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Technology Stocks : Nortel Networks (NT)

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To: Paul Fine who wrote (2394)4/10/1999 8:17:00 AM
From: Kenneth E. Phillipps  Read Replies (1) of 14638
 
From Sounding Board Magazine - Nortel claims its call server is the
unique element that is absolutely necessary in the Succession Network.

soundingboardmag.com

Nortel Unveils SUCCESSION
By Ken Branson

Nortel Networks (www.nortelnetworks.com) says it has the solution to make the move from the circuit-switched to the packet-based world seamless, painless and profitable.

SUCCESSION Network, which company officials say will be ready for customers in the fourth quarter of this year, currently is undergoing an interoperability field trial at SBC
Communications Inc. (www.sbc.com). Rod McPherson, Nortel's vice president, next-generation networks, says SUCCESSION also is going through field trials with "a European PTT" that he declines to name.

The SUCCESSION network consists of four parts: a call
server, a multiservice gateway, a network manager and a Passport 15000 asynchronous transfer mode (ATM) switch. McPherson says they're designed to work together and with just about anyone else's equipment and systems. The call server, he says, is the unique element, the one piece that's absolutely necessary. Nortel's competitors have similar products, he concedes, "but the call server is the part they
haven't figured out." And, he says, "those other products tend to be proprietary."


Hilary Mine, executive vice president of Probe Research Inc.(www.probe.com), confirms that other solutions are
proprietary, at least for now. "I suppose you could say that ...
Cisco [Systems Inc.] (www.cisco.com) has a solution that works across other vendor's platforms. It's just that their approach is probably a lot more expensive, and involves a whole lot of additional switching, routing and real estate."

McPherson says Nortel is aiming SUCCESSION at carriers of all levels and persuasions--from deeply embedded regional
Bell operating companies (RBOCs) with hundreds of Class 5 switches and thousands of route miles of fiber and copper to next-gen carriers with more venture capitalists than access lines. He puts the price of the network at roughly $200 per port, and says Nortel's customers range in size from 10,000 to 100,000 ports.

Joe Skorupa, director of switching and routing at the
consulting firm of Ryan Hankin Kent Inc. (www.rhk.com) says this announcement positions Nortel to be able to deliver a multiservice backbone and replacement products for both the Class 4 tandem market and the Class 5 end-office market. And it moves Nortel's call-processing software to an off-board, standardized platform that will enable third-party developers to bring value to the Nortel solution, he says.

Skorupa adds that many new vendors are building
replacement switches for the old Class 5 end offices and Class
4 tandems, but Nortel has a complete solution that will be able
to interoperate with those new switches. "And Nortel has
remembered the importance of software," Skorupa says. "Lots
of vendors forget that."

McPherson says that many vendors are trying to bring voice onto data networks, but that SUCCESSION represents an
attempt to "port all that telephony into being packet telephony. Yesterday was circuit switching; now you can have all that on packet switching. It's a matter of a few weeks' installation, no matter how big you are. For little guys, maybe two weeks. For big guys, maybe six or seven weeks."

Mine agrees that SUCCESSION may be the answer for
startups and incumbent local exchange carriers (ILECs).

"New entrants are buying TDM (time-division multiplexing) today because TDM pays the bills," she says. "So, what
Nortel is really saying is, 'Look, here is a solution that competes with SALIX [Technologies Inc.] (www.salix.com) or TransMedia [Communications Inc.] (www.trsmedia.com).' It makes sense. With respect to ILECs, SUCCESSION is the plan--or some competing solution from Lucent [Technologies Inc.] (www.lucent.com) or Siemens (www.siemens.com). The only other approach is to buy a bunch of 'mediation' switches from [startup] companies. ... I don't think you'll find too many ILECs willing to write down their installed base of TDM switches--that's $250 billion in the United States--and then
replace everything with routers and DSL (digital subscriber line)."

Nortel Introduces Signaling Gateway
By Charlotte Wolter

In an announcement that is indicative of progress on
standards to link circuit-switched and Internet protocol (IP) voice networks, Nortel Networks (www.nortelnetworks.com)
says it will introduce a carrier-class signaling system 7 (SS7)/IP signaling gateway application.

Signaling gateways are new network elements being
developed in Internet Engineering Task Force (IETF)
(www.ietf.org) standards committees to facilitate the
translation of services from SS7 to IP. These gateways control the flow of packets containing signaling only, as opposed to voice packets themselves, which are controlled by media
gateways.

Nortel says the implementation of this signaling gateway will allow the delivery of seamless intelligent services between the public switched telephone network (PSTN) and IP networks.
Key attributes of SS7 can be translated to the IP network, such as custom local area signaling services (CLASS); access
to special prefix services (such as 1-800 toll-free dialing); and
the ability to intelligently route or reroute traffic between
voice circuits.

Nortel is just one of a number of companies developing a product that will incorporate signaling gateway features, says Lisa Pierce, director of telecommunications services and carrier analysis, Giga Information Group (www.gigaweb.com).
The products are based on standards work in progress in the IETF's SigTran Working Group." This type of product is very
significant. It is one of a number of high-level similar products
coming from Bellcore (www.bellcore.com) and Cisco SystemsInc. (www.cisco.com). Lucent [Technologies Inc.](www.lucent.com) has something in the works. Ascend [Communications Inc.] (www.ascend.com) is working on this with Stratus [an Ascend subsidiary]."

Signaling gateways are important because "without signaling, you can't have robust, feature-rich reliable networks. In order for IP or ATM [asynchronous transfer mode] public networks
to carry voice and fax etc., and to interface with circuit-switched networks, they have to be able to interface and be compatible with signaling system 7."

The SS7/IP signaling gateway was placed in trials in the fourth quarter of 1998 by a competitive local exchange carrier
(CLEC) that Nortel would not identify but described as "a major U.S. competitive local exchange carrier." The signaling gateway application will run on a Nortel signaling engine, the Signaling Server, a very robust platform designed to control Class 5 switches if necessary. "We have added this new signaling gateway application," says Marcel Chenier, director, technology, signaling solutions group, Nortel Networks, "so the power of this is that it will be a co-resident application [with SS7]."

SS7 is the basis for the reliability of today's switched telephone networks, "so the challenge was to provide the
same reliability of calls in an IP network," Chenier says. To do that, the IETF's SigTran Working Group, a major standards body for IP telephony, has been working on a specification called IPS7. "IPS7 will bring all robustness of SS7 and make an IP network as robust as today's network," Chenier says.

That group, which is chaired by Lyndon Ong, senior
architect, Bay Networks (a subsidiary of Nortel Networks), is working to complete a draft proposal of IPS7 by July, after which it will go through a period of comment and testing. At least two companies, and probably more, will build prototypes and test them for interoperability.

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