"LTD is doing very well," says Jim Hansen, LTD's senior vice president. "We're providing the best service in our history."
Dedication to improved performance and gaining efficiencies from a converged network form the basis of Sprint's circuit-to-packet program. First introduced in spring 2003, the migration strategy has been carefully crafted by LTD network leaders. Grounded in hard economics, it will take as many as 10 years to complete.
"We're doing it [switching from circuit to packet] when it makes good economic sense," says Hansen, who cites examples of when outdated switches no longer held the capacity end-users desired or when offices simply ran out of physical space.
As of mid-July, Hansen reports the carrier had converted about 30 central offices, connecting close to 150,000 access lines. That figure should rise to 500,000 lines by the end of the year.
The pace of the project, originally intended to take eight years, has been slowed somewhat by reduced growth in access lines. The vast majority of switches are from Nortel, and the equipment maker is also supplying products from its Sucession portfolio for the new packet architecture.
CONCEIVING SERVICES
Hansen stresses that a packetized network will enable a higher level of differentiation in the marketplace, based on convergence to IP. "As an end-user, what you're going to see is a more reliable network that is up all the time, and is able to support an assortment of data offerings--from ADSL to fiber-to-the-premises--that will give you higher speeds."
Just what shape these services will take, and how they may be distinct from competitive offerings, is still hard to quantify. No new services have been launched because of the circuit-to-packet transition, but Hansen does offer a glimpse of things to come. "Our entire strategy at Sprint is to make a data-centric network that has complete interoperability," he says.
One of the larger unanswered questions is how Sprint's video strategies will evolve, given its ambitions to improve its access network which has included working more closely with broadband solutions provider AFC. Hansen explains that customers continue to express interest in simplicity and ease of use in communication services. "It's more than just cost, it's the customer interfaces and the how all the end products are integrated," he says. Bundling is likely to become a central focus for the local division as its video plan ramps up.
The result of unifying the circuit-to-packet program with a higher performing last-mile connection is being closely watched. "Sprint is committed to moving towards broadband and is specifically looking at broadband DLC systems for all greenfield builds," comments Lehman Brothers analyst Steven Levy, in a July research note. "There is a connection between the access technology (DLC remote terminals) and the voice-over-packet roll-out, but it is too early to say how extensive the connection is."
OSS FACTORS
A team of technicians from Atos Origin, a Paris-based company that purchased assets from OSS supplier Schlumberger last year, is replacing (and in some cases, rebuilding) circuits for the project. It also supports the data migration strategy from central office to central office.
Jan Gerimm, the Sprint account manager for Atos Origin, says his team tests whether each new circuit is load bearing by employing Metasolv's Objectel inventory system. The company is also responsible for three other projects: user acceptance development, training of Sprint technicians and network inventory management.
Gerimm says the network inventory process serves an important purpose: Identifying assets that are not carrying live traffic. "Our job is to figure out the total dollar value of those network elements," he says.
The Atos Origin contract runs through 2006. It is the company's first circuit-to-packet initiative in North America. About 60 people are working on the Sprint job at any one time.
WHOLESALE FAVOR
Methods used by Sprint's local division to leverage its position in terminating traffic as wireless, VoIP and cable telephony take hold, will clearly have an impact on the FON group's bottom line. It is believed Sprint charges other carriers about $15 a month per line for PSTN termination, but that pricing is under pressure because of IP telephony.
Danny Klein, a senior analyst with the Yankee Group, says Sprint's ability to market itself as a wholesale provider is increasingly critical. "They are focusing more on wholesale, and I think that is going to continue," says Klein. He adds that Sprint PCS has been the most active of the nation's wireless carriers offering mobile virtual network operator support to Virgin Mobile and AT&T Wireless.
Inside Sources
Project: Sprint's local telecommunications division is embarking on a major transformation of its network by replacing circuit-switches with packet architecture in each of its 1,500 central offices. It has completed about 30 central offices, connecting 150,000 access lines, so far. Some 500,000 lines are expected to be completed by year's end. The total project is expected to take about 10 years to complete. The cost has not been disclosed, but Sprint executives say "economic triggers" determine the rollout schedule.
Implementation: Technicians are pulling out legacy switches (like the Nortel DMS 10 product and Siemens' Stromberg Carlson DCO switches) in favor of Nortel's Succession softwitches. The expectation is that Sprint will seek at least one more major switch supplier for the project. Originally, the switch replacement was supposed to take only eight years, but the timetable was slowed by reduced access line growth.
Market Issues: The transition from circuit to packet will enable a new generation of services, details of which are scant at this stage. Sprint, like most full service vendors, is devoted to developing an integrated communications services approach, which will be supported by a converged data network. Wireless and wireline platforms will become more integrated as a result. One unanswered questions involves the company'svideo strategies.
Our Read: Sprint is taking a practical, no-nonsense pathway to a higher performing network. We anticipate that the newly evolving network will reveal its benefits sometime in 2005 as the carrier starts to introduce more sophisticated services to local subscribers.
