After much anticipation, the winners of BT's £10 billion (or about US$19 billion) RFP for its 21st Century Network (21 CN) were finally announced today. The key objective is to upgrade UK's legacy PSTN and evolve it to a multi-service IP based network carrying both voice and data services. The project will span five years and the migration of customers onto the new network is expected to start next year. A grand total of eight vendors were selected for six major areas of this massive undertaking:
- Access (DSL, Metro WDM): Fujitsu / Huawei
- Metro Routing: Alcatel / Cisco / Siemens
- Core Routing: Cisco / Lucent (with Juniper's routers)
- iNode (network intelligence / softswitches): Ericsson
- Optical (long haul, switching): Ciena / Huawei
- Services: Lucent
The results have disappointed some Marconi investors and rumors already have started about a possible sale of the company (ironically to Huawei, one of the 21 CN winners). Marconi's loss also has negative implications to Sonus, which was hoping to leverage its gateway product as part of the Marconi solution. Huawei's wins on two areas (access and optical tranmission equipment) is a proof point of a higher penetration of low-priced Asian manufacturers into Tier 1 carriers. Also, the commoditization of low margin business (broadband access and optical networking) is expected to be a contuining trend. Cisco's win is another validation of its CRS-1 routing platform, which will be used on BT's IP/MPLS core. Lucent comes out as a winner, getting a lucrative portion of the puzzle (services, which carry good direct operating margins of about 10%). Lucent will resell Juniper's routing systems, but these will be souped up with Lucent's own OS software and extra tools (developed at Bell Labs) to optimize network efficiency. The selection of Ericsson might be indicative of BT's future plans to provide its customers with a seamless wireline/wireless service.
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