LTE fuels interest in IP exchange

Michael Carroll and John C. Tanner
11 Aug 2011

Operators are starting to prick up their ears at mention of IP exchange (IPX), as IP core networks become the norm and looming mass market LTE services make adoption of the GSM Association-defined traffic exchange mechanism a more urgent concern. However, carriers say more clarity over what constitutes an IPX network and the service-level-agreements that underpin them is needed before the market can truly take off.

Almost two-thirds of global operators plan to deploy IPX services in the next one to three years, with the shift to LTE a major driver of interest in the exchange networks, research by Telecom Asia reveals.

The study - conducted for IPX provider Sybase 365 - found that 63% of global carriers plan to launch the networks within three years, with the majority believing the networks will become an essential component to offering LTE services during that period. Factors turning operators on to IPX include the security, ease of deploying end-to-end IP services, promises of lower costs, and the potential to ease the migration to next-generation networks.

More than 50% of the operators surveyed rated all the elements as key benefits of IPX currently, however, a breakdown of the numbers shows that many operators see the ease of IP deployment element as the chief purpose of IPX (see Figure 1).

While IP deployment and service quality top the list, carriers are also attracted by the potential to lower costs using IPX. Justin Middleton, intercarrier commercial manager at Vodafone Hutchison Australia (VHA), explains one of the main cost saving measures is reducing the number of IP exchange hubbing partners from the 10-12 VHA has currently, to potentially just one. "I'm curious to see what results we'll derive from that," he notes.

Despite the current benefits, it is for LTE networks that IPX holds the greatest appeal. There is a clear correlation between the number of operators planning to deploy IPX in the next three years and those that consider the networks essential for LTE services. And many operators also see the exchange networks as a means to shore up relationships with fixed-line carriers and over-the-top service providers.

Relationship building aside, operators rank roaming, IP signaling and streaming as the principal services IPX will bring to next-generation networks. In the longer term, they will also expect their IPX to handle fraud detection.

Paul Hodges, executive VP of corporate, wholesale and international at Hong Kong-based CSL, believes it will be up to IPX carriers to implement the new services offered by the networks. His view is echoed by Bernd Hoogkamp, mobile data sales manager at TeliaSonera's international carrier division, who says his firm will expect the IPX to offer new services rather than build services to suit the new networks.

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