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Want to Keep Those High Margin TDM Leased Line Revenues? Here’s How...

SONET/SDH networks continue to generate valuable TDM leased line service revenues. Margins for these services are determined by the prices charged for them minus the costs of delivering them. The nice thing about TDM leased lines is that at this stage in their market lifecycle they are primarily purchased by risk-averse and relatively price-insensitive customers, so they face relatively little pricing pressure. The problem with continuing to offer these services over legacy SONET/SDH infrastructure is that operating costs are high and getting higher with expensive maintenance, large footprint, and high power consumption, and operators often face increasing difficulties finding replacement parts. Furthermore, the operating cost of the SONET/SDH network is being shared by a shrinking volume of services. All this is putting pressure on margins.

The solution is to offer TDM leased line services based on next-generation infrastructure with lower operating costs that can also support high volume packet-based services, enabling operating costs to be shared by a larger number of services. Packet with TDM circuit emulation, OTN switching, and SONET/SDH switching in a next-generation platform are the three main options with each having its advantages and disadvantages.

SONET/SDH Migration Options

Advantages for packet with TDM circuit emulation include low speed TDM (E1, T1, E3, DS3) support and the better granularity and statistical gain of packet. However, quality of service is more complex and more learning may be required for users that are less familiar with packet technology, though these disadvantages can be largely mitigated with a good network management system, such as Coriant Transcend™ Chorus for Transport, that hides complexity and provides TDM-like provisioning and operations, and with MPLS-TP that more closely resembles SONET/SDH, as we will discuss later. One final disadvantage of packet with TDM circuit emulation is that STM-64/OC-192 interfaces are typically not supported. 

OTN switching offers scalability and simplicity/familiarity but has lower granularity (ODU0 = 1.25 Gbps) and OTN switching products do not typically support low speed interfaces. SONET/SDH in a next-generation platform, such as the Coriant® mTera® Universal Transport Platform (UTP) (see the blog 5 Options for Migrating SONET/SDH Networks to OTN/Packet), benefits from technology familiarity and offers better granularity than OTN, however, low speed interfaces are not typically supported and it cannot match the granularity of packet. 

If packet with TDM circuit emulation provides the best fit, then the next question becomes which packet technology? Carrier Ethernet or MPLS-TP? Carrier Ethernet includes Ethernet Bridging and VLAN cross-connect with G.8032 Ethernet Ring Protection and G.8031 linear VLAN protection for sub-50ms protection, and is generally seen as the simpler option, at least for those familiar with packet technology or with limited transport technology experience. However, MPLS-TP provides a circuit-based approach to packet networking and is based on the same architectural principles of layered networking that are used in SONET, SDH, and OTN. It supports SONET/SDH-like protection mechanisms such as LSP SNCP and LSP ring protection, with platforms such as the Coriant® 7090 M/CEM, which also support MSP 1+1/1:1 protection, capable of being deployed in mixed networks with end-to-end protection of individual TDM services across both MPLS-TP and SONET/SDH domains, removing a significant barrier to migration. It provides the better service scalability relative to Carrier Ethernet – for example it is not restricted by the 4,000 S-VLAN limit of Ethernet bridging. And it includes VPLS/H-VPLS for multi-point services. For these reasons of greater familiarity and scalability, MPLS-TP is typically the preferred packet technology for TDM circuit emulation, with the majority of packet with TDM circuit emulation products available on the market today following this approach. 

An additional choice relates to TDM circuit emulation. Here the options include RFC 4553 Structure-Agnostic TDM over Packet (SAToP), RFC 4842 SONET/SDH Circuit Emulation over Packet (CEP), and Transparent SONET/SDH over Packet (TSoP). SAToP provides an option for low speed TDM though it also supports channelized high speed interfaces (i.e., VC12 onto ch.STM-1, VC11 onto ch.OC-3) and is probably the most widely supported and deployed. TSoP provides an option for clear channel high speed TDM (i.e., STM-n/OC-n). CEP supports both low speed and high speed TDM with the ability to aggregate lower speed circuits onto higher speed channelized interfaces. CEP is also the most bandwidth efficient of these options as empty TDM slots will not occupy packet bandwidth. However, these circuit emulation options are not mutually exclusive with the same hardware often capable of running different options for different services simultaneously.

So to summarize, MPLS-TP based packet platforms with support for circuit emulation, such as the 7090 M/CEM Series, enable network operators to continue to generate revenues from a wide range of TDM leased line services, while reducing operational costs with less expensive maintenance, lower power consumption, and smaller footprint, and to share these operational costs among both TDM services and a wide range of packet-based services, thus maintaining high margin TDM leased line revenues.

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