In February 2012, Infonetics Research published its inaugural Diameter Signaling Control worldwide and regional market size and forecasts report, in which we reported worldwide sales totaled $8.6M in CY11. The Diameter signaling controller market is in its infancy; as we predicted, a growing number of new products have launched in the past three months, and we expect more through 2012. As with all new markets, Diameter signaling controllers will expand functionality to meet operator requirements and use cases. We forecast revenue to grow at a 106.2% CAGR through CY16, resulting in $321.3M in revenue that year.

As mobile operators migrate to all-IP networks (access to core), signaling standards are migrating from SS7 to Diameter. At its core, Diameter enables the exchange of policy information within and between network operators. Diameter has also been developed as the foundation for authentication, authorization, and accounting (AAA) functions in IP-based networks.

Diameter signaling controllers provides centralized routing, traffic management, and load balancing among Diameter and non-Diameter elements within IMS and mobile broadband networks. It also supports protocol mediation and interworking functions between carrier networks. A fully loaded Diameter signaling controller will encompass the Diameter agents, DRA, DEA, and load balancing.

The move to all-IP mobile networks is being driven by LTE, and Infonetics forecasts that the number of LTE subscribers worldwide will grow from 9.2M in CY11 to 130.2M in CY15. The escalation of subscriber growth and the amount of signaling traffic these subscribers will generate is at the heart of our Diameter signaling controller forecast model.

As LTE networks are deployed and begin to grow, a key challenge is scaling the signaling and control plane due to the increasing amount of Diameter messages passing among network elements. Several global operators have experienced significant signaling storms in their LTE networks that in some cases have resulted in network outages. The storms have been caused by growing usage of the networks, but also by architectures that allow Diameter signaling to be dealt with on a peer-to-peer basis.

The increased use of mobile broadband networks is driving the growth of Diameter signaling within and between operators. This signaling traffic in turn has hastened the need for centralized controllers that can help manage the traffic in a more efficient and scalable manner. There are a number of key drivers to consider when evaluating the future growth of Diameter signaling traffic that will require signaling controllers:

• The continued rise in smartphone adoption as prices continue to drop due to strong competition and broad availability from high-end to low-end devices
• The availability of advanced 3G and LTE services such as tiered pricing and shared data plans, which require more frequent exchanges of policy and charging information
• The increase in the number of 3G and LTE network elements, particularly related to policy and control (e.g., PCRF, HSS, OCS), that must communicate with each other
• Roaming in LTE networks and between LTE and 3G networks, as well as subscribers moving between 3GPP (LTE/HSPA) and non-3GPP networks such as WiFi

A number of vendors are clamoring to play a role in this emerging market. We expect to see Diameter signaling controllers from at least 15 vendors by the end of 2012. Not all vendors will be successful, as the market cannot support that many, but we expect the competition to spur further innovation.

Today Tekelec is the front-runner in Diameter signaling control, with a strong revenue lead in 2011, helped by key wins in North America, including Verizon Wireless for its 3G and LTE networks and MetroPCS. With its heritage in SS7 and SIGTRAN, Tekelec has been an early mover in the Diameter signaling controller space and is well positioned for the future. In our February report, we asserted that Tekelec’s ability to draw upon its installed base of legacy customers will make it a formidable competitor. Since then, Tekelec has continued to increase its customer base for its Diameter Signaling Router (DSR), announcing 15 new customers across all regions, which confirms our statement. This brings their customer base to 19 for the DSR, totaling 1.8 million messages per second across a variety of use cases including interconnection for roaming, scaling policy deployments, core routing for LTE and IMS networks, and providing subscriber locator function in an LTE architecture.

Diane Myers

Principal Analyst, VoIP and IMS

diane@infonetics.com

When we hear about signaling and the signaling storm, we instantly think about all of the negative aspects of signaling and the costs of supporting signaling traffic in the network. However, not all signaling is “bad” traffic.

Bad News First

Radio Access Network (RAN) signaling can be considered the “bad” kind of signaling. These messages are only for establishing an Internet connection so that the data itself can reach the device.

Revenues for connections themselves are very small, yet the amount of signaling messages required to establish and then release the connection is significant.

For example, when a subscriber wishes to connect to the Internet and download an email, 50 or more signaling messages traverse back and forth between the RAN and the Gateway GPRS Support Node (GGSN). Now consider a subscriber who connects to Facebook and plans on staying logged into the account all day. The service provider, though, does not maintain the Internet connection all day. Instead, the connection ends after the initial data is sent and received. The device will then reestablish the data connection seconds later, poll the Facebook server for updates, and release the connection – requiring another round of RAN signaling messages.

Let’s assume that the connection required 50 signaling messages for setup and tear down (a conservative number). At a cycle of every 2 seconds, that’s 1500 messages an hour, 36000 messages a day. Multiply this number by 10 million subscribers and we are talking about 360,000,000,000 signaling messages in a single day!

Yes, There Is “Good” Signaling

Diameter signaling traffic, on the other hand, directly correlates to operators’ increased data revenues and provides profits they would otherwise never realize. Diameter enables personalized mobile data services, including tiers, loyalty programs, quality of service (QoS) for specific applications, over-the-top (OTT) applications value-add and RAN-congestion controls.

This “good” signaling increases as service providers begin monetizing their data networks. For example, when a subscriber wishes to purchase a higher service tier, the GGSN/Packet Gateway (PGW) will send a Diameter message to the Policy Control and Rules Function (PCRF) to find out what restrictions are to be applied based on the subscriber plan. The PCRF will then send a Diameter message to the Subscriber Profile Repository (SPR) database to retrieve the subscriber’s profile (data quota, etc.) and send this data back to the PCRF. The PCRF in turn sends this information to the GGSN/PGW for enforcement. That’s around five Diameter messages to support one interaction on a tiered service plan (and this is a simple example).

Diameter is also the protocol that:

• Connects the PCRF with the Deep Packet Inspection (DPI) equipment and the other policy enforcement control points;
• Communicates policy rules to the enforcement points throughout the network: and
• Provides the connection between the PCRF and the billing and charging domains.

The Diameter traffic that results from new revenue streams is a strong contrast to its predecessor in voice and text networks, SS7. SS7 signaling was about connecting voice facilities or, in the case of wireless networks, connecting to the Home Location Register (HLR) to support roaming.

In sum, it’s easy to have a negative association with increased signaling. But when thinking about signaling and the impact it has in the core network, remember that an increase in Diameter signaling is a good thing. It is a natural byproduct of an increase in revenue generation, and hopefully will only continue to increase as operators introduce more innovative and creative mobile data plans.

Technologist Travis Russell explains what makes up the New Diameter Network.

Today, Tekelec announced:

A tier one U.S. operator has selected Tekelec, the mobile broadband solutions company, to provide core Diameter routing, intelligent policy traffic routing and security for its LTE network.

Tekelec’s Diameter Signaling Router (DSR) will help the operator scale the LTE network and reduce costs, generate revenues from LTE roaming services and manage Diameter signaling and data traffic.

This is the fourth U.S. LTE operator to choose a new Diameter network from Tekelec. Earlier this month, industry analysis firm Infonetics Research named Tekelec as the “front runner” of the Diameter signaling control market.

Read the full announcement here.

Next week Tekelec will be sponsoring and speaking at 4G World in Chicago, Ill.

Randy Fuller, director of strategic marketing, will speak as a panelist at the “Role of Network Services in Delivering Differentiated Services” session during the “Service Enabling Strategies For 4G” track. Mr. Fuller will focus on policy management and enforcement, real-time charging and network intelligence that will enable service providers to profit from 4G services. The panel will be held on October 25 at 3:40 p.m. CT.

The next day at 2:30 p.m. CT, Matt McCann, principal architect, CTO Office, will discuss how to cost effectively scale and secure Diameter traffic in 4G networks. Mr. McCann will speak on key Diameter interfaces and policy, charging and mobility management. Discussion topics include several Diameter routing use cases:

• Policy, charging, roaming and home subscriber server (HSS) access networks
• Connection and transaction scalability
• Screening and topology hiding
• Stateful and stateless routing
• Network monitoring and intelligence

To view more information, check our press release.

In a recent Heavy Reading Policy survey, more than two-thirds of the respondents said they want to define their own policies, so they are seeking a policy-creation environment that is easy to use. Tekelec offers the leading policy management technology in the market and is the expert in deploying policy control solutions that are easy to use. Operators can easily add and re-configure policies to manage and control Quality of Service (QoS), charging, quota, optimization and admission control.

The Tekelec Policy Server supports a large menu of features and service plans, providing operators with the ability to establish business rules based on real-time information pulled from subscriber information, the network, or service behavior.

For more information, please download our free whitepaper: Why Tekelec for Policy Management – Ease of Use

Tekelec’s policy management solution stands out among all competitors. This videos discusses key differentiators of Tekelec’s solution that will benefit operators.

Joanne Steinberg, Director of Strategic Marketing, describes four key opportunities for operators to monetize their networks and get subscribers on their side.

Joanne Steinberg, Director of Strategic Marketing, talks about how operators can use network and subscriber activity to create revenue from their mobile broadband network.