Fundamental Challenges in the Evolution Path to 4G

Jorge DelrioJorge DelrioHead of LTE/4G Evolution

Technology Strategy

TELUS launches HSPA+

� TELUS launched a full national next generation wireless service on November 5, 2009 based on the latest version of High Speed Packet Access (HSPA) technology

� This network reaches peak speeds of 21 Mbps and gives Canadians access to new next generation data services and applications

This initiative ensures a smoother transition to long term evolution � This initiative ensures a smoother transition to long term evolution (LTE) technology

Changing economics

Voice pipe

vs

Data Pipe

BILL #: John DoeBILL #: John Doe

Address: xxxxx

500…1000 mins/month voice .... $ (= 45…90 MB/month)

1…2…4…8.. GB/month data ... $ ?NSN

Steep data traffic growth

2010 2011 2012

Megabyte

Megabytes

Gigabytes ?

Mo

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ata

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…20152007…

� Mobile Internet use lags wired Internet (5-10 GB/sub/month) by 3-5 years

� Mobile data traffic volumes are surging

� Average mobile data usage at 2....4….8…. GB/subscriber/month ?

� Not a question of ‘if’……..but ‘when’

Megabyte

Mo

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ata

Usag

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Data traffic concentration

Over 70% of US mobile data traffic in 2008 was from laptops (Unwired)

5% of subscribers account for 80% of traffic (Unwired)

Mobile video will be 64% of traffic by 2013 (Cisco)

80% of data traffic in urban centers managed by 10% of cell sites (Infonetics)

Data traffic volume is a huge challenge; but traffic concentration represents an even bigger challenge

Spectrum & macrocell limitations

Spectrum is limited. Additional cells are required to address capacity demand, but costs are high.

LTE macrocells alone do not fully address long term capacity needs

Traffic is mostly indoors

Macrocell capacity, throughput are limited at the cell-edge and indoors

MacroMacro

Informa

Data traffic is growing exponentially and clustering around in-buildings

Revenue balance is shifting

The traffic-to-revenue imbalance is increasing under traditional business models

The balance of application revenues is gradually shifting in favor of the offdeck ecosystem.

Operator challenges

� The Business is Shifting from Voice to Data

� Data Traffic is Growing Exponentially

� Data Traffic is Highly Concentrated

� Higher Proportion of Traffic is Occurring Indoors

� Traffic-to-Revenue Imbalance is Increasing� Traffic-to-Revenue Imbalance is Increasing

� Ondeck/Offdeck Revenue Balance is Shifting

� Network costs need to be reduced

� Operational costs need to be reduced

� Revenues need to increase

� Market Differentiation is critical

Evolution to 4G: LTE & SON

Self-Optimized Networks

SON

Source: SOCRATES

3GPP LTE

� More Efficient Spectrum Utilization

� Flat IP Architecture

� Enhanced User Experience (QoE)

� Higher Network Capacity

� New/Enhanced Services/Applications

� Lower Costs

Source: SOCRATES

� Higher Capacity

� Improved Performance

� Reduced Complexity

� Lower Costs

Evolution to 4G: Capacity and Traffic Management

Subscriber Data MgmntNetwork policiesApplication policiesDevice policiesSubscriber policies

Capacity/Coverage Enhancements

WiFiPicocells/MicrocellsFemtocells

QoS/Policy & Traffic Management

� Traffic Offload

� Improved Indoor Coverage

� Higher Network Capacity

� Better Performance (QoE)

� New Services/Applications

� Lower Costs

Subscriber policiesTraffic optimization

FemtocellsIn building systems

� Congestion Management

� Demand Shaping

� Tiered Services

� Personalized Offerings

� New Service Models

� Lower Costs

� Monetization Through Services/Applications� Subscription , In-App� 3rd party application enrichment via subscriber data� Advertising: impression-based, performance-based,

promotions

� Monetization Through Tiered Services

Evolution to 4G: Increasing Revenues Via Service Innovation

� Monetization Through Tiered Services� Gold – Silver - Bronze� Time/Bandwidth/Speed based tiers� Real-time offers: bandwidth boosts, day passes

� Monetization Through Personalization� By user preference, behaviors or usage patterns� By demographics� By location

Summary

� Essential Network Evolution Framework Elements:

� LTE � LTE-A

� SON

� Capacity/Coverage Enhancements (indoor and outdoor)

� QoS/Policy and Traffic Management

� New/Enriched Services /Applications

� Personalized and Tiered Services/Applications� Personalized and Tiered Services/Applications

� To Enable:

� Improved Performance (QoE)

� Lower Costs (OPEX and CAPEX)

� Improved Coverage

� Increased Revenue Opportunities

� New Business Models

Thank youThank you