Operator Survey Results – What’s really driving wireless revenues?

Operator survey results – What’s really driving wireless revenues

Monica Paolini, Senza Fili Consulting

Manish Singh, Radisys

2 Radisys Corporation Confidential

At a Glance

Embedded Wireless Infrastructure Solutions

Embedded

Wireless

Infrastructure

Solutions

Protocol Software

Professional

Services

COTS Platforms Media Server / MRF

Single Solutions Source Worldwide Customer Base

http://www.samsung.com/us/index.html

http://www.comba-telecom.com/Default.aspx

http://www.nei.com/default.asp

http://www.lgericsson.com/gindex.laf

http://www.arkadin.com/

http://radisysbrandguide.findsubstance.com/downloads/Trillium_Mark_Master.zip

| 3 | © Senza Fili Consulting LLC 2012

Technology to drive wireless disruption, with service monetization mired in uncertainty

• Global survey of mobile operators to get insights from decision makers

• Devices continue to drive change, among subscribers and mobile operators

• VoLTE is seen as necessary, but not a top priority

• Small cells and Wi-Fi offload provide a capacity boost

• LTE Advanced will bring improved spectrum efficiency and lower costs

• FDD and TDD will both succeed, but not yet clear how they will coexist

February 22, 2012


Data Remains The Growth Engine

Capacity Mind The Gap

Text

Traffic Doubling every 12 months

Video = Operators’ Albatross

Increase ARPU

Lower Cost per Bit

Source: Cisco VNI Source: Heavy Reading

Revenues

Traffic

Revenues &

Traffic Gap

Widening

Revenue vs. Traffic Growth

Voice Era

Data Era


Devices drive new usage models among subscribers, innovation among operators

February 20, 2012

“New form factors will emerge, but change will continue to be driven by smartphones and tablets, entering new segments and expanding their functionality.” – European survey participant

• Devices will continue changing usage model

• Smartphone adoption spreading to feature phone users

• Tablets may create a second wave of traffic increase

• Increase adoption of data-centric devices drives innovation among operators

• Cloud applications will have an impact on design of devices


Smartphones, Tablets, Notebooks…

Cameras, eBooks, Med Devices, Gaming, Navigation…

Mobile Internet of Things

Smartphones Tablets Notebooks

IP Cameras eBooks

Personal

Medical

Devices Gaming Consoles Connected Cars


Intelligence Flight Continues

eNodeB

eNodeB

eNodeB

MME / Serving GW

X2

S1 S1

MME / Serving GW Cloud

Devices

Dumb Pipe?

Intelligence Flight from Network to Devices & Cloud


VoLTE: eventually necessary, not yet

February 22, 2012

“Circuit-switched voice is not going to disappear over the next five years. But we do need VoLTE to gradually reduce our dependency from legacy 3G and 2G networks.”– APAC survey participant

• Voice is still an essential component and necessary to LTE’s success

• VoLTE needed to decrease dependency on legacy networks

• Concurrent voice and data connectivity is a driver to deploy VoLTE soon

• Revenues are largely unaffected by the introduction of VoLTE


MPX-12000 – VoLTE MRF Video & Voice over LTE

VoLTE Media Resource Function

• High Definition Voice, including AMR-WB

• VQE – critical media conditioning in noisy

wireless environment

Conversational Video

• Video calling – High Definition video 720p, H.264

• Video conferencing

• Video Transcoding

Audio/Video VAS

• Conferencing, Ringback, Multi-media

mail…

Open 40G ATCA Platform

"Mavenir has already integrated the Radisys CMS-9000 media server with our

Mavenir mOne Convergence Platform for one of our LTE operator deployments….

product like the MPX-12000-with a design objective to increase MRF media

processing capacities for mobile video services-offers an enticing MRF product

evolution for LTE operators" Terry McCabe, CTO, Mavenir Systems


Small cell and Wi-Fi offload: the quest for capacity density

February 22, 2012

“Today it is Wi-Fi offload, but in the long-term small cells will become more important to increase capacity.” – North American survey participant


3G/LTE Small Cells

3G Femtotality

LTE TotaleNodeB

Multi-mode.. 3G+LTE+WiFi

60+ LTE/3G Small Cell Licenses

Coverage

Cap

acit

y

Macro

Micro

Pico

Metro

Femto

Our Focus: Small Cells


SEG - WiFi & LTE Security

Macro Backhaul Security Small Cells Backhaul Security

Secure WiFi Offloading

MME

eNodeB

S1u X2

S11

S-GWY

4G

MME

Femto

Metro

IPSec Tunnel

S-GWY Untrusted IP

Network

PGW

AAA

Wm

Gn’

Wu

WiFi

AP ePDG

Untrusted IP

Network

SEG + TTG + ePDG

IPSec Tunnel

IPSec Tunnel


The future of LTE: LTE Advanced, TDD-FDD networks

February 22, 2012

“LTE Advanced will be a gradual and incremental upgrade, with carrier aggregation as its main component. Without it, most operators without 20MHz channels cannot fully benefit from the new technology.”

– North American survey participant

“Traffic loads are growing so fast that FDD LTE will not be sufficient alone. We will need TD-LTE as well.” – APAC survey participant


Fragmented Spectrum Challenge & Opportunity

The Spectrum Challenge

• 700MHz

• 2.6GHz

• AWS bands

• Digital Dividend

• 900 / 1800MHz re-farming

Roaming requires Harmonization

Frequency Impacts Network Costs

• Increases with frequency

TD-LTE = Opportunity

• FDD for Macro

• TDD for Small Cell

Multi-Band Deployment

• 700MHz for Macro

• 2.6GHz for Small Cell

2.6 GHz

2.6 GHz

2.6 GHz

700 MHz

Cell radius ~30 – 300m

Cell radius ~1 – 3km


LTE-Advanced (LTE-A) ITU-T’s True 4G… Marketing’s 5G…

3GPP R10

Carrier Aggregation

• Aggregate multiple contiguous & non-contiguous carriers up to 100MHZ

• Peak data rates 1Gbps

LTE Relay Node (RN)

• Over-the-air (OTA) backhaul

• Coverage

• Cell-edge throughput

3G

5 MHz

LTE 20

MHz

LTE-A 20

MHz

LTE-A

20 MHz …

Macro

‘Donor eNB’ Relay (RN)

Wired Backhaul


A conspicuous absence: service creation and monetization

• Drivers related to new services and monetization did not make it the top six drivers: Why?

• Path to revenues not as clear as the technology and device path

• Many opportunities, unclear strategy

February 22, 2012

“We cannot afford to manage traffic growth without a corresponding increase in revenues. We have ways to increase capacity, but we can not necessarily afford it.” – European operator

“Counting packets is not the way to make money.” – North American operator

Source: The observer effect, theobservereffect.wordpress.com


Video Calling – LTE’s Killer App Bringing Intelligence Back

Video Calling Today Video Calling Tomorrow

Infrastructure in Place: Smartphones, Tablets, etc.

3G / LTE networks

Operators’ Opportunity Beyond a Bit Pipe

ARPU Generator

Device Silos iPhone: Facetime-to-Facetime ONLY

Skype breaking silos

WiFi Access Limited Mobility, hotspot bound

Internet Core Best effort, no QoS

Breaking Silos Ubiquitous video calling

Interworking = MRF transcoding

3G/LTE Access Ubiquitous mobility

EPC + DPI Conversational managed QoS

LTE + IMS


Video Conferencing Today

Video Conferencing Tomorrow’s Value Added Service

Extend Video Conferencing Beyond conference rooms

Mobile work force, remote executives

Video Ringback, Video mails etc.

Operators’ Opportunity Beyond a bit pipe

ARPU generator

New revenue streams

Counter OTT threat

LTE+IMS

Video Conferencing Tomorrow


Taking charge of the mobile broadband experience

February 22, 2012

“RAN-aware real-time traffic management brings the operator closer to what subscribers wants to do, when and where they are.” – European operator

• Operators control a precious asset: information on subscribers location, activity and devices

• Yet, they feel distant from subscribers

• What’s needed: fine tune services to match network resources and subscribers’ behavior and expectations

• How: active, real-time traffic management

• Encourage service adoption, increased data consumption to reach sustainable profitability


DPI = Control

Tiered SLAs

App- based QoS

Maximum Network

Monetization

Video Conference

Operator VoIP

Gaming

Video on Demand

Business Class VPN

P2P

Email

Browsing

Platinum

Bronze

Silver

Gold


Enabling LTE End-to-End Infrastructure Solutions From Access to IMS

Evolved Packet Core Policy Control Radio Access Network IMS

Application

Server

Media

Resource

Function

IP

Multimedia

Subsystem

Internet

Policy &

Charging

Routing

Function

Policy &

Charging

Enforcement

Function

Mobility

Management

Entity

LTE Security

Gateway

Serving

Gateway

Packet

Gateway

eNodeB

User

Equipment

Macro Small Cells

60+ Customer Wins

Audio Video Conf

~65% Market Share

10G 40G ATCA

~40% ATCA Market Share

Dumb Smart Pipes

Traffic Management

Home eNodeB

User

Equipment

Embedded Wireless Infrastructure Solutions


Monica Paolini Senza Fili

+1 (425) 657 4991 www.senzafiliconsulting.com

[email protected]

Source: Aapo Haapanen (Creative Commons BY-NC-SA)

Manish Singh Radisys +1 (858)882 8971 www.radisys.com [email protected]