Print

Comment

Email

Digg

Del.icio.us

Reddit

Against the backdrop of one of the world's largest telecom events-International Telecommunications Union (ITU) Telecom World 2006, held this week in Hong Kong, Nortel took the opportunity to speak about its plans for the 4G space.

The company has long since been known for its work in voice and with its 4G plan it is shifting its focus to include data as well. "People don't know much about WiMax. It was earlier defined as just a fixed product, but today it has moved to a fast quality service and from just voice to data as well like VoIP," said Peter MacKinnon, GM, WiMax who is also chairman of the LG-Nortel joint venture, signed last year. In September this year, the company sold its UMTS access business to Alcatel for $320 mn. This step further consolidated the company's commitment towards 4G technology, based on MIMO (multiple-input, multiple-output) and OFDM (orthogonal frequency division multiplexing).

Strategy for WiMax
While in India the buzz is currently surrounding 3G, Nortel is looking ahead and focusing its energies on the next generation of wireless networks-increasingly being referred to as 4G. "The definition of 4G is WiMax, it is an IP-based system which has a flat topology and is more fluid than 2G or 3G," explained John Roese, CTO, Nortel. The basic aim of the company is to take the complexity out of technology and give people connectivity at all times in true broadband experience. 4G involves linking devices, which people didn't earlier think about connecting wirelessly to the Internet. "4G is a correct broadband experience and we are looking at it more as an ecosystem," said Roese. This is essentially the 'ecosystem' that Nortel is looking at, the WiMax vision. Instead of having one broadband Internet and data connection, 4G will provide a single broadband connection that can be used anytime anywhere. "The Centrino effect has got PCs connected, but there are a billion devices like MP3 players that can also be connected wirelessly," said MacKinnon speaking about the opportunities in the market for WiMax.

In 3G technology, cost seems to be the biggest barrier. It is also more suitable for voice while it struggles with some video applications and has a much more rigid structure as compared to 4G. WiMax is the first step to 4G. According to Nortel, it delivers three to five times the efficiency at roughly three to five times the speed of today's commercially deployed 3G cellular networks and at as little as one-tenth the cost per bit. The increasing need among wireless operators for more optical backhaul capacity has given rise to Metro Ethernet Networks (MEN). Metro Ethernet provides carrier-grade services at Ethernet economics. "MEN is about infrastructure, moving from traditional TDM to IP structure. And, the reason we're using Ethernet is because it's a commonly used technology and it's cheap," commented Edwin Fu, director-Market Development, Services Edge, Wireless Networks, Greater China, Nortel. The Ethernet business service market is pegged to grow at $1 bn over the next three years at 50% CAGR. "We have a successful track record in carrier-Ethernet and have a deep understanding of solution providers (SPs) needs. In Q1, 2006, we were number one in optical networking," said Fu. Speaking about the trends in MEN, Fu said, "We're seeing changes in applications and how SP's are adapting to networks. Traditionally, SPs have just provided bandwidth etc, but now to grow their business, they are going into different territories. So, network is transforming. Video is growing fast and today 60% of Internet traffic today is video. SPs are also moving to provide IPTV." The increased bandwidth capability supported by Metro Ethernet will impact IPTV deployment. The merging of voice, multimedia and SIP technologies into the TV experience will create an attractive IPTV offer for subscribers and also new revenues for service providers.

Finding the Silver Lining
The major challenge with WiMax is with regard to spectrum allocation. The Indian government has not been very proactive when it comes to WiMax. "The government has been silent. While it looks at 3G, we are pushing for 2.5 GHz allocation of WiMax," commented MacKinnon. Currently India has 3.5 and 3.3 GHz frequency bands and the space on the spectrum is fast running out. These are things that operator have to look at. With more and more people accessing not just voice but data as well, the available bandwidth has to also increase.

Another challenge in the Indian market is the low percentage of PC penetration. "In India, the PC and broadband penetration is low. However, with the cost of PCs coming down, broadband connections will increase simultaneously. As we move to 4G, people will use other devices to connect to the Internet, not just PCs. Hence the cost of being connected to the Internet will also go down as one would not be required to buy a PC," remarked Malur Narayan, senior director/GM-Carrier Solutions India, Nortel. He added that the government has allocated a USO fund, which is going to drive broadband adoption in India. But, a lot depends on when the spectrum is allocated.

Another advantage for the India market is the fact that currently 3G is still at a nascent stage here. "There is much talk about 3G in India but as of now the adoption is not very high, so India has a choice," said MacKinnon. He added that in a market like Europe, the adoption of 4G would be low, because Europe already has a 3G network. "We are trying to convince operators that you can also do data and not just voice, hence 4G is the solution," commented MacKinnon.

Although, 4G is a newer network Nortel sees much promise here. The focus markets for the company are North America and Asia. 4G also opens up the market for other players like Internet service providers, content providers and governments. Another advantage to WiMax is the fact that one would not have to dig up roads to lay the infrastructure. On the other hand DSL and cable require expensive physical wiring infrastructure and also need to be maintained.

MacKinnon indicated that 3G and WiMax spectrum would be allocated approximately at the same time, in mid 2007. "Our strategy is to enter through the rural markets. We are in talks with two or three major operators. There is a lot of money in the rural markets which are untapped," commented Narayan. Nortel has made a trial run on WiMax in North Delhi, though they did not give details about the project and the partner they are launching the test-run with.

Enterprise to SMB
Nortel has so far been concentrating on the enterprise segment. It recently announced its SMB initiative in India, which happens to be the first country in Asia where the SMB initiative is being rolled out. Nortel's new product range includes switches, routers and access points and will feature the SMB-specific Business Communications Manager (BCM50), and a digital hybrid PBX supplied by Nortel's Korean JV, LG-Nortel. These products will be distributed through Ingram Micro and its resellers across the country. According to the company, earlier advanced business communications systems were only available to large enterprises. With the focus on SMB market, Nortel is looking at bringing the power of VoIP, wireless LAN, security and converged voice and data to SMBs. A dedicated national customer support center, will also be set up. This will provide customers a single interface for all post-deployment support and services.

The company has stepped up its staffing and R&D spends by 50%. It also recently opened an Asia Network Management Center in India. Nortel hopes to establish itself in the Indian market in the next 12 months.

Ruth Samson
vadmail@cybermedia.co.in