april 2008 Tellabs

InspirE:
new name
new look

i n sid e

Spectrum
Auction
Scorecard
reliable networks superior services Bidding ’til It Hertz
Verizon Looks to
Trump Cable
The D in MDU Stands
for “The Donald”?
Pick a Partner
Tellabs Marks 25 Years
of Channel Partners

Swisscom’s

Kurt Schmid,
Swisscom
3G Makeover
Ë

“Everything is an experiment now.”Page 10

 leading edge a n e w b eg i n n i n g

A Note from Robert Pullen, Tellabs CEO

Allow me to take this opportunity to introduce myself. I’m
Rob Pullen, and I am the new CEO of Tellabs. For more than 20
years, I’ve worked in various capacities with great teams at Tellabs
to bring leading-edge technologies, services and solutions to our
customers. I’m sure throughout the years, I’ve met many of you
and look forward to working with you again, as well as establish-
ing new relationships and, above all, validating your trust.
I have recently been given the opportunity of a lifetime.
Having been appointed CEO at the end of February, my job is
to guide this great company into a new age and to help inspire
our people toward a set of common goals: creating innovative
solutions and providing excellent customer satisfaction. Tellabs
recognizes the significant changes and challenges that this in-
dustry poses for vendors and service providers alike. So I’ll share
with you some insights and ideas about what I believe define the
current and future landscape and how we’ll succeed together.
First, the state of our industry. Everyone recognizes that the
telecom industry is facing some heady challenges. Consolidation
is occurring on both the vendor and service provider sides, and
the fight for new and profitable revenue streams is white-hot.
Tellabs has and will continue to adjust and adapt as needed to
provide this industry with great solutions. We have enjoyed
many long-standing relationships, and we look forward to build-
ing new ones. Most importantly, we are highly focused on those
strategic applications and services driving network changes and
profitable revenues for our customers.
Next, growth. Tellabs sees growth opportunity in the world.
We are working with some of the largest and smallest providers
on every continent and others in between, and our goal in every
instance is to provide solutions that fit a business model for
growth. While the blockbuster “killer apps” are few and far be-
tween, the one killer app in which everyone believes is one with
growth opportunity. Despite being considered a largely North
American company, Tellabs has a major presence on every con-
tinent and continues to build on significant international market
share. As a result, we’ve helped virtually every type and size of
customer achieve some of their goals, including enabling cut-
ting-edge services for their customers.
Finally, innovation. Innovation has always been a core value
at Tellabs. Our investment in innovation stretches from our
people to our labs to our solutions. I’ve witnessed it firsthand.
As an electrical engineer by education and in practice, I believe
that at the end of the day, it’s innovation that drives this industry.
And innovative solutions and services are what drive end-user
demand and our customers’ success. Tellabs will continue to
hold innovation sacred and offer solutions that differentiate and
advance our customers.
For more than 30 years, Tellabs has been fortunate to serve great
customers in an exciting industry. Let me take this opportunity to
thank all of you for your interest in Tellabs. Together, we will build
on past successes and ensure a bright future for our industry.

Robert W. Pullen
Chief Executive Officer
and President, Tellabs

Why Emerge is now Inspire

Welcome to the first edition of Tellabs
Inspire. For returning readers of the magazine
formerly known as Emerge, you’ll likely notice
a few changes — starting with the name on the
front cover.
This is more than just a cosmetic makeover.
Our new title captures the spirit of the time, a
time in which telecommunications technology
has evolved from a plaything of the privileged
few to a can’t-imagine-how-we-ever-lived-
without-it necessity for the global masses.
End users, once satisfied with simple utility,
have become increasingly savvy, and ever more
demanding of creative, flexible, personalized
solutions. The time span between “the next big
thing” and the “next, next big thing” has short-
ened exponentially.
The challenge to service providers — and
to Tellabs — is not just to meet these new user
expectations, but to exceed them. Not just to
provide the answers, but to anticipate the ques-
tions. Basic communication is a thing of the past.
Our industry is no longer “emerging” — we’ve
arrived. So where do we go from here? Wherever
inspiration and innovation take us.
Tell us what you think at inspire@tellabs.com.
d av i d m o rfas ,
e d it o ria l m ana g e r

 Tellabs Inspire • APRIL 2008

 co n t e n t s

tellabs 4 upload
One Tellabs Center Long tails. Mobile TV subs tuning
1415 West Diehl Road out. Broadband for all? And more.
Naperville, IL 60563 USA
Phone: +1.630.798.8800
Fax: +1.630.798.2525 6 unleash the power
www.tellabs.com If your EMS/NMS isn’t living up
to its potential, you’re not alone.
President and CEO
By Tim Kridel
Robert W. Pullen
Executive Vice President,
Global Sales, ServiceS 8 partnering for success
and strategy The Tellabs channel partner program
Carl A. DeWilde passes the quarter-century mark.
By M.J. Richter
Editorial Manager
David J. Morfas
inspire@tellabs.com 10 the swiss confederation
Published by Swisscom gives itself a
Telephony Custom Media network makeover.
330 North Wabash Avenue, By Raymond Conway
Suite 2300
Chicago, IL 60611
Phone: +1.312.595.1080
14 you’re fiosed!
Fax: +1.312.595.0296 Verizon Trumps cable in
www.telephonyonline.com the MDU market.
By Joan Engebretson
Editor
Tim Kridel
Editorial Contributors
16 spectrum of
Raymond Conway, Joan Engebretson,
opportunities
Iain Gillott, Tim Kridel, Lynnette Luna, What’s up for grabs in this
Karen Lien Miller, Raianne Reiss, M.J. year’s spectrum auctions.
Richter, Patty Wetli By Lynnette Luna
Art Direction
Cavedweller Studio 18 analyst insight
Production Manager Winning the auction but
Melissa Langstaff losing in the market.
By Iain Gillott
Reprints
For reprints and e-prints, call
FosteReprints at +1.866.436.8366
Statements herein may contain projections
or other forward-looking statements

www.inspirethenewlife.com
regarding future events, products, features,
technology and resulting commercial or
technological benefits and advantages.
These statements are for discussion Video Podcasts • Audio Podcasts • Download Center
purposes only, are subject to change and are
not to be construed as instructions, product
cov er p h oto by w illy s piller / g e t t y i m ag e s

specifications, guarantees or warranties.

Actual results may differ materially. CT[[PQb
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marks are owned by Tellabs Operations,
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and/or other countries: TELLABS®,
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TELLABS and T symbol®, and T symbol®.

Any other company or product names may

be trademarks of their respective companies.

Copyright © 2008 Tellabs.

All rights reserved. =PaaPcTS
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Tellabs Inspire online:
tellabs.com/news/pubs.shtml

APRIL 2008 • Tellabs Inspire 

 vo d | t u n i n g o u t | D i g i ta l D i v i d e | H i e r o g ly p hs | M DU S c r u m

Calendar
IIR’s TNMO
May 5-9, 2008
Amsterdam
NXTcomm

upload
June 16-19, 2008
Las Vegas
CommunicAsia
June 17-20, 2008
Singapore

Ë For more information about The Long

Tail’s influence on telecom, see “Chasing
the Long Tail” in the Winter 2007 issue
of Tellabs Emerge. It’s available online at
www.tellabs.com/news/reprints/
emerge_winter07_longtail_reprint.pdf.

ticketing service Fandango, allows users to

search for a television program or feature film
by entering keywords such as title, actor or di-
rector. A number of current television programs
can be viewed directly on the Fancast site.
In other instances, Fancast will either link
the user directly to the content — for example,
Vo d by connecting the user to iTunes or Netflix
— or provide a list of where the show can be

The Long Tail Reaches to Infinity

If there’s content to be viewed and a screen to watch
it on, Comcast wants to be the one to point consumers in the
right direction.
Earlier this year, Comcast CEO Brian Roberts announced a
number of initiatives that, together, form the company’s “Project
Infinity.” Perhaps the most intriguing venture: Fancast, which
Wired describes as the “electronic programming guide that
TVGuide.com only wishes it could be.”
The site, which builds on Comcast’s acquisition of the movie-
D V D : Digital Video Disc D V R : Digital Video Recorder
H D : High Definition VoD : Video on Demand
found, by date, time and television station/
network. For theater listings or times, Fancast
will send the user to — you saw this coming
— Fandango, where the consumer can purchase tickets.
Other elements of Project Infinity include a portable DVD/
DVR, developed in partnership with Panasonic and available in
2009, and a massive expansion of Comcast’s HD VoD offerings.
Over the next couple of years, plans are to grow the existing
library of 300 HD films to more than 3,000.
Comcast’s initiative is the latest example of the telecom in-
dustry capitalizing on the “Long Tail”: a widely held theory that
obscure, niche, older or even unpopular content — be it mov-
ies, books or music — can be a significant source of revenue for
consumer-focused businesses, including service providers, cable
operators and wireless operators. — Patt y W e t l i

tu n i n g o ut Mobile TV to Subscribers: Can This Marriage Be Saved?

According to a recent M:Metrics study commis- providers a clear window of opportunity. Sixty
Decline in sioned by Tellabs, new users continue to sign up percent would sign up for mobile TV again
mobile TV for mobile TV services at a healthy rate. But it’s if service quality and reliability significantly
user
population
not enough to counteract the number of sub- improved in the coming year.
scribers who are leaving the service in droves. M:Metrics conservatively estimates that by
-68%
Source: M:Metrics survey, 2007

Key takeaways from the survey of mobile TV regaining just half of the potential market lost
users in Europe and North America suggest due to quality and reliability issues in the next
ways in which service providers could stem 12 months, service providers could increase
+36%
Growth of
this tide. After price, mobile users cite quality
and reliability as major reasons for abandoning
revenue by $270 million. The solution is
simple — give the people what they want.
new mobile mobile TV. Yet those ex-users grant service — K a r e n Li e n M i l l e r
TV users
Ë For more information, go to www.tellabs.com/news/2008/nr021208.shtml

 Tellabs Inspire • APRIL 2008

 D igita l D ivid e
U.S. Leads and Lags in Broadband
Connectivity Scorecard (score of 10) With more than 65 million
subscribers, the United States is the world’s
1 United States 6.97 biggest broadband market, according to a
2 Sweden 6.83 recent OECD study. But is it the best?
A number of recent reports provide
3 Japan 6.8 conflicting snapshots of how various
4 Canada 6.5 countries — developed and emerging —
are faring in terms of not only providing
5 Finland 6.1
access to information and communica-
5 UK 6.1 tion services, but utilizing them, as well.
Increasing broadband penetration
OECD Broadband Subscribers has been a high priority of the Bush
per 100 inhabitants Administration. NTIA figures released
earlier this year indicate improvement
1 Denmark 34.3 has been made, with the FCC reporting
that more than 99 percent of U.S. ZIP
2 Netherlands 33.5
codes received broadband service from
3 Switzerland 30.7 at least one provider by the end of 2006.
Critics argue that the ZIP code measure
4 Korea 29.9 is misleading, as is the FCC’s definition
5 Norway 29.8 of broadband: 200 kbps, barely capable
of streaming video.
15 U.S. 22.1 Further complicating the picture is
the OECD’s annual broadband survey,
The Economist e-readiness Ranking which shows that the United States
(score of 10) continues to lag most Western European
countries in terms of broadband lines per
1 Denmark 8.88 person: It ranks 15th, well behind leaders
2 U.S. 8.85 such as Denmark, the Netherlands and
South Korea.
2 Sweden 8.85 Yet in studies that tie usage to infra-
structure, the United States fares much
3 Hong Kong 8.72
(up from #10 in 2006) better. Since 2000, The Economist has
provided “e-readiness” rankings that
4 Switzerland 8.61 evaluate a country’s e-business environ-
ment and openness to Internet-based op-
portunities. The 2007 survey placed the
United States second, tied with Sweden
and just behind the Danes.
Yet another new study, “The
Connectivity Scorecard,” assesses how well
a country’s consumers, businesses and gov-
ernment employ information and commu-
nications infrastructure. In it, the United
States scored the top ranking among 16
developed countries. (Denmark wasn’t
included in the survey.) Commissioned by
Nokia Siemens Networks and conducted
by Professor Leonard Waverman at the
London Business School, the Connectivity
Scorecard rewarded countries for produc-
tive use of information and communica-
tions assets.
The e-readiness rankings and the
Connectivity Scorecard argue that world-
class infrastructure alone does not a com-
munications powerhouse make. Instead,
adoption must be widespread and by a
skilled population. And no one should
get too comfortable with their status in
either ranking: Expanding mobile and
e-commerce applications coupled with
aggressive government action are helping
a number of emerging countries leapfrog
their more developed counterparts.
The battle for broadband bragging
rights continues. — P att y W e t l i
OECD: Organization for Economic
Co-operation and Development
NTIA: National Telecommunications
and Information Administration

H i e r o g lyphs
Who Needs Words
When You Have Zlango?
Maybe those prehistoric cavemen had it right
after all. Who needs words when you can
communicate with pictures?
 Israeli-based Zlango has developed a
universal iconic language designed for mobile
messaging, among other applications. The
service is beginning to catch on: A number
of mobile operators have inked partnerships
deals, including Pelephone and Orange in
Zlango’s home country, as well as Globe in the
Philippines and Kyivstar in Ukraine.
 According to the company’s web site,
“any type of communication done via Zlango
creates smiles.” So try using it the next
time you have to tell the boss your project’s
running over budget. — patty w e t l i

APRIL 2008 • Tellabs Inspire 

 u p loa d
M D U S c r um
Playing by the Rules
Imagine a baseball game where the
umpire calls one team out on two strikes and
the other out on four. Not a level playing field
— that’s how the cable industry feels as it at-
tempts to compete in the MDU space.
Although it’s common for companies such as
Verizon to enter into exclusive service and mar-
keting agreements with MDU building owners
and property managers, cable operators have
recently been banned from inking similar deals.
That has the cable industry crying foul.
In a 2007 ruling, the FCC voted to prohibit
cable operators from entering into and en-
forcing existing exclusive access agreements,
arguing that such arrangements limit consumer
choice. But the ruling did not extend to ad-
ditional MVPDs such as DBS providers and
PCOs (cable companies operating a few, small
systems), a decision the NCTA believes will tilt
the competitive landscape in those companies’
favor. (See “You’re FiOSed!” on page 14.)
Appeals of the FCC ruling — filed by NCTA
and organizations representing MDU owners
— are pending in the D.C. Circuit Court. The
NCTA’s argument is two-fold, questioning the
logic behind the ruling, as well as its terms.
Where the FCC views exclusive access
agreements as harmful to consumers, the
NCTA takes the opposite position. In com-
ments responding to the ruling, the NCTA
notes that these arrangements often serve as
incentive for providers to take on the signifi-
cant cost and risk of wiring MDUs, while at the
same time enabling building owners to negoti-
ate benefits for residents, such as lower fees or
improved customer service.
But what really has NCTA up in arms is the
fact that the commission’s ban applies only to
cable operators and common carriers. Failure
to treat all MVPDs equally “would simply give
those companies not covered by the prohibi-
tion an artificial advantage,” according to the
NCTA’s response.
In other words, if the FCC decides to change
the rules of the game, cable companies want to
make sure everyone is playing by the same one.
— Patt y W e t l i
f cc : Federal Communications Commission
M D U : Multiple-Dwelling Unit M V P D :
Multi-Channel Video Programming Distributor
D B S : Direct Broadcast Satellite P C O : Private
Cable Operator N C TA : National Cable &
Telecommunications Association
 Tellabs Inspire • APRIL 2008
p ro f e s s iona l s er v i c e s
Network Management Systems —
Unleash the Power
From collecting dust to saving money.
S
top us if you’ve heard this
one before: Your company
orders a state-of-the-art
EMS/NMS solution, but
it literally collects dust
because no one has the time to set
it up. Or maybe it’s set up, but no
one got around to configuring it,
so it sits idle. Or the EMS/NMS is
used on a regular basis, but it still
takes a significant amount of time to
compile data that could be used to
make major decisions, such as adding
network capacity.
Any or all of these scenarios prob-
ably sound familiar. An idle EMS/
NMS is a waste of the large invest-
ment typically required for the hard-
ware, software and training. And even
if the EMS/NMS is in service, usage
is often inefficient if users do not un-
derstand its full capabilities.
Management systems are typically
designed to simplify tedious, time-
consuming tasks and have a wide
range of enhanced features. In many
cases, though, the systems are simply
used for network monitoring or sys-
tem provisioning. “Sometimes service
providers are using it for just one or
two features,” said Curtis Taylor, se-
nior product manager for the Tellabs®
by ti m k ri de l
MetroWatch® Integrated Network
Manager (INM). “Is it being fully
utilized and doing everything it could
be doing?”
Case in point: A wireless service
provider was looking for a way to
simplify the process it used to un-
derstand its backhaul bandwidth
utilization. Although this seems like
a simple function, gathering the
large amounts of necessary data and
assembling them into an understand-
able form was a lengthy and complex
process. This is a critical component
of controlling necessary costs for all
wireless service providers.
Call in the Professionals
Service providers increasingly turn
to vendors and other third parties for
help with tasks that require expertise
or resources that they don’t have in-
house, and network management is
no exception.
“Management systems have come
a long way,” Taylor said. “They are
very feature rich and unless you
take the time to really learn them,
it is easy to miss valuable time-sav-
ing capabilities. Why not lean on a
partner to leverage all of the features
and functionality that can help you

effectively manage your business? That
could help you optimize your network
and save money.”
As an example, Tellabs® Management
System Services provide expert help with
all of Tellabs’ EMS and NMS systems:
● Management system deployment:
Includes configuration site survey, hard-
ware build and installation, OS installa-
tion and configuration, database instal-
lation, EMS/NMS software installation,
database configuration and system ac-
ceptance testing.
● Database consulting and backup
configuration: Includes reviewing data
availability requirements, analyzing existing
resources and backup strategies, custom-
designing a backup and recovery strategy
and testing in a variety of scenarios.
● Database redundancy configuration:
Includes bringing in a team of Oracle da-
tabase experts to implement a customized
MOP and disaster-recovery test plan.
● Remote database maintenance:
Includes administration and mainte-
nance, proactive monitoring of the active
database for potential problems and soft-
ware upgrades and patches.
● Northbound interface integration:
Enables Tellabs management systems
to communicate with OSS or umbrella
management systems to support func-
tions such as fault management, network
Telecom Namibia: An Emerging Leader in Africa
By Raianne Reiss – Senior Manager, Tellabs Global Services Marketing and Strategy
Although demand for voice services
has flattened in many mature mar-
kets, subscriber growth is exploding in
developing countries around the world.
Customers in emerging markets now
account for more than 50 percent of the
world’s telecom subscriptions, accord-
ing to a recent study by Gartner Group.
This study also predicts that 69 percent
of all mobile and fixed-line telephone
users will be located in developing mar-
kets by the end of 2010.
Disposable income in Africa is general-
ly low, and many customers face financial
hardships. Despite these constraints,
end users in developing countries often
spend five times more of their disposable
income on communications than their
counterparts in the developed world.
Ë To view the Telecom Namibia video case study, go to www.tellabs.com/services
provisioning and network inventory.
● OSS update service: Supports bulk
system updates to assist when new net-
work elements are added to your network
or when older systems are replaced.
● Management system consulting
services: Includes services tailored to the
service provider’s specific needs and cov-
ers all aspects of management system im-
plementation, usage and maintenance.
Tellabs Management System Services
essentially wrap around the service provid-
er’s existing EMS/NMS and then squeeze
out the value trapped by underutilization.
“Tellabs can create custom script-
ing and GUIs so service providers can
print reports automatically, as opposed
to having a couple of people assigned to
manually retrieve the information and
assemble it into a usable report,” Taylor
said. “This service helps make sure a sys-
tem is being effectively utilized and that
service providers are taking advantage of
all of the features and functionality.”
In the earlier case of the service pro-
vider that needed to understand backhaul
bandwidth utilization, Tellabs was able
to provide a solution that included the
Tellabs MetroWatch INM and manage-
ment system consulting services to create
customized utilization reports. These
reports are capable of providing detailed
information for various time periods
Clearly, the fundamental need to com-
municate and access information is as
strong in emerging Africa as it is in the
developed world. “The need to communi-
cate with others and share information is
an important and fundamental part of the
human experience and extends to all cul-
tures and regions throughout the world,”
said Tim Ayers, Tellabs global consulting
services director.
Service providers in emerging Africa
are moving quickly to grow their net-
works and deliver advanced services
to keep up with demand. The 40-plus
sub-Saharan countries that make up
emerging Africa share a common vision
of being change drivers in the region
and are passionate about the need
to provide access to information and
E M S : Element Management System
G U I : Graphical User Interface I N M :
Integrated Network Manager M O P :
Method of Procedure N M S : Network
Management System O S : Operating
System O S S : Operations Support System
throughout the day and week, so the cus-
tomer can ensure sufficient bandwidth is
available to handle peak calling periods
while maintaining the lowest possible
cost for backhaul facilities.
There are many other examples of fea-
tures contained in a management system
that users fail to leverage fully, such as
performance management reports that
help highlight troublesome facilities and
capacity management to ensure system
growth is planned as needed. Systems
such as the Tellabs MetroWatch INM
or the Tellabs® 8000 Network Manager
include other features that take advantage
of the ability to manage different types
of network elements. Features such as
“Micro-Topologies” enable a service pro-
vider to view a circuit that passes through
multiple network elements and click any-
where in that topology view to zoom in
on potential problem areas. With proper
training and a little extra help to utilize
key features, service providers can greatly
expand the value that a management sys-
tem brings to their business. n
distribute knowledge throughout their
population. Arguably, few service pro-
viders have a management team more
devoted to becoming regional leaders
than Telecom Namibia.
“Customers in emerging Africa expect
the same services and network quality
as customers in First World countries,”
said Coenraad Coetzee, general manager,
ICT & Corporate Business Solutions at
Telecom Namibia. “Our customers are
looking for us to provide advanced servic-
es like metro Ethernet and bandwidth on
demand. Telecom Namibia is committed
to rising to the challenge and providing
the communication tools and access to
information we need to continue growing
and developing as a nation.”
As Telecom Namibia transforms its
c o n t i n u e d o n pag e 9
APRIL 2008 • Tellabs Inspire 
 2 5 Y ear s o f Partner s h i p s

Partnering for Success business,” said Matt Hassett, channel

development manager for Tellabs. “We
After nearly a quarter century, Tellabs’ channel provide a portfolio of support based on
individual business models.”
partner program continues to deliver the goods. This support includes:
• Sales training.
By M .J. R icht e r • A portal on the Tellabs Web site, where
partners can obtain the latest sales tools.
• Various types of local marketing
assistance, from formal programs to at-
tending local trade shows.
Combining Tellabs leading-edge
technology with the Tellabs brand “al-
lows our channel partners to offer a very
robust solution to the customer,” Hassett

W
hen making pur-
chases, service pro-
viders and large en-
terprise customers
around the world
are a lot like individual consumers: They
prefer dealing with established compa-
nies they know and trust, especially those
that are local. To find everything they
need as fast as possible, they also like to
do business with suppliers that offer one-
stop shopping.
When it comes to buying Tellabs
network equipment, many Tellabs cus-
tomers can do it just the way they like,
thanks to the Tellabs channel partner
program. Channel partners — typically
VARs — are companies doing business
in their home markets in Africa, the
Americas, Asia, Europe and the Middle
East. Through formal agreements, these
companies operate seamlessly as regional
and local extensions of Tellabs sales-and-
service capabilities. (Two large national
stocking distributors in the United States
are channel partners, as well.)
The primary goal of the channel
partner program is to deliver maximum
value to service provider customers, no
matter where an individual service pro-
vider operates, said Scott Jones, manager
of the Tellabs Channel Development
Group. Through the program, both the
local partner and Tellabs contribute their
individual strengths toward satisfying
customers’ needs.
“In their local markets, our channel
partners have been working with the service
M P L S : Multiprotocol Label Switching
3 G : Third-Generation VA R : Value-
Added Reseller
providers and large enterprises for many,
many years. In a lot of markets, they are
Tellabs’ sole representatives,” Jones said.
“They have a strong track record of being
dependable and credible. So end customers
rely on them and get the convenience of
having a single, local point of contact, too.”
Think Locally, Act Globally
In the international telecom market-
place, service providers, large banks,
utilities and other enterprise customers
benefit even further from working with
a Tellabs channel partner: conducting
business in the local language with local
resources. To illustrate the global scope
of the program, attendees at the recent
Tellabs annual Partner Conference in
Orlando, Fla., included companies from
more than 25 nations. Among them
were partners from Caribbean nations,
Chile, China, Colombia, Denmark,
Ecuador, Guatemala, Israel, Japan,
South Korea, Panama, the Philippines,
Russia, Saudi Arabia, South Africa,
Spain, Switzerland, Turkey, the United
States and Venezuela.
During the conference, various chan-
nel partners shared their successes from
the past year in providing customers with
Tellabs networking solutions. They also
learned about new and emerging Tellabs
applications that will be available to their
customers this year and beyond.
Channel Partners Win, Too
Just as service providers and their cus-
tomers benefit from the channel partners
program, so do the partners themselves.
For one thing, Tellabs tailors the pro-
gram to the specific partner’s busi-
nesses. “We match our support to their
said. “As Tellabs channel partners, they
can fill out their portfolios and thus be-
come stronger competitors within their
individual markets.”
A partner portal on the Tellabs Web
site has helped streamline interaction
between Tellabs and the partners. “If a
channel partner needs certain informa-
tion right away, they can just go to the
portal 24/7 and get the information
there,” Jones said. “By making it easy for
them to do business with us, we're trying
to reduce their costs.”
Win-Win
Ultimately, channel partners broaden
Tellabs’ global reach. “They give us the
ability to cover much more of the world
and to go deeper into many markets than
we would be able to do alone,” Jones said.
Because some channel partners stock
Tellabs equipment, they can, in some
cases, deliver equipment to customers
more quickly than Tellabs could if it had
to manufacture the equipment to fill the
order. In the United States, if a service
provider customer needs an item im-
mediately, some channel partners — par-
ticularly distributors such as Embarq
Logistics and Windstream Supply — can
often step in and deliver it right away.
That capability enhances customer sat-
isfaction, and it also strengthens Tellabs’
financial position.
“We're not only gaining more revenue
by having more coverage but, because
our channel partners are able to deliver
equipment much more efficiently than
we are when a fast turnaround is re-
quired, it means we don't have to bear
those rapid-delivery costs,” Jones said.
“That, in turn, gives us more operating
flexibility in the marketplace.”

 Tellabs Inspire • APRIL 2008

 p ro f e s s iona l s er v i c e s

n a m i b i a c o n t ’ d f ro m pag e 7
Channel Partner Success Stories
business model toward next-genera-
During the the Tellabs Partner Conference, held earlier this year in Orlando, Fla., sev- tion technologies, it often encounters
eral channel partners shared their successes from the past year. Among them were: the same barriers that challenge other
service providers in developing markets,
Channel partner: Miracom-Tellabs Solution such as skill-set shortages, budgetary
Client: Swisscom Mobile pressures, bandwidth constraints, infra-
Using the Tellabs® IntegratedMobileSM solution in an end-to-end deployment, structure challenges and lack of expertise
Miracom helped Swisscom migrate its wireless network to 3G using pseudo- in new and significantly more complex
wire-based Ethernet to backhaul traffic. Swisscom is now positioned to offer new, technologies. To help overcome these
revenue-generating services while at the same time was able to reduce its CapEx/ barriers, Telecom Namibia increasingly
OpEx. (For more information about Swisscom’s migration to 3G, see The Swiss relies on partners such as Tellabs to
Confederation on page 10 in this issue.) provide the expertise needed to comple-
ment its own staff and capabilities.
Channel partner: Grintek-Tellabs solution “Good partners are critical to our busi-
Client: Telecom Namibia ness. We are looking for partners who
Telecom Namibia, an existing Tellabs 8100 system customer for digital leased-line not only deliver quality products but add
service, was looking for a way to migrate to a converged MPLS platform to support all value to our business,” said Coetzee. “The
of its existing disparate technologies. Using a combination of the Tellabs 6300 system companies we choose to partner with
and Tellabs® 8800 Multiservice Router Series, Telecom Namibia can now aggregate need to be committed to the success of
metro Ethernet traffic via the Tellabs 6300 system and converge that traffic to the IP Telecom Namibia and to the success of
core using the Tellabs 8800 series. (For more on Telecom Namibia, see page 7.) emerging Africa as a whole.”
Tellabs Global Services recently
demonstrated this commitment by
Customizing Relationships offered the Tellabs 8600 system and providing consulting services and
Because channel partners are key ele- the Tellabs® 6300 Managed Transport developing a comprehensive business
ments of Tellabs global operations, these System for integrating the voice and data plan for metro Ethernet services to help
relationships are carefully nurtured. infrastructure while supporting future Telecom Namibia make business and
“It’s actually an advantage to have applications like videoconferencing and financial decisions about the future of
fewer channel partners because we can telemetry,” Jones said. Additionally, the their Information and Communications
customize each relationship,” Jones said. customer will be able to sell capacity on Technologies (ICT) business. Tellabs’
“When we recruit a partner, we under- its fiber network, providing a new rev- deep understanding of Telecom Namibia’s
stand that company’s business model and enue stream. technology requirements, business chal-
work very closely with them on a go-to- But occasionally Tellabs has a need lenges and local market drivers enabled
market program. We match the strength to recruit additional channel partners. Tellabs to deliver a plan that included a
of our company to how that partner runs For example, Tellabs may develop a new detailed market analysis, service launch
its business, not vice versa. In turn, we’re product, and none of its existing channel strategies and roadmaps, service defini-
both able to provide better service to our partners operates in that market sector, tions and a robust financial analysis.
mutual customers.” or perhaps a channel partner changes its The business case enabled Telecom
This approach has led to long-term business model. Sometimes emerging Namibia’s management team to move
relationships; some partners have worked marketplace developments can also cause towards the market release of their
with Tellabs for 20 years or more. “That’s Tellabs to seek out additional channel first metro Ethernet service with the
something we’re very proud of and al- partners. “We are being more aggressive confidence that their decisions were
lows us to leverage each other’s strengths in recruiting channel partners right now supported by a sound business plan.
and history when going into new oppor- in the U.S. municipality market,” Jones With the launch of their progressive
tunities,” Jones said. said. “Cities in the United States are metro Ethernet plan, Telecom Namibia
Recently, this bore out with two Latin putting in their own networks. We want is well on its way to achieving their
American projects. “In Central America, channel partners who can serve our cus- company blueprint of becoming a state-
Datatel’s engineering, consulting ser- tomers in this market and help us expand of-the-art ICT company by 2010.
vices and integration expertise won them our coverage.” “Our partnership with Tellabs has
a contract to upgrade the provider’s Although channel partners and Tellabs contributed to the success of Telecom
network along a major transporta- all benefit from the channel partner Namibia by helping us reduce costs
tion route,” Jones said. “That upgrade program, the number one reason for its and reduce our time to market,” said
consisted of expanding existing Tellabs existence is to deliver maximum value Coetzee. “We consider Tellabs a part-
equipment and adding the Tellabs® 8600 to service provider customers. If a given ner, not just an ordinary supplier. We
Managed Edge System to the project.” customer in a particular part of the world will increasingly look to partners like
In Venezuela, Eprotel proposed a is working with a Tellabs channel partner, Tellabs to help us deliver the services
new voice and data infrastructure for a that customer effectively is getting every- our customers are demanding.”
subway/bus transport system. “Eprotel thing Tellabs has to offer — and more. n

APRIL 2008 • Tellabs Inspire 

c o v er s tory: S w i s s c om ’ s M a k eo v er
Swiss
Confederation
The
Kurt Schmid, head of Swisscom’s wireless access platforms business
By Raymond Conway
F
or Kurt Schmid, head of the
wireless access platforms
business at Swisscom, the
migration from 2G to 3G
is much more complex than
just deploying new infra-
structure. In a country perhaps best
known for the accuracy of its watch-
es, it should come as no surprise that
Swisscom would focus not only on the
big picture, but the smallest of details
as well. The result will be a network
that can shoulder the enormous load
of bandwidth-intensive 3G services
without sagging under the weight of too
much OpEx and CapEx.
10 Tellabs Inspire • APRIL 2008
For now, the 2G network and services
of Swisscom — a carrier with more than
5 million customers — remain the com-
pany’s “cash cow,” according to Schmid.
However, Swisscom already reaches
about 90 percent of the population
coverage in Switzerland with its UMTS
network and has HSPA (both HSDPA
and HSUPA) coverage throughout much
of the country. Most users have mobile
Internet access at up to 3.6 Mbps, but the
carrier is now in the process of launching
7.2 Mbps access.
Although HSDPA at 3.6 Mbps is
competitive with DSL, doubling mobile
broadband bandwidth will give Swisscom
 Fresh off the
launch of 7.2
Mbps HSDPA,
Swisscom
sees 3G as an
opportunity
to launch
a unifying
network
strategy.
an advantage in the marketplace. Yet as
competitors race to upgrade to 3G, a
fundamental question looms: What will
customers do with all that bandwidth?
Schmid readily admits how difficult it
is to predict customer behavior. “What
it comes down to is that we don’t know
how the customer will behave,” he said.
“We are getting our feet on the ground
with all of this. Behaviors are different
from country to country.”
Give and Take
Recent shifts in usage offer clues as to
what the future might hold. “We are see-
ing bandwidth demand growing on the
HSPA network by a factor of three [in]
the last 10 weeks,” Schmid said in late
January. “We’re about to do 7.2 Mbps,
and we are finding that as we roll out
more bandwidth, the use of mobile data
services increases. Right now, they can
have the same experience with broad-
band service that they get in the fixed
environment, and they are finding uses
for it. There is reason to think this will
continue with 7.2 Mbps.”
This trend provides some comfort
for incumbent service providers enter-
ing new territory. Like many mobile
carriers, Swisscom became accustomed
to predictable, annual 2G growth in
subscribers and voice minutes. Now, in
the era of mobile content applications,
Swisscom is banking that some of its
growth will come from third-party ap-
plications such as Napster MobileTM ,
which the company launched last sum-
mer. Users have access to more than 3
million tracks that can be downloaded
directly to handsets.
“Everything is an experiment now,”
Schmid said. “We were so spoiled by
our own success before. Napster Mobile
is an example of what customers will do
with 3G music downloads and is the type
of service every operator has to support
now. The customer does not want to wait
tens of minutes for it; they want it more
or less immediately.”
Paradigm Shift
As customers find new uses for 3G de-
vices and establish new patterns of band-
width consumption, Swisscom watches
closely for the changes these trends will
have on network and service quality.
“Coverage everywhere — in trains and
tunnels — is a commodity. Swisscom’s
differentiation is quality,” said Schmid.
“There’s a very high level of customer
expectation.” As the carrier migrated to
3G, it recognized that the upgrade to a
next-generation access technology with
higher data-rate ceilings also required
rethinking its approach to overall net-
work management, backhaul transport of
increasing amounts of traffic, as well as
new traffic types.
“Bandwidth limitation in cellular net-
works is not just in the air interface, but
in the backhaul portion too, and both
factors must be addressed,” Schmid said.
Swisscom relied on Tellabs to help
address the broader network transition
prompted by the move to 3G. Investing
in Ethernet as a new backhaul solution
was a major step in that transition, and
it came after much discussion between
Swisscom and Tellabs, according to
Karl Erben, executive account manager
for Tellabs.
“We had been working with Swisscom
for 10 years, had regular meetings with
them and talked to them extensively
about this kind of change,” Erben said.
“They wanted to reduce transmission
costs. They wanted to do that for the 2G
services they already had, and we also
talked to them about focusing on reduc-
ing the costs to support 3G because we
knew that was coming.”
In the 2G world of predictable band-
width usage patterns, leased lines such as
T1s and E1s have been the traditional
mode for mobile traffic backhaul. The
main advantage of TDM circuits is
their reliability. The main disadvantage
is expense: At hundreds of dollars per
line per month, they can account for 30
percent or more of a wireless carrier’s
OpEx. Another drawback is that leased-
line TDM doesn’t scale cost-effectively
as backhaul loads increase. E1s could
also take weeks or longer to install, de-
pending on the supplier, and once a car-
rier adds a new E1 circuit, it is paying for
excess capacity until bandwidth growth
fills the pipe.
“The cost to add that backhaul band-
width by adding more E1s is prohibitive,”
Erben said. “It’s also too cumbersome to
provide so many E1s in so many cell-site
locations when you start to need more
than a couple for every cell site.”
These drawbacks have prompted
Swisscom and other mobile carriers to
view Ethernet as the solution with the
scalability and flexibility necessary to
handle 3G’s increasing but unpredictable
growth. Ethernet is a much less expen-
sive and more flexible technology to
work with, supporting high-bandwidth
scalability that can be brought online
incrementally, with carriers paying only
for what they use.
“For years we observed the situation
with Ethernet technology, and we knew
we could no longer wait,” Schmid said.
“We had to evolve a flexible way to react
to the growth in air interface bandwidth
to 7.2 Mbps.”
APRIL 2008 • Tellabs Inspire 11
 c o v e r s t o r y: s w i s s c om

“Coverage everywhere — The Pseudowire Transition

in trains and tunnels — is Despite the growing popularity of data

services, the additional voice spectrum

a commodity. Swisscom’s 3G provides remains a key benefit to

network operators. But voice also hap-
differentiation is quality,” pens to be Ethernet’s one perceived
weakness. Combine this with the large
Kurt Schmid, Bern, Switzerland numbers of existing 2G and 3G base sta-
tions that do not yet support Ethernet,
and leaping directly from TDM to
IP and from ATM and SDH gear to
Ethernet isn’t an immediate jump many
carriers want to take.
That’s where Pseudowires come in.
This standardized technology enables
TDM traffic, such as voice, to be emu-
lated over an IP network. It’s an in-
creasingly popular interim approach to
mobile backhaul that allows operators
to make the most of their base station
investments, while backhauling data and
content traffic over Ethernet.
“We saw Pseudowire as the hybrid
approach to keeping more than one or
two leased lines at a cell site,” Schmid
said. “We keep the voice traffic on the
traditional TDM E1s, and go into the
IP world step-wise by keeping the high-
speed traffic separate. It’s a smooth tran-
sition to all-IP backhaul.”
This hybrid solution allows Swisscom
to introduce IP into its network while
avoiding further investment in non-IP
equipment, such as ATM switches and
SDH infrastructure. “An ATM switch is
not future-proof,” Schmid said. “It’s ex-
pensive. Our future will be fully based on
an IP core with metro Ethernet access.”
Erben said TDM Pseudowire-to-
Ethernet is just the solution some carri-
ers need to embark on a major backhaul
overhaul. “Carriers do not want a quality
trade-off for moving to the scalability
and flexibility of Ethernet, nor do they
want to replace much of their existing
base station equipment,” he said. “You
need a technology that is able to translate
those interfaces, and that is why you do
Pseudowires.”
Some of Swisscom’s competitors opted
for SDH infrastructures and leased lines

A D S L : Asymmetric Digital Subscriber Line A nsi : American National Standards Institute AT M : Asynchronous Transfer
Mode Ca pE x : Capital Expenditures D S L : Digital Subscriber Line E T S I : European Telecommunications Standards Institute
G . S H D S L : Global Standard High-Bit-Rate Digital Subscriber Line H S D PA : High-Speed Downlink Packet Access H S PA : High
Speed Packet Access (Uplink & Downlink) I P : Internet Protocol OpE x : Operating Expenditures O S S : Operations Support System
R N C : Radio Network Controller S D H : Synchronous Digital Hierarchy S L A : Service Level Agreement T D M : Time Division
Multiplexing U M T S : Universal Mobile Telecommunications System 3 G : Third-Generation 2 G : Second-Generation

12 Tellabs Inspire • APRIL 2008

 the Tellabs® 8607 Access Switch — Flexible Cell-Site Aggregation
The Tellabs® 8607 Access Switch,
launched in February at Mobile World
Congress in Barcelona, Spain, is the
newest member of the Tellabs 8600
series. The Tellabs 8607 switch enables
service providers to offer high-band-
width, cost-effective 3G services
worldwide. The Tellabs 8607 switch,
which includes TDM, ATM, IP and
Ethernet interfaces, is a single, flexible
platform for seamlessly connecting
any generation mobile site to the rest
of the network. Operators can migrate
their existing infrastructure to support
Ethernet backhaul and Ethernet-enabled
networks to continue the utilization of
an existing E1/T1 infrastructure. The
Tellabs 8607 switch covers both ANSI
and ETSI standardized countries.
Cost-effective
The Tellabs 8607 switch is designed to
handle even the most demanding cus-
or microwave for backhaul, Schmid said.
The hybrid approach gives Swisscom the
edge in flexibility and cost savings that
translates into more efficient response to
customer demand.
Profitable Growth, Bit by Bit
Some carriers are also concerned about
how the move from 2G to 3G will affect
profitability of their services portfolio.
Will it decrease as they invest in each up-
grade, from 3.6 Mbps to 7.2 Mbps and
eventually up to 14.4 Mbps? According
to Erben, that may be the case if opera-
tors don’t take steps to ensure the com-
mercial viability of mobile data services.
Swisscom addressed the issue in its
backhaul migration strategy by selecting
the Tellabs® IntegratedMobileSM solu-
tion, which is designed to adjust to new
traffic demands in a step-wise fashion
while mitigating service profit erosion.
Tellabs worked with its Swiss channel
partner, Miracom, to deliver several net-
work elements into Swisscom’s network,
including the Tellabs® 6300 Managed
Transport System, the Tellabs ® 8100
Managed Access System and the Tellabs®
8600 Managed Edge System, which in-
cludes the Tellabs® 8660 Access Switch
and the Tellabs® 8605 Edge Switch. (See
“Partnering for Success” on page 8.)
tomer requests, and enables operators
to benefit from low-cost DSL transport
without adding any additional hardware.
Integrating E1/T1 and Ethernet inter-
faces with DSL functionality brings clear
cost savings to the service provider and
makes network deployment and man-
agement simple and efficient.
Reliable
The environmentally hardened, carrier-
class Tellabs 8607 switch supports site
installations that experience extreme
weather conditions. Power redundancy
and extended operating temperature
range increase reliability and enable
service providers to lower the site
investment and power consumption at
cell-site locations.
Flexible
The Tellabs 8607 switch’s small size,
support for fiber, copper, Ethernet and
“The Tellabs IntegratedMobile solu-
tion was designed to help carriers move
from 2G to 3G while making sure cur-
rent services remain profitable and that
new services are generating revenue,”
Erben said. “When investment goes for
new technology to deliver more band-
width, revenue does not keep that pace
of growth. We want to break that linear
relationship between bandwidth and
cost, and revenue per bit.”
For Swisscom, deployment of the
Tellabs 8600 series represented a key
piece of the puzzle. The Tellabs 8605
switch operates as a cell-site aggregator
that separates TDM voice traffic from
IP data and content traffic, and the
Tellabs 8660 switch enables an efficient
traffic handoff to the RNC. Meanwhile,
the Tellabs® 8000 Network Manager is
capable of managing the Tellabs 8600
switch, Tellabs 8100 system and Tellabs
6300 system.
“We now have the Tellabs 8100 sys-
tem, the Tellabs 6300 system and the
Tellabs 8600 series deployed, and the
Tellabs 8000 manager managing all three
systems,” Erben said. “Swisscom liked
that capability to have one system manage
all three because they didn’t need to re-
train people on a new system or integrate
it into their proven OSS landscape.”
DSL and ability to perform in extreme
temperature ranges make it a versatile
solution for mobile service providers.
The switch has been designed to handle
the most demanding flexibility needs
and requirements of service providers.
Operators can easily reconfigure the
switch to support a mix of E1/T1 and
packet-based technologies to meet
changing backhaul deployment needs.
Additionally, the interface modules
— including Fast Ethernet, E1/T1, ADSL
and G.SHDSL, as well as the power
modules — can easily be swapped out.
The modularity of the device prevents
spending money on powering unused
interfaces and simplifies network chang-
es and spares management.
“We needed an upgraded network
management system for this new struc-
ture, and Tellabs has a very operator-
friendly network management system,”
Schmid said. Swisscom technicians were
already familiar with the equipment,
which made for a smooth transition.
The Tellabs solution proved better than
those from several notable vendors, and
Schmid said the battle between vendors
was a competitive one. “We did our trials,
and the products and the services support-
ing the products were what convinced us.”
Erben added that Swisscom’s diligent
evaluation of the Tellabs gear also helped
the vendor incorporate new attributes
into its roadmap of system capabilities.
Some of the Tellabs 8605 switch’s unique
features have been shaped by this process.
The next step for Swisscom could
be backhaul of its voice traffic over
Ethernet, as well. Schmid is prepared
for this eventuality, but Swisscom re-
mains cautious when planning for the
future. Moving traffic to Ethernet, he
said, is “one more step toward an all-IP
network. But IP is an evolution, not a
revolution. It has lots of advantages, but
it is also a tricky technology. When you
can compare IP service quality to TDM
service quality, that will be the right time
to go all-IP.” n
APRIL 2008 • Tellabs Inspire 13
 B roadband Pro p ertie s
You’re FiOSed!
From exclusive Trump high-rises to
affordable Bronx apartment complexes,
Verizon’s service adds to a property’s appeal.
By Joan Eng e br e ts on
R
obert Eddy was delighted
when Verizon’s FiOS ser-
vice brought high-speed
data, telephone and ad-
vanced video service to
Stonehenge Apartments, the 92-unit
complex in St. James, N.Y., where he
lives and serves as superintendent. “The
television picture is so much better and
cleaner,” Eddy said.
In addition to delivering higher qual-
ity, FiOS also has proven more reliable.
With previous service providers, Eddy
notes that the picture used to freeze. But
those problems are a thing of the past.
“We also have more channels,” Eddy
said. “The other service had 90 channels
total. Now we have more than 200, plus
music channels.”
Eddy is just as happy with the tele-
phone and Internet service he gets with
FiOS, a brand that plays off of its fiber-
optic foundation. “The Internet service
is great. You don’t have to worry about it
slowing down or getting kicked off.”
Inside Verizon’s MDU Play
When building owners make a deal
to bring Verizon’s fiber-based FiOS
service to a property, they can opt to
allow Verizon to offer FiOS to individual
residences rather than just to a single
demarcation point. Verizon recommends
that option because it makes the service
more future-proof.
As a result, Verizon often has to ret-
rofit existing MDU properties. In those
cases, the company takes care to make
sure the finished installation blends in
well with the existing decor.
“We offer several options to cam-
14 Tellabs Inspire • APRIL 2008
Word of Mouth
People like Eddy who live in MDUs
are an important market for Verizon.
Twenty-five percent of households in
the company’s local service area live in
MDUs. Once a building owner or condo
association strikes a deal with Verizon,
the service tends to catch on quickly,
even if it’s not the only voice, video or
data service available on the property.
“If people love it, as we’re finding they
do, they’re telling their neighbors, and this
word-of-mouth recommendation tends
to spread faster in cluster communities,”
said Eric Cevis, vice president of Verizon
Enhanced Communities, the business unit
ouflage the necessary wiring,” said
Eric Cevis, vice president of Verizon
Enhanced Communities, the business
unit dedicated to serving MDUs and
other planned residential communities.
“For example, there are several moldings
we can use in paintable plastic or real
wood, including a crown molding style.”
Verizon uses a range of equipment from
Tellabs to deliver FiOS service to MDUs.
“We started with a wall-mounted unit
that Verizon would mount in a common
room, and from there Verizon would
run voice, video and data to individual
dedicated to serving MDUs and other
planned residential communities.
A recent survey of FiOS subscribers
showed that 80 percent would recom-
mend the service to others and that 60
percent have already done so. At the
same time, FiOS is becoming a key ame-
nity for MDUs, with the service acting as
a significant market differentiator.
“FiOS is an effective amenity owners
and property managers can leverage to
improve vacancy and occupancy rates
and to lower churn,” Cevis said. “We’ve
found people are less likely to go some-
where that doesn’t have the service.”
According to independent research done
living units,” said Richard Miller, Tellabs
account vice president for Verizon. “But
some properties didn’t have enough wall
space, so we provided a rack-mount unit
that could accept multiple fibers. We
were also called upon to make the units
smaller. Verizon wanted as many tools
as they could have to meet the needs of
MDU owners.”
That strategy has paid off, Cevis said.
“The reason we’ve been able to scale
to large numbers is because Tellabs has
given us flexibility. They’ve been a tre-
mendous partner.”
by Praxis Research Partners, half of con- more bells and whistles and recognizes M D U : Multiple-Dwelling Unit
sumers surveyed said they’d be more likely the needs of consumers.” S F U : Single-Family Unit
to choose an MDU with Verizon FiOS Cable television and communications
service, other factors being equal. (Praxis service providers traditionally have offered grandchildren who live in other parts of
Research Partners, “FiOS Assessment in building owners an up-front fee and often the country — an application optimized by
the MDU and SFU Markets, 2007.”) a percentage of revenues in exchange for FiOS Internet, offering connection speed
When a condo association or home- the ability to offer service at a property. of up to 50 Mbps in some markets. At 50
owner group is involved, FiOS can Verizon offers similar incentives. Mbps, downloading a 1.2 GB (gigabyte),
increase the value of an individual home. “We either do a revenue share or a re- or 90-minute, standard-definition movie
A recent study by research firm Render, sidual based on penetration in the build- takes approximately 3.2 minutes. In the
Vanderslice & Associates found that ho- ing, as well as a one-time payment based future, Verizon will be in a position to
meowners estimate that the value of their on how many marketing rights we’re provide specialized applications, such as
house increases by more than 1 percent allowed in the building,” Cevis said. services involving telemedicine or moni-
when they are served by fiber optics all toring over its all fiber-optic network, for
the way to the home. Wide Demographic Appeal instance to help ensure that senior citizens
Verizon’s marketing efforts run the take their medication on a regular basis.
Trumping the Competition gamut, from cards promoting FiOS hung “We’re working to develop specific
FiOS has already captured the atten- on residents’ doors to complimentary applications for each life stage. FiOS
tion of Donald Trump, whose Trump barbecues where residents can experi- Internet has the bandwidth and the
Organization has signed on for FiOS at ence FiOS and then sign up for service. Verizon network has the reliability to
its posh Trump World Tower at United Verizon carefully targets its FiOS deliver these services.” Cevis said.
Nations Plaza and Trump Park Avenue promotions. “We’re doing a lot of work Perhaps the greatest testament to the
properties. But the service is not just for in life stage segmentation modeling,” power of FiOS for MDUs is the change
higher-income customers. FiOS is also Cevis said. “Some MDUs are rather that Cevis has noted in the dynamics of
finding its way into properties such as homogenous, and when that’s true, we the MDU FiOS sale.
Eastchester Heights, a 1,416-unit Bronx, leverage the nuances of what’s appropri- “The buzz is out there and property
N.Y., apartment complex offering afford- ate for that group.” owners see FiOS as a competitive differ-
able housing in one of the world’s most Even MDUs that skew toward an over- entiator,” Cevis said. “In the past some
expensive real estate markets. 55 demographic are good candidates for had a ‘wait-and-see’ attitude. But now
Residents of communities such as FiOS, Cevis said. For example, grand- they’re realizing that if they don’t jump on
Eastchester Heights can be excellent cus- parents are interested in seeing videos of the bandwagon, they’ll be left behind.” n
tomers for FiOS, Cevis said.
“What we’re finding is that
triple-play technologies rep-
resent entertainment value in “We’re doing
affordable communities. The
usage rates are probably even a lot of work
greater at some affordable
units as this becomes their pri- in life stage
mary entertainment service.”
AMLI Management Co., a
segmentation
Chicago-based company that
owns 70 rental properties
modeling,”
with 24,000 units through- Eric Cevis, VP of Verizon
Enhanced Communities
out the United States, has in-
troduced FiOS at a property
in Texas. Bob Faitz, who is in
charge of ancillary services
for AMLI, would like to
make the service available on
a wider basis.
“Residents, depending on
demographics and age, are
asking, ‘Whose high-speed
data service do you offer, and
what speeds do you offer?’”
Faitz said. “FiOS is a very
good product that offers

APRIL 2008 • Tellabs Inspire 15

 I n s ide t h e A ir wav e s A u c tion s
F
reedom isn’t free. Just ask the
bidders in the U.S. 700 MHz
spectrum auction. The band
is widely considered the last
of the beach-front property,
partly because of its favorable propaga-
tion characteristics: Signals travel farther
at 700 MHz than at higher frequencies
such as 1900 MHz, so operators need
fewer base stations to cover an area. That
translates into lower overhead costs — a
major asset for any operator, but particu-
larly for newcomers who want to be price
competitive with incumbents.
Such optimism is reflected in the bid-
ding. At press time, the auction had gar-
nered more than $19 billion in bids, sig-
nificantly more than the $10 billion to $15
billion the FCC had originally projected.
“Adding a new swath of spectrum gives
new entrants an opportunity to enter the
service provider mobile market and/or
provides current service operators an op-
portunity to enhance their current posi-
tion,” said Emmy Johnson, founder and
principal analyst at Sky Light Research.
“It is not often that a large portion of spec-
trum comes up for bid, and it is seen as a
key strategic move to take advantage of it
when it occurs, especially if this is one tool
lacking in the service provider’s tool kit.”
The 700 MHz auction has also attract-
ed attention because of the large number
of bidders involved (214), particularly
those companies with little or no associa-
tion with traditional wireless operators
or technology, including Chevron, and
MSOs such as Cablevision and Cox. But
perhaps the biggest focus is on Google,
which pledged to bid at least $4.6 billion.
Why $4.6 billion? Google and a coali-
tion of other Silicon Valley companies
and consumer groups lobbied the FCC
to require the winning bidder of some of
the spectrum to allow open access — in
which devices aren’t locked to a single
carrier — and $4.6 billion was the mini-
mum amount necessary to trigger the
open-access provisions.
With the $4.6 billion reserve met,
many industry experts believe Google
dropped out of the auction after securing
the open-access provisions for which it
had lobbied. If so, Google has still had
a significant impact on the U.S. mobile
industry because AT&T and Verizon
Wireless both have committed to open-
ing their existing networks to new devices
16 Tellabs Inspire • APRIL 2008
Spectrum
of Opportunities
From Asia to Europe to the Americas, 2008 is the
year of the spectrum auction. Here’s what to watch.
By Ly nn e tt e Luna
and applications beyond those they offer.
“Having won its point, Google is ex-
pected to stay out of the auction,” said Ken
Hyers, an analyst with Technology Business
Research. “However, other new players,
such as cable companies, may be actively
participating in the auctions. Regardless
of who wins the auction, the outcome for
consumers looks bright since the choice of
devices and handsets that can be brought
onto networks will expand — something
that the operators will have to respond to
with more competitive pricing and more
attractive products and services.”
WiMAX at 700 MHz
Another wild card is the technology
that will be deployed at 700 MHz. Most
industry pundits believe it will be an all-
IP, OFDMA-based technology such as
mobile WiMAX or LTE, the 4G path
for GSM operators. CDMA operator
Verizon, which was expected to go big
in the 700 MHz auction, has plans to
align itself with partner Vodafone to
deploy LTE, which requires a significant
amount of new spectrum.
Until recently, not much of the 700
MHz band was able to support mobile
WiMAX because the technology uses
TDD. Much of the 700 MHz band’s
spectrum, including the coveted C block,
is configured for FDD. That changed in
January, when the WiMAX Forum an-
nounced that it is adding the 700 MHz
frequency to its technology roadmap. The
specs will be unveiled soon and will support
both TDD and FDD certification profiles.
“The 700 MHz spectrum is set to
become a key spectrum band globally
and many administrations are now con-
sidering spectrum arrangements in the
band,” said Ron Resnick, president of the
WiMAX Forum. “Interest in WiMAX
deployments is also reinforced now that
802.16e is part of the IMT-2000 family
of standards and certified products are
becoming available.”
WiMAX or not, few companies have
revealed device or service plans for 700
MHz. One exception is Qualcomm,
which announced in November that it
had added support for WCDMA and
CDMA2000 to its transceiver product
roadmap. Qualcomm’s MediaFlo mobile
TV service already uses 700 MHz, and it
is among the bidders. AT&T, meanwhile,
has purchased Aloha Networks’ 700 MHz
spectrum but hasn’t indicated its plans.
“What are these devices going to
look like? Is it a phone? Is it going to
be used for radio broadcast?” pondered
Rick Segil, vice president of marketing
at antenna-maker Ethertronics. “We just
don’t know if the initial applications are
going to be data or voice.”
3G Spreads Across
Latin America
The rapid deployment of 3G across the
globe largely missed Latin America dur-
ing the past three years, but the region
is finally becoming a hotbed for next-
generation deployments. Plans for 3G
networks sat on the back burner during
2006 and 2007 as Latin American opera-
 Ë View Tarcisio’s video on Latin America Communication Markets at www.inspirethenewlife.com/podcasts > Get Schooled

tors recovered from the massive capital ● Venezuela – Sixty MHz in the 1900 Bridging the
expenditures they incurred migrating MHz band was auctioned in December Digital Divide
from TDMA to GSM or CDMA. 2007.
But 3G has gained importance now that ● Chile – Operators have launched At its November 2007 meeting in
mobile data services are making inroads 3G in existing spectrum, but Chile plans Geneva, the WRC adopted an inter-
into the region and 3G handset prices are to auction 700 MHz spectrum for 3G national treaty to increase available
falling. As a result, Latin American regula- in 2009, aligning itself with the United spectrum for mobile broadband
tors are auctioning off spectrum, although States. WiMAX will be auctioned in the services. The ITU adopted a proposal,
some operators have already launched 3G 2.5 GHz band in the second half of 2008. promoted by African governments,
services in their existing spectrum. Rojas said the initial steps for those to identify a chunk of UHF spectrum
According to Tarcisio Ribeiro, Tellabs operators that have launched 3G is to for mobile broadband services in
vice president and general manager of offer Internet access through laptop developing countries and rural areas
Latin America and the Caribbean, the data cards, but as handset prices fall they of developed countries.
new 3G spectrum coming into the region can begin to target enterprises, as well Europe, the Middle East and Asia
will enable operators to extend services as consumers with e-mail, music and all backed the proposal, agreeing to
beyond voice and compete with both streaming video. allocate the same 790-862 MHz
cable and wireline telephone companies. band; the Americas identified 108
“The spectrum they are acquiring will Europe Opens Up 2.6 GHz MHz in the 698-862 MHz band for
allow them to offer broadband services, The United Kingdom, Norway and mobile broadband services. The WRC
with the added advantage of gaining mo- Sweden are expected to become the first also identified 200 MHz of con-
bility,” Ribeiro said. European markets to auction spectrum tiguous spectrum in the 3.4-3.6 GHz
Here’s a rundown of what has already in the 2.6 GHz band, which will be used band for high-capacity, next-genera-
happened and what is ahead: for mobile broadband on a technology- tion mobile networks.
● Brazil – Regulators auctioned off 3G neutral basis. These auctions will set a “This decision by the WRC is an
spectrum in the 1900 MH z band. All of the baseline for how much 2.6 GHz spec- important step towards enabling
country’s existing operators won spectrum trum will be reserved for operators that hundreds of millions of people in the
at prices that reached up to a 104 percent want to deploy OFDMA-based systems, developing world and rural parts of
premium over the minimum bid deter- such WiMAX and LTE, rather than 3G the developed world to gain afford-
mined by the government. In the first two technologies such as UMTS. able access to broadband services,”
years of offering 3G services, the operators One question is how much of the spec- said Tom Phillips, chief government &
are required to offer coverage of at least 50 trum will be allocated to TDD to enable regulatory affairs officer of the GSM
percent of the urban area in Brazil’s capital WiMAX. CEPT says that regulators Association. “Radio signals in the
cities, in the Brasilia Federal District and in should allocate 50 MHz for TDD and UHF spectrum will travel further than
cities with more than 500,000 inhabitants. two 70 MHz blocks for FDD. But U.K. signals in the higher bands, enabling
WiMAX spectrum will be auctioned this regulators don’t believe those guidelines future mobile broadband networks to
year in the 3.5 GHz band. match the potential operators are look- reach as far as 2G networks do today.”
● Mexico – About 90 MHz is expected ing for and are prepared to take another
to be released this year, according to approach. Sources close to the WiMAX operators, Ofcom plans to buck the
Erasmo Rojas, director of Latin America Forum say it plans an FDD version of European Commission’s decision to al-
and the Caribbean with 3G Americas. WiMAX at 2.6 GHz, although it’s un- locate FDD/TDD spectrum within the
Regulators plan to sell spectrum at clear when that might be released. 2600 MHz band by allowing greater flex-
1900 MHz, 2100 MHz and 1700 MHz, Also in Europe: ibility in allocating unpaired spectrum to
which aligns with the U.S. AWS bands. ● United Kingdom – Ofcom plans to accommodate WiMAX. Operator objec-
WiMAX spectrum in the 3.5 GHz band auction spectrum in the 2010-2025 MHz tions include the perceived potential for
is expected to be offered this year. and 2500-2690 MHz bands this summer. interference.
● Colombia – The 1700 MHz AWS That spectrum will be offered on a tech- ● Norway – Regulators auctioned 2.6
band has been reserved for 3G services, nology-neutral basis, a boon for opera- GHz spectrum in November and didn’t
and the government appears ready to tors considering LTE and WiMAX. follow CEPT’s recommendations be-
auction it this spring, Rojas said. Amid objections from the country’s cause of demand from potential WiMAX
c o ntinu e d o n pag e 18
A P I : Application Program Interface AW S : Advanced Wireless Services C D M A : Code Division Multiple Access C E P T:
European Conference of Postal and Telecommunications Administration F C C : Federal Communications Commission 4 G : Fourth-
Generation F D D : Frequency Division Duplexing G S M : Global System for Mobile Communications I M T- 2 0 0 0 : International
Mobile Telecommunications-2000 I T U : International Telecommunication Union LT E : Long Term Evolution M S O : Multi-Service
Operator O F D M A : Orthogonal Frequency-Division Multiple Access P H S : Personal Handy-phone System QoS : Quality of
Service S D K : Software Development Kit 3 G : Third-Generation T D D : Time Division Duplexing T D M A : Time Division Multiple
Access U H F : Ultra High Frequency W c D M A : Wideband Code Division Multiple Access WiM A X : Worldwide Interoperability
for Microwave Access W R C : World Radiocommunication Conference

APRIL 2008 • Tellabs Inspire 17

 ana ly s t in s ig h t
The 700 MHz Opportunity
History shows that winning a spectrum auction
isn’t the same as winning market share.
By I ain Gi l l o tt
T
he wireless and mobile in-
dustry has been an amaz-
ing global success story: In
just 25 years, cell phones
have gone from analog
models the size of a small briefcase to
today’s multimedia, music-and-TV player,
e-mail-spouting smartphones. Yet despite
the technical developments and advances
in handsets and services, one constant re-
mains — the need for spectrum.
The laws of physics dictate that many
aspects of wireless technology are deter-
mined by the spectrum used to provide
the service. Although the details are
complex, the basic rule is that the lower
the spectrum used, the stronger the sig-
nal, which then is better able to penetrate
buildings. Conversely, higher spectrum
AW S : Advanced Wireless Services C D M A : Code Division Multiple Access E V- D O : Evolution - Data Optimized
H S D PA : High-Speed Downlink Packet Access M V N O : Mobile Virtual Network Operator P C S : Personal Communications
Service U M T S : Universal Mobile Telecommunications System WiM A X : Worldwide Interoperability for Microwave Access
S p e c t ru m c o n t ’ d f ro m pag e 17
operators. The Norwegian plan for the
2500-2690 MHz band called for two 40
MHz blocks allocated to FDD and 100
MHz for TDD.
Craig Wireless won 50 MHz and is
planning a nationwide WiMAX network.
It’s not immediately known if the other
winners will deploy WiMAX, but the
probability is high, say industry watchers.
● Sweden – Two auctions are sched-
uled: one for 1900-1905 MHz and the
other for 2.6 GHz. Both bands will be
service-neutral and, within certain limi-
tations, technology-neutral. For exam-
ple, the winning licensees could use the
spectrum for mobile communications or
wireless broadband services. The 1900-
1905 MHz auction will be for a single
national license, while the 2.6 GHz auc-
tion will be for 15 frequency blocks: 14
for FDD and one for TDD.
18 Tellabs Inspire • APRIL 2008
bands allow the use of lower power (and
thus more cells in a given area), thereby
increasing capacity. Historically, most
cellular systems have operated in the
850-900 MHz band, with PCS services
using 1800-1900 MHz. A few years ago,
additional spectrum was licensed in vari-
ous regions in the higher 2.3 GHz band.
Without spectrum, a mobile service
provider cannot operate. Competition
for spectrum is intense and the license-
holder can determine many aspects of the
service. RF spectrum has a tangible value
and can be traded easily. Although some
service providers have tried to use unli-
censed bands, such attempts typically fail
because it is very difficult to control the
quality of service and provide a positive
and differentiated customer experience.
Asia: Mobile WiMAX Hotbed
Analysts say Asia will become a hotbed
for mobile broadband services, with
more than 40 million mobile WiMAX
subscribers by 2013, according to Jupiter
Research. That’s more than half of all
mobile WiMAX subscribers world-
wide. Jupiter expects countries such as
Australia, India, South Korea and Taiwan
to drive growth of mobile WiMAX tech-
nology because they’re ideally suited for
quick deployment in underserved areas.
“Licenses in countries such as India, Japan
and Thailand, as well as in more countries
in other regions, will be auctioned over the
next year,” said Howard Wilcox, a Jupiter
analyst. “Timely award of these licenses will
accelerate market development.”
In December, Japan granted two 2.5
GHz licenses to Wireless Broadband
Planning, a WiMAX joint venture
headed by KDDI, and Willcom, which
is planning an advanced PHS network.
Today, several countries — including
the United States, Chile and India — are
licensing spectrum in the 700 MHz
band. Although the ultimate winners are
currently unknown and the rules vary de-
pending on the license available — some
dictate the type of service that must be
offered, for example — there are some
things we do know:
● Given the price tag associated with
spectrum acquisition, only the largest
companies will thrive. The days when
entrepreneurs could build sizeable
operations from scratch are over. This
doesn’t mean that smaller operators can’t
succeed in emerging markets, but rather
that the mature markets will continue to
be dominated by incumbents and larger
newcomers.
KDDI and its investors, which include
Intel, Kyocera and a number of Japanese
companies, plans to spend about $1.3
billion on the WiMAX network with
the hope of covering about 90 percent of
the population in 2013. Trials are due to
start this spring, with commercial launch
by summer 2009. The service will cost
$47/month for unlimited data, mainly
accessed via PC or laptop data cards.
Free for All?
Regardless of what’s being auctioned or
awarded and where, the new spectrum
is likely to shake up telecom markets
worldwide. One example is the push for
open access, where operators no longer
sell contracts and subsidized devices but
instead offer a broadband experience for
many types of consumer devices.
Open access is becoming a mantra of
sorts, particularly for the U.S. 700 MHz
auction. Accenture, a consultant to the
 ● Network technology is no lon-
ger a deciding factor. For example, a
CDMA2000 1xEV-DO operator has as
much chance of prospering as a service
provider using UMTS/HSDPA. What is
needed is a strong ecosystem of network
infrastructure, devices, support services
and applications, something the WiMAX
community is in the process of building.
● Brand, market differentiation, ser-
vice, support and distribution channels
are key drivers in today’s mobile market.
Consider that one of the major MVNOs
has consistently been rated higher for
network quality than its parent operator,
even though both use the same network
and the same handset vendors. Network
technologies have reached such advanced
states of development that consumers
can no longer differentiate based on
quality of service alone — but they can
quickly identify poor customer service
and high pricing.
● Incumbent operators will get larger.
As markets mature, consolidation is
likely to gain the required economies of
scale required.
● Building a new network — or ex-
panding current services into a new
license — takes time. A general rule to
follow is that after a license is awarded,
it takes approximately 18 months to in-
world’s largest operators, has been advo-
cating this open-access business model
for several months.
“The writing is on the wall,” said
Shahid Ahmed, partner with Accenture’s
Technology Consulting Group and the
lead for the firm’s Network Technologies
Wireless practice. “Regulatory-wise and
policy-wise, everyone is endorsing open
access. Times have changed since the
Internet debacle in the early 2000s. The
cost of IT is now significantly less than it
was then. All of this bodes well for a wire-
less world. It’s the next frontier.”
Ahmed says operators can monetize
open access by encouraging third-party
developers to use their APIs and SDKs,
which enhance the value chain and add
stickiness because applications can only
be used on that carrier’s particular net-
work. QoS will also play a large role as
API: Application Program Interface IT: Information Technology PHS: Personal Handy-phone System SDK: Software Development Kit
Spectrum up for grabs
U.S.: 700 MHz band
Latin America
Brazil: Auctioned off 3G spectrum in
1900 MHz band; WiMAX spectrum in the
3.5 GHz band slated for later this year.
Mexico: Regulators plan to sell spectrum
at 1900 MHz, 2100 MHz and 1700 MHz.
WiMAX spectrum in the 3.5 GHz band is
slated for later this year.
Colombia: 1700 MHz AWS band slated
for this spring.
Venezuela: 60 MHz in the 1900 MHz
band was auctioned in December.
Chile: 700 MHz to be auctioned in 2009
for 3G. WiMAX spectrum in the 2.5 GHz
band is slated for the second half of this
year.
troduce service and another five quarters
after that before the operator will see an
impact from the new network on their
bottom line.
So although the 700 MHz spectrum is
important to the industry, air alone will
not separate the winners from the losers.
There is no doubt that an operator needs
licensed spectrum in order to succeed,
but a license by itself is not a guarantee of
victory in the marketplace. Wireless his-
operators can now offer tiers of service,
offering limited throughput to lower-
spending customers and wide-open pipes
to higher-paying customers.
“If you look at the investments hap-
pening in the Web 2.0 world, there is no
place in the world like California, where
investments in Web 2.0 companies are
greater than any other sector,” Ahmed
said. “Look at companies like Flickr and
Facebook. There is tremendous move-
ment and transformation happening in
the Internet. The wireless industry has a
golden opportunity to take advantage of
all of these things happening on the Web
and translate them into new services.”
For those operators embarking on the
open-access route, there are examples
to follow in the United States. Mobile
WiMAX operators Sprint Nextel and
Clearwire are both pushing a new busi-
Europe
United Kingdom: Ofcom plans to auction
spectrum in the 2010-2025 MHz and
2500-2690 MHz bands this summer.
Norway: Regulators auctioned 2.6 GHz
spectrum in November.
Sweden: Two auctions are scheduled:
One for 1900-1905 MHz and the other for
2.6 GHz.
Asia
Japan: Granted two 2.5 GHz licenses in
December.
Analysts expect licenses in India, Japan
and Thailand to release spectrum over the
next year.
tory is littered with operators that owned
valuable spectrum but were unable to
launch a profitable business.
Iain Gillott is founder
and president of iGR,
an independent analyst
firm specializing in the
wireless industry. For
more information, visit
www.igr-inc.com.
ness model that dismantles the tradi-
tional walled-garden content approach,
ends traditional wireless device subsidies,
and doesn’t require long-term contracts.
Both operators are encouraging their
device partners to come into the market
under their own brands. This enables
customers to buy devices at major retail
outlets and activate and program ser-
vices without Sprint’s or Clearwire’s help
before they make their first run on the
mobile WiMAX networks. The upshot:
Freedom for carriers, for device vendors
and for end users.
Ben Wood, Clearwire CEO, noted dur-
ing the company’s recent analyst day event,
“In 2009, we’ll start seeing WiMAX chip-
sets in consumer electronics services, open-
ing up a wide variety of revenue streams and
allowing consumers to do the same things
they do on the tethered Internet.” n
APRIL 2008 • Tellabs Inspire 19
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