Mobile Europe:
Ron, we are back from Barcelona now, and the Mobile World Congress, how would you sum up the mood of the mobile industry given what you saw and heard at the event?
Ronald de Lange:
Customers I met are focusing on their immediate needs, such as how to meet the recent heavy increase in traffic growth, as well as exploiting new revenue opportunities. There’s no doubt that the vast majority are being very pragmatic about 2009, and intend to focus their spending on the things they need to accomplish, versus a “build it and they will come” mentality.
Mobile Europe:
Within that focus, were there any topics that your customers were most interested in?
Ronald de Lange:
LTE is certainly the main topic at the moment, which is good news for Tekelec – because we are central to operators’ business plans as they move towards IP networks. We also continue to see a strong demand for text messaging, which is generating increases in traffic and is a good example of how continuing support for existing applications, as well as future uses of SMS, are very important right now. But in all areas, operators are looking to become more efficient in utilising existing resources, to make sure they are leveraging their investments as best they can and making efficient use of capital.
In this area we are working with customers who are either looking to drive new services to grow revenues, or have a very compelling cost reduction business case. And that cost reduction can either be in capex or opex.
There was a great deal of interest in Barcelona in our middleware and signaling platform, the EAGLE XG. The EAGLE XG platform supports a converged subscriber routing database and multiple signaling protocols – including SIP and SIGTRAN – enabling operators to run multiple applications in a hybrid network operating environment. This architecture gives operators the flexibility and scalability to meet subscriber growth and evolving customer needs, along with the ability to keep tight control of their opex and capex.
Mobile Europe:
How does your knowledge of, and expertise in, the signaling layer help operators meet these challenges?
Ronald de Lange:
One of the key areas where operators can reduce their opex is creating a signaling layer that centralises all of the network routing data across all network elements. By centralising this information into a signaling layer, they can significantly reduce the amount of network elements they need to engineer, as well as cut down on their OSS/BSS system overhead. We can help our customers take advantage of this efficiency and find new ways of leveraging the signaling control layer. For instance, through advanced routing and load balancing, we can help them generate revenues more efficiently, and that translates into capex and opex savings.
Mobile Europe:
Will operators have to evolve to IMS and IP signaling architectures if they want to remain competitive?
Ronald de Lange:
It’s important to remember that no two networks are the same. But there is no doubt that next-generation networks will see operators migrate to SIP, perhaps a variant that may or may not include SS7 messages embedded inside of it. The goal is to ensure that the transition is efficient and cost-effective whether they introduce IMS as an overlay or add-on.
Technologies come in far faster than operators can remove them, so there’s no doubt that operators are going to have to support multiple generations of network technologies simultaneously. The challenge and opportunity is to help integrate new technologies without breaking the bank on capex or opex, but also to give the end users the seamless experience that they expect.
What this means, and I’m encouraged to see it, is that CTOs are talking about the need to adopt and embrace open standards and open platforms so they can reduce their costs and improve their responsiveness to customer needs. That gives operators the opportunity to take advantage of new services without having to re-engineer their networks.
We use off-the-shelf Linux servers and ACTA servers that run Linux, providing a server platform that can reside in an IT or central office, whether on a blade or rack-mounted server. That means we can offer the option appropriate to the networks at the cost that they need.
For networks in transition, we see that uniformity of standards, along with the middleware capabilities we have, as really being the new big initiative.
Mobile Europe:
The major network equipment vendors are all talking the same game, so what gives Tekelec the advantage?
Ronald de Lange:
What makes us different is our unique focus on the signaling layer. It’s our core competency, and we invest heavily to be the market leader. We do this by having a substantially different product portfolio for the signaling layer. We don’t play in the radio access or application server spaces because our focus is on the signaling layer.
Our understanding of the intelligence and flexibility of the signaling layer enables operators to deliver incremental, or completely new, services into their networks. Signaling opens up those opportunities. For instance, it’s the signaling layer that provides the APIs to either the service provider’s own products or to a third-party provider. It’s the signaling layer where network and user profile information comes together and gets exchanged, providing a hub that will let operators cost-efficiently drive new services, and revenues from those services.
Mobile Europe:
Can you give an example of that?
Ronald de Lange:
By giving the application layer access to the customer and network meta data, we can enhance the customer experience by giving operators and their partners access to information that they can leverage in terms of their services. It could be something like inserting text advertisements into a message, in a relevant and targeted way.
Here our approach differs from that of the SMSC vendors because we disaggregate the functions of the SMSC into functional components. This makes the SMS network more efficient and provides not only a traditional SMS interface, but also opens up the messaging platform to email, to ad insertion, to ISP connections or other connections the operator wants.
It’s an example of how operators can use their signaling platforms to support both current and next-generation business models and networks.
Mobile Europe:
You said that operators are seeing a great growth in mobile data traffic, and this is driving their need to move to cost-effective platforms. Are there other challenges that growth may bring?
Ronald de Lange:
There’s no doubt that operators rely on growth of data services for a great deal of their revenue growth. But until very recently, supporting the case for network investment was done in a tactical way, and that has often made it very hard to keep up. A marketing person might say that data penetration would increase 3% and then the network would plan for that. It was difficult to get hard data, and it meant that as mobile data engaged a much wider set of customers than before, operators often scrambled to keep up.
We are constantly continuing our innovation to increase the capacity that our portfolio can support for mobile data. A key element of our work is to ensure our products can scale at the rate of our customers’ business.
Mobile Europe:
And do you do that by centralising the signaling intelligence, or by distributing the intelligence across the network?
Ronald de Lange:
Some customers view highly centralised control structures as being very efficient, because it reduces the number of places in the network they have to provision. Others prefer a distributed approach, with perhaps 10-20 centralised locations, so they can have a more relatively local distribution, but there’s a cost implied with that. We’re comfortable with both approaches, and our job is to help our customers find their desired degree of efficiency and reliability.
Whichever structure customers choose, we will continue to provide technology-agnostic solutions to help support new applications through our knowledge of customer and network data, performance management and monitoring, and routing algorithms.
As operators support new services and increased data traffic, they will look to IP solutions, but will also need to support legacy networks and services in a way that appears seamless to the customer.
To succeed, they will need the most open, scaleable and flexible signaling platforms.
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