Cisco's Plan for Service Providers in the Mobile Internet Age
As mobile networks feel the strain, Cisco's Pankaj Patel says the company's newly fortified mobile Internet portfolio can help service providers prepare for the future
February 9, 2010
Weeks after its recently completed acquisition of Starent Networks, Cisco Systems is holding its first show-and-tell, revealing why the mobile infrastructure supplier was a must-have item last Christmas.
At Mobile World Congress in Barcelona, Spain this month, Cisco will unveil the first product to come from the acquisition – a mobile multimedia platform now branded the Cisco ASR 5000, which Cisco says will play an increasingly key role for service providers as mobile data traffic mushrooms in the coming years. Cisco is also announcing the new business group it formed in the wake of the Starent acquisition to focus specifically on mobility and its importance for Cisco's service provider customers. The Cisco Mobile Internet Technology Group is led by former Starent CEO Ashraf Dahod.
For a greater understanding of what the Starent acquisition and the ASR 5000 mean for Cisco and the telecom industry, News@Cisco spoke with Pankaj Patel, senior vice president and general manager of Cisco's service provider business.
How do the Starent acquisition and the Cisco ASR 5000 round out Cisco's mobility portfolio, and what competitive advantage do they bring?
Pankaj Patel: The mobile Internet has reached a major turning point with the proliferation of smart devices, greater availability of broadband, high growth of data traffic, and a movement of applications away from the wired world onto mobile networks, as in the case of apps for smart phones. At the same time, with the large scale deployment of third-generation (3G) and the emergence of high-speed fourth-generation (4G) cellular wireless standards such as Long Term Evolution (LTE), networks must shift toward Internet protocol (IP). This is obviously very timely for Cisco, because anything on Internet protocol plays to Cisco's strength.
It's also where Starent comes into play in a major way. The Cisco ASR 5000 is now the centerpiece of our offerings in the mobile packet core of the wireless network which is really the edge of the mobile IP network. Purpose-built for mobility, it's a robust, carrier-class, multimedia services platform that offers a host of benefits to service providers, including the ability to work seamlessly with a range of networks, be they CDMA2000, HSPA, femtocell, Wi-Fi or WiMAX, or, in the future, LTE. The ASR 5000 will also allow service providers to efficiently migrate their networks to LTE through software, thus extending their investment in the hardware. These are very important attributes that make the ASR 5000 an industry benchmark offering from Cisco.
What is Cisco's overall mobility strategy for service providers and their networks?
Pankaj Patel: Our mobile Internet strategy falls into four main categories: applications; selective radio; mobile packet core; and the "unified service delivery" offering we introduced last year, which is part of our data center strategy designed to help service providers build a foundation for Web-based services. It's really in the third bucket – mobile packet core – that the Starent portfolio is most relevant and dominant, both for the current third-generation (3G) networks and as we go to 4G. Also our data center initiative is very nicely geared to service providers both because of Cisco's offerings and what Starent brings. Taken together, Cisco's and Starent's offerings form a very compelling portfolio that allows us to provide mobile IP-based subscriber services reliably, intelligently and on a very large scale.
What trends in the communications industry make the ASR 5000 necessary?
Pankaj Patel: Some of the most important trends are highlighted in the Cisco Visual Networking Index Mobile Forecast for 2009-2014, which we're also announcing in Barcelona. Over the five-year forecast period, it projects that global mobile Internet traffic will increase nearly 40 times over, reaching 3.6 exabytes per month by 2014. An exabyte is a billion gigabytes; that's a lot of zeros. Video is going to play a huge role in mobility, as we're already seeing today. As the 4G networks get deployed, you'll see people using even more video over a mobile network. The forecast predicts mobile video will account for 66 percent of the global mobile data traffic by 2014 – that's the highest growth of any mobile application category. There are numerous other remarkable stats, but the point is that the ASR 5000 is coming at an absolutely critical time for service providers.
What main challenges do these trends represent for communications service providers?
Pankaj Patel: The explosion in mobile Internet traffic has very interesting implications for the way service providers need to design their networks. A lot of the networks today were built from the ground up to handle voice phone calls, but those will have to change to handle all of these new dominant traffic types coming into play in the next few years – mobile video, mobile Web and data, mobile gaming, mobile peer-to-peer, mobile VoIP and so on. Video solutions in a mobile network must be different from those that are designed for fixed networks since the user is on the move and could have a variety of screens operating in a dynamic network environment. This presents a tremendous challenge for service providers, which will have to invest in network upgrades in order to ensure fidelity of service for their customers in the face of this onslaught. The Visual Networking Index provides them the opportunity to be proactive in this effort, and the ASR 5000 can play a major role in helping offset the associated operating and capital expenditures. Another key benefit of the ASR 5000 is its ability to provide service providers with a wealth of data about their customers and the network itself in business-to-business and business-to-consumer transactions. On the customer level, that means subscriber information, device type, service type, location, brand and billing relationship, session information and so on. On the network level, it means things like quality of service (QoS), security, packet filtering, packet insertion and ad insertion. All of this intelligence is aimed at helping service providers create new revenue streams and monetize new services to offset their investment on the infrastructure side. The ASR 5000 helps them do this.
What additional challenges are communications service providers facing?
Pankaj Patel: I always put myself in our customers' shoes. Whatever their challenges are, those will be our challenges – to make sure we can keep up with all the growth and deliver all the products and services that they need in time. Monetization of investment is the big challenge on their minds, so we have to be sure that we bring the fiscal reality to the top of mind. While the IP infrastructure is still a pretty small percentage of the overall mobile carrier wireless infrastructure spending, the scalability and the intelligence in the IP infrastructure provide the greatest potential impact on overall network profitability through generation of new services and cost savings.
By the way, mobility is where service providers actually make decent money. Nonetheless, we're hearing about the significant investment required by customers like AT&T because of all the growth in iPhone data traffic, and now you have the Apple iPad on the heels of it. Certainly, it's a great opportunity for Cisco to be able to work with the large service providers to help build their networks, but at the same time I don't think we can focus only on what's good for Cisco. We have to look out for what's best for our customers. This is why we're engaging with them to define new services, to figure out how to exploit the intelligence in the network and their customer data, and turn that intelligence into personalized experiences that their customers will be willing to pay for. That's what our goal has to be.
How will the changes in mobile networks affect the user experience and business models?
Pankaj Patel: Normally, when we think of a subscriber, we associate that with a fixed line phone number. But with mobility, it makes more sense to think of the subscriber as an end user. You can only do so much on a fixed line, even if you are a cable subscriber. But if you are on the move, and the communications company has location, roaming and other intelligence about you, the potential revenue opportunities explode in a very different way.
For example, today you might be fairly forgiving when it comes to calls dropping or having a less-than-ideal video experience on a smart phone, but I don't believe that will always be the case. The time is coming when you will be able to watch pretty decent clips of a live basketball or football or hockey game, and I'm sure new business models will emerge where franchise owners will work with service providers to allow you to access this experience for a subscription fee or something similar. We're talking about live, personalized, multimedia experiences for every subscriber. Consumers are going to demand these services to any screen, any time, anywhere. In addition, the lines between the wireline and mobile spaces will blur with exciting applications like mobile Cisco TelePresence. Personally, that's one I can hardly wait for – to be able to have that experience while riding in the back of a cab in Manhattan!
New services are how service providers are going to make money. Features translate into services, and services translate into new revenue streams. In addition, the speed of deploying these services is going to play a key role because the mobility world moves very fast – much faster than the fixed wireline world. All of this has huge implications for the way data will be delivered to subscribers or end users. Clearly, the IP network will need to deliver unprecedented scale, performance and intelligence. So it comes as absolutely no surprise that, when you look at service providers' investment profile, so much of that capital expenditure is moving into mobility. With the help of products like the ASR 5000, Cisco and its ecosystem of partners can help turn this into a reality.