GMPLS IMPACT ON NETWORK PROVIDER’S OPEX WHEN

COMPARED TO TRADITIONAL APPROACHES

S. Pasqualini

, S. Verbrugge

, A. Kirstädter

, A. Iselt

, D. Colle

, M. Pickavet

, P. Demeester

Department of Information and Communications, Corporate Technology,Siemens AG,Otto-Hahn-Ring 6,D-81730

Munich,Germany

Department of Information Technology (INTEC), Ghent University – IMEC – IBBT, Sint-Pietersnieuwstraat 41, B-9000,

Ghent, Belgium

Keywords: OPEX, network management, network operations, business case, GMPLS

Abstract: This paper provides a detailed analysis and modelling of the Operational Expenditures (OPEX) for a

network provider. The traditional operational processes are elaborated and the expected changes when using

GMPLS are described. GMPLS is promoted as a major technology for the automation of network

operations. It is often claimed to allow the reduction of OPEX. However, detailed analysis and quantitative

evaluation of the changes induced by such technologies is rare. In this paper we quantify the cost reduction

potential of GMPLS. In case of a traditional network, we show an important impact of the used resilience

scheme on the expenses directly related to continuous costs of infrastructure (floorspace, energy,…) and on

the planning and reparation costs. Concerning the service provisioning costs, we show that GMPLS

introduction leads to a reduction in the order of 50% of the OPEX cost compared to the traditional case.

1 INTRODUCTION

This paper presents a quantitative study on the

operational expenditures for a transport network

operator. We evaluate how Generalized

Multiprotocol Label Switching (GMPLS)

technologies impact transport network operators’

processes and costs, when compared to traditional

approaches.

During the last years the main focus of transport

network evolution was on increasing transport

capacities and on introducing data networking

technologies and interfaces, e.g. Gigabit Ethernet.

This evolution is complemented by ongoing

initiatives to reduce the operational effort and

accordingly the costs of network operations.

GMPLS together with standardized interfaces like

UNI/NNI automate the operation of telecom

networks (Banerjee, 2001). They allow to efficiently

provide services and to improve the resilience of

networks. For the service provisioning there is the

new paradigm of user initiated service provisioning

(also known as switched connections) where the

client can setup connections without operator

interaction. This does not only speed up the

provisioning process, but also reduces effort for the

network operator.

Currently the approach of using a distributed

control plane for network functions like link

management, failure restoration, or provisioning

services such as leased lines is followed by several

initiatives and standardization bodies including ITU,

OIF and IETF. In this paper we do not distinguish

the details of these approaches but generally assume

a control plane supporting automation of network

operations. We use the term GMPLS to refer to any

kind of control plane according to one or several of

these standards.

2 APPROACH

The total expenditures of a company can be split

in two parts: the capital expenditures (CAPEX) and

the operational expenditures (OPEX). CAPEX

contribute to the fixed infrastructure of the company

and are depreciated over time. They are needed to

expand the services to the customers. OPEX do not

contribute to the infrastructure itself and

consequently are not subject to depreciation (Soto,

2002). They represent the cost to keep the company

185

Pasqualini S., Verbrugge S., Kirstädter A., Iselt A., Colle D., Pickavet M. and Demeester P. (2005).

GMPLS IMPACT ON NETWORK PROVIDER’S OPEX WHEN COMPARED TO TRADITIONAL APPROACHES.

In Proceedings of the Second International Conference on e-Business and Telecommunication Networks, pages 185-192

DOI: 10.5220/0001420001850192

 SciTePress

operational and include technical and commercial

operations, administration, etc. This paper focuses

on the impact of GMPLS on the OPEX in an

operational network, i.e. one that is up and running

(Verbrugge, 2005(1)). We therefore don’t consider

initial installation and network extension costs. All

infrastructure is counted as CAPEX, as suggested in

(Eurescom, 2000). For the traditional network, we

assume that it provides end-to-end services. The

GMPLS network additionally offers dynamic

services.

Network operation comprises all the processes

and functions needed to operate a network and

deliver services to customers. That includes the sales

and marketing processes, the various support

functions, as well as provisioning and monitoring of

the network, and the corporate processes in general.

Thus the significance of a reduction in OPEX cannot

be downplayed.

In this study we want to perform a process-based

quantitative analysis of OPEX and the reductions

expected for operators using GMPLS in their

transport network. The study is based on the OPEX

model defined in (Verbrugge, 2005(1)). Starting

from this very comprehensive model, we evaluate

which operations become more or less expensive

when the used technology is GMPLS instead of the

traditional static transport network. Apart from the

operations, particular attention has also to be paid to

the processes’ branches. The probability of each

branch of the processes’ flow has also to be

extrapolated when considering the new technology.

Based on this qualitative modelling, quantitative

results can be calculated. The normal cost of each

operational step is the one assumed in the base

OPEX model, for the traditional approach.

Combining this cost and the qualitative variation, the

new cost can be extrapolated. In this way the

incremental costs/benefits from using GMPLS can

be obtained.

3 TRADITIONAL PROCESS

STRUCTURE

In general, the introduction of GMPLS as well as the

considered resilience scheme will influence the cost

structure of network operators in many ways. The

next sections describe the processes being affected.

A more generic description can be found in

(Pasqualini, 2005). For traditional networks, we

consider 1+1 protection (two connections are setup

simultaneously, one of them being used as backup).

3.1 Continuous and Recurring

Processes

3.1.1 Continuous cost of infrastructure

The cost to keep the network operational in a failure

free situation is the first important cost in this

category. We call this the telco specific continuous

cost of infrastructure. It includes the costs for floor

Figure 1: Typical service provisioning process

ICETE 2005 - GLOBAL COMMUNICATION INFORMATION SYSTEMS AND SERVICES

186

space, power and cooling energy and leasing

network equipment (e.g. fiber rental). The

continuous cost of infrastructure follows the same

trends as CAPEX. Additional network equipment

installed as a backup for failures (1+1 protection)

leads to higher costs for floor space and energy.

3.1.2 Routine Operations

It is the cost to maintain the network or to operate

the network in case a failure can occur. The actions

involved include direct as well as indirect (requested

by an alarm) polling of a component, logging status

information, etc. Also stock management (keeping

track of the available resources and order equipment

if needed), software management (keeping track of

software versions, and install updates), security

management (keeping track of people trying to

violate the system and block resources if needed),

change management (keeping track of changes in the

network, e.g. a certain component goes down) and

preventive replacement are included.

3.1.3 Reparation

Reparation means actually repairing the failure in

the network, if this cannot happen in routine

operation. Reparation may interrupt unprotected

services. The actions involved in the reparation

process are diagnosis and analysis, technicians

travelling to the failure location, actual fixing of the

failure and testing whether it is actually repaired. In

a unprotected network, we expect that reparation is

more expensive because of the additional effort to

reroute the affected traffic.

3.1.4 Operational Network Planning

It is an ongoing task and includes all planning

performed in an existing network which is up and

running, including day-to-day planning, re-

optimization, planning upgrades. The costs for

planning are smaller for the unprotected network,

because backup scenarios do not need to be planned

for. We also assume that the non-GMPLS network is

managed by one standard centralized Newortk

Management System (NMS) per administrative

domain, calculating routes and monitoring alarms

but still requiring human intervention to configure

the equipment.

3.1.5 Marketing

With marketing we mean acquiring new customers

to a specific service of the network operator. The

actions involved are promoting a new service,

provide information concerning pricing, etc.

3.2 Service Management Processes

We investigated the five most technology dependant

processes within the traditional structure of network

operators considering the interactions and operations

of sales department (SD), administration (AM),

project management (PM), network operation (NO)

and external suppliers (ES).

3.2.1 Service Offer

The sales department negotiates the terms and

conditions of the offer with the customer and checks

whether the connection request can be handled by

the standard mechanisms and infrastructure. In case

of non-standard connection inquiries, separate

projecting (PM) is triggered for the various domains

(local, internal, external), and missing equipment

(cards, fibers, etc.) is ordered, causing additional

effort and delay. The projecting results then define

the price calculation (SD), as well as the delay

necessary to set up the service. Then the offer sent is

to the customer.

3.2.2 Service Provisioning

After the contract has been accepted the service

delivery process starts (fig. 1). The sales department

handles the contract administration, then the order is

split it into work packages according to the network

domains involved (PM). After providing the

connection (NO), an end-to-end test is conducted

and customer care, billing and alarm management

are activated (AM). Finally, a delivery report is

issued by the sales department to the customer. In

case of 1+1 protection, the cost increases

significantly since it is required to setup almost two

connections.

3.2.3 Service Cessation

At the end of a contract or on cessation request by

the customer the cease process triggers (via PM) the

deactivation of the circuits (NO), followed by the

recovery of equipment by field technicians (NO).

SD is informed about the expected cessation and the

final bill is sent out (AM).

3.2.4 Service Move or Change

Moving or changing a connection is the most

complex task since it involves all three previous

processes: Contract update, new connection setup

and release of the previous connection. The

customer’s request for change is handled by the

sales department as a service offer process, checking

again for the availability of resources. The sales

GMPLS IMPACT ON NETWORK PROVIDER’S OPEX WHEN COMPARED TO TRADITIONAL APPROACHES

187

department then generates orders for the service

provisioning and cease process that are implemented

through coordination from the Project Management

department. In the same time the client is receiving

updates on the new installation.

4 IMPACT OF GMPLS ON

OPERATIONAL PROCESSES

From the main operational processes described

above, several are impacted by the use of GMPLS.

We consider that the use of GMPLS impacts the

processes in two ways: the way connections can be

setup and managed, and the wider variety of

resilience schemes it promotes. Regarding the

resilience schemes, we will now assume that in a

GMPLS network shared mesh protection will be

used instead of 1+1 protection. For shared

protection, two connections are also planned, but

only one is actually provisioned, the second one

being provisioned only when the first one has failed.

The advantage is that the resources of the latter can

be shared among several backup connections,

leading to more efficient resource utilisation. This

obviously impacts CAPEX, and as a consequence

the continuous and recurring processes, which tend

to decrease together with CAPEX. Shared protection

could also be used in a non GMPLS network, but we

consider it is more applicable in the GMPLS case

because the backup path can be provisioned and

switched much faster.

4.1 Continuous and Recurring

Processes

4.1.1 Continuous cost of infrastructure

The continuous cost of infrastructure will be

impacted by the amount and the type of the network

components used. With GMPLS the network usually

allows mesh-based restoration, where less backup

capacity is required, which in turn leads to less

network components. The cost to power, cool and

host this equipment will therefore also decrease.

4.1.2 Routine Operations

The cost of the routine operation (maintenance cost)

depends also on whether the network is

automatically switched or not. The use of GMPLS

influences the routine operation costs because

(re)configuration after replacement of equipment can

happen faster. The replacements in the routine

operation process are only those that can happen in

the service window. The service window indicates

the time (e.g. during the night) during which service

interrupts are contractually not considered as

downtime. As GMPLS enables faster

reconfiguration, more operations can happen during

the service window, so that the repair process needs

to be triggered less often. On the other hand,

monitoring the software and the needed software

upgrades becomes more expensive in case of

GMPLS, because its complexity drastically

increases due to the presence of the control plane. In

general, we can expect the routine operation cost to

increase a bit when GMPLS is used.

4.1.3 Reparation

As a result of using GMPLS more failures can be

fixed from the NOC, which could have a beneficial

impact on the reparation cost. On the other hand,

GMPLS leads to more complex network operation,

which might be an additional source of failures.

Rerouting of traffic happens faster: GMPLS allows

for many fast and automated restoration and

protection schemes. Isolating a fault gets cheaper

when Link Management Protocol (LMP)'s fault

management procedure is available (but LMP is

optional in GMPLS, (Banerjee, 2001)). Overall, we

expect the cost for the reparation process to decrease

in case of GMPLS. (Verbrugge, 2005(1)) gives an

overview of the repair process.

4.1.4 Operational Network Planning

Indirectly the used network technology will also

influence the cost of planning, as more complex

systems require a higher planning effort.

4.1.5 Marketing

As GMPLS technology allows to offer new services,

which are initially unknown to the customers,

additional marketing will be needed to inform the

customers. This will lead to higher marketing costs.

On the other hand, of course, it may also lead to

higher revenues.

4.2 Service Management Processes

Finally, technologies automating some of the

network operation allow to significantly reduce the

cost for service provisioning, because the signalling

can be done via standardized interfaces (User

Network Interface UNI and Network to Network

Interface NNI), without requiring manual

intervention. This means that the cost for setting up

a new connection decreases strongly. In this case,

the service offer process and provisioning process

ICETE 2005 - GLOBAL COMMUNICATION INFORMATION SYSTEMS AND SERVICES

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will be changed fundamentally (Chahine, 2005).

Since the service delivery will now be automated

and executed on the pure machine level, correct

agreements and regulations have to be negotiated by

the sales department, and implemented well before

in the form of Service Level Agreements (SLAs).

The use of GMPLS technologies and the possibility

to offer dynamic services are strongly

interconnected issues. The strongest impact of the

dynamic services is on the pricing and billing

process. Fixed price services, e.g. leased lines, will

definitely be cheaper in pricing and billing than

dynamic services. For dynamic services it is much

more difficult (and thus more expensive) to correctly

assign costs to customer accounts. Calculating a new

price for a new service is more expensive than just

applying a traditional pricing scheme. This is

elaborated below as “negotiations” in the service

provisioning process.

4.2.1 SLA Negotiations

The process chain therefore starts with the SLA

negotiation process. Before the single services are

ordered and delivered, a contract framework

specifies in detail all sections of a generic service

template. Technical aspects like bandwidth

(minimum, burst) and its granularity, service

availability, quality of service are specified as well

as legal and organizational questions (penalties for

requirements not met, compensation, tracking and

reporting, etc.). Within the network operator this is

accompanied by forecasts (SD), Planning (PM), and

adaptation of the infrastructure (NO). For new

customers, it also involves connecting the

customer’s location with the network (which is

carried out in the service provisioning process for

the non-GMPLS case).

4.2.2 Service Provisioning

After this framework has been set up the, service

delivery process can be simplified due to the

introduction of standardized interfaces (fig. 2).

External signalling at the UNI is directly forwarded

to the call control (PM) that splits it into RSVP

signalling for each domain (NO). Manual

intervention is necessary to set up the connection

completely only if no positive responses were

received. After database update (AM), customer care

is informed, and billing and alarm management are

activated. At the end of this process, the client

receives the delivery report.

4.2.3 Service cessation

In the GMPLS case, the cessation request is also

received via the UNI. The cease process then

triggers the sales department to assess the cessation

request and trigger the billing and confirmation of

cessation to the client. On the physical side, the

network operation centre is requested to cease the

physical connection. Once the connection is

Figure 2: Service provisoning with GMPLS.

GMPLS IMPACT ON NETWORK PROVIDER’S OPEX WHEN COMPARED TO TRADITIONAL APPROACHES

189

released, this is confirmed to the project

management and the order is closed.

4.2.4 Service Move or Change

The GMPLS-modified move and change process is

initiated by the customer requesting a move and

change. The sales department transforms this request

directly to check for possibility of request and

availability of resources within the framework of the

SLA. Once the check of SLA is done, the customer

is sent the offer to accept or refuse it. If the customer

accepts the sales department generates orders for the

service delivery process and cease process that are

implemented with coordination from the project

management department. At the same time the

customer is receiving updates on the new

installation.

5 QUANTITATIVE RESULTS

5.1 Service management

For each of the processes described in (Verbrugge,

2005(1)), costs have been assigned to the process

steps (boxes in the figure) and a probability to the

branches. We focused on labour costs, expressed in

terms of hours required to carry out the task

described in the box. Then we calculated the hourly

fully accounted cost of each kind of employee, and

multiplied it by the number of hours. As suggested

in (Van Steen, 2004), we distinguish several

personnel categories: sales, administration,

engineers and technicians (in the NOC or field

technicians). Each department displayed in fig 1 and

fig. 2 is composed of one type of employee, except

the NOC where engineers, technicians and field

technicians have been considered. Summing up costs

for all steps gives then an upper bound estimate of

the overall cost of a given process. Cost and effort

figures for the current network operations were

collected based on surveys and interviews with

several carriers. From these figures we extrapolated

the figures for the new GMPLS process model.

In the case of a typical incumbent operator (fig. 3),

the service offer process involves expensive sales

and availability checks operations. In the end it is

nearly as expensive as the service provisioning

itself. The cease process involves nearly no work

from project management and network operations

center, which explains why it is much cheaper. The

move and change process is the combination of

service offer, provisioning and cease (in principle, it

is a little more expensive since it requires some more

coordination). Looking at the GMPLS-modified

processes, we first notice that SLA negotiations are

more expensive than the typical service offer. This is

normal since the former includes some operations

that are usually carried out in the service

provisioning process (plan, install and configure

equipment boxes). For a fair comparison, one needs

to compare the combination of service offer and

provisioning. In the case where GMPLS is used,

project management and sales are involved only

once - when the SLA is setup - leading to substantial

savings. Another advantage is that the same SLA

can serve for several services. So once the SLA is in

place, provisioning several services with GMPLS

costs much less.

5.2 Overview of all Operational

Processes

In order to compare the costs of all processes, a

specific case needs to be studied. We consider an

optical (WDM) network carrying 2.5 Gbps leased

lines and calculate the costs over one year.

Although, in a realistic network, leased lines would

probably be offered via SDH or OTN over WDM,

we focus on this architecture for the sake of

simplicity. The topology is the reference German

network (Hülsermann, 2004) with 17 nodes and 26

links and the associated traffic for 2004. This traffic

leads to 1214 services for one year, 80% of which

we assume to be standard services. We also assume

that there are no service cessations or move.

5.2.1 Equipment

For each type of equipment (WDM line systems,

optical amplifiers, transponders, unequipped OXC

Figure 3: Normalized costs for a non standard service.

0,00

20,00

40,00

60,00

80,00

100,00

SLA negociations

traditional provisioning

MPL

S se

ice

ning

radition

ervice c

ase

PLS

rvice ce

Cost

Sales Administration Project management NOC

ICETE 2005 - GLOBAL COMMUNICATION INFORMATION SYSTEMS AND SERVICES

190

itself) we take the following parameters into

account: price, and Mean Time Between Failure

(MTBF). Detailed values can be found in

(Verbrugge, 2005(2)). The equipment life time is set

to 10 years. In order to be able to calculate the

yearly capital equipment costs, the total equipment

cost obtained from dimensioning is divided by this

life time.

5.2.2 Failure probabilities

We assume two types of alarms in the network:

preventive alarms and failure alarms. Based on

(FCC, 2004), we assume 39% of all alarms to be

preventive alarms. Considering failure alarms, we

differentiate between CPE problems, external

problems (power disruption, etc.), misconfigurations

or software failures, and hardware failures (incl.

cable cuts). The probabilities of these problems are

specific for an optical network (Verbrugge,

2005(3)). Based on this and the MTBF values, we

determined a total of 1171 failures and 749

preventive alarms per year over the entire network.

5.2.3 Estimated yearly OPEX

With the above assumptions, we have been able to

estimate yearly costs for this network scenario, as

shown in fig. 4. In this respect, we need to point out

that our study only considered OPEX for a network

which is up and running. Also, including the costs

for first-time installation in the process-based costs

would have probably changed the picture.

This case study on a specific network scenario

allows to compare the process-based costs over one

year. We see a significant decrease for service

management processes in the GMPLS case. The

other processes’ costs remain of the same order in

both scenarios, and could be investigated further.

But this case study already allows to have an

evaluation of cost reduction that could be awaited

from the automation of some processes, and

compare it to other OPEX categories.

6 CONCLUSION

In this paper we show that most network operators'

processes are similar and can be modeled quite

generically. When introducing GMPLS, OPEX cost

reductions in the order of 50% compared to

traditional operations can be identified for service

offer and provisioning together, as shown in fig.3.

Based on these results the introduction of GMPLS

can generally be recommended to significantly

reduce OPEX. This advantage can even be

improved, if all network domains and all network

layers support interworking GMPLS control planes

and hereby also reduce the operational cost for end-

to-end connections across multiple operators'

domains. When comparing the use of GMPLS with

shared protection capacity to the traditional network

without control plane, using 1+1 protection, some

other cost effects become clear. The amount of

backup capacity in the network has a direct effect on

the CapEx costs and the OpEx part which is directly

related to continuous costs of infrastructure

(floorspace, energy…) A similar trend is seen for the

costs of service provisioning, which is most

expensive in case of 1+1 protection (more

connections need to be set up). Also planning costs

grow with the amount and complexity of failure

scenarios that need to be planned for. Finally, also

the reparation process is impacted by the

dimensioning, because more equipment leads to

more possible failures. On the other hand, the

availability of backup capacity strongly reduces the

time to get the network operational after the

occurrence of a failure and therefore reduces this

cost.

This paper reports preliminary results, and future

work will focus on refining the model and the input

data by further questioning network operators.

ACKNOWLEDGEMENTS

This work was supported by the European

Commission through IST-NOBEL and ePhoton/One.

And by the Institute for the Promotion of Innovation

through Science and Technology in Flanders (IWT-

Vlaanderen) through a PhD grant for the second

author, and the GBOU-project IWT 010058.

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0,00E+00

2,00E+05

4,00E+05

6,00E+05

8,00E+05

1,00E+06

1,20E+06

1,40E+06

1,60E+06

1,80E+06

2,00E+06

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