Customer Case Study
SureWest chose a Cisco solution to be first to deliver HDTV over an IP network.
BUSINESS CHALLENGE
SureWest has always set itself apart from competing telecommunications companies with a combination of innovative services and dedication to the highest levels of customer care. In early 2002, the incumbent local exchange carrier (ILEC) acquired the assets of a local cable company to expand its data and voice business with high-growth video services. SureWest continued to build out the acquired cable network through 2003.
In parallel with the radio frequency (RF) cable buildout, SureWest began to evolve an IP network that could serve as a cohesive, open, scalable foundation for the company's expanding "triple-play" offering. The challenges surrounding the adoption of a new infrastructure included:
• Helping ensure adequate performance and quality of service (QoS) for IP/TV, high-definition television (HDTV) over IP, and other bandwidth-intensive services.
• Meeting the security requirements dictated by providers of licensed video content as well as users.
• Integrating traditional and new networking equipment.
"We knew that we had to strengthen our foundation before we could start adding more services," says Bill DeMuth, senior vice president and chief technology officer for SureWest. "Quality of service was number one on our list - we cannot keep our customers if we do not deliver the experience that they want, and our content providers also require that we guarantee a good experience for their viewers. Security was our second challenge. Licensing content requires that we demonstrate end-to-end network security."
NETWORK SOLUTION
SureWest chose the Cisco® IP Next-Generation Network (NGN) architecture to help ensure its ability to develop and deliver advanced IP video services over its soon-to-be all fiber-to-the-home (FTTH) network. Featuring Cisco Catalyst® 4500 and 6500 Series Switches, the new SureWest core and distribution design provides a flexible, open solution with pluggable optics for accommodating changes without requiring the expense of additional fiber. Each Catalyst 4510 Switch (providing 1550/1310 bidirectional single-fiber connectivity) delivers 100-MB bidirectional Ethernet to 1000 residential customers. Located in cabinets in residential neighborhoods, the Catalyst 4510 remote terminals (RTs) connect to a primary hub (PH) housing Catalyst 6509 Switches for 40,000 homes. The Gigabit Ethernet uplink connection between the Catalyst 4510 and Catalyst 6509 Switches can be upgraded to 10 Gigabit Ethernet as deployment densities increase, and SureWest also plans to upgrade the core switches to 10 Gigabit Ethernet. The primary hubs are connected upstream to the primary core locations, which also house Catalyst 6509 Switches. From the super headend of the network, voice, video, and data content is passed directly into the Cisco 6500 core switches (see Figure 1).
Figure 1. The SureWest FTTH Distribution Network
SureWest takes advantage of integrated QoS and security features in the Cisco solutions, and the Cisco IOS® multicast capabilities are utilized helps to enable an efficient use of bandwidth. Traditional cable infrastructures deliver all channels to all houses. In comparison, the Cisco Catalyst switches forward a single copy of the channels down to the remote Catalyst 4510 Switches. At the most remote switch, each channel is multicast to only the homes that are watching it. At any point in the network, only one copy of each channel is being forwarded.
In 2004, over the new network architecture, SureWest introduced IP/TV services. In 2006, the company brought to market the industry's first HDTV over IP service. To date, the upgraded network has enabled an IP video lineup including 260 standard video and audio channels, 17 HD channels, and video on demand (VoD) totaling approximately 500 hours at any point in time. Going forward, the all-IP network simplifies the provisioning of data, voice, and video services, and also streamlines the processes required for service delivery, service monitoring, and reacting to network performance. The Cisco foundation has also enabled enhanced data services, with the standard offering delivering 10-megabit-per-second (Mbps) symmetrical data rates and optional 20-Mbps rates. The high bandwidth and low latency of the Cisco switches provide levels of responsiveness that appeal to gamers and other customers.
"Channel-change time is a good indicator of the overall network responsiveness," says Scott Barber, vice president of network operations at SureWest. "Some carriers struggle with this. Our network is very responsive - more so than satellite and comparable to cable. We can take advantage of multicast for bandwidth efficiency, without compromising performance or degrading the user experience."
BUSINESS RESULTS
Service quality and customer statistics improved significantly when SureWest transferred traffic to the new Cisco network in 2005:
• Disconnects: The number of customer disconnects has been cut in half compared to equivalent traffic volume on the previous network.
• Average revenue per user (ARPU): With the introduction of video services, SureWest's ARPU rose to almost $100. The recent introduction of HDTV is expected to further strengthen ARPU results.
• Revenue-generating units (RGUs): SureWest tracks the number of services purchased by each customer. With the new network, RGUs have increased from 2.30 to 2.37 per customer, meaning that customers are signing up for more services on the new network.
• Market penetration: Penetration rates are also increasing as a result of the expanded service portfolio. Though still in its infancy, HDTV service sales are strong. Of the homes that are purchasing the service, early reports show that there is an average of 1.6 HD set-top boxes per home. The current network gives SureWest plenty of bandwidth to take advantage of this increasing base of HD viewers.
To bring their next-generation of IP/TV services to market rapidly, SureWest utilized the Cisco Powered Network (CPN) program. Its CPN designation for Ethernet Access services provides SureWest with a variety of Cisco resources to assist with service creation, acceleration, and marketing. Today's customers demand performance and reliability, and the Cisco Powered Network designation gives customers confidence in the provider's ability to meet expectations.
The strong video portfolio strengthens the SureWest position as a market leader for triple-play services. By creatively bundling telephone, high-speed Internet, and digital TV services, SureWest has increased "stickiness" or customer loyalty, and attracted new customers. Subscribers are given the convenience of a single bill and a single point of contact for all services. As a result of the expanded bundles, turnover rates have dropped to 1.2 percent, an excellent result compared to industry averages.
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"Nearly 49 percent of U.S. households are interested in a larger bundle that meets most or all of their communications needs." -The Yankee Group, 2004 |
The converged core and distribution network also lowers operating costs (OpEx) for SureWest, providing an integrated foundation that streamlines provisioning and support functions. Traditional neighborhoods are being upgraded to the new IP architecture to further reduce OpEx over time, and increase the performance and responsiveness compared to the acquired RF infrastructure. "Our top-priority goal was to improve our ability to deliver services," says DeMuth. "A stable, reliable core network was the essential step toward that goal. With the Cisco NGN, we gained a solid foundation and were able to get to market first with HDTV over IP."
TECHNICAL IMPLEMENTATION
"We knew that the key to our success in video - like voice and data services - was differentiation," says DeMuth. "Another `me-too' cable system would not guarantee long-term customer retention. From the beginning, we set out to give our customers exceptional quality. Where voice and data services can tolerate an occasional dropped packet or retransmission, viewers notice every lost video packet."
This dedication to a maximized user experience drove SureWest during the selection of a vendor for its IP NGN core and distribution switching solution. In mid-2003, the company brought in two finalists for a competitive demonstration of capabilities, including an investigation of the ability to integrate new solutions with traditional network equipment while also achieving the best QoS. The evaluation focused on the metrics for high quality and reliability. Competing platforms were integrated with video services that were under development at SureWest, and channel change times, packet loss, failover times, and other crucial factors were analyzed. The capital (CapEx) and OpEx costs were also analyzed to compare total cost of ownership, and the solutions were evaluated in terms of flexibility and scalability for future service delivery options.
The Cisco IP NGN architecture and switching solutions won the competition. The ultimate selection of Cisco was also based on evaluation of the overall relationship between SureWest and Cisco. SureWest recognized that Cisco represented the type of vendor that could support their long-term vision for success. "During our evaluation and selection process, Cisco demonstrated the flexibility that we need in a partner," says DeMuth. "Their responsiveness helped us develop an innovative solution for our single-fiber Fast Ethernet deployment, and the range of Cisco service provider programs will help us with this and future service introductions. We know we can count on them for the long term, and that they are committed to the ongoing working relationship between our companies."
The new core and distribution upgrade was deployed in 2003. Alpha trials were carried out within a controlled subset of the network, and a beta test began at the end of the year, providing IP video services to employees and some customers. By the beginning of 2004, the new Cisco IP NGN and FTTH architecture allowed SureWest to roll out IP/TV services. The initial IP video service was provided to a new market in Sacramento, with the traditional cable infrastructure still supporting the installed base. Due to the success of the new IP/TV service, SureWest began converting neighborhoods and migrating all of its video business to the new architecture.
To date, SureWest has worked with leading IP/TV companies to strengthen the network and expand services. "Developing our IP video business encompassed lots of integration," says Barber. "The network, services, middleware, set-top boxes, and other components affect the overall viewing experience. Most of the work was focused on the set-top components - the Cisco core and distribution solutions worked from day one. Our new foundation and integration work has paid off, and our IP/TV services have been well received by customers."
In January 2006, SureWest became the first provider to introduce HDTV over IP, gaining further payback for its investment in the new core and distribution network. From its inception, the Cisco switching solution was designed to meet the requirements for HDTV, including:
• Bandwidth: The Cisco switches allow SureWest to provide a bidirectional 100-Mbps connection to Cisco FTTH customers. This supports up to two streams of MPEG-2 HDTV at 19.4 Mbps each, up to six MPEG-2 SDTV streams at 3.5 Mbps each, and up to 20 Mbps for data services.
• Small footprint: The Cisco Catalyst 4510R chassis, with 100BASE-BX-D 48-port line cards, provides a high-density (almost 400 ports) solution for minimizing the amount of fiber required to pass all the homes.
• Single fiber, dual direction: Fiber costs are further reduced with the Cisco solutions. A new line card gave SureWest the single-fiber capability that it required and reduced fiber costs compared to dual-fiber alternatives.
FOR MORE INFORMATION
To find out more about Cisco service provider solutions, please visit: http://www.cisco.com/go/serviceprovider.
To find out more about SureWest, please visit: http://www.surewest.com.