Next Generation Networks

Agenda
1. A Brief History of Electrons Movements
 From Talking to Communicating
 Demand
 Cost
 Outlook
2. Convergence, Evolution or Revolution?
3. What is NGN?
 Baseline
 Technology
 Outlook
 Opportunities
4. Does a Brand New Network Addresses Lack of Imagination?
 Apple, Google & a Mobile Operator?
 Partnerships
 New Opportunities
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 1. A Brief History of Electrons Movements
Fixed Perspective
Personal Computer with
computer 64kb/s modem Laptop Internet
Computing TV IPTV Video
Phone
cable VoIP
Home Phone Cordless Tablet
Telephone
Phone xDSL Hi-Speed Internet
Voice PSTN ISDN
Internet Virtualisation Cloud

1870s 1970s 1980s Wi-Fi 1990s 2000s 2010s

Wi-Max

Reality
1G Augmented
Services
Mobile Phone 3G Mobile Smart Phone
Technology SMS Phone 4G
2G 3G 3,5G
Data
3
2,5G MMS Video
Mobile Perspective Call
 1. Evolution of Mobile Networks

Services

QoS
Mobile TV
Fast Mobile
MMS Internet
Data Mobile Internet HDTV
Voice SMS Video
Video Call
Broadcast
1870s 1970s 1980s 1990s 2000s 2010s LTE
Mobile Wi-Max
Analog Signal GPRS UMTS
EDGE HSDPA+
LTE Advanced
Digital Signal HSDPA
Technology
1G 2G 3G 4G
4
 1. Growing Demand for Connectivity
Source: Cisco VNI 2011 Global IP traffic 2010-2015
60

Thousand PetaByte/month
40
Fixed Internet
Managed IP
20 Mobile Data

0
2010 2011 2012 2013 2014 2015

5 2020 Forecast: Internet Traffic 1000 times more

Source: National Institute of Information and Communications Technology (NICT)
 1. What is Cost Implication for this Demand?

Keeping pace with expected growth of connectivity demand will require

European Telcos to invest in enhancements of current-generation networks

Additional CAPEX over 5 years

(ATKearney estimates)

Fixed networks: Mobile networks:

10 bn € 30 bn €

Conversely, new demand for data traffic only brings marginal revenue increase

6
 1. Customer Perspective Evolution

Yesterday Today / Tomorrow

Content and Services

Computing

Telephone

News

Reality
Augmented
Television

Mail Converged
Interactive
Phones IPTV
7 gaming
 1. Europe: State of The Union
Fixed Broadband pop. coverage
80,0%

70,0%

60,0%

50,0%
None
40,0% < 2 Mbps
2 - 10 Mbps
30,0%
> 10 Mbps
20,0%

10,0%

0,0%
Germany Italy UK

2020 EU Digital Agenda Goals: 100% > 30 Mbps, 50% > 100 Mbps
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 1. Market Trend – Huge Competition

Market competition is increasing Mobile operators squeeze

fixed operators

Core revenue (voice) is saturated and profit

declining whereas data revenue increases
Fixed operators fight back
with Wi-Fi / Wi-MAX
Network costs are too high, and old equipment solutions
need replacing

Networks are complex, hard to scale and New players (MVNOs,

interoperate VoIPs, Google, Skype)
squeeze everyone

Roll-out time for new services is too long

Also customers are pushing for more innovative

services
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 2. Market Convergence

Commercial Convergence
• Bundling of fixed, mobile, data and TV services
• Subscribers can access fixed, mobile, internet and TV services from
a single operator

Service Convergence
• Subscribers access same services regardless of whether they are
using a fixed or mobile connection (e.g. Email access on a computer,
mobile or fixed phone)

Device Convergence
• One device may integrate various access types:
• This may include Mobile Networks (GPRS, 3G, HSDPA) and wireless
technologies (Bluetooth and/or WLAN 802.11 b/g)
• Also may refer to ‘one device does all’ with enhanced functions such as
10 Music / Photo / Data / GPS
 2. Network Convergence

Network Convergence
• Removal of distinctions between fixed and wireless networks

NGN

11
Source: Ericsson
 3. What is Next/New Generation Network, NGN?

Looking at the Evolution NGN is a concept, not just a technology

Its goal is to provide a single technology

platform

NGN facilitates convergence of network

and services

It supports generalised mobility which

will allow consistent and ubiquitous
provisioning of services to users

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 3. NGN – Technical Features

A single IP packet-based network which

replaces the different transport networks

Underlying network and access is enabled

across a wide range of broadband technologies,
both wireless (e.g. 3G, Wi-Fi, Wi-MAX) and wire
line (e.g. DSL, Cable, Fibre)

The Migration to NGN reduces network and

operational complexity resulting in better & more
reliable services

It employs a meshed core, having embedded

intelligence which would provide scalability,
throughput and improved QoS

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Source: Defined by ITU-T (International Telecommunication Union)
 3. NGN – Basic Architecture

NGNs are structured and separated into

functional layers, including:

• Access
• Transport & Switching
• Control & Intelligence
• Service (Application)

Layers are independent - they can be modified

or upgraded regardless of other functional
layers

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Source: Ericsson
 3. Expected Benefits from NGN
…End User perspective …Network Service Provider perspective

NGN enables any category of customers to

receive wide range of services such as voice, Enhanced revenue generation by providing
data and video over the same network optimised connection, service, flexibility and
efficient network management
It offers unrestricted access by users to
different service providers
Greater control and personalisation; offering
continuity for existing PSNT services

Converged Reality
Phones Augmented

IPTV Interactive
15 gaming
 3. New Revenue Streams – Opportunity & Challenge
Digital Content Revenue
(Global Consumer Market)
Billion $ 350
308
300

250
+108 Bn $
200
200

150

100

50

0
Source: Gartner 2010 2015

Who is going to earn the revenue? Telcos currently only earn traffic fees
Need to upgrade Business Models, not just Network capabilities
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 4 – Apple, Google & Vodafone
Product First
• Understand the Users
• Focus on Customer Experience
• Apply and Use Technology as an Enabler
• Be Product Oriented
• Innovate

Technology First
• Invest on Technology
• Build Relationship with Customers
• Focus on Technology
• Be late with the Application of Technology
• Follow the Technology

Market First
• Identify a Need
• Create a Market
• Innovate
• Challenge
• Expand

Partners or Who is the Service

17 Competitors ? Provider?
 4 – Other Players & Partnerships

Android Mobile OS
Microsoft Software
Google OS on the Cloud
Nokia Hardware
Google Voice
Samsung Hardware Skype VoIP Service

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 4. A Sample Case
Japan is developing a “New-Generation Network”

New-Generation Network’s main features

Speed faster than Peta-bit/sec

More than 100 billion terminals can be connected at the same time

Security capable of Address Traceback

Power Consumption less than 1 / 1000 of existing networks

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Source: National Institute of Information and Communications Technology (ICT) - Japan

 4. Final Consideration & Opportunities

Opportunity Challenge
- New Services - Revenue Sustainability
- New Revenue Streams - Cost Rationalisation
- New Innovative Business Models - Innovative Offerings
- IT Rationalisation - Differentiation
- Consolidations - Regulation
- Bridging Technology with Services - Customer Ownership

Need Risk
- Innovation - Market Instability
- Time to Market - Offshoring
- Integration & Migration - Regulation Constraints
- Transformation & Change Management - New Competition from OEMS
- Focus on the Needs rather than Technology - New Competition from SW/Platform vendors
- New Paradigm

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 5. What Telcos Need to Consider?

Design Next Generation Business

What to Bill & How New Revenue

to Bill? Streams
NGN Engagement
Programs Approach, Model
Governance & Value
RoI for Every
Penny Spent Manage Transition
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New Business Models
 Thanks
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