Building the Next Generation Mobile Network Vision & Blue Print Towards a SMART Broadband Caribbean Community

Vincent T SpinelliManaging Director, Mobile Solutions GroupJuniper Networks

2 Copyright © 2010 Juniper Networks, Inc. www.juniper.net

AGENDA The SP Conundrum New Architectural Approach Architectural Vision leveraging Software Defined Networks (SDN)

Paths toward Monetization A smarter Caribbean means a more connected Caribbean with

new services models

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MOBILE SP SERVICE PARADIGMTODAY’S CHALLENGES CENTERED ON OPTIMIZATION

TrafficPeak

Revenues

Time

Need to ensure profitability over potential capacity increases toward higher data rates and mobile data.

Revenue & Traffic De-Coupled

Big Pipe(Voice AND Data)

Costs I-Phone/Android

Phenomenon network effect

Over-The-Top Applications Backhaul

Access(Voice OR Data)

Price Pressure Voice Revenue Big Data Pipe

Applications

Monetization IMS and the “Killer App” Applications are FREE Regulatory Concerns

Data DominantVoice Dominant

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THE MOBILE SP CONUNDRUM – BIGGER PICTURE

Fixed Services

Mobile Services

OTT Services

10-20%

20-50%

50% +

SP Margins SP Industry

5 Copyright © 2010 Juniper Networks, Inc. www.juniper.net

THE MOBILE SP CONUNDRUM – BIGGER PICTURE

Fixed Services

Mobile Services

OTT Services

10-20%

20-50%

50% +

SP Margins SP Industry

Cost Optimization

Monetization

How long until Mobile services commoditize?

Mobile voice is not elastic (we don’t do more of it if it gets cheaper)

Value of connectivity/access is declining

Better consumer segmentation is required

Service transformation is key to solve the conundrum

From access provider to service company

Business transformation

10-20%

6 Copyright © 2010 Juniper Networks, Inc. www.juniper.net

MOBILE ARCHITECTURAL THINKING MUST SHIFT

Fixed Services

Mobile Services

OTT Services

10-20%

20-50%

50% +

SP Margins SP Industry

Access Layer

Service Control & Enforcement

Layer

Application Layer

MobileArchitecture

3GPP evolution and standardization has and perpetuates tremendous value

Roaming Global Harmonization Cost Control

Standards are necessary but not sufficient

IMS does not reflect realitySubscriber policy use cases

can not keep up

Telco 1.0 >> Telco 2.0 Standardization versus innovation Lower layers – standardize system

architecture Higher layers – standardize

approach

Social applications require social networks

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TELCO 1.0

TODAY'S BUSINESS/ARCHITECTURAL PARADIGM

Over-The-Top Services/Service Revenue

Millions of Customers

Consumers

SMB

Enterprise

Application/Content

COSTREVENUE

Access Layer

Service Control & Enforcement Layer

Application Layer

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TELCO 2.0

NEW PARADIGM – TRANSACTIONAL VALUEInsertion In The Economic Value Chain

Millions of Customers

Consumers

SMB

B2B

Enterprise

Application/Content

Advertising

Application Development

Retail

Government

Content

Banking

Access Layer

Service Control & Enforcement Layer

Application Layer

REVENUEREVENUE

REVENUE

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TELCO 2.0 REQUIRES A SMART NETWORKIMPACT ON NET NEUTRALITY AND PRIVACY

Intelligent networks are often characterized as smart pipe (versus dumb pipe)

The smart pipe is not about favoring the Access Provider’s content; it is a network resource management and a security problem

Conditioning (not blocking) misbehaving applications (and subscribers) to ensure equal access to all applications

2% of subscribers consume 80% of network resources

The Network is the common denominator for which open, efficient, and secure intelligence delivery (BIG DATA) may be supplied to the Application Development/Application Service Provider community

Handset is partly a mobile SP managed device today

IP layer to radio layer Application layer is decided by Subscriber

“On-Net”Managed/Hosted

Content

“Off-Net”Over-The Top

Content

Location

Presence

Subscriber Profile/Identity

Messaging

Network Profile/Identity

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HOW DO WE MAKE IT WORK?SOFTWARE DEFINED NETWORKING (SDN) IS KEY

Leverage SDN

Principles

Access Layer

Service Control & Enforcement Layer

Application Layer

Mobile Service Architecture

Sta

ndar

dize

d S

yste

ms

Sta

ndar

dize

d A

ppro

ach/

Fram

ewor

k

Evolve Business ProcessesEvolve Access NetworkEvolve Core Network

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SERVICE LAYER

MOBILE NETWORK VISIONSIMPLIFICATION, FLEXIBILITY, & AUTOMATION

TRANSPORT/TRANSMISSION NETWORKEVOLUTION FROM TDM/OPTICAL TO IP

MOBILE CORE NETWORKEVOLUTION FROM CS TO PSSOFTWARE DEFINED NETWORKING

RADIO ACCESS NETWORKMULTI-ACCESS/HETNETSOFTWARE DEFINED NETWORKING

USER ELEMENT (UE)HANDSETS, SMARTPHONESMACHINES

OSS/BSS LAYERREDUCE COMPLEXITY/MINIMIZE DB

Architectural PlanesSimplification of layersSimplification of protocols/interfacesFlexible architecture based on software

Physical PlaneReduce and simplify the layers of Points of Concentration

Distributed Data CentersVirtualized Core

3-5 hops of microwave

RNC/BSC Site

MSC Site

GMSC Site

Data CenterInternet Peering

PoC

Aggregation/Hubbing Cell SiteIP Radio Routers

Virtualized RAN

Hotelled Macro Cell Sites 3G/4G/WiFi SC/Femto

EVOLUTION

Reduction of Microwave hops

TODAY FUTURE

Access Layer

Service Control &

Enforcement Layer

Application Layer

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CONSEQUENCES ON BUSINESS DYNAMICS OF ORGANIZATIONAL SEGMENTATION

Network IT / DataCenterAccess

Transport

Core VAS

AppsEnablers

DC infra

BSS

OSS

CRM

Operations

Layers and domains derive from 20-years old technology constraints driven architecture

Organizations, and consequently Business processes, have been thought using this segmented model

Less than 30% of new ideas are

‘approved’ and go to market

Marketing Prd. Mgmt CFO

Gate On Hold

Go

Network/IT

Feasibility study phase : 3-4 months

Traditional business process

Subscriber churn

OpEx (loss of HE costs)

Loss of favourable churn

Revenue loss

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NEW ORGANIZATIONAL PROCESS

Empowering Service Providers to create revenue-generating services with the same dynamics as OTT

Network / IT / DataCenter(distributed physical/virtualized

resources and assets)

Marketing & Sales

Service Creation and Delivery

Automation of Service ControlAnalytics behavioral feeds

Consumer

Corporate

B2B2C MVNOs

M2M

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HOW DO YOU CREATE REVENUE INSTEAD OF JUST CARRYING TRAFFIC?

Better Consumer Segmentation Analytics-Based Policy Personalization – subscriber-based policy controls

Network-Based APIs Leveraging Big Data in the Mobile Network Partnering with the broader application community

B2B2C/B2B2E M2M enterprise services

Behaviour/Social-Based Services

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REQUIREMENT: BETTER CONSUMER SEGMENTATION

Net

wor

k / I

T /

Dat

aCen

ter

Online and Historical usage

trends

Predictive AnalyticsUnderstand

dynamic usage behaviors

Create new service

offerings on the fly

Online and Historical

network trends

Detect dynamic resource usage

OTT

, ap

psto

res

Better Consumer OffersPersonalization

Lead to happier and more stickier customers

16 Copyright © 2010 Juniper Networks, Inc. www.juniper.net

APIS ARE BUILDING BLOCKS FOR DIGITAL SERVICES

Other

Device capability discovery

Presence and IM

Security

UC / call control

M2M

SMS / MMS

Location

Identity / subscriber data management

Billing / payments

25%

13%

16%

20%

20%

20%

26%

28%

46%

61%

Non-telcos: Which telecom APIs are most valuable?

% of respondents

• Airtime top up• Data roaming• Device

configuration• Mobile money• Number

portability• Prioritization• QoS• RCS service APIs• SIM / UICC APIs• Voice / video

calling

75% of developers that Informa surveyed believe demand for communications APIs will rise due to ongoing mobilization of the web and cloud services.

Base: Non-telcos involved in API ecosystem (n=192) Source: Informa Telecoms & Media, Exposing Telecom APIs survey, 2012

APIs are how customers get to your business, and how you create, consume and control digital services.

* Source Informa

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M2M SERVICE GROWTHMARKET BREAKDOWN

By 2020 Carrier TAM grows to $292B total, $6B connectivity, $2.8B for Mobility

12.0B

9.5B

1.2B1.6B

Source: GSMA, Machina Research

2010 2012 2014 2016 2018 2020$0

$50

$100

$150

$200

$250

$300

$350

Global Connected Devices to 2020

M2M MNO TAM to 2020 (All Connections)

2.0B5.7B0.6B0.7B

$25.0B $0.6B

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

CY11 CY12 CY13 CY14 CY15 CY16 CY17

Rev

enue

(US$

Mill

ions

)

GSM/GPRS/EDGE CDMA2000/EV-DO W-CDMA/HSPA WiMAX LTE

M2M MNO TAM to 2017 (Mobility)

$0.4B

$1.6B

$0.7B

$286B: Higher Value• Device• Provisioning• Data Collection• Reporting• Analytics

$6B: Connectivity

25B

$292B

$2.8B

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THERE’S A ‘DISCONNECT’ IN THE TELECOM INDUSTRY WHEN THINKING ABOUT SDN*

* Source Informa

Operators believe that SDN is something divorced from service monetization.

SDNCarrier Ethernet

High-definition videoWi-Fi

Multiscreen videoMachine to machine (M2M)

Converged billingOn-demand video

Apps and app storesSuperfast fixed broadband

Cloud computing4G / LTE

2%17%17%17%

20%20%21%21%22%

25%32%

58%

2013: What technologies and services will drive top-line growth?Here’s what 240 telecom

operators told Informa.

In fact, SDN is the linchpin to deliver on top-line growthexpectations.

Source: Informa Telecoms & Media, 2013 Industry Outlook survey

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KEY TAKEAWAYSTOWARD A SMARTER BROADBAND CARIBBEAN

Rethink how we design, build, and operate: From Network to Services Standardization versus Innovation Monetization & Cost Optimization enabled by Software Defined

Networking Cost optimization as part of SP hygiene The real value of SDN is in monetization

Consumer segmentation provides better consumer service and subscriber self control resulting in happier customers

The Network is a platform with a rich set of APIs that are the foundational building blocks for digital services

M2M services will be key differentiators

Juniper Networks OffersInnovative IP Solutions

to Improve Customer Experience and SECURELY OPTIMIZE and MONETIZE

the Mobile Network

21 Copyright © 2010 Juniper Networks, Inc. www.juniper.net

PERSONALIZATION USE CASESWHAT OPERATORS DO TODAY

First

deployed

LTE

VoLTEPCC (P

olicy and Charg

ing Controls)

Fair U

sage

QoS Control

Prioriti

zation (Service

, Subscr

iber)

Video Optimization

Servi

ce Ti

ers

Servi

ce Pass

Time-b

ased Controls

Promotions / Zero

Rating

Parental Contro

ls

Bill Shock / R

oaming Contro

ls

Redirecti

on (Upsell)

Device Teth

ering

Shared quotas

FMC Q

uota Contro

l

Tier 1 USA 2009 n n n n n n n n n n

Tier 2 Indonesia 2011 n n n n

Tier 2 USA 2011 n n n n n n n n

Tier 1 Brazil 2011 n n n n n n n n n

Tier 1 Indonesia 2010 n n n n n n n n

Tier 1 France 2009 n n n n

Tier 1 Poland 2009 n n n n n

Tier 1 Slovakia 2012 n n n n

Tier 1 Egypt 2012 n n n

Tier 1 Kenya 2009 n n n n n n n n

Tier 2 Japan 2010 n n n

Tier 2 USA 2010 n n n n n n

Tier 1 Austria 2012 n n n n

Tier 1 Belarus 2012 n n

Tier 2 Bulgaria 2012 n n

Tier 2 Croatia 2012 n n

Tier 2 R. Serbia 2012 n n

Tier 2 R. Macedonia 2012 n

Tier 2 Slovenia 2012 n n n

Tier 2 South Africa 2010 n n n n n

Tier 1 Canada 2011 PoC n n

Tier 1 Turkey 2010 n n

Tier 2 USA 2011 n n

Tier 1 Netherlands 2009 n n n n n

Tier 2 Kuwait 2008 n n n n n n n n

USE CASE %

Bill Shock / Roaming Controls 80%

QoS Control 60%

Fair Usage 60%

Redirection (Upsell ) 36%

PCC (Policy and Charging Controls)36%

Service Tiers 32%

LTE 24%

Service Pass 20%

Promotions / Zero Rating 16%

Prioritization (Service, Subscriber)16%

Parental Controls 16%

Device Tethering 16%

Time-based Controls 12%

Shared quotas 8%

FMC Quota Control 8%

VoLTE 4%

Video Optimization 4%

QoS Control, 60%

Fair Usage, 60%

Redirection (Upsell), 36%

PCC (Policy and Charging

Controls), 36%Service Tiers,

32%

LTE , 24%

Service Pass, 20%

Promotions / Zero Rating, 16%

Prioritization (Service, Subscriber), 16%

Parental Controls, 16%

Device Tethering, 16%

Time-based Controls, 12%

Shared quotas, 8%

FMC Quota Control, 8%

VoLTE, 4%Video Optimization, 4%%

Tiered services and service boosts

Web session (HTTP) control

LTE promotion

Tiered QoS

Fair usage

Roaming control (bill shock)

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NETWORK DESIGN MUST TRANSFORM TO 21ST CENTURY NORMS

Legacy Network (Telco 1.0) New Mobile Network (Telco 2.0)Network Design Static

Over Provisioned Multi Network for voice, video,

data services

Elastic Flexible, Scalable, Centrally Managed

Nature of Network Proprietary, Silo’d Open and much less proprietary

Management Network Operations Center Service Operations Center

3rd Party Interface Closed “Intelligent Network” Proprietary

Web based Protocols APIs

Service Velocity 16-18 month innovation cycle Reactive, me-too, services In-house

Expansion into new markets and services

High degrees of personalization Out-sourced/In-house development

23 Copyright © 2010 Juniper Networks, Inc. www.juniper.net

DIGITAL ECONOMY FOUNDED ON COMPUTE & COMMUNICATIONSEXAMPLE - THE VALUE OF THE NETWORK HAS CHANGED

0 5 10 15 20 25 30 35 40

Television - 1946

PC - 1972

Facebook - 2007

Radio- 1922

38

16

13

4

.3

WWW - 1984

Rapid Adoption of Group Forming Networks/Communities of Interest

Advertising ExampleYears to 50 million users

Sarnoff’s Law The total value of a communications

network grows with the square of the number of devices or people it connects Value = aN; where N = number of

users Tandem Switching

Metcalfe’s Law The total value of a communications

network grows with the square of the number of devices or people it connects Value Of Potential Connectivity =

bN(N-1) è bN2 optional transactions Ethernet, Internet Protocol

“Reed’s Law” on Group Forming Networks

Group Forming Networks are communities of interest whose connectivity value scales exponentially to N Potential Value = c2N-N-1 è c2N

Social Networking, Transactional Value

Therefore Total Value Of Network: aN + bN2 + c2N è c2N

GFN Transactions Create More Value Per Unit Of Network Investment

*Source: The Sneaky Exponential – Beyond Metcalfe’s Law to the Power of Community Building; David Reed

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WHAT DOES IT TAKE TO MAKE IT WORK

Behavioral community

Service Provider control domain

Behavioral knowledge of

subscriber (Analytics)

Policy driven

control of subscriber

services

Elastic allocation of service-level resources

(centralized, distributed)

Distributed

Distributed

Centralized

25 Copyright © 2010 Juniper Networks, Inc. www.juniper.net

MACHINE TO MACHINEVERTICAL BREAKDOWN

M2M connections will grow from 2B in 2011 to 12B in 2020

Source: GSMA, Machina Research

M2M Connections by Sector in 2020