A Historical perspective of ISDN in Australia by the Technology Applications Group. Amazing how things have progressed with data speeds, networks and Applications.

ISDN NETWORK

Technology Overview

ISDN stands for Integrated Services Digital Network. The ISDN is a digital communications network service which uses the same copper wire lines used for standard (analogue) telephone services. ISDN services enable end-users to send and receive information at faster speeds and with greater reliability than is possible using the standard telephone service. ISDN services are used for the carriage of information such as voice, data, high quality sound, text, still images and video.

ISDN was designed around the notion of separate channels at 64Kbps. This number springs from the fact that 64Kbps is essentially the data rate at which the analogue lines are sampled at (8000 samples per second, 8 bits per sample) for the phone company’s ISDN. ISDN is essentially combinations of these channels, and also slower 16Kbps channels, used only for signalling. The 64Kbps channels are called B channels. The 16Kbps channels are called D channels.

There are two main interfaces – Basic Rate and Primary Rate. The Basic Rate Interface is intended for home use, and Primary Rate is intended for businesses. The Basic Rate Interface (BRI) is designed to carry the most data consumers can possibly send to the home through existing copper phone lines. The Primary Rate Interface is designed for businesses with larger data needs, or with the need to set up their own local phone system. It is generally just a much faster connection to the phone company, with several B channels.
Applications for ISDN services include: • data transfer • telephony • Internet access • PABX networking • video conferencing, and • telecommuting.

How Does an ISDN Network Work?

Telstra supplies ISDN services to both end-users and service providers. Where service providers have access to their own transmission networks, they purchase short distance ISDN services to use as customer ‘access tails’. The access tail services supplied to service providers are similar to the eligible ISDN services. In essence, they are carriage services using that part of the network which connects end-users’ premises to an exchange (that is, the customer access network). They are joined with the service providers’ networks to create an end-to-end service

 The early days of ISDN saw the evolving technology developed along proprietary lines. In the US the two competing camps were AT&T with its 5ESS switch and Northern Telecom and the DMS100. Both products were rolled out at approximately the same time with similar features and options. As the product was placed on the network there were some compatibility issues.

The Australian ISDN was implemented in 1988 prior to the presence of a second carrier. Australians have therefore been fortunate to have a single set of protocols and interfaces from any location in which ISDN is provided, thus avoiding some of the problems associated with incompatibility, in certain other countries. Unfortunately, the set of protocols used were different to every other ISDN service. Recognising this as a major impediment to the industry, Telstra migrated its platform towards the European ETSI ISDN standards, called Euro-ISDN, in 1995.The

Deployment of ISDN in Australia

ISDN is a digital communications service which enables the end-user to send and receive information at faster speeds and with greater reliability than is possible using the analogue carriage service of the PSTN network.
Telstra operates the only ISDN in Australia. Telstra has expanded its ISDN capacity in line with the licence conditions under s.66 of the Telecommunications Act 1997. Specifically, the licence condition requires Telstra to be in a position to make available: ... within 90 days of a request, a carriage service that provides a digital data capability broadly comparable to that provided by a data channel with a transmission speed of 64kilobits per second supplied to end- users as part of the designated basic rate ISDN service: • by 1 July 1997 – to at least 93.4% of the Australian population; and • by 31 December 1998 – to at least 96% of the Australian population.

Number of ISDN Services at 1999-00

The number of Telstra basic rate ISDN services installed at 30 March 2000 was 125,013, compared with 73,028 services installed at 30 June 1998. Very few basic rate ISDN services are utilised by residential customers.
Telstra has provided a separate measure of ISDN service penetration – the number of installed digital data equivalent lines (Exhibit 3-3). This measure is derived by multiplying the number of ISDN services in operation by a factor based upon the number of 64Kbit/s data channels provided by the type of ISDN service. For example, a basic rate ISDN service (OnRamp 2 and Microlink) is multiplied by two as it provides two 64Kbit/s channels, whereas a primary rate ISDN service (OnRamp 30 and Microlink) is multiplied by a higher figure, owing to the greater number of 64Kbit/s channels provided by primary rate ISDN services.

ISDN Network Rollout -The Deployment of Telstra’s ISDN Network

Telstra was one of the first telecommunications carriers in the world to introduce ISDN starting in 1988. The initial introduction of a primary rate service called Macrolink was followed by the introduction of Microlink, a basic rate service providing two 64Kbit digital channels and a 16Kbit signalling/packet data channel.
Telstra’s ISDN services are offered using two distinct ‘networks’ namely, the overlay network and the ETSI network. Each network is described below.
• The overlay network is based on a discrete network (separate from the PSTN). This network has been in operation since 1989 and, as at mid- 1998, provided connections to over 400,000 PSTN basic access line equivalents. It is to be phased out in 2000.
• The ETSI network, on the other hand, is integrated with the existing PSTN infrastructure. It is designed according to the standards of the European Technical Standards Institute (ETSI) and was introduced in 1997 as ‘OnRamp’.
With each network, terminal adaptors are located at customer premises in order to enable end-users to send and receive information over the network. As the overlay network is phased out, terminal adaptors which are not compatible with the ETSI network will need to be replaced.

These services are provided by a $200m overlay exchange network which extends out to user exchanges using a custom designed remote server known as a BMUX, connected by a 2Mb/s primary rate access to the overlay network node. The BMUX can only be provided at exchanges with digital transmission available to the rest of the network. In addition, on cost grounds, a BMUX is usually not installed until at least 5 orders have been received for Microlink ISDN service at that exchange.

By 1996, there were over 36,000 Microlink Services (basic rate ISDN) connected via 3,900+ BMUXs and more than 8,100 Macrolink Services (primary rate ISDN) in operation on the overlay network. The number of BMUX based services peaked in mid 1997 and has declined thereafter, as the ETSI based OnRamp substituted Microlink in the market.

Following OnRamp’s introduction, new ISDN customers are being served primarily by the new Future Mode of Operation (FMO) network and ETSI based ISDN service capabilities. Also existing Microlink customers have progressively migrated from Microlink to the OnRamp ISDN service. Migration from Microlink to OnRamp requires a telephone number change for the customer. In addition, a modification to the customer premises equipment to allow for compatibility with the new OnRamp Service may have been required in some cases. It is our understanding that the migration is due to be completed by 2001/2002.

The Migration of ISDN Network to ETSI Standard

As part of Telstra’s strategic planning process, it created a vision for the future which it called its “Future Mode of Operation” (FMO). The FMO incorporates fundamental changes to its “Present Mode of Operation”.
As a result of this network infrastructure, managing, operating and extending ISDN had become complex and expensive. The FMO directly addressed these concerns by creating a “composite” network in which a single network of switches will support both telephone and ISDN services.

Telstra’s ISDN service had been developed as a separate network to the PSTN. At certain locations there were connections between the two networks in order to enable interoperability. This dual/integrated network is sometimes called an ‘overlay’ network – ISDN ‘overlays’ the existing telephone network – but they remain two separate networks.

 Telstra’s existing ISDN network was further complicated by the fact that basic rate access MicrolinkTM, was not provided directly from the ISDN exchanges. Basic rate is provided by a purpose-built device called a B-MUX which was connected to the exchange via Primary Rate Interface (PRI). Each B-MUX supports up to fourteen Basic Rate Interface (BRI) ports.

In December 1994, the Telstra Board approved $300 million to rebuild its ISDN network over the next five years. The decision was based on the recognition that Telstra needed to expand its network and move to international standards to meet the rising demand for ISDN services.

From 1996, new switches provided ISDN services based on international ETSI standards, MacrolinkTM and MicrolinkTM services continued to be supported by Telstra to 2000 and existing customers were being migrated to ETSI ISDN progressively.

The major benefit of the network upgrade to Telstra was that it would be better positioned to satisfy market needs and demands more cost- effectively. In particular, the Composite Node network enabled Telstra to provide ISDN wherever there is a telephone exchange. Previously, it required either a special ISDN exchange or a B-MUX to be within about 5 kilometres of the customer and this often cannot be cost-justified. As a result, the penetration of ISDN had been restricted.

By supporting international ETSI standards, Telstra made it less costly for international CPE manufacturers to make their products available in Australia. Increased competition in the CPE environment has lowered prices and increased the number of applications which can use ISDN.

The national network deployment profile of FMO, ETSI ISDN and BMUX as at 1999, as provided by Telstra, is summarised in the Exhibit 3-5. This is based on the accelerated FMO program that has been agreed between Telstra and the Government. This shows that by July 1997, 25% of exchange sites nationally, representing 58% of PSTN lines were equipped to provide ETSI ISDN (On Ramp service) within normal provisioning periods.

ISDN Service Applications and Users -Telstra ISDN Offering

ISDN services enable end-users to send and receive information at faster speeds and with greater reliability than is possible using the standard telephone service. ISDN services are used for the carriage of information such as voice, data, high quality sound, text, still images and video.

Telstra’s ISDN services are targeted at the business sectors, especially large corporate. At the end of December 1998, Telstra had 648,000 ISDN channels in operation, which increased by 48% during 1999 to reach 964,000 channels.

The service had been largely marketed to business customers, such as the corporate and government sectors. However since early 1999, in view of the growth of Internet, Telstra’s ISDN service has began to address the small and medium businesses.

Telstra’s ISDN provides a range of voice and data business solutions including telephony, fax, file transfer, Internet access, access to the corporate LAN and video conferencing.

Voice Communication

OnRamp supports voice communication by phones or phone systems - providing fast call connections and clear voice quality. OnRamp provides features such as Direct Indial, Multiple Number, Easycall features like Call Waiting and Line Hunt that help users manage their calls.
For the small home office, an OnRamp service with Multiple Number provides extra phone numbers to differentiate between business and personal calls. One OnRamp service provides two digital lines for two simultaneous phone conversations - or talk on one line and still receive a fax or access the Internet on the other. Larger businesses can use larger OnRamp services with 10 digital lines or more for phones and data requirements.

Internet Access

The Internet has been called ‘information at your fingertips’, yet as the Internet moves increasingly to sound, image and video content, standard modem connections are proving too slow. At 128 Kbps, OnRamp can provide Internet access much faster than conventional modems, which means less time waiting for connection to the internet or files to download and more time available for working.

Telecommuting

In addition to its telephone and fax facilities, OnRamp provides high speed access to central office resources for regional offices and telecommuters, enabling all employees to share the same facilities and function better as a team.

Video Conferencing

Video conferencing provides the facilities for live full colour video and audio communication between people situated in two or more locations.

Image Transfer

OnRamp provides fast data transmission to industry sectors with such applications, specifically the pre-press graphics industry, the health sector and construction industry.

LAN Interconnection

Office Local Area Networks (LANs) have become part of the modern working environment with their ability to help staff share information and work better together, but their advantage can be lost as a business expands to new locations. Staff working from home (telecommuters) and channel partners are also disadvantaged by the loss of access to shared information.

OnRamp’s high speed digital transmission and instantaneous call set-up speeds up the flow of information and allows all staff – whether telecommuters or channel partners - to work together more effectively.

Telstras ISDN Users - Corporate ISDN User

A study by STM Consulting and Bellcore (1998) showed the percentage of services in operation that belong to Corporate & Government (C&G) customers. C&G customers are Telstra customers with a total Telstra bill size exceeding a specified amount. At the end of 1999, more than 95% of the ISDN customers belonged to the commercial, business and government sectors. Residential users accounted for less than 5%.
It is a common understanding in the Australian market that the skewing of basic rate ISDN demand to corporate customers relates to its use almost entirely for intra-corporate communications (eg, semi-permanent connections and LAN/WAN connectivity). The same is believed to apply to commercial customers; these tend to be larger multi-site customers with internal/inter-site communications requirements. For this reason, at this stage basic rate ISDN demand tends to occur only at centres which are large enough to have branch offices of large corporates and medium sized enterprises.

In Australia, as in other countries, Internet access requirements are expected to stimulate demand for basic rate ISDN in the residential and small business sectors, which today effectively have no real application for ISDN. However, the pricing of ISDN is prohibitively high for small business and residential users.

However, with the introduction of xDSL technology in 2000/2001, with its faster access speeds (up to 8Mbps) and the ability to use existing copper infrastructure, ISDN has a formidable competitor. In addition, HFC, LMDS and FTTC are also some of the competing technologies for ISDN as a high-speed access network solution.

In fact, Telstra has introduced xDSL as migration path for ISDN. ADSL (asymmetric digital subscriber line) promises 8Mbps Internet access to anybody within 1.5km of a telephone exchange.In June 2000, to fight the entry of xDSL, Telstra launched a new ISDN data service. It targets small office home office (SoHo), micro-business, and residential users.

Data Applications

Data applications (in terms of call minutes) account for more than 85% of the ISDN network traffic. However, in terms of number of calls, voice accounts for 75% of the total calls made.
Inter-business applications (such as videophone and videoconferencing) which use 64Kb/s (or nx64Kb/s) end-to-end connectivity, have yet to be adopted on a significant scale.
Telstra considers further disaggregation of its traffic volume of ISDN network to be commercially sensitive.

Rural ISDN Demand

Anecdotal evidence was presented to suggest that existing ISDN services in rural areas are exclusively in larger towns and are most likely to be part of the telecommunications facilities of a large corporate or government organisation. Such demands only occur in larger towns where there are government institutions such as hospitals and educational facilities, and branches of large businesses, such as banks and the post office. This reflects the current dominant application of basic rate ISDN which is for intra-corporate communications.
Data from Telstra on the deployment of BMUX and Microlink shows that rural penetration of Microlink is about 0.2% of telephone services in rural areas, about half the national total (0.4% of services). Furthermore about three quarters of rural Microlink services are in exchanges having more than 1,000 lines (ie, the larger rural centres). The 77% of rural exchanges which have less than 500 lines in total have only 34 Microlink services (1.2% of the rural total).

Market Perspective  ISDN was a Service for Large Corporate – Pre Internet Boom

Back in the late 1980s and early 1990s, ISDN was heralded as the high- speed access network technology of the information superhighway, with a maximum non-compressed data speeds of up to 128Kbps.
However, it was mainly utilised by large corporates, government units and businesses for their inter-office and LAN connections. It lacks the applications for small business and residential users. In addition, the value proposition for ISDN – benefit compared to price – resulted in limited take up by the small to medium businesses, let alone residential consumers. The fact that Telstra operates the only ISDN network in Australia has also prevented competition in delivery of the service. Despite network coverage of 96% by 1998, ISDN has failed to achieve wide adoption.

In 1998, the ACCC said ISDN prices in Australia were high by international standards, citing the Asia-Pacific Telecommunications Index from the National University of Singapore that indicated Telstra ranked first for IDD pricing but eighth for its ISDN pricing. Telstra competes with other carriers and service providers in international traffic but no carriers have the underlying network to offer a different ISDN tariff.
The ACCC report (1998) also quoted from a study by Siemens, a German electronics corporation, which showed that Australia had a penetration of 0.61% of ISDN in 1997, compared with Germany’s 8.69%, Switzerland’s 5.3%, the Netherlands’ 3.08%, Japan’s 2.57%, France’s 2.54% and the UK’s 2%.

Internet Boom Drives ISDN Adoption

However, with the arrival of the Internet in the mid 1990s, demand for higher bandwidth has breathed a new life into the ISDN service, especially in the small and medium business.
Since early 1999, Telstra has been addressing the need for an ISDN service in the small and medium businesses. The number of ISDN channels (both basic and primary rates) in operation increased by 48% from 648,000 channels in 1998 to 964,000 channels in 1999. xDSL and other technologies now provide competition for ISDN.

Competing Technologies – DSL and LMDS

In fact, Telstra has introduced xDSL as a migration path for ISDN while competitors are introducing xDSL services. Some xDSL operators believe the 30,000 or so ISDN users (mostly SME) are likely to convert to ADSL.

In June 2000, to fight the entry of xDSL Telstra has launched a new ISDN data service. It targets small home office (SoHo), micro-business, and residential users. The remodelled OnRamp Business Highway was launched on 19 June 2000. ISDN voice and data calls are fixed at Australian local rates, with a flat rate of A$1 an hour for data calls, timed per second, and a A$0.15 connection fee. Previously all calls were charged by time and distance. Telstra is cutting ISDN costs to better compete in the small-end data market against new high-speed copper-wire technology, ADSL, and cheaper cable Internet services.

However, Telstra is confident that ISDN still has a future, despite competition from other access network technologies. An attraction of ISDN is that it is an all rounder because it can enable so many applications and is well suited for international data traffic and video conferencing.

According to Telstra the market grew strongly in 2000 with a growth rate of 30%. However, being a mature product with competition from new technologies like xDSL, Telstra expects the market to level off in 2001/2002.