by Thor Olavsrud

Verizon’s IP VPN Opens a New World of Wireless Possibilities

Apr 19, 20124 mins
CarriersMobileSmall and Medium Business

In what may be a first salvo in a new battle among carriers, Verizon's new Private IP Wireless (LTE) service offers the potential to let businesses create private networks that incorporate cell towers while meeting or exceeding the speeds of a wired T1 connection.

Verizon’s announcement yesterday of its new Private IP Wireless (LTE) service is the most recent advance in what appears to be an emerging technology offering for carriers: multiprotocol label switching (MPLS) IP VPNs that span and integrate both wireline and high-speed wireless.

The stakes are high, as the capability to create essentially a private network that incorporates cell towers while meeting or exceeding the speeds of a wired T1 connection open a myriad of new use cases that go well beyond simply providing employees with remote access to corporate resources.

Imagine the Wireless Use Cases

“We notice a lot of companies are actually starting to think outside the box with wireless,” says Stephen Goodman, manager of Global Wide Area Solutions Marketing for Verizon. Imagine, for instance, pop-up ATMs that don’t require a wired connection deployed along the route of the Boston Marathon or reporters being able to transmit reports with video to their broadcast stations without the need for expensive satellite uplinks and satellite trucks. Vending machines could alert distributors when they need to be restocked, and they could also collect valuable data on customer tastes and preferences. Even digital signage could be transformed.

Some firms are also looking at the offering as a solution for seamless failover to back up a mission-critical location, Goodman says.

“When that dreaded backhoe comes in and cuts your wire, your 4G connection just steps in,” he says.

“3G access to MPLS networks has been well-received by the market, particularly in certain verticals, like retail,” says Lisa Pierce, managing vice president at research firm Gartner. With the capability to leverage LTE and the dramatically increased bandwidth it offers, she says, many options become available. One that she says she believes has legs is its use in medical settings for remote monitoring on a continual basis. Since monitoring chronic illnesses accounts for roughly 75 percent of medical providers’ costs, she says, the capability to monitor patients continually while decreasing doctor visits could reduce costs dramatically.

Secure Communication with MPLS IP VPN over LTE

Verizon’s offering combines 4G LTE with Private IP (Verizon’s branded MPLS IP VPN), providing the capability to segregate data and verify that traffic is sent and received only by customer-authorized subscribers, with end-to-end connection from the wireless devices to the company’s private IP network. Essentially, when a wireless device accesses a cell tower, it is routed to an enterprise gateway in a Verizon switching center, where it is encoded and kept completely separate from the public Internet. Customers can also opt to add encryption for another layer of security.

Verizon quietly rolled out the technology with LTE in January, and it is now in use by about two dozen business customers, according to the company. Verizon has been offering the service over its 3G EV-DO wireless network since 2008.

Pierce foresees a point at which carriers like Verizon will be able to offer an end-to-end unified communications application that incorporates LTE, but she says she believes it will be about a year-and-a-half to two years before it’s available from multiple providers. First, she says, carriers need to offer a performance warranty, which is not available with 3G.

New Wireless Pricing Models?

Perhaps even more important, the price points have to make sense—and that may require rethinking the pricing model for wireless entirely.

“The pricing doesn’t really reflect the way companies should be buying mobile services, which is precisely the way they buy landline capacity,” Pierce says. “You can’t do that right now with mobile devices.”

Pierce says CIOs can expect to see a lot of service providers begin to offer usage-based pricing, potentially with different rates based on time of day.

“CIOs in general need to get ready for a world where the concept of only paying for something on a flat-rate basis is going to become less and less rare,” she says, adding that CIOs will need to understand their wireless usage and traffic volumes in the same way they currently keep tabs on their server capacity and storage capacity. “It’s always good to understand how you’re using your resources.”

Thor Olavsrud is a senior writer for Follow him @ThorOlavsrud.