PSTN Evolution to NGN Workshop (II) NGN Class 5 cases
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1 PSTN Evolution to NGN Workshop (II) NGN Class 5 cases ITU-D Centers of Excellence. Damascus, August 18-21, 2003 Souheil Marine PSTN Evolution to NGN Agenda General General Concepts Concepts Modelling Modelling and and tools tools CLASS CLASS 55 Study Study cases cases CLASS CLASS 44 Study Study cases cases slide 2 1
2 Contents STUDY CASES Introduction slide 3 Study cases Introduction Several cases are introduced in order: NOTE: To highlight the tutorial on PSTN evolution economics with several examples to show variety of cases to identify the driving factors of the different cases CAPEX and OPEX value will be expressed in a relative way (use of a custom currency, CC ) these cases can strongly vary from an operator to another, and thus give different results. slide 4 2
3 Study cases Introduction 1. Class 5 A: choice between TDM or NGN solutions 2. Class 5 B: keep TDM or migrate to NGN 3. Class 5 CG: Cap and Grow case slide 5 Contents 1. Class 5 A: choice between TDM or NGN solutions slide 6 3
4 Class 5 replacement example Part of a Network having a large number of switches coming to end-of-life 100 end of life switches of about subscriber/switch associated to a multi-level transit network within a global network of about 5 M lines Replacement in one year, afterwards annual growth of 6% THE Question: Replacement by TDM or by NGN class 5? slide 7 Class 5 replacement with TDM Replacement by 20 TDM switches with remote units/access systems subscribers / switch number of sites remain unchanged subscriber copper line arrivals not modified more remote sites Simplification of the transit part to interconnect these switches (only 3 TEX) slide 8 4
5 NATIONAL LAYER REGIONAL LAYER TRANSIT NETWORK Consolidation: from 100 switches to 20 switches LEX LAYER Consolidation implying simplification NATIONAL/REGIONAL LAYER Single-layered TRANSIT NETWORK LEX LAYER + remote units slide 9 Class 5 replacement with TDM Traffic distribution INTERNAL VOICE TRAFFIC DISTRIBUTION 100% INTERNAL VOICE TRAFFIC PERC USER-LCL-USER 30% INTERNAL VOICE TRAFFIC PERC USER-LCL-LCL-USER 20% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-LCL-USER 30% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-RGL-LCL-USER 20% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-NTL-RGL-LCL-USER 0% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-NTL-NTL-RGL-LCL-USER 0% slide 10 5
6 Class 5 replacement with TDM Main dimensioning outputs (new resources per year) REMOTE SITES Remote Units POTS lines ports Trunk ports to LEX LOCAL SITES LEX POTS lines ports Remote unit trunk ports Trunk ports to LEX Trunk ports to TEX REGIONAL SITES TEX Trunk ports from LEX Trunk ports to other Regional TEX Trunk ports to rest of TDM network slide 11 Rest of the tdm network TDM case - new network dimensionning TDM trunks ports to the rest of tdm network TDM trunks ports (64kbps) between Tex : TEXs TDM trunks ports between Lex : REGIONAL Transit level LAYER TDM trunks ports (64kbps) Lex to Tex : LEX LEVEL K subscriber lines 20 Local Exchanges 990 Remote Units slide 12 6
7 Class 5 replacement with NGN Rest of the TDM network Trunk gateways regional level Packet network IP links Softswitches/MGCs (*) Access gateway Access gateway Local and remote site level (*) MGC function can be put on some existing TDM switches Obsolete TDM LEXs Access equipment slide 13 Class 5 replacement with NGN Replacement by access systems in each of the 100 sites Access gateway function can be: located in each remote access system (distributed) or centralised for a group of access systems (hypothesis of the case), deployed in 20 sites remote access systems still connected in TDM to the access gateway in the local site (SDH access loop) slide 14 7
8 Class 5 replacement with NGN Call control function is handled by: 3 softswitches / MGCs MGC function can be implemented on some existing TDM switches Additional Trunking Gateways used to interconnect the NGN part of the network with the rest of the network, still in TDM slide 15 Class 5 replacement with NGN Traffic distribution INTERNAL VOICE TRAFFIC DISTRIBUTION 100% INTERNAL VOICE TRAFFIC PERC USER-LCL-USER 30% INTERNAL VOICE TRAFFIC PERC USER-LCL-LCL-USER 20% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-LCL-USER 30% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-RGL-LCL-USER 20% slide 16 8
9 Class 5 replacement with NGN Main dimensioning outputs REMOTE SITES Remote Access POTS lines ports LOCAL SITES Access gateways VoP gateway ports Local Access POTS lines ports REGIONAL SITES TRUNKING GATEWAYS Sites equipped VoP ports DATA switches STM-1 line ports CALL CONTROL Softswitch Subscribers VoP trunk ports slide 17 Class 5 replacement with NGN TGW Vop Ports Rest of the TDM network Trunk gateways in 3 regional sites STM1 equivalent ports 110 IP links Packet network 3 Softswitches/MGCs Access gateway Access gateways in 20 sites AGW Vop Ports K subscriber lines Obsolete TDM LEXs Access equipment slide 18 9
10 Class 5 replacement: CAPEX Comparison PROJECT: All rights reserved 2002, Alcatel, Paris. One-time Expenditure Cumulated CAPEX Illustrate that comparison is at network level and not on a box to box basis MCC 300 MCC 250 MCC 200 MCC 150 MCC 100 REMOTE UNITS LOCAL UNITS LOCAL / CLASS 5 SWITCHES TEX / CLASS 4 SWITCHES CALL SERVERS ACCESS GATEWAYS TRUNK GATEWAYS DATA SWITCHES TRANSMISSION TOTAL IN MCC MCC 50 MCC 0 tdm rep cl5 rep tdm rep cl5 rep slide 19 Class 5 Replacement: CAPEX comparison Main part of the CAPEX remains within the Access systems relatively neutral in the comparison because it is driven by POTS lines connections Differences are coming from 20 access gateways systems managed by 3 softswitches, compared to the deployment of 20 new TDM core part switches savings in the transit part Additional trunking gateways for TDM interconnection have limited impact slide 20 10
11 Class 5 Replacement: OPEX Comparison Network Opex comparison NGN Network OPex TDM Network OPex OPEX savings of about 15%/year slide 21 Class 5 Replacement: OPEX comparison OPEX related to Network elements Personnel expenditure PROJECT: All rights reserved 2002, Alcatel, Paris. Other Recurring Expenditure PROJECT: MCC 160 All rights reserved 2002, Alcatel, Paris. Recurring Personnel Expenditure MCC 180 MCC 140 MCC 160 MCC 140 MCC 120 REMOTE UNITS MCC 120 LOCAL UNITS LOCAL / CLASS 5 SWITCHES MCC 100 MAINTENANCE MCC 100 MCC 80 MCC 60 MCC 40 TEX / CLASS 4 SWITCHES CALL SERVERS ACCESS GATEWAYS TRUNK GATEWAYS DATA SWITCHES TOTAL IN MCC MCC 80 MCC 60 MCC 40 MONITORING NE MANAGEMENT SUBSCRIBER MANAGEMENT TRANSPORT NETWORK MANAGEMENT TOTAL IN MCC MCC 20 MCC 20 MCC 0 tdm rep cl5 rep MCC 0 tdm rep cl5 rep slide 22 11
12 Class 5 Replacement: OPEX Comparison OPEX savings are not so large when comparison is done with new TDM technology large switches centralised operation but OPEX savings come from simplification of the network elements: replacement of 20 LEX by 20 access gateways induced simplification of the transit part of the network call control concentration within a limited number (3) of softswitches sites all of the above factors contribute to the diminution of OPEX related to the Network elements (maintenance ) and staff needed to operate the network. slide 23 Class 5 Replacement: Delta of Cumulated Discounted Cash Flow Delta Cash flow delta CAPEX Opex savings cumulated DCF Reminder : CAPEX about kcc, so, about 25% DCF savings with NGN in this example slide 24 12
13 Discounted Cash Flow Difference (delta) of cash flow between the TDM replacement solution and the NGN one difference of the CAPEX between the two solutions difference in their yearly OPEX Evaluation of the delta of the cumulated discounted cash flow (discount rate of 12%) In this case: the delta cash flow is in favour of NGN for CAPEX and OPEX. In other cases, NGN CAPEX may be higher than TDM but the supplementary CAPEX can be compensated by OPEX savings if the CAPEX difference is not too high. slide 25 Class 5 Case A: Conclusions Driving factors in this case: need for a replacement of an end of life part of a network with a network consolidation economic competitiveness of NGN components giving a NGN CAPEX in the range of TDM additional OPEX savings through NGN : still simpler network structure with NGN, and centralised call control slide 26 13
14 Contents 2. Class 5 B: keep TDM or migrate to NGN slide 27 Case B :Class 5 replacement example Same part of the network as in case A, but Existing TDM switches are not at their end of life 100 switches of about subscriber/switch THE Question: Do we keep the existing TDM switches? or do we replace them by NGN? slide 28 14
15 Case Class 5 B : keep TDM The as it is case annual growth of 6% additional lines and traffic handled by extension of existing TDM switches slide 29 Case Cl5 B : keep TDM Transit Network LEX LEVEL 100 Local Exchanges K subscriber lines growth slide 30 15
16 Case Cl5 B : keep TDM Traffic distribution INTERNAL VOICE TRAFFIC DISTRIBUTION 100% INTERNAL VOICE TRAFFIC PERC USER-LCL-USER 20% INTERNAL VOICE TRAFFIC PERC USER-LCL-LCL-USER 10% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-LCL-USER 35% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-RGL-LCL-USER 15% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-NTL-RGL-LCL-USER 10% INTERNAL VOICE TRAFFIC PERC USER-LCL-RGL-NTL-NTL-RGL-LCL-USER 10% slide 31 Class 5 B Keep TDM Main dimensioning outputs (new resources per year) only extensions REMOTE SITES Remote Units POTS lines ports LOCAL SITES LEX POTS lines ports Trunk ports to LEX Trunk ports to TEX REGIONAL SITES TEX Trunk ports from LEX Trunk ports to other Regional TEX Trunk ports to National TEX slide 32 16
17 Case B :Class 5 replacement with NGN Same NGN solution as in case A Replacement by access systems in each of the 100 sites Access gateways in 20 sites Softswiches /MGCs in 3 sites MGC function can be implemented on some existing TDM switches Additional Trunking Gateways used to interconnect the NGN part of the network with the rest of the network still in TDM slide 33 Class 5 replacement with NGN TGW Vop Ports Rest of the TDM network Trunk gateways in 3 regional sites STM1 equivalent ports 110 Packet network IP links 3 Softswitches/MGCs Access gateway Access gateways in 20 sites AGW Vop Ports K subscriber lines Obsolete TDM LEXs Access equipment slide 34 17
18 Class 5 replacement with NGN Main dimensioning outputs REMOTE SITES Remote Access POTS lines ports LOCAL SITES Access gateways VoP gateway ports Local Access POTS lines ports REGIONAL SITES TRUNKING GATEWAYS Sites equipped VoP ports DATA switches STM-1 line ports CALL CONTROL Softswitch Subscribers VoP trunk ports slide 35 Case B :CAPEX comparison PROJECT: All rights reserved 2002, Alcatel, Paris. One-time Expenditure MCC 300 Cumulated CAPEX Difference due to the initial CAPEX in NGN to replace the existing network Only extensions in TDM MCC 250 MCC 200 MCC 150 MCC 100 MCC 50 REMOTE UNITS LOCAL UNITS LOCAL / CLASS 5 SWITCHES TEX / CLASS 4 SWITCHES CALL SERVERS ACCESS GATEWAYS TRUNK GATEWAYS DATA SWITCHES TRANSMISSION TOTAL IN MCC MCC 0 cl5 rep tdm exist slide 36 18
19 Case B: OPEX Comparison OPEX Comparison (cumul) TRANS OPEX Manpower Net Elts OPEX NGN TDM OPEX savings of about 30%/year slide 37 Opex related to Network elements 28% savings on OPEX related to Network elements many small switches (100) replaced by access system and access gateways network consolidation process PROJECT: MCC 300 MCC 250 MCC 200 MCC 150 MCC 100 All rights reserved 2002, Alcatel, Paris. Other Recurring Expenditure cumulated REMOTE UNITS LOCAL UNITS LOCAL / CLASS 5 SWITCHES TEX / CLASS 4 SWITCHES CALL SERVERS ACCESS GATEWAYS TRUNK GATEWAYS DATA SWITCHES TRANSMISSION TOTAL IN MCC MCC 50 MCC 0 cl5 rep tdm exist slide 38 19
20 Personnel expenditures 38% savings many small switches (100) replaced by access system and access gateways centralised operations PROJECT: MCC 200 MCC 180 MCC 160 MCC 140 MCC 120 MCC 100 MCC 80 All rights reserved 2002, Alcatel, Paris. Recurring Personnel Expenditure cumulated MAINTENANCE MONITORING NE MANAGEMENT SUBSCRIBER MANAGEMENT TRANSPORT NETWORK MANAGEMENT TOTAL IN MCC MCC 60 MCC 40 MCC 20 MCC 0 cl5 rep tdm exist slide 39 Case B : Delta of Cumulated Discounted Cash Flow Delta Cash flow CL5 replacement (20 000) (40 000) (50 000) ( ) ( ) (60 000) (80 000) ( ) ( ) ( ) delta CAPEX Opex savings cumulated DCF ( ) ( ) ( ) ( ) ( ) slide 40 20
21 PROJECT: MCC 300 MCC 250 MCC 200 MCC 150 MCC 100 MCC 50 MCC0 cl5 rep All rights reserved 2002, Alcatel, Paris tdm exist REMOTE UNITS LOCAL UNITS LOCAL / CLASS 5 SWITCHES TEX / CLASS 4 SWITCHES CALL SERVERS ACCESS GATEWAYS TRUNKGATEWAYS DATA SWITCHES TRANSMISSION TOTAL IN MCC Discounted Cash Flow Difference (delta) cash flow between the TDM As it is case and the NGN one is evaluated in fact in this case we essentially compare between the CAPEX costs due to NGN deployment versus OPEX savings brought by NGN Main finding: significant OPEX savings are not sufficient to compensate the CAPEX investments required by a full replacement a negative difference of cash flow NGN not justified here to replace a modern TDM infrastructure Many operators currently consider that they don t need today to replace /migrate their existing state of the art TDM network to a full NGN priority put on new service development (see workshop on Services) slide 41 Keep TDM or go NGN? Potential mix? Back on slide 37 : over 60% of CL5 replacement CAPEX is in remote and local units! Case B :CAPEX comparison One-time Expenditure Cumulated CAPEX Difference due to the initial capex in NGN to replace the existing network only extensions in TDM ITU/CoE /ARB -NGN Economics (II) slide 37 Can we envisage keeping the TDM remote & local units within an NGN architecture? Yes, if they are not obsolete and can be handled by the Centralized Access Gateways and the Media Gateway Control function (e.g. MGC function within existing TDM switches) slide 42 21
22 Contents 3. Class 5 CG : Cap and Grow case slide 43 Class 5 CG : cap TDM, grow with NGN Network with a growth of 10% installed base of subscribers with 40 TDM Local exchanges and 5 transit exchanges THE Question: Grow withtdm or with NGN class 5? slide 44 22
23 Class 5 CG : grow with TDM Transit Network 5 TEXs LEX LEVEL 40 Local Exchanges K existing subscriber lines K growth over the period slide 45 Class 5 CG : Grow with TDM Main dimensioning outputs (new resources per year) REMOTE SITES INSTALLED BASE Remote Units POTS lines ports LEX POTS lines ports Trunk ports to LEX Trunk ports to TEX REGIONAL SITES TEX Trunk ports from LEX Trunk ports to other Regional TEX slide 46 23
24 Class 5 CG : Grow with NGN Existing subscribers remain on existing TDM switches: kept as they are Access systems deployed only for new subscribers with access gateways in local sites MGC function introduced within some existing TDM switches from one to three at the end of the period capacity : up to 200 K subscribers per MGC Trunk gateways distributed within local sites Voice compression (factor 1 to 4) slide 47 Class 5 CG : Grow with NGN Trunking gateway Access gateway 40 LEX TEX LAYER MGC function added on up to 3 existing TDM switches Packet Trunking network gateway IP links MGC Access gateway LEX LAYER K existing subscriber lines Exchange A subscriber Growth K lines over the period slide 48 24
25 All rights reserved 2002, Alcatel, Pari All rights reserved 2002, Alcatel, Paris. Class 5 CG : grow with NGN Main dimensioning outputs (new resources per year) REMOTE SITES INSTALLED BASE Remote Access POTS lines ports LOCAL SITES Access GWYs VoP gateway ports Local Access POTS lines ports TRUNKING GATEWAYS Sites equipped VoP ports REGIONAL SITES DATA switches STM-1 line ports CALL CONTROL MGCs Subscribers VoP trunk ports slide 49 Class 5 CG :CAPEX comparison PROJECT: ITU CL5 CG kcc One-time Expenditure tdm kcc TDM and NGN CAPEX are close kcc kcc REMOTE UNITS LOCAL / CLASS 5 SWITCHES TEX / CLASS 4 SWITCHES TRANSMISSION TOTAL IN kcc kcc NGN CAPEX in the first years driven by geographic coverage kcc kcc PROJECT: ITU CL5 CG One-time Expenditure Access systems represent a large part of CAPEX kcc kcc kcc CL5 CG7515 REMOTE UNITS LOCAL UNITS LOCAL / CLASS 5 SWITCHES similar values in TDM and NGN kcc kcc CALL SERVERS ACCESS GATEWAYS TRUNK GATEWAYS DATA SWITCHES TRANSMISSION TOTAL IN kcc kcc kcc slide 50 25
26 Class 5 CG: OPEX Comparison Overall network OPEX Includes the OPEX of the existing installed base and of the growth Opex Comparison (cumul) NGN case is a mix of TDM OPEX (installed base) and NGN OPEX (growth) TRANS OPEX Manpower Net Elts OPEX TDM part has a big weight and limits the impact NGN TDM slide 51 Class 5 CG: OPEX Comparison Focus on the incremental OPEX OPEX of the existing TDM installed base (2003) removed compares OPEX due to growth (TDM or NGN) Incremental Opex Comparison (cumul) large impact on transmission due to voice compression in NGN TRANS OPEX Manpower Net Elts OPEX significant impact on manpower centralised operations flexibility NGN TDM slide 52 26
27 Class 5 CG : Delta of Cumulated Discounted Cash Flow Delta Cash flow CL5 Cap and grow delta CAPEX Opex savings cumulated DCF - (2 000) (4 000) Reminder overall yearly CAPEX of about 9000 K CC overall yearly OPEX: KCC slide 53 Class 5 CG : Discounted Cash Flow In this case we evaluate the difference (delta) of cash flow between a growth in TDM and a growth with NGN Growth with NGN generates a positive delta cash flow compared to TDM growth (apart for the first year due to coverage) Impact remains limited when compared to the overall network costs still a large TDM part similar access systems in the two cases coexistence of two architectures A significant network growth allows NGN to quickly reach a relevant volume level allowing to benefit from a better CAPEX coverage and OPEX savings slide 54 27
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