transition to IP: the tipping point i3 Forum: international interconnect forum for services over IP PITA – Honolulu – January 17th, 2009 Philippe Millet VP Marketing, Orange Chairman, i3 Forum Orange

the tipping point countries A-Z retail services going IP (40% French phones work over IP) growing number of services going all IP until now: international wholesale bilaterals were mostly in TDM (IP limited to hubbing) today: TDM is full Main international operators will migrate bilaterals (over 70% of international traffic) over IP in 2009 countries A-Z new IP based business models appear (flat retail rates) new voice services (wideband voice) service pressure to move to IP network, peer and service pressure to move to IP service pressure to move to IP

IP TDM IMS full network classic network new objectives new demands sky rocketing needs full IP network HD streaming IPTV videoconferencing VoD new objectives new demands new needs LTE classic TDM network Mobile subscription growth has led to unprecedented levels of investment in Asia. But the high ARPU segments have already subscribed and the focus of competition is moving to new, advanced services. Increasingly, users have new expectations. They are connected without interruption, combining more and more services and applications at the same time (download, upload, video, TV, mobile…) driving the demand for content rich and next generation services: Why do we need to move on to all-IP now? Telcos need to keep up with the rapid changes in customer demands. NEW OBJECTIVES FOR CARRIERS Invest in new infrastructures Operators must remain flexible and ahead of technological developments so that the consumer may be the one making the choice and not the other way around. IPTV Worldwide market will be worth €12.2 BN in 2011 (InformaMediaGroup, October 2006). Video on Demand (VoD) By 2011, 435M households will generate 11.5 billion dollars in revenue (Informa Telecoms & Media, Jan 2007) VoIP Worldwide VoIP subscribers should exceed 250M households in 2011 compared to 25M in 2005 (Idate, May 2006) Building a new world for customers means as well investing in new network technology: 3G+: France Telecom Group has deployed 3G+ throughout Europe (Spain, Slovakia, France, Belgium, Poland, the UK and Switzerland, with speeds up to 7.2 Mbps in Lyon) India’s government plans to hold an international auction for 3G services (Financial Times, Aug 2008) In Korea, millions of subscribers have adopted 3.5G services. (ITU, February 2008) Vietnam Datacommunications has rolled out trial WiMAX networks in the country’s two largest cities (MIS Asia, Nov 2008) Provide new niche solutions The killer application is dead as customers want highly tailored services No more “only international voice”. An all-IP architectures will allow telcos to offer this wider range of goods and services end-users are seeking for, which entails a higher level of profitability for these emerging niche markets (cf. exemple sur le slide suivant). Assure interoperability of new IP services An all-IP architecture guarantees larger interoperability of these new solutions enabling a whole new world of highly specialized and interactive applications. Boost new revenue streams In a competitive industry environment where pressure on prices is increasing and traditional voice revenues are decreasing operators have to seize new market opportunities of an all-IP world. With the progressive roll-out of new infrastructures guaranteeing more capacity and interoperability and increasing IP connections, next generation services will gain further momentum, accelerating the transition from the classical TDM network to an all-IP world… IMS interactive gaming VoIP fiber optic

the IP transition: what is at stake today maintaining & enhancing the customer experience scale quality security The transition to all-IP networks involves fundamental challenges for the telecom industry. We must prepare for VoIP, and we must make sure we can enjoy the best conditions to build the new convergent services and business models that will be our bread and butter tomorrow. We face the challenge of making the IP world as safe, secure and well-known as the TDM world we are progressively leaving What’s at stake: SCALE, QUALITY, SECURITY, and INTEROPERABILITY Ensuring that the world of all-IP is at least as safe and well-known as the TDM world we are used to So we can preserve and enhance the quality of services we already know and migrate & generalize the service features our customers cherish IP is a wonderfully versatile technology, that can be based on a variety of networks. Our task is to ensure that IP services work seamlessly across all networks, delivering the quality experience customers expect. We need to create the best conditions to build new, convergent services: everything ranging from IP set-top boxes to remote surgery (fields in which France Telecom is a leader). It would be unacceptable, for instance, for the transition to VoIP to produce a drop in sound quality for international calls. The challenge today is to define the international interconnect models that will guarantee the levels of quality and security and the scope of activity we need to provide fully satisfactory services. interoperability strengthening the pillars of our business in a new environment

what is the i3 forum eight major carriers team-up in Q3 2007 AT&T, Deutsche Telekom, Orange, SingTel, Telecom Italia Sparkle, Telefónica, TPSA, TeliaSonera 1 billion fixed and mobile customers in over 80 countries, approximately 40% of Int’l Voice traffic 14 more carriers join in 2H08 : Tata, Telus, Rogers, Sprint, BT, BICS, Telkom Austria, Telecom New Zealand, PLDT, NTT, iBasis, Etisalat, Telkom South Africa, SFR objective : facilitate the development of interconnected IP services facilitate efficient migration of voice services as well as multimedia services to IP take into account the interconnection requirements for various players and services help select standards among multiple alternatives, in various situations contribute to explore and to promote the IP-based services innovation approach business oriented (retail and wholesale) pragmatic, focused and fast-paced open and relevant to all players I3 forum members to implement their own recommendations independently i3 forum and the carrier industry not a standardization body, not a commercial alliance open to liaise with other industry bodies (e. g. GSMA, ETSI…) open to additional members who support the above objectives

phase 1: voice bilaterals 70% of international traffic business aspects maintain (improve) current quality levels, service features, make sure existing business models can be transitioned technical recommendations network architectures allowing a variety of interconnection models designed to enable trusted, secure and QoS compliant bilateral voice interconnects over IP based on existing standards & recommendations deliverables: operational documents available and open to all service description interconnection models interoperability test plan template for migration

what we have delivered Existing model still possible existing bilateral voice business model still possible revisit the service definition of bilateral voice base on calling party pays scheme guarantee or exceed existing TDM quality levels multiple quality levels deriving from combinations of technical elements two quality levels worked out in the document top quality best effort service features migration enhance present set of capabilities voice call / IDD toll free numbers and home country, voice ISDN fax calls, DTMF / modem support ready for wide-band codecs Existing model still possible

technical aspects minimum set of QoS parameters IP parameters: voice/media parameters: network parameters accounting and charging capabilities security issues border functions implementation strongly recommended encryption: IPSec encryption of signaling flow for public-oriented interconnection only signalling protocols: two protocols selected SIP protocol (IETF RCF 3261): specific profile defined ISUP enabled SIP profile media functions supported voice conference calls; DTMF support; fax connections based on T.38 protocol; modem connections

interconnection models for bilateral voice private-oriented interconnections no unidentified third party is able to affect the bilateral voice service 3 options depending on type of link potential for highest quality and network security can replace existing TDM-based interconnects public-oriented interconnections VoIP traffic mixed with other IP traffic coming from the public internet 2 options differentiated at the interconnection layer service performance and quality can be affected lower cost (resources shared with other services) lower provisioning time (no need to set-up an ad-hoc link) keeping the value in voice

implement phase 1 recommendations and work on phase 2 moving forward expand the i3 Forum Involve more carriers & remain agile Raise i3Forum profile implement phase 1 recommendations and work on phase 2 explore other aspects and services rest of voice (traditional models) new business models IP-based routing & addressing (incl.ENUM) other services liaise with other bodies and forums establish cooperation with the GSMA and the IPIA

players/roles requirements a simplistic mapping … services IPIA with IPX model Working to keep things synchronized ….. other U2U services messaging I3 forum recommendations voice mobile operators fixed line operators SPs without network national carriers/ wholesale International carriers/ wholesale players/roles requirements … between i3 forum and IPIA scopes and roles

new ways of providing value to telcos i have a dream… billing data warehouse content distributor reporting level of quality security We are moving from a conventional business to an IP-oriented one. The wholesaler’s role is taking on a new dimension and could lead, in the coming years, to a "trading room" type offering that will simplify telcos’ access to valuable services - and let them focus on their core business. In the present situation, only a wholesaler’s expertise and position can be leveraged to provide this type of offering. It’s something entirely new, with guarantees of security, quality and network interoperability. Also, only a wholesaler can manage: reporting (a paid service) and a guaranteed transaction billing content management and distribution As well as: audience aggregation (our customers and our customers’ customers). The need for such a market is becoming clearer, in view of the expectation of the ecosystems we increasingly coexist with, often beyond the boundaries of telecommunications. The wholesale of tomorrow is a new line of business, with new functions and new organisations The wholesaler’s traditional business will not disappear but will be challenged on the value it delivers. A complete evolution for roles based on: relationships with customers (billing). Isn’t our true know-how based on our ability to invoice? customer databases and our knowledge of them. Welcome to tomorrow! customer base compilation data mining new ways of providing value to telcos

thank you!