MPLS ready for China's core challenge; Chinese carriers have not yet traded in their ATM networks for Layer 2 MPLS for a very simple reason: ATM works just fine as is. However, that's about to change. China Unicom was the first to shift, and if that doesn't convince rivals, growing demand for bandwidth and service flexibility will

Telecom Asia, April, 2004 by John C. Tanner

What Unicom did, with help from Juniper and its partner Lucent Technologies (which supplied the original ATM gear), was to leave the ATM edge network alone and build an MPLS "supercore" through which the ATM traffic passes.

"The end-user doesn't know that it's not going through an ATM core but in fact is going through an MPLS core," says Coward, who explains that Unicom wanted to ensure that the MPLS system worked within the parameters of their ATM customers' expectations.

"Unicom is also moving more IP traffic through ATM than before, so now they'll be able to offload that traffic onto an MPLS core," he adds. "It's a gentler approach to ripping out the legacy network and replacing it with MPLS."

Bandwidth surge

Not unexpectedly, Juniper expects that the Unicom deployment will convince its competitors to follow suit.

"Other carriers are planning more complete MPLS-based services rather than ATM extension. We think the Unicom case will convince them to go with MPLS," says Coward.

However, whoever the first mover of the market turns out to be, adoption of Layer 2 MPLS is largely just a matter of time, according to most market observers. And it is getting to be about that time.

For one thing, according to Pooh of Yankee Group, there's the growing appetite for bandwidth among Chinese enterprises. A survey published in a January research note from Yankee Group found that 64% of enterprises will need more than 2 Mbps of connectivity per site by next year. "Networking speeds of 6 to 8 Mbps and 10 Mbps would become the hot picks in the next two years," Poon says.

An extra bandwidth driver, she adds will be the 2008 Olympic Games in Beijing. "Given the scale of real-time communications required, we estimate China will need at least 500 data links running at speeds of 2 Mbps and up to 155 Mbps," she says. "A robust data network with high capacity is imperative to ensure the reliability and integrity of network performance."

As such, carriers will have to think very hard about whether their ATM networks can handle that load, and what it will cost to scale up to the demand. Traffic engineering is going to be major consideration there as well, says Coward.

"Internet traffic will eat up a 10-gigabit circuit if you let it," he says. "You have to do the engineering to make room for other traffic, like high-quality prioritized traffic. A lot of that is the same stuff you have with ATM, except that in the ATM world, the boundaries are very hard. In the MPLS model, you have more flexibility in how you divide up bandwidth."

Hou of Alcatel Shanghai Bell cites other factors that will push up bandwidth demand, such as economic growth and increased competition.

"The competition for high-end enterprise users has driven the price down, so carriers have to provide cost-optimized services. At the same time, the operational costs for the older frame-relay/ATM services are high, and getting higher," he says. "China Telecom and China Netcom are facing this dilemma now. They have to provide high-quality SLA services, but they have to get their costs down."