans.
Unsurprisingly, VoLTE is still in the fledgling stage for most players. Almost 46% said they are planning to launch VoLTE, but haven’t done so yet, and less than 4% have actually launched VoLTE already. An-other 4.5% say they’re just about to do so, and 16.6% are still in the build or test phase. Notably, almost 30% say they have no plans at all to launch VoLTE.
The main motivators for launching LTE are fairly evenly divided between cost effi-ciency (46.6%) and voice quality (44.4%). “Avoiding CS fallback” was only cited by 9% of respondents, which makes sense when remembering that until LTE networks achieve 100% coverage in enough markets,
VoLTE
Source: Telecom Asia/TelecomsEMEA
Do you plan to launch VoLTE? What is the main driver of VoLTE?
Figure 7 Figure 8
avoiding CS fallback is going to be next to impossible anyway.
The follow-up interviews reveal a variety of opinions about the need for VoLTE.
Telefonica Global Services says VoLTE’s value lay in the “increase in quality in terms of reduced setup times, audio quality with the possibility of wider codecs, and the pos-sibility of implementing voice with more ser-vices such as video or RCS.”
Du’s Al Balooshi also emphasizes qual-ity and efficiencies. “VoLTE will provide bet-ter customer experience with shorter call setup time and high-quality voice. It also requires lower bandwidth, which will result in savings on RF spectrum compared with 3G and 2G.”
Nitipong of DTAC sees VoLTE as a re-sponse to OTT voice services eating into traditional voice revenue. So does kT’s Oh.
“The main drivers we see for VoLTE are
to provide innovative communication ser-vices with better quality and features and provide differentiated services against OTTs’ VoIP services,” Oh says.
However, king of Telstra isn’t so sure about the need for VoLTE, at least for the immediate future. “Given 3G equivalent cov-erage and CS fallback, deployment of VoLTE and an associated business case/model remains questionable in the short term,” he says.
kwok of HGC says that he initially didn’t see the drivers for running voice on IPX at first, at least for operators that already have TDM support for voice and can drop down to 3G. But he says that there is a definite case for running VoLTE on IPX because it com-bines high-quality voice with network QoS.
“If you really want just high-quality voice, you can find apps that can do that already, most of them free – Viber, WeChat, etc. But
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Source: Telecom Asia/TelecomsEMEA
As you consider VoLTE, how will you manage interconnects?
What is or will be your commercial model as you move to VoLTE?
Figure 9 Figure 10
LTE: it’s still about speedTwo yEars ago, many operators felt that the status of IPX would arguably depend on the status of LTE. However, that hasn’t been entirely the case in practice, says Fatiha el afghani, head of VoIP and IP convergence for the international carrier division of orange.
“IPX is a reality today, even before LTE deployments”, she says, and points to orange’s multiservice IPX services as evidence. “we launched in april 2012 and have around 130 customers. IPX helps prepare for LTE and other networks, and ensures edge-to-edge quality of service for services like voice and grX signaling, and now it can do the same for LTE.”
Even so, for the purposes of this report, we took the opportunity to ask cellcos about their LTE status to put current IPX activity in the context of all-IP mobile broadband rollouts.
a little under half of respondents (46.4%) reported they have already launched LTE. another 28% plan to launch LTE sometime in the next two to three years, though to put that in perspective, 10% intend to launch LTE before the end of this year. Just over a quarter said they have no plans to launch LTE at all, though it’s worth remembering that (1) some of the respondents to our survey are not cellular operators (see our Methodology section at the end of this report) and (2) some of those that are cellular operators don’t yet have LTE licenses from their respective regulators.
we also asked operators what they see as the top driver for LTE adoption. and for the most part, it’s still about the speed. Close to 60% of respondents named “higher data speed” as the top driver. That number suggests that for all the industry advice about focusing more on Qos and new service possibilities, operators are still fixated primarily on LTE’s boosted data throughput – which is an easy sell in this data-hungry age.
still, that’s not the only thing they’re interested in. almost a third also named “new services” as their top driver. so, many operators do see opportunities to take LTE beyond its obvious potential as a speed booster.
also notable is the fact that few operators see LTE in itself as a competitive differentiator – less than 5% named “follow or beat the competition” as a top driver.
and why not? when everyone is moving to LTE sooner or later, the technology itself isn’t much of a competitive advantage. also, cellcos don’t see LTE as a way to counter the threat of oTT players, according to our survey. If nothing else, LTE is enabling them.
Figure 11
Source: Telecom Asia/TelecomsEMEA
What is the top driver of LTE?
you’re putting VoLTE on top of IPX for highly differentiated service quality,” he explains. “Future LTE handsets will be encrypted for noise cancellation, and people talk about high-end voice with full duplex capabilities. So I do think there’s a chance to rescue the voice business beyond just offering VoLTE as a service differentiator.”
We also asked operators how they plan to manage their VoLTE interconnects. The majority (almost 61%) plan to rely on IPX, with the remainder using whatever inter-connect management they already have in place (to include legacy TDM).
We also asked operators what com-mercial model they have in mind for VoLTE. A slim majority (55%) plan to leverage IPX transparency for termination rates and transit rates, but the rest plan to stick to tra-ditional pricing models.
Navigating complexity: the quest for true IPXNavigating complexity: the quest for true IPX
RCSDo you have plans to deploy Rich Communications Suite (RCS)?
Figure 12
What do you see as the main driver for RCS?
Figure 13
Source: Telecom Asia/TelecomsEMEA
ANOTHER HOT TOPIC in the LTE services space is Rich Communications Suite (RCS), as industry groups like the GSM Association lobby for adoption of RCS as a competi-tive necessity for cellcos looking for a way to keep up with OTT services that are oth-erwise hurting their cash cows of voice and SMS.
To be sure, RCS is already a commercial reality. In Asia Pacific, KT, SK Telecom and LG U+ launched “joyn” RCS services in De-cember 2012. In Europe, Vodafone, Orange and Telefonica (Movistar) all launched joyn in Spain last year. Orange also launched joyn in France this past June, with plans to launch it in Orange’s remaining European markets throughout 2013 and 2014. Tel-efonica says Germany is next on its RCS rollout list as we went to press. Germany already has RCS services via Vodafone Ger-many and Deutsche Telekom. And in the US, MetroPCS launched joyn late last year.
Overall, however, opera-tors have been slow to em-
brace RCS, as our survey reflects. Less than 7% of respondents say they have launched RCS, and while another 13% say they will launch RCS later this year, close to a third say they won’t launch RCS for at least an-other year. And just over 48% say they have no intention of launching RCS services, pe-riod.
For those who are already running RCS or plan to do so, half are backing the new RCS-e version. The other half are going with the older RCS 5.x. Also, close to 60% plan to run hosted RCS.
Fighting off OTTsIn terms of motivations, the majority
of respondents (around 70%) see new rev-enue streams as the main driver for adopt-ing RCS. The other 30% see RCS as a way to fend off OTT competition. Interestingly, however, in our follow-up interviews, opera-tors spent more time talking about the latter than the former.
“We launched joyn to provide innova-tive communication services and compete
against OTTs,” says Oh of kT. For example, he says, “The most unique feature is inte-gration of RCS and text messaging [SMS and MMS] in a single UI that automatically sends messages in an appropriate format – RCS to RCS recipients, and SMS/MMS to non-RCS recipients.”
Joyn also supports higher capacity file sharing, he adds: “up to 100MB per mes-sage, compared to 20MB from other OTT messengers. And it provides strengthened security based on carrier-grade network quality of service.”
Bellego of Orange takes a macro view of RCS’s capabilities to explain how it will help cellcos on the OTT front. “Joyn will deliver an enriched communication experience for customers by bringing together the servic-es that customers are already familiar with – voice calls, messaging, accessing music, photos and files and so on,” he explains.
“Initially for example, it will allow cus-tomers to share videos, music and files while chatting on the phone or while they are mes-saging, either one to one or with many.”
But the longer-term vision, Bellego adds, “is that joyn will become the core communications platform for our IP net-works, including LTE voice and video experi-ence over IP. We are also opening the RCS/joyn framework to allow developers to build other rich services.”
That, Bellego insists, will help operators distinguish themselves from OTT messag-ing services that are neither interoperable nor as multifaceted as joyn. “This will help us protect revenues as well as engender loy-alty among our customer base.”
Nitipong of DTAC isn’t quite as con-vinced. “We’re looking into it, but I’m not sure whether RCS will really help to com-pete with OTT or not.”
kwok of HGC/Conexus also takes a more cautious tone, saying RCS is a tricky proposition for operators precisely because
15RCS
14
it offers them a chance to compete with OTT players – and cellcos don’t exactly have a great track record on that front.
“When a traditional mobile operator launches an OTT service, compared to a pure-play OTT, they normally fail, and they fail ugly,” kwok says. “Only the pure-play OTT can be successful, because the mobile operator can’t help thinking about what the OTT service is going to do to its traditional SMS revenue, which is dying. If I launch this or launch that, what will its impact be on my existing revenue?”
RCS comes with similar challenges, he says. “It’s tough as a revenue proposition because OTT players offer their services for free. To ask customers to pay for RCS is dif-ficult in that situation, but operators don’t want to give away services for free.”
Stone of Two Degrees concurs. “It does come up in conversation around LTE and IPX and whether we should be looking at more integrated RCS products and servic-es. But it’s not high on the agenda because when we look at it in terms of our three-year roadmap, it’s one of those things that no one can put a true monetary value on. So it gets pushed further down the product roadmap in favor of other things where revenues are… well, not guaranteed, but they have higher EBIT numbers associated with them.”
Stone also agrees that telcos in general need a little more convincing that RCS will be worth the effort to roll out. “I think it’s seen more as a future product. Telcos historically have been concerned about change, worried about over-the-top and bastardization of current revenues. It’s harder to make a dol-lar now than it used to be, and I think there’s a little bit of skepticism over how much new revenue RCS can really bring versus the movement away from current products and services in an RCS-type environment.”
kwok says Hutchison is interested in RCS and testing it, but doesn’t see it as an
Navigating complexity: the quest for true IPXNavigating complexity: the quest for true IPX
exclusive alternative to the option of part-nering with OTT players. “We also have ini-tiatives to talk with the big OTT players and try to cooperate with them instead of relying solely on a mobile carrier launch of this kind of VAS.”
Telenor’s Hanshus says, “As a carrier we will look into RCS. We will closely moni-tor operator demand, but have no specific plans beyond offering connectivity where needed.”
He adds that support for RCS will of course be market-driven. “It could all change tomorrow.”
Looking toward videoThere’s also interest in using RCS for
video services, at least from 54% of the op-erators we asked. As for what kind of video they’re interested in, it’s a fairly broad mix. Premium video content was the most popu-lar single category (30%), but there was also support for video messaging (27%), video broadcast (23%) and distribution (20%).
Oh says that kT’s joyn service already supports video sharing during voice calls, as well as HD-voice/HD-video call integration.
Some operators aren’t waiting for RCS to launch video-based services. Du – which has not yet launched RCS but plans to do so as part of its IMS RFP, possibly later this year – already offers video calls for mobile users, and several video conferencing solutions for enterprise customers, says Al Baloosh.
Kwok says that high-definition vide-oconferencing (HDVC) is on his IPX service roadmap, but isn’t putting a lot of hope in apps like video telephony. “Even with 3G, the capability and capacity was there for video calls, but for whatever reason people didn’t want the other person to see them on mobile.”
However, he adds, “I do have the hope that video content providers will give me more traffic and business.”
Source: Telecom Asia/TelecomsEMEA
For which services have you or would you introduce QoS on the RAN?
Figure 15QoS on the RANFINALLy, we also asked operators to give us their thoughts on launching services with QoS on their radio access network (RAN). Currently, few have actually done so (only 17%), and while 36% say they plan to do so “soon”, 47% say they have no plans at all.
Fatiha el Afghani of Orange says that cellcos “have new opportu-nities regarding radio, and minimizing the flaws, but nothing is really defined. LTE is new, so everyone has to develop expertise together.”
kwok at HGC agrees. “We haven’t seen any big discussions sur-rounding that. It’s not very mature yet.”
Bellego of Orange points out that QoS in the RAN is just one piece of a more complex QoS puzzle. “you need to have QoS on the service part, which can then be extended to other services, and you must also have it at the interconnection point level – from access to core to interconnection/IPX with other operators.”
As for what services operators are prioritizing on the RAN, voice and video are at the top of the list (at 70% and 60%, respectively). HD voice also ranks fairly high at 54.5%.
“At the moment, we’re focused on services that are intolerant to time delay such as voice and video,” says king of Telstra.
Lucas of Orange says that the focus for QoS with LTE should start with real-time services, VoLTE and data. “Then you go deeper, for example video for interpersonal communications, which is an ex-tension of voice, video for streaming and so on.”
Gaming, interestingly, rates pretty low in terms of QoS at the mo-ment (18%). While a good gaming experience does depend on low latency and QoS, not all games come with that requirement, whereas both voice and streaming video generally need acceptable QoS in any situation.
Another question we asked is whether operators would be inter-ested in leasing that QoS RAN capability out to third parties, i.e. OTT players. The response was a pretty firm “no” from well over 80% of respondents.
Do you have plans to offer video services beyond RCS?
If yes, indicate those you’re most interested in:
Figure 14
Figure 14.1
Source: Telecom Asia/TelecomsEMEA
1716 RCS
Navigating complexity: the quest for true IPXNavigating complexity: the quest for true IPX
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OUR IPX SURVEy collected data via an online survey open to telcos across the world, as well as follow-up interviews with operator ex-ecutives.
The 170 respondents to our survey were employed in a wide spectrum of telecoms sectors, including wireless (26%), integrated (22.4%), wholesale (17.6%), wire-line (12%) and “other” (the re-mainder).
Similarly, respondents came in a variety of sizes, from 1-10 mil-lion subscribers (20.6%) and 10-50 million (18%) to as small as less than a million subscribers (also 18%), with almost 8% sporting over 100 million subscribers.
By region, 41% of those surveyed are based in Asia Pacific, 34% in the Americas, 20% in Europe and 5% in the Middle East & Africa.
18
Methodology
AcknowledgmentsFatiha el Afghani, head of VoIP and IP convergence for international carrier division, Orange, ParisSaleem Al Balooshi, EVP of network development and operations, duNathan Bell, head of marketing, portfolio and pricing, Telstra GlobalYves Bellego, director of European networks (strategy & spectrum), Orange, ParisNitipong Boon-long, VP and head of the international business department, DTAC Kjetil Hanshus, VP of group relations, Telenor Global ServicesAlex King, general manager for IR, corporate messaging and premium services, TelstraAndrew Kwok, president of international and carrier business, Hutchison Global Communications, and chairman of Conexus Mobile Alliance Philippe Lucas, VP of standardization and eco-system development, Orange, ParisByungki Oh, VP of business collaboration at Group Corporate Center, kTColin Stone, wholesale and interconnect manager, Two Degrees Mobile Telefonica Global Services, Madrid
Future outlookAS LTE NETWORkS spread and demand for high-speed data ser-vices continues to expand rapidly, IPX deployments have accelerat-ed. The IPX market has evolved significantly over the last two years, which is reflected in our survey that shows a majority of respondents (56%) are now connected to an IPX network compared to only 30% two years ago.
We also found a higher level of clarity among operators about the perceived benefits of moving to IPX. Top of the list is a private managed and secure network, followed by support for different commercial models, support for LTE roaming as well as lower costs. Most operators have developed specific requirements and expecta-tions for IPX.
But as the markets and network deployments continue to evolve, so have the definition and complexity of the role that IPX plays. There are different points of view on what it is to be “IPX-ready” vs having a true IPX connection. Besides differences in terminology, some telcos are still in the evaluation stage because they feel the IPX market is cluttered and are waiting for consolidation and more clarity.
Despite these obstacles, the industry is definitely leaning toward
one connection for multiple (if not all) services to both simplify inter-connectivity and reduce costs. Voice of course is by far the dominant service running through IPX, with 80% of those that have connected to an IPX network running voice. But a wide range of other services is now also being connected via IPX, including SMS, video and Diam-eter signaling.
The IP nature of LTE means that IPX will pretty much be required for LTE roaming and interconnect (almost half of those surveyed said they will run LTE roaming over an IPX network). And although just 19% of operators currently connect all their roaming destina-tions via Diameter hub, that is likely to increase sharply as many in the industry say Diameter is necessary to quickly and cost-effective-ly scale and rebuild connections with roaming partners.
How each service is deployed over IPX varies and is still open for discussion. But the medium-term outlook is indeed bright, with half of those that haven’t yet connected to an IPX network planning to make the move over the next one to three years. That growth will be driven by the 53% of telcos that have yet to deploy LTE as well as the 46% of operators that are planning but haven’t launched VoLTE.
Navigating complexity: the quest for true IPX