“Telecom Egypt is a traditional organization but visionaries there, and at the Egyptian Ministry of Telecommunications, wanted to introduce IP as soon as possible,” says Johan Lallerstedt, president of Ericsson Egypt and responsible for Market Unit North Africa. The decision to upgrade the network to an IP-based multi-service network was driven mainly by the planning department, which saw the need for additional capacity but did not want to invest in legacy technology. Lallerstedt says that Telecom Egypt was looking to get more capacity for its existing services while investing in a technology that would provide future benefits and new revenue streams.

For fixed-line operators, upgrading to an IP-based network enables them to continue carrying their existing telephony traffic, while at the same time beginning to offer new higher-growth, multimedia services.

Telecom Egypt is the country’s incumbent fixed-telephony operator – servicing about 11 million subscribers – the largest in the Middle East. It operates in a traditional environment in which it has a monopoly in most services, but has consistently led the region in adapting new technologies.

In 2000, Telecom Egypt chose to upgrade to an ATM-based ENGINE network, and most recently, the company signed a contract for a new IP-based multi-service network, designed with the Ericsson Telephony Softswitch Solution, the first of its kind in the region.

The telephony softswitch is a crucial element for introducing IP into the network, but it also provides operators with significant savings on operating expenses.

“One of the immediate benefits of a softswitch solution is that Telecom Egypt will be able to reduce the number of switches in its network by at least 20 percent,” Lallerstedt says.

This is possible through the more efficient, layered architecture of the softswitch solution. Layered architecture enables the control and switching functions in the network to be separated, allowing traffic to be handled more efficiently and requiring fewer switches. Besides the cost-saving aspect of this new design, layered architecture also enables circuit-switched telephony and IP-based broadband traffic to run on a single multi-service network. It is also a critical stepping stone for introducing IMS into the network. With IP and IMS running in the network, a wide range of new services become available.

“Previously, it has been the technology department telling marketing what kinds of services it was possible to deliver, but now it is the other way around,” Lallerstedt says. “Telecom Egypt can provide so many new services that it is now on the shoulders of the marketing department to develop the right business models for these new technical solutions.”

Ericsson was chosen to provide a next-generation network based on the Ericsson Telephony Softswitch Solution in part by the company’s long relationship with Telecom Egypt and a reputation in the country that goes back to 1897. Lallerstedt says that while trust was an important factor, Ericsson was also chosen for this contract because it is seen as a leader in technology, something Telecom Egypt wants to be recognized as by its customers.