Hidden costs and benefits of telecom systems

The hidden costs and benefits of the
telecommunications systems
Olivier ANDRE
April 2012

AGENDA

1. Alcatel-Lucent in brief
2. The right choices at the right time
3. The added value of your brand new network
4. Conclusion

2
COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED.

AGENDA

4. Conclusion

3

Alcatel-Lucent at a Glance
REALIZING THE POTENTIAL OF A CONNECTED WORLD

“ Broadband everywhere is speeding up life and
business. It takes no time to go from having a
“
new idea, to touching peoples lives. We must
innovate – and help our customers innovate – at

”
the speed of ideas.
Ben Verwaayen
Chief Executive Officer

FAST • Headquarters: Paris, France • R&D Budget: €2.5 billion
• Annual Revenues: approx. €16 billion • Active Patents Held: 27,900
FACTS
• Employees: 77,000 + • Patents Awarded in 2010: 2,400
• 130 countries • Nobel Prizes Won: 7

4


CUSTOMERS WE SERVE
SERVICE PROVIDERS STRATEGIC INDUSTRIES ENTERPRISES

A leader in mobile, fixed, IP We provide end-to-end We help our enterprise and
and optics technologies, and turnkey communications government customers
a pioneer in applications and integration that improve worldwide interconnect their
services, we offer complete quality of life through better networks, people, processes
solutions that help service energy management, efficient and knowledge to make
providers and their customers transportation and improved money and save money.
realize the potential of a government services.
connected world.


S EGMENTS strategic Industries: 3 main focus areas

Transportation
Urban Energy
Power Utilities Public Sector
Rail Smart Grid

Focus sub-segments: Focus sub-segments: Focus sub-segments:
• Urban & Main Line Rail • Power Utilities/Smart Grid • Public Safety
• Highways • Oil & Gas • Defense
• State & Local Government
Key ALU solutions: Key ALU solutions: Key ALU solutions:
• Operational comms transfor- • Operational comms transfor- • First responder networks
mation mation • BB overlay services (LTE)
• Ground-to-Train Comms • Grid automation • Video protection
• Integrated Control & Mgmt System • Advanced Metering Infra.(AMI) • Open community broadband
• Digital Signage • Customer engagement • Strategic backbone and rapidly
• Intelligent Transport Systems • Pipeline management deployable networks

6


Alcatel-Lucent is running effectively in more than 80
mission-critical railway networks around the world

 ADIF, Spain  Dehli Metro Rail Corp., India  Network Rail, UK Singapore Mass Rapid Transit
 AlpTransit, Gotthard,  Deutsche Bahn, Germany  New Jersey Transit  SNCB, Belgium
Switzerland Corporation, USA
 Dubai LRT  SNCF, France
 Arlanda Express, Sweden  Norfolk Southern Rail, US
 Dublin LRT, Ireland  SNCFT, Tunisia
 ATM Milano Subway, Italy  NRIC, Bulgaria
 Eixo Norte, Portugal  South Korea LRT
 Beijing MTR Construction,  NYC Transit, USA
 Eurotunnel, France  St Petersburg Metro, Russia
China  OEBB Telecom Service GMbH,
 Ferrocarril Surburban, Mexico Austria  Suzhou Metro, China
 Beira Baxa Line Refer,
Portugal  FGV, Spain  PKP, Poland  Swiss Federal Railways,
Switzerland
 BLS Alptransit, Switzerland  Guangzhou Metro, China  Railtel Corp., India
 Syntigo N. V., Belgium
 Botniabanan, Sweden  Hungarian State Railways,  RATP, France
Hungary  Taiwan Railway
 Cairo Metro, Egypt  PKP, Poland Administration
 Istanbul Metro, Turkey
 Canadian Pacific Railway,  REFER Telecom, Portugal  Tanzania Railways Corporation
Canada  Jernbaneverket, Norway
 REFER, Coino/ Pinhal Novo  TCDD, Turkey
 CFR, Romania  JSC TransTelecom, Kazakhstan Line Portugal
 Tianjin Metro, China
 Changchun LRT, China  Kolejowe Zaklady Lacznosci,  S-Bahn, Germany
Poland  Transnet Freight Rail, South
 Changchun metro line Co.,  SBB, Switzerland Africa
China  Manila Light Railway Transit,
Philippines  Seattle Monorail, USA  Trafikverket (formerly
 Czech Railways, Czech
Banverket), Sweden
Republic  Massachusetts Bay  Seoul Metro, Korea
transportation Authority, US  Trenitalia, Italy
 Chicago Transit Authority,  Shanghai Rail Transit, China
USA  MAV, Hungaria  Wuhan Metro Corporation,
 Shanghai Shengtong Line
China
 Copenhagen metro,  Ministry of Railways, China Development Co., China
Denmark  Xi’an Metro, China
 MPK, Poland  Sintra Metro, Portugal
 Corenet, Finland  ZSR, Slovakia
 MPTE, UK  Shenzhen metro line Co. Ltd.,
 Delhi Airport Metro China
express Private limited,  MTRC, Hong Kong
India

7


AGENDA

4. Conclusion

8

Technology Adoption Curve – Intelligent Rail

80 % Rail Systems Buyers
Pragmatists:
Conservatives:
Stick with Herd
SDH Hold On

Visionaries:
IP/MPLS
Get Ahead of DWDM
The Herd Optical Skeptics:
Switching
Techies: No Way!
LTE PDH
Try It! 40G Ethernet
100G Ethernet

Early
Innovators Early Majority Late Majority Laggards
Adopters
Time

9


Reality with legacy network today

Multiple networks to serve different applications

Cost of Expansion
Operators have to maintain multiple networks in parallel
Duplicate hardware and physical infrastructure
TDM IP/MPLS Ethernet
Duplicate personnel and operation systems
High OPEX

Services

Limited capability to support next generation application requirements
Limitation in bandwidth and expensive to scale
Limited flexibility for adapting to different network topology requirements
TDM based network are statically configured and suited for low bandwidth, low delay applications

Justification for continue investment in legacy network is weak
Obsolete hardware/software components
End user application moving towards IP/Ethernet based (e.g. IP based CCTV Camera)

10


What to take into account when comparing?
Legacy vs Up to Date (IP/MPLS)
• Acquisition cost
• Operational Costs
Man hours & skills
Spares
• Obsolescence

• Expendability

11


What happens in the wireless world?
The convergence standard for all technologies
GSM W-CDMA W-CDMA 4G ITU
Commercial radio

TDMA HSPA HSPA+ 100 Mb/s en
mobilité et
technologies

1Gb/s en fixe
TD-SCDMA

LTE R8/R9 LTE R10
EV-DO EV-DO
CDMA 1X FDD/TDD FDD/TDD
Rev A Rev B

1996 WiMAX
16d
WiMAX 16e
TDD ?
WiMAX 16m
FDD/TDD
2006 2010
P25 (US)
Private radio
technologies

Deployed

TETRA TETRA 2 Ramping
?
Future
GSM-R Evolution path

12


Communication Network Transformation
From: To:
Separated service networks Converged service network

Optimization
Simplification

All services in one network

Each service has its own network
A mix of networking technologies

Customer Benefit: Provides common communications foundation
for all rail applications to reduce CAPEX and OPEX

BUT Alcatel-Lucent understands what makes the
rail customers different
1. Life expectancy – “only change it when absolutely necessary”
considerably longer than a carrier, who would be typically driven to
upgrade to offer new services, reduce its operational expenditures,
derive new revenue streams… more about this later!
2. Standards – in addition to traditional telecoms standards, the Railway
has its own set of rules to ensure safety and interoperability, proving
compliance to these standards is a costly business
3. Environment – Physical and electrical (EMC) environments are far
worse than a more controlled carrier environment
4. Signalling Requirements – Every new type of signalling system
relies and interacts more and more with the communications backbone.
This is particularly true for radio based signalling
5. Control and supervision – as opposed to just sending voice and
data (being a pipe), the Railway must be in control of the system at all
time
14


AGENDA

4. Conclusion

15

When all put together...

16


Let’s assume HappyRail Co has bought this!

17


Now they Can -
• Look beyond the immediate savings brought by a converged network topology…
• Enjoy the flexibility of remote network management through a visual interface…
• Benefit from an all IP infrastructure…

But most of all they can unleash the real value through applications!

LOWER OPEX /
A. OPERATIONAL
INCREASE
REVENUE • Quantifiable financial benefits of deploying new approach

INCREASE B. SAFETY / SECURITY
SAFETY/ • Difficult to quantify and produce business case but often
SECURITY required through legal requirements

C. PASSENGERS RELATED SERVICES
IMPROVE
• Applications used to retain existing customers
PASSENGERS
SATISFACTION • Applications used to gain new customers
• Multi-Modal applications
18


1st Application
Smart Infrastructure
• SBB aims to achieve cost savings of up to 15% from more efficient technologies
by 2017-2018 using M2M solutions

• Energy / Electrification / Smart Grid concept
Capacity

Customers Carbon
• Condition based maintenance,
Limited track possession, etc…
Cost

Business Impact


Intelligent Infrastructure - Wide ranging usage
INTEGRATED CONTROL AND
CIVIL STRUCTURES MONITORING
MANAGEMENT SYSTEM

LEVEL CROSSING MONITORING POINTS MONITORING

20


So how does it help the business?
• “Predict and Prevent” Maintenance
• Improved first time fix
• Arrive at site with information = the
right people, right equipment
• Fewer fault callouts and reduced “no
fault found”
• Develop asset performance knowledge
over time
• Reduce expenditure for us
• Reduce train delay for our
customers

Source :

21


2nd Application
Smart Rolling Stock
• Remote Monitoring of Rolling Stock
assets
• More efficient maintenance – less
downtime
• Condition based maintenance
• Infrastructure monitoring in real Capacity
time
• Energy efficiency
• Potential saving of 20% delay Customers Carbon
minutes

Business
Cost Impact


3rd Application
Security concerns • On-board video-surveillance
LTE enabling high quality live video transmissions
• Live Video Streaming from
moving trains or live access
to DVR recorded images
after an incident 1. Detection
3. Response
• Level Crossing remote
surveillance for Driver or
2. Dispatch
control centre
• Single Driver Operation in Capacity

Urban Rail environment

Customers Carbon

Cost Business
Impact


AGENDA

4. Conclusion

24

Conclusion
Timely Decisions and Unforeseen Benefits

1 | Alcatel-Lucent understands what serving the rail customers means and
has done so for more than 75 years

2 | Given the evolution pace of the Telco industry, not is not the right time
to be shy and overly conservative.

3 | Clear financial benefits can be extracted from making the right
technological decisions

4 | Whether wireline or wireless, an all IP infrastructure makes life easier
to add extra systems to serve new applications
5 | A number of benefits can be extracted from a modern comms network
through innovative applications

6 | Telecommunications are the highest growth area in the Rail Market!

25


Case studies
Macau LRT (Light Rapid Transit) Project

Challenges Solution Benefits
 Fully Automated  Full communications  Complete end-to-end communications.
Driverless Railway package  Integration with signaling system for
System Solution  Full On board driverless train operation
 High RAMS required communication system for  Carrier grade infrastructure to ensure RAMS
Communications driverless train operation requirement
Package Solution  Data transmission network  Complete on board comm. Standard
for CBTC Signaling system Package


Case studies
Swedish Transport Administration

Sweden’s transportation agency is
responsible for rail, road, maritime and air
transportation systems.

 Complex network  Upgrade to single rail  Simplified network operation - single easy to
 No support for new communications system use interface.
services  Converged IP/MPLS  Able to safely migrate all traffic from
 End of life for older infrastructure multiple legacy networks
products  All IP 10-gigabit national  Carrier grade Ethernet exceeded ITU-T
 Need to reduce OPEX network standards
 Common management  New revenue generating opportunities
platform


Case studies
Delhi Airport Metro Express (DAMEPL)

Connecting Delhi’s Indira Ghandi
International Airport to the Delhi central
train-station.

 Reduce travel time  Full communications  Complete end-to-end communications.
downtown-airport to package  Integration with signaling to announce train
20 minutes  SDH + Ethernet core arrivals
 Premium passenger network  Carrier grade infrastructure to ensure
experience  Complete turnkey - voice, reliability
data, tunnel, CCTV, displays,  Complete passenger information for both
emergency services comms. trains and flights


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