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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.

26 "67 6-2/1

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.

"67 6-2/1 27

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.

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