4G LTE Driving IP Exchange (IPX) Adoption

A new study (“IPX: New Interconnect Strategies for Operators”) commissioned by Sybase 365®, a subsidiary of Sybase, Inc., says 4G LTE deployments and the evolution of mobile networks from circuit switched to end-to-end IP has global operators looking at IPX deployments in the next three to five years. The findings were based on an online survey of 353 companies in May and June 2011 by Questex Media Group, LLC, and interviews with 10 global operators and the GSM Association. They validate basic trends reshaping the wireless and wired worlds as they converge.

What is IPX?

For those unfamiliar with the term, a brief primer on IPX is in order. This IS NOT the IPX that was a competitor to TCP/IP. What IPX does is provide a gateway to a global managed IP network supporting end-to-end QoS and the principle of cascading interconnect payments.  

Think of this as the next generation replacement for General Packet Radio Service (GPRS) — the best-effort services framework currently used for providing mobile users data services on 2G and 3G networks without a guaranteed QoS on the connection. It also, in essence, is the IP replacement of what Signaling System #7 (#SS7) in the circuit-switched world.

For service providers, the key benefits of IPX include:

• End-to-end QoS, enabling consistent and predictable service delivery between end users
• Prioritization of time-sensitive applications over less demanding services
• Service Level Agreements (SLAs) apply from end-to-end across multiple IPX segments
• Full route traceability and connectivity between ‘trusted’ entities
• Fair remuneration to all members of the value chain
• Universal service interoperability (across access networks)
• Single connection and commercial agreement for global reach

What this will enable is an MPLS network that leverages the ability to deliver end-to-end IP capabilities for more efficient and secure communications in support of the underlying business of the global communications business — improving interoperability, service quality, billing and security between mobile carriers and between mobile carriers with evolving fixed/mobile networks, ISPs and over-the-top (OTT) service providers.

Note: For a comprehensive review of IPX and its benefits Sybase 365’s white paper, “IPX: The Second IP Revolution,” is recommended reading.

In anticipating that all networks globally are inevitably evolving to ones that are IP end-to-end:

• The GSM Association (GSMA), the group for mobile operators using the world’s dominant 3G mobile networks, completed IPX specifications in 2006. First phase trials of packet voice services over IPX-enabled networks were completed in 2007. Further trials are ongoing.
• The IP Interworking Alliance has been formed to provide an environment for stakeholders to facilitate the global interworking of IP services.

The survey says…

Key findings from the survey include:

• 63.5 percent of operators plan to deploy IPX over the next one to three years.
• 24.0 percent rank IPX management and security capabilities as the prime current benefits.
• 50.0 percent agree that IPX networks make it easier to deploy end-to-end IP services, cut costs, guarantee quality and ease the migration to 4G networks.
• 23 percent rank highly the ability to consolidate multiple connections.

William Dudley, Group Director of Operator Services Products at Sybase 365, stated that, “Despite the interest in IPX as a next-generation play, operators also report benefits on today's congested networks. The majority rate the security and manageability of IPX as the main plusses, however operators are also excited by the potential to cut costs by reducing the number of connections needed.”

The impact of 4GLTE deployment echoed loud and clear. The survey finds “a clear correlation between the number of operators planning to deploy IPX within the next one to three years (41 percent) and those who believe IPX will become essential to operating 4G networks in the same timeframe (45 percent).  

In an exclusive interview with MobilityTechzone, Dudley stated that, “there is an operator recognition worldwide that LTE adoption will be accelerated with the addition of IPX functionality with benefits not just to carriers in terms of efficiencies and extended services reach, but also to consumers of all types who will benefit from better quality, more choice and an improved user experience.”

Dudley said that faster call set-up times and ease-of-use enabled by services interoperability are the things users will experience first in IPX environments. He also said that OTT user experiences will be improved should they choose to avail themselves of the guaranteed QoS IPX affords.

As context as to why this is important and for those trying to size the market, according to the Global Mobile Suppliers Association (GSA):

• 218 operators in 81 countries are investing in LTE, 166 networks are in various stages of deployments and the remaining 52 in technology trials.
• Globally, 24 networks have commercially launched in 16 countries.
• LTE subscribership is expected to reach 303.1 million by 2014.

The study concluded that while operators will rely on IPX to handle roaming, IP signalling and streaming services first, when 4G networks are more pervasive operators will leverage it to expanded voice interconnect as all networks evolve to IP end-to-end.  As Dudley is quoted in the press release as saying, “We firmly believe IPX will become a centralized infrastructure across service providers and across solutions for the rest of the decade and beyond.”

Challenges remain

All of the enthusiasm for IPX that is reflected in the survey should be tempered with the fact that important challenges lie ahead. These include:

• Reconciling current mobile and fixed service provider business models (IPX introduces a more transparent pricing model unfamiliar to fixed service providers)
• Fixed service providers may be tempted to continue using the public Internet for its low cost rather than IPX for its quality and security
• Efforts by mobile service providers to orchestrate FMC delivery via IPX may be in vain if web-based service providers conquer that market before the mobile service providers are ready

These are all non-trivial. The industry is discovering that negotiations with end users are difficult when the starting point from the industry has been “unlimited” service in a world of decreasing ARPU. Plus, the last point about web-based providers is also key since content and context (social networking) is king and not carriage, and things like the global debates over net neutrality will play a role.

All of that said, certainly in the enterprise and cloud interconnection markets, the need for interoperability and security will drive what appears to be robust IPX interest and deployment especially when coupled with the demand for VoIP over 4G LTE mobile. The rest will just have to wait for the markets, ecosystem evolutions and regulators to sort things out.  

Want to learn more about 4G wireless technologies? Then be sure to attend the 4GWE Conference, collocated with TMC’s ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. The 4GWE Conference provides unmatched networking opportunities and a robust conference program representing the wireless ecosystem. The conference not only brings together the best and brightest in the wireless industry, it actually spans the communications and technology industry. To register, click here.