GENBAND says it is looking to make operators’ moves from TDM- to IP-based networks a bit more palatable. The company is rolling out a program that will enable operators to fund the total cost of TDM replacement with energy cost savings—as long as GENBAND is the general contractor for the project.
GENBAND CEO David Walsh unveiled the strategy during his keynote at TIA. He says GENBAND is working with energy audit firm TelEfficient and Wall Street financiers to pull off the plan, and that the scheme is different from others in that the bank partner holds all the financial risk. GENBAND, which installs and maintains all the new IP-based network gear, then concentrates on working with TelEfficient to prove energy cost savings—as well as reduced real-estate requirements, tax credits, government incentives, etc.—can finance the entire cost of a new network. At the end of 10 years, operators can then choose to stay with GENBAND or go another route.
Yankee Group Research VP Brian Partridge comments
“You don’t hear as much about TDM network migration these days, but it’s an elephant in the room. There is literally a ton of old, reliable, yet power-hungry and space-eating TDM switching infrastructure deployed worldwide. And we should give kudos to the original gear vendors (many of which are no longer in business) that it still works. When you combine the fact that the gear works along with a shrinking number of customers actually using it, building a business case and getting the upfront cash for an upgrade can be difficult. That said, every year the gear gets older, it gets more expensive to maintain and the support personnel get closer to retirement.
In theory, this upgrade and financing plan removes the major obstacles in the way of a TDM upgrade by first identifying savings and then using them to pay for the upgrade itself through clever financing and the full support (and trust) of GENBAND . The requirement to give GENBAND the prime contracting role might require a leap of faith, but its track record in this area is solid and was greatly enhanced with the pickup of Nortel's assets. I also like that the burden of financial risk is mostly absorbed by the Wall Street financiers, not GENBAND . While there are still some devils in the details, I’m sure that cash-strapped Tier 2 and 3 operators will be willing to listen. This plan just might work.”