If an entity stays in this world beyond the fulfilment of
its purpose it will only cause imbalance and anarchy.
-------Old Proverb
1. Introduction
In the last blog that I wrote about ODU-XC and how it is
fading and giving way to OTN-Transport and IPoDWDM I mentioned the shortcomings
and the reasons why ODU-XC in now a non-viable solution. This is especially to
those who are in the bandwidth leasing business or in the CoC business. The
wholesale business is marred with margins and ODU-XC does not provide a
suitable option over economical options like OTN-Transport and IPoDWDM. In this
blog we are going to talk about especially the nuances of planning of the wholesale
network for the new telecom era.
The fact that we are trying to establish in this section of
the blog is related to the planning part of the wholesale network. A wholesale network
is very different from that of a mobile back-haul or an ISP backbone. A
wholesale network is supposed to serve many functions and many kinds of network.
This is why the planning of such a network that is business oriented is extremely
complex and has a lot of challenges. We will explore the requirements, the
challenges and the new aspects of planning that goes into building this wholesale
telecom network.
2. The requirements of a wholesale bandwidth provider
It needs to be clear that a wholesale bandwidth provider is
not the owner of the content or is not generating any revenue from the content
delivery. They are just pipes or media who
carry the traffic from one point to another with a standardized SLA. They are
not owners of QoS or QoE, they are channelizers or media enablers and they are
also paid in the same way. Thus the requirements of a wholesale provider is
extremely flat and bland (if I am excused to say so)
2.1 Optimized bandwidth infrastructure
The wholesale provider has to play between the CAPEX and the OPEX of the solution that is implemented. The biggest asset it has is the fiber and that it has to capitalize to great extent. This capitalization comes from being able to have an infrastructure layer that will be able to carry large amounts of channels across the distance by consuming least pairs of fiber. Here we are focussing on delivery of bandwidth rather than the QoS of it, which is generally controlled by the end user. Thus the infrastructure is more important. Flex Grid systems with the ability to carry more bandwidth in flexible channels is definitely the good way to go forward. Flex Grid infrastructure provides that quintessential platform on which the premise of a wholesale business in the modern era can be based on.
2.2 Cost effective transport modules
After the flex-grid ecosystem is created there needs to be a
focus on cost effective transport modules that need to be provided in order to
carry the traffic from one point to another. In this regard the focus should be
on having modules that can aggregate more number of high bandwidth clients in a
higher rate line output. This will result into the optimization of the revenue.
Most of the times due to the ODU-XC and its inherent separation of the client
and the line modules the cost of the solution increases, however if we look at
the efficient muxponders that can provide the same solution at a lesser cost
then it becomes very cost effective.
The
muxponder that we see in the picture is a clear depiction of how the entire functioning
of the ODU-XC can be compressed to a single module that can fit as a service
card in the optical photonic shelf. This is an ideal situation for the
wholesale bandwidth provider. The muxponder provider the end to end services
for the wholesale provider to an extent that the CAPEX is kept minimal and the
photonic shelves, that are extremely efficient in power and space, can handle
the services. Muxponders serving as simple transport modules
2.3 OPEX Efficiency
Another very important need for the wholesale bandwidth
provider is the OPEX efficiency of the solution. The wholesale provider makes a
full account of the cost that includes CAPEX and OPEX and the latter is a very
important aspect as it is recurring in nature. Costs such as power, space,
maintenance etc is a major part of the OPEX of the solution. OPEX efficiency,
thus, forms an integral part of offering for the wholesale provider. Studies
reflect the fact that the classical ODU-XC is extremely OPEX hungry and does
not justify the RoI for the wholesale provider. In some cases the OPEX runs out
to be more than three times of what it ideally needs to be. For wholesale
bandwidth providers this situation is no less than a nightmare where the
bandwidth has to be delivered in a wafer-thin margin cost structure. So
definitely there have to be alternatives for the ODU-XC for such purposes so
that economical ways of bandwidth delivery can be achieved.
3. Why MNO requirements cannot be imposed on a wholesale network?
Under normal circumstances it is always seen that the
planning philosophy of MNOs often hijack the requirement scene of the wholesale
bandwidth provider. This is the first step towards creating a loss-making
network for the wholesale bandwidth provider. The wholesale bandwidth
environment needs a network planning structure that is very different from the
MNO planning structure. There are
certain factors which necessitate a separate design philosophy for the
wholesale networks.
3.1 Wholesale providers are not owners of the end-service
In the case of MNO the ownership of the end service and to
an extent the content access lies with the MNO. The MNO is supposed to be the
end to end provider of the service whether it is the wireless access or the
back-haul. In the case of the wholesale bandwidth provider, this is not the
case. The wholesale provider only owns the path and that too a part of the path
than owning the entire service. The wholesale provider is like that of an
active wire on which the service needs to pass. Since the ownership is limited
the revenue expectancy is also of that category. Therefore the technology that needs to be
chosen under this case has to be extremely efficient in terms of cost whether
it is CAPEX or OPEX.
3.2 There are diverse routes in place of complex protection schemes
You agree or you do not agree the end customer will not
solely depend on one wholesale network for the carriage of the bandwidth. The
premium thus a customer will pay to you for a service that is protected by your
network will be negligible in this respect. The focus should rather be on
selling diverse routes that are unprotected while letting the protection
mechanism work on the end customer. Diverse routes lead to a situation where
the spectrum of the DWDM is more optimized and more static. Contrary to the
cases of WSON or ASON where most of the resources are used up in protection. If
we talk about WSON then there is a bit of economic sense involved as the
resources are only blocked on the virtual channel level, however the ODU-XC
ASON is of a really different level. Here we can see that the resources are
pre-reserved in terms of hardware and interfaces. This increases the CAPEX
dramatically.
The end customer on the other hand also ensures that there is enough diversity in the level of wholesale providers also. This is to ensure that if there is a major problem in the network of one wholesale provider the other wholesale provider can carry this bandwidth. This is a common phenomenon observed in the hyper-scaler sector where diversity is a key issue.
Example of diverse route by the same provider
As seen in the figure above, we see that the diverse routes
are provided here but the provider is the same for the wholesale bandwidth. The
onus of the protection however is lying with the end service provider who does
the switch between the main and the alternate path. Here the situation is a
kind of a win-win.
For the wholesale bandwidth operator it is a sale of 2X bandwidth with low consumption of resources as there is no complexities of protection involved in the provisioning of the bandwidth.
For the end customer there is a control of the main and the alternate path with full transparency. In addition to that the say 2X bandwidth can be used for passing best effort traffic when both the paths are available.
There is also a situation which is more ideal for the end service provider. Here the service provider does not rely on one wholesale entity but has two entities for the diverse carriage of the bandwidth. The diversity is more robust over here because here there is less reliance of the efficacy on one operator.
Diverse route provided by diverse provider to the end customer
If we see the picture above then the situation is more
pragmatic as now there are diverse routes provided by diverse providers. So for
the end service provider instead of having an independent network of its own it
can have a platter of bandwidths provided by different wholesale provider. The
wholesale provider on the other side can be less robust and focus more on
spectrum optimization rather than on the protection path.
Generally the end customer would seek such an arrangement
with the wholesale provider(s) in order to maintain proper robustness in the
network. This in a way lowers the load of onus on the wholesale network and
thus can provide a more price optimized offer for the end customer from the
wholesale side.
3.3 Cost sensitivity is at its peak
As we can see from the above section that wholesale
bandwidth is an extremely cost sensitive business, so the planning also needs
to be cost sensitive. While the demands of technologies like WSON, ODU-Flex can
be a sort of a wish-list, they do not have any kind of commercial leverage. So
with the dwindling margins of bandwidth delivery there needs to be an
innovative approach and cost effective approach in planning that is very much
different from the planning that is involved to build a mobile network
backhaul. A wholesale network will need to eliminate most of the features that
are bulky in nature and are not required into the network. Focus has to be for
delivering good quality bandwidth from point A to point B with all the SLA
covered.
The planner has to realize that the margins in the wholesale network is less and it is more of a volume game. So, the mandatory aspect of a network needs to be covered for the wholesale network. More and more bandwidth is disposed off as a commercial entity in less and less cost incurred that will sustain the business to a greater level than creating space for more wishlists for the future.
4. New aspects in the planning of the wholesale network
Now that we have understood the challenges that lure for the
planning of the wholesale network let us delve into some points that consider
the new aspects that are involved in the planning of the wholesale network.
These new points will be extremely essential to build up wholesale networks
rapidly and with extremely less cost. Before we venture into the building of
the wholesale network we need to consider two fundamental principles on
building it.
1. Faster network roll-out and faster delivery
2. Less CAPEX and OPEX involved in building the network.
3. Prioritize service from the business point of view.
Considering these fundamental principles we will explore some of the points that will make wholesale network building extremely efficient and cost effective.
4.1 Build the infrastructure
The biggest requirement for a wholesale network is to secure
the infrastructure. This forms almost 80-90 percent of the effort of building
the wholesale network. More the delay in building the infrastructure more will
be the delay in the delivery of the services. When we talk about the
infrastructure we are talking about the following things.
1. Fiber network readiness.
2. Flex-Grid DWDM network with OTDR monitoring and fiber health monitoring.
3. Proper channel/grid planning.
4. Provision for the Alien wavelength/Spectrum on the network.
This actually wins most of the battle. It enables the wholesale entity to start providing services on the day one with wavelength or spectrum basis.
4.2 Identify high-bandwidth services
In a business of wholesale to sustain and to grow it is
important to have an outlook and outreach towards cherry-picking the profitable
kind of bandwidth deliveries that provide immediate revenue with minimal capex
and opex. Our infrastructure is already done and ready. We can already provide
spectrum and thus bandwidth on this logical infrastructure with minimal
movement of CAPEX and OPEX. However, if there are operators who insist us to
take ownership of the traffic segment also, the key guys would be the ones who
are demanding bulk bandwidth. Let us take the example of an operator that is
demanding bulk bandwidth across two points of 4X100G or more. Now for this the
investment is quite small.
We can assign muxponders that will aggregate this over a
400G or a 800G wavelength and provision across the two ports and be done with.
This just is a module addition in the existing OLS not affecting the CAPEX and
the OPEX as opposed to a full fledged system addition.
Thus, it becomes a very gradual addition to the infrastructure that we already have built without any additional hassle. Identifying the inventory is also easy as this mapped to the end user. Operations are not a hassle.
4.3 Looking for those important low-rate subscribers
It is not rocket-science to understand that when you build
an information superhighway then looking for a low-rate subscriber who wants
the traffic also to be a part of your solution is a much expensive affair. For
one such 10G there needs to be a line out towards 100G line or more and this
built up can be a hassle for the network. Low rate customers can be the most
expensive ones when it comes to the cost of delivery and the cost of maintenance.
There cannot be a parallel line network for the 10G and for the 100G+. Therefore
it is necessary to find the customers that are more suited to the network. A low-rate
customer can be a very good strategic acquisition considering that there will
be expansion in the future with growth of experience and the growth of the
customers that the end customer has in this aspect.
Generally low rate customers are coming from the enterprise
sectors and more than the bandwidth what they require are.
1. Reliability
2. Quality
3. Value addition
While the reliability and the quality part is already covered
in the equipment and delivery of the wholesale provider the part of value
addition is often missed out. Let us take some examples of the value addition
that can be done for these enterprise customers.
1. Customer network management (CNM)
2. Bundled services (Voice+Data Breakout)
3. SDWAN
4. Data monitoring and security.
5. Encryption.
Generally, when these value add services are provided with
the wholesale bandwidth provider then there is a great deal of attraction for
the enterprise services.
4.4 Alien is very friendly these days
Today there are many service providers, MNOs, MVNOs, ISPs, MSOs
etc who have the end device that can support the coherent but do not have
either the DWDM infrastructure or the dark fiber. Under these circumstances
they are looking for an infrastructure that can carry their traffic, which is
already coherent in nature, on a specific wavelength or a spectrum. Hyperscalers,
especially make a demand for such a service where they want just a chunk of the
spectrum that is available in the DWDM infrastructure.
It is very important thus to plan for the alien spectrum and services like that because these are extremely quick and low maintenance businesses that a wholesale bandwidth provider can achieve.
4.5 Automation is the key
Quick delivery, Express provisioning, Flexible BwoD and Self
Healing networks. These are some of the important buzzwords that are in the
market. The answer to all these buzzwords is “Automation”. The automation has to be primarily in the
network management system that the provider is choosing to manage the network.
- Configuration automation to ease the delivery of the services.
- Bandwidth on demand
- Fault automation with AI/ML to have a more self-healing network.
5. Summary
Thus, we understand that the planning of the wholesale network
cannot be congruent to the planning of the MNO network. There has to be
expertise involved considering all the new aspects of network building.
To cut a long story short. The planner of a Mobile Back-haul is Network-centric but the planner of a wholesale network is network-centric and business-centric. So, in order to get into the planning of a profitable and revenue yielding wholesale network such attitudes have to be developed.
I will be adding more of wholesale networks in my next
blogs. Keep watching.
Cheers,
Kalyan
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