The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.

MORRISVILLE, N.C. – Tekelec executives heads into the World Mobile Congress this week in Spain bolstered by a major deal with a large telecommunications provider in an emerging network communications market known as Diameter routing.

The Morrisville-based company announced the contract with an unnamed customer last week. It was the first big deal for Tekelec since it was taken private in a $780 million deal that closed in January.

At the conference Monday morning, Tekelec announced several other “wins:”

  • Two top-level service providers in the Asia-Pacific market
  • A “tier one” provider in Europe
  • A provider in Mexico
  • A provider in Canada

The new contracts give Tekelec deals with nine service providers, four of which are in the U.S.

The deals give Tekelec a big boost and more credibility in the Diameter market where the company had earlier publicly disclosed deals with major carriers Verizon Wireless and MetroPCS.

Diameter is a key part of so-called LTE, or long-term evolution, technology for mobile and wireless data providers worldwide. It’s the backbone for the “4G” wireless broadband networks being rolled out across the U.S. today, and Tekelec sees LTE spreading worldwide.

“Mobile data is the greatest opportunity service providers have ever had,” explained Joanne Steinberg, director of strategic marketing for Tekelec. “But to maximize this revenue opportunity, they need to add intelligent controls to their networks. They can implement those controls through the messages that exchange network, subscriber and charging information.

“Those messages communicate using a protocol called Diameter. It’s essential for operators to provide and bill for mobile data services, including Internet browsing, mobile video and app usage. As mobile data usage continues to grow, operators need to manage and monetize Diameter traffic to ensure a high quality of service and minimal network disruptions.”

“If handled insufficiently, Diameter can overwhelm other critical network equipment, with the worst-case scenario meaning a network outage.”

Mobile data revenues are expected to double from 2010 to 2016 to the tune of well over $400 billion, according to one estimate from Ovum. Preventing problems is big money.

Heading Off a “Signalling Storm”

In a blog, Steinberg described the problem as “signalling storm:”

“Operators (and their subscribers) are experiencing the impact of a data surge on their networks. Network outages caused by sudden increases in subscriber application usage due to unexpected events serve as a reminder that the rapid growth in subscribers, devices and applications is causing a ‘signaling storm.’ In some instances, signaling traffic is exceeding data traffic. This signalling storm is causing congestion and impacting the user experience.”

Tekelec, which emerged as a global leader in services related to texting and renumbering software, has been hailed as a leader in the Diameter space by analysis firm Infonetics. Tthe recent contracts seem to back that praise. The new technology plays to Tekelec’s strengths, according to Steinberg.

“Tekelec’s heritage is supporting core network technologies, providing the equipment that customers never see, but service providers rely on to deliver all of their services,” she said. “We’ve had tremendous success at this for operators’ voice and text message businesses. We have been the market leader for many years routing messages using an earlier protocol called SS7. We’re now applying the same expertise for mobile data services running on the Diameter protocol, and we think this market can be bigger than the SS7 market.”

More Patents Ahead?

A so-called “patent wall” is the first thing visitors see when they enter Tekelec’s headquarters. The company has for years been a leader in communications software. Steinberg said SS7 is an example.

“Our SS7 leadership is unparalleled. No one knows the core network like we do,” she explained.

“Also, we view Diameter as a network-wide need, not a one-off solution. Diameter routing has many use cases, and our competitors attempt to solve a few of them piece by piece. We offer a Diameter network vision, where all of the elements sending and receiving Diameter messages need a framework for long-term scalability, reliability and flexibility.

“Finally, we offer the three most important elements of this new Diameter network: a Diameter signaling router, policy server and subscriber databases.”

Tekelec also is positioned to capitalize on its LTE expertise as more carriers embrace it.

“Yes, LTE is going global,” Steinberg said. “The Global mobile Suppliers Association counted 49 LTE operators in 29 countries that have launched commercial services. By the end of the year, the group predicts 119 commercial LTE networks in more than 50 countries. “

As for more patents being added to the “wall,” Steinberg said Tekelec expects to add Diameter-related patent “wins” in the future.

“We have applied for many patents that are Diameter-specific, and we can apply many of our existing issued patents to Diameter-related systems and products,” she said. “We continue the R&D work to add to our patent portfolio. “

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