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"67 6-2/1 13
1
Presentation on “Next Generation Network (NGN) in Competitive Market Environment” by Warid Telecom
International Ltd. (SATRC Workshop on Regulatory Aspects of NGN including Interconnection)
1
Next Generation Network (NGN)
in Competitive Market
Environment
Prepared & Presented by Md. Shahriar Rashid, Head of NSS
Warid Telecom International Ltd.
Bangladesh Operations
2
What is NGN?
Next Generation Network (NGN)
Packet-based network.
Able to provide telecommunication & broadband services.
Able to support general mobility service.
Able to support QoS-enabled transport technologies.
Last but not least , it is a network where service-related functions
are independent from underlying transport- related technologies.
14 "67 6-2/1
1
What NGN Does?
NGN separates transport layers from control layers.
Introduce layer architecture.
MONOLITHIC SWITCH
ARCHITECTURE
NGN ARCHITECTUREOpen, standardised interfaces
Media Gateway
Controller
Media Gateway
TDM Switch
4
Market Situation:
Continuous volume growth.
Falling unit prices.
New service opportunities.
Network Requirements:
Efficient CAPEX expansion.
Continuous OPEX reduction.
IMS preparation.
Cost Optimization & Migration to Common IP Technology.
Why operator moving towards NGN?
Because of :
"67 6-2/1 15
5
“Triple-play” – Voice, Video & Data.
Simplify service creation environments. -> Easy operation.
Single network management layer. -> Simplify the operation.
Services are independent to transport layer. -> Easy deployment.
Maximize the data network capacity. -> CAPEX savings.
Open standards creates vendor competition. -> Reduce price.
Future proof solution for introducing IMS and FMC. -> Ensure TCO.
Reduce the OPEX and CAPEX.
NGN Benefits
6
Next Generation Network (NGN)
deployment in WARID Network
16 "67 6-2/1
7
WARID is the first operator in Bangladesh
deployed NGN Core
Long Term Operator Market Shares (%) Operator Comments
License:
Operations:
Technology:
Shareholders:
1996
1997
GSM 900 / 1800
Telenor (62%),Grameen Telecom (38%)
License:
Operations:
Technology:
Shareholders:
1996
1997
GSM 900 / 1800
Orascom Telecom
License:
Operations:
Technology:
Shareholders:
1996
1997
GSM 900 / 1800
Telekom Malaysia International (70%),
NTT DoCoMo (30%)
License:
Operations:
Technology:
Shareholders:
2005
2007
DCS / GSM 1800
Dhabi Group
License:
Operations:
Technology:
Shareholders:
1989
1993
CDMA 800
SingTel (45%), Pacific Motors (31%),
Fareast Telecom (24%)
License:
Operations:
Technology:
Shareholders:
1996
2005
GSM 900 / 1800
GovernmentSource: BTRC and WCIS
70%
64% 64%
53% 51%48% 48%
15%23% 28%
29% 27% 21% 19%
1%3%
4%
12% 15% 21% 22%
4%5%
4%11% 10%4% 5% 4%8%
3%2% 2%3%
2002 2003 2004 2005 2006 2007 Jun-08
GP Banglalink Aktel WTIB Citycell Teletalk
8
WARID consideration on NGN selection
Market Consideration
ARPU is low.
2-3 big players.
Continuous price cut.
Continuous new services.
Fast penetration.
And fast growth.
Network consideration
Easy deployment to catch the opportunities.
Easy operation and maintenance.
Advanced technology independent on CN and AN.
Future-oriented network.
Open system.
Low cost. TCO.
"67 6-2/1 17
9
WARID Core Network
At launch Warid has deployed:
MSC Server : 09
Media Gateway : 13
HLR : 02
FNR : 02
SGSN : 01
GGSN : 01
Core Router: : 12
Core Switch: : 12
This is happened within 6 to 7 months because of simplified
layered (NGN) architecture.
MSC 11 MSC 12 MSC 13
MPBN IP Network
MGW 24MGW 21 MGW 22 MGW 23
Rankstel
Aktel
Banglalink
TeleTalk
GP
CityCell
BSC 03 BSC 07 BSC 23 BSC 32 CC BSC 04 BSC 20 BSC 02 BSC 06 BSC22 BSC30 BSC 01 BSC 05 BSC 21 BSC 31
HLR
FNR
IP connection with
SIGTRAN association
Legend
E1 connection
with narrow C7 links
E1 connection
with HSL
10
WARID IP Backbone
MPBN
/
MPLS
P&Q
Assurance
CS Core
PS Core
IT
Network
Same IP backbone used for:
Circuit switch voice traffic.
Circuit switch signaling traffic.
GPRS network/service.
IT network.
Performance & quality network.
IP phone (for Warid office only).
Benefits:
No separate investment for IT and GPRS network.
No separate investment for transmission of Warid
office internal calls.
Optimize bandwidth utilization for Warid to Warid
calls by payload traffic (Nb Traffic).
CAPEX and OPEX savings.
Same transport layer for different services
18 "67 6-2/1
11
Transmission Efficieny in Traditional Network
Result: High CAPEX Involvement, Lower optimize usages.
Example: Legacy/Traditional Local Switching
Point of Interconnect (POI)BSC
MSC
Call under same BSC has to carry over to MSC by costly TDM based transmission.
2 long distance circuit is required for per intra BSC calls.
Call under same area PSTN/PLMN has to carry over to MSC by costly TDM based
transmission.
BSC is far from MSC
12
Point of Interconnect
MSC-SBSC M-MGw
Benefits: CAPEX saving, CAPEX maximization
Example: NGN Local Switching
Transmission Efficieny in NGN Network
BSC is far from MSC-S but MGW is close
Call under same BSC does not need to carry over to MSC.
Saving 2 long distance circuit for per intra BSC calls.
Call under same area PSTN/PLMN does not need to carry over to MSC.
"67 6-2/1 19
13
Transmission Efficieny in Warid Network
Distance between Dhaka and Bogra is 300KM.
Warid Bogra BSC connected with Bogra MGW
controlling from Dhaka MSC-S.
Savings transmission bandwidth and cost for
intra BSC/MGW calls.
Savings 66% transmission bandwidth and cost
for long distance calls.
Benefits:
CAPEX saving.
CAPEX maximization.
Bandwidth utilization.
MSC 13
(Dhaka01)
MPBN IP Network
MGW 41
(BOGRA)
Aktel
BanglalinkCityCell
GP
BSC
IP connection with
SIGTRAN association
Legend
E1 connection
with narrow C7 links
E1 connection
with HSL
14
IP Backbone Redundancy in NGN Network
Benefits: High availability & increased robustness.
Ethernet
board
Gb
Gb
Ethernet
board
Gb
Gb
Primary link
Secondary link
M-MGw Ethernet
Switch
Router
X
Ethernet
SwitchRouter
As all service are providing through same IP backbone,
Backbone Redundancy is High Priority.
20 "67 6-2/1
15
MPLS TE part
BOGRA SYLHET
KHULNACHITTAGONG
DHAKA 1
DHAKA 2
Warid has deployed:
1+1 Redundant MPBN.
Signaling redundancy by E1
Sylhet, Bogra and Khulna
incase of fiber cut for MPBN.
Router to Router is GE.
Board level Ethernet card
redundancy at MGW level.
IP Backbone Redundancy in Warid Network
Benefits:
Service availability high.
Day time maintenance.
No single point of failure.
Reduce O&M cost.
16
Advantage of Soft Switch with virtual MGw
1
Virtual MGws
2 ..32 1
Virtual MGws
2 ..32 1
Virtual MGws
2 ..32
BSC or RNC
M-MGw node M-MGw node M-MGw node
BSC Load Sharing in Warid Network
Benefits:
Service availability high.
Day time maintenance.
No single point of failure.
Reduce O&M cost.
"67 6-2/1 21
17
VMGW
(Internal
Network)
VMGw
(National
Network)
BSS
POIMSCS07
MSCS08
KHULNA
MGW
Core Capacity Optimization in Warid Network
Advantage of separate control and connectivity layer
Distance between Dhaka and Khulna is 300KM.
Khulna MGW is controlling by
2 MSC-S from Dhaka.
BSC is controlling by one MSC-S.
POI is controlling by another MSC-S.
Benefits:
Utilization of MSC-S’s extra capacity.
Resource utilization.
Service/capacity ensure during
festivals like EID.
CAPEX maximization.
18
Signaling over IP
HLRHLR HLRHLRHLR HLR
STP
STP STP
STP
IP NetworkIP Network
HLRHLR HLRHLRHLR HLR
Traditional Signaling
Signaling Architecture in Warid Network
Traditional signaling has complex physical &
logical configuration.
Signaling over IP (Sigtran) has simple
configuration (IP address only).
Warid HLR and FNR are based on Sigtran.
Warid MSC-S to MSC-S is through Sigtran.
Warid IN SCP and SDP are based on Sigtran.
Like other operator Warid does not require
separate STP or Signaling Gateway (SG).
Benefits:
CAPEX saving, no investment for STP & SG.
Better utilization for transmission capacity.
Packet switch and O&M traffic can be
shared from signaling transmission.
Less analysis require for signaling.
Easy O&M means reduce OPEX.
22 "67 6-2/1
19
Benefits: Flexible use of investment.
Ensure TCO.
WCDMA
ATM Iu I/f
TDM A I/f
GSM
GCP
RANAP
BSSAP
RNC
M-MGw
MSC-S
BSC
Warid way forward:- 3G network deployment
NGN allows simultaneous access for WCDMA & GSM
Warid has no traditional MSC.
Warid has soft switch MSC.
Warid has IP backbone.
No investment require in the
core network.
Warid core network is ready for
3G deployment. No architectural
change is required.
Requirements:
3G license from regulator.
RNC, lu over IP.
NodeB, lub over ATM.
20
Warid way forward:- MSC in Pool deployment
MSC-S
MGW
BSC
MSC-S
MGW
BSC
MSC-S
MGW
BSC
IP/MPLS
Advantage of MSC in pool:
No inter MSC handover is required
within the pool area.
No call drop due to inter MSC handover.
No LU is required within pool area.
Traffic balancing, specially during special
event like EID, HSC, SSC result, 31st nights.
Service availability.
Benefits:
Service availability high.
Day time maintenance.
No single point of failure.
Reduce O&M cost.
Utilization of MSC-S’s extra capacity.
Defined in 3GPP R4
"67 6-2/1 23
21
Warid way forward:- IMS deployment
One of the requirement for IMS is service independent transport layer.
Warid existing MPBN transport (IP) layer is service independent.
Benefits:
Time-to-market will be reduced.
Commercialized services growth
will be Cost-effective.
Ensure TCO.
Defined in 3GPP R5
22
Nutshell
NGN helps WARID (a green field operator)
- Faster network deployment.
- Maximize utilization the CAPEX.
- Reduce the OPEX.
- Higher availability.
- Participate in the Air time price cut environment.
- Ensure TCO.
- Ready for 3G and IMS.
24 "67 6-2/1
2
Interconnection Policy under the Next Generation Networks (NGN)
Environment in South Korea
Next Generation Network (NGN) environment
A Next Generation Networks (NGN) is a packet-based network able to provide telecommunication services to
users and able to make use of multiple broadband, Quality of Services (QoS)-enabled transport technologies and
in which service-related functions are independent of the underlying transport-related technologies. It enables
unfettered access for users to networks and to competing service providers and services of their choice. It supports
generalized mobility which will allow consistent and ubiquitous provision of services to users. [ITU-T
Recommendation Y.2001 (12/2004) - General overview of NGN]
As network environment moves from circuit-based to packet-based, telecom regulators in most countries need to
review whether current policy fit the packet-based environment and promote network development. Among
several telecom policy issues, interconnection policy has a major position among issues of telecom policy.
Interconnection policy
Through the interconnected networks, individuals are able to communicate with others who are not in connection
directly on their network. That is, if an individual subscriber is connected to a particular network through
interconnection, the subscriber can communicate with anyone who is connected to many other networks that are
connected with the particular one. Given this, effects which the subscriber can gain through network will increase,
as the number of subscribers connected through the interconnection grows. Adding up all of these effects will
increase exponentially and this is called network effects.
As the telecommunications market turns over into competitive environments by multi-carriers, government’s
policy regarding network connection between carriers plays an important role in its competitive policies. While
interconnection policy provides incentives for new entrants to do business, it provides investment incentives for
the current vendors that own and operate networks. ITU’s recommendation for interconnection policy is that the
connections between networks should be provided in a timely manner, and the charges should be based on cost-
oriented rates. The organization also recommends that the price needs to be set in a transparent, reasonable, and
unbundled way (ITU Reference Paper, Para. 2.2(b)).
The key issues regarding interconnection policy include the process of connection request and offer, the
assessment procedure of charge, the conditions of level, technology and operation of charge.
Roles of regulator in terms of interconnection
Regarding the government’s role of regulating interconnection, there is a need to identify the existing as well as
new regulations for the entrants to the interconnection market. Government needs to prepare an interconnection
guideline in order to let new entrants know about technical and operational issues on interconnection with other
carriers. Generally, in the guideline, definitions of types of interconnection, descriptions on carrier-to-carrier
relationship, declaration of carrier-to-carrier charging principles, and accounting principles among carriers are
included.
When assessing charges through negotiation between carriers, it can cause conflicts. Right then, it is a high time
the government should intervene in the negotiation between carriers. Basically, charges refer to the fees paid for
the rent to use other carriers’ networks. To some of new entrants, the charges take up to 40~50% of the total cost,
making a direct and significant effect on the carriers’ outcome.
Interconnection issues under the NGN environment
There are three different types of interconnection models: The interconnection in Public Switched Telephone
Network (PSTN) which is the base of telecommunication services; the interconnection in Voice over Internet
"67 6-2/1 25
Protocol (VoIP) which is spreading out recently; and the interconnection in All-IP which is expected to work as
the based for the future telecom networks.
In VoIP which is based on the Internet packet system, vendor using access is hard to prescribe the network
component of vendor which is providing. In other words, theoretically, delivery path depends on packets, so it is
hard to figure out the network components of each vendor properly. As such, it is tough to apply the estimation
system to the existing PSTN. Suggested model until now is a charge system which is applied to the data
communication systems including the Internet. It is “Uniform Access Charges” which pay charges regardless of
the distance and type.
Table 1. Comparison of Telecommunications and Internet Cost Recovery
Telecommunications Internet
• Cost recovery subject to significant
regulation and government oversight.
• Settlements are transparency.
• Settlements based on traffic flow and charged
on minutes of use.
• “Half-circuit” approach to sharing the costs
of the international link.
• Settlements operate on a destination specific
basis.
• Under the accounting rate settlement model,
the same system applies for all network
operators.
• Little or no regulatory oversight.
• ISP contracts are subject to non-disclosure
agreements.
• ISPs combine transmission and content.
• Cost recovery based on link capacity.
• Charged on bandwidth and derived throughput of
the link.
• ISP network access provides onward transit to many
other networks and destinations.
• ISPs use different charging models, depending on
the characteristics of the ISPs involved.
Regarding models of internet interconnection, there are two agreement schemes which are peering
agreements and transit agreements. Peering agreements, which is so called “Sender Keep All” or “Bill and
Keep,” is a zero compensation arrangements by which two internet service providers (ISPs) agree to
exchange traffic at no charge. The process, terms, and conditions remain private. Transit is an agreement in
which larger ISPs sell access to their networks, their customers, and other ISP networks with which they had
negotiated access agreements. The sender pays the full cost of interconnection. Transit charges are set by
commercial negotiation, and are generally not disclosed. One Internet transit payment arrangement with one
major Tier-1 ISP can provide a small, remote session initiation protocol (SIP) with access to the rest of the
world.
The opportunities VoIP creates for arbitrage create pressures to move toward cost-based pricing for
interconnection and adopt uniform charges for access, regardless of the type of call, type of service providers, or
other call characteristics. New approach to interconnection pricing should encourage efficient competition and the
efficient use of, and investment in, telecommunications networks, preserve the financial viability of universal
service mechanisms, treat technologies and competitors neutrally, allow innovation, and minimize regulatory
intervention and enforcement.
In the meantime, we forecast that the environment of information communication network will be turned into All-
IP type in the future. In this case, relationship between service and cost driver will be ambiguous to prescribe as
interconnection is developing to convergence service. Accordingly, new charge estimation system will be
requested. As the network environment is developed, the converged IP network based network will be emerged as
a popular alternative, providing diverse services through a single backbone network. Here, it should be kept in
mind a new charge scheme will become one of the challenges.
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Transition on Interconnection policy in South Korea
A monopoly telecom operator, Korea Telecom (KT), was founded in 1982 when there was no interconnection
issue due to monopoly. In 1984, Korea Data Telecommunication launched data communication services and there
was no interconnection charge for dial-up calls. Spun off from KT, Korea Mobile Telecommunications (KMT)
provided analog mobile service in 1988. Interconnection charges and conditions were left to operators’
negotiations.
Since Dacom launched international call service in 1991, Interconnection Order was released. The Order declared
reciprocal compensation that calling party pays interconnection charge to called party, focused on non-
discriminatory interconnection, and did not require accounting separation. Accounting Separation Order was
published in 1994. In the Order, it is requested that cost separation of NTS and TS from 1996. In the mid-1990s,
several telecom service providers entered the telecom market in Korea. Regarding interconnection, mother
network system is applied. For both fixed-to-mobile and mobile-to-fixed calls, mobile operators collect tariffs and
paid fixed network’s interconnection charges to fixed operator. When interconnecting with local network, the
other party paid for the interconnection line. It is required that KT’s local switched provides for interconnection to
any telecom service providers.
After WTO agreements settled in 1997, which agrees to open telecom market to operators without network,
interconnection scheme was back to reciprocal compensation and set interconnection charges at dominant carriers’
cost, and abolished NTS deficit contribution and introduced NTS interconnection charges. As Hanaro telecom
(now SK Broadband) started local telephony and broadband services in 1999, interconnection between local
networks was imposed. It was also determined that cost-based mobile networks’ interconnection charges,
interconnection line cost borne by user network, and universal service fund introduced.
In 2001 KT’s local tariffs was rebalanced. A plan for abolishing NTS interconnection charge for five years was
announced in 2001 when long-distance carriers were exempted. Individual interconnection charges for mobile
networks for 2002-2003 were determined. Mobile internet facility was opened to mobile ISPs and portals.
Research on Long-run incremental cost (LRIC) started in 2003 and applied from 2004. As data communication
services were flourishing, interconnection between data networks was applied. In 2007 through a review process
of interconnection charges for 2008 and 2009, different mobile termination charges between dominant and non-
dominant carriers was applied.
Interconnection charge scheme of VoIP in South Korea
Even though a dial-pad service based on soft-phone was launched by Saerom in 2000 in South Korea, in
substance commercial services started on May 2004 when a guideline of internet telephony was announced. Since
October 2004 internet telephony has been common telecom services under regulation and “070” service
identification number was assigned to internet telephony services. After expansion of number portability to VoIP
services, number of subscribers of VoIP will be expected to increase dramatically.
In terms of interconnection, unbalanced approach is applied. For VoIP calls to fixed or mobile network, VoIP
service providers pay the same amount of interconnection charge as circuit-based network to fixed or mobile
carriers. Among VoIP service providers, there is no settlement of interconnection charges. In case of calls from
fixed or mobile to VoIP users, fixed or mobile operators also pay interconnection charge to VoIP service provider.
The fee takes network component of VoIP service providers toward an access to the network into account.
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Table 2. Interconnection charge for VoIP in South Korea
Interconnection type Interconnection charge
VoIP to fixed VoIP service provider pays the same amount of interconnection fee to fixed
operator.
VoIP to mobile VoIP service provider pays the same amount of interconnection fee to mobile
operator.
VoIP to VoIP No settlement
Fixed or mobile to
VoIP
Fixed or mobile operator pays interconnection fee to VoIP service provider. The
fee accounts for network component which required to access network.
Current solution for VoIP interconnection charges in South Korea is still a tentative one. As VoIP service
diffuses, unbalanced approach for interconnection charge could be a debatable issue. In the long-run,
interconnection under the All IP network should be considered. Transition path or scheme also should be
come up with. In this process, traditional principles on the objectives of telecom policy – users’ benefit, fair
competition, network advancement, and technology development – should be taken into account.