TLEN 5510 Future of Inter-Networking Robert Duncan Transaction Network Services +1 (303) (m) “How to Make a lot more Money from your Network”

Topics Interconnection of Networks  Why?  How? Future: All-IP Network Interconnection (IPX) Roaming among Networks  Why?  How?

Intro 20 years in Mobile networks 30 years in Telecom (see “Bellhead”)Bellhead Author (“Wireless Intelligent Networks”) Standards contributor, Chair Experience in Network Planning, Engineering, Operations  AT&T, Qwest/U S WEST Wireless  TDMA, CDMA, GSM, WiMax, Wi-Fi, LTE

INTER-NETWORK CONNECTIONS Why? How?

Recurring Pattern n*(n-1)Connections:n Hub

Telephone WHY Interconnect networks?More subscriber connections, traffic, revenue eXchange Local eXchange Local eXchange Local eXchange Local eXchange Toll

Network Interconnection Network eXchange Network WHY use an eXchange? Fewer network connections, Lower cost

New Network Interconnection > 1000 Mobile networks! Network eXchange Network New WHY use an eXchange? Fewer network connections, Lower cost

Connecting Networks Creates Value Value (Network A) + Value (Network B) = ??? Example:  Value (Network A) = 1,000,000 subscribers’ traffic  Value (Network B) = 1,000,000 subscribers’ traffic Metcalfe’s Law 12…S1,000, … 1,000,000 12…S1,000, … 1,000,000 12…S1,000,000…S2,000, … 1,000, … 2,000,000 +=

Why Inter-Networking? Maximize Revenue (Metcalfe’s Law) … at Minimum Cost

INTER-NETWORK FUTURE From Circuit to Packet Convergence Ahead

Cellular Calls Connect via _____?

Mobile Network Current Inter-Network Connections Telephone eXchange IP Network Fixed Network Mobile Network IP Network Fixed Network Any Disadvantages?

Mobile Network Disadvantages of Public Telephone Connections Telephone eXchange IP Network Fixed Network Mobile Network IP Network Fixed Network ↑ Cost ↑ Complexity ↓ QoS ↓ Features

Mobile Network Native Inter-Network Connections Telephone eXchange IP Network Fixed Network Mobile Network IP Network Fixed Network IP eXchange

Today: Mobile Connects via Public Telephone (PSTN) 16 GRX BG PSTN (LEC + LD) STP MSC Signaling Voice SGSN Op AOp B Data Circuit Voice

Tomorrow: Mobile connects via IP 17 IPX MSC Server MSC Server MGW MSC Server MSC Server MGW BG SIP Proxy SIP Proxy Packet VoiceCircuit Voice PSTN (LEC + LD) STP Existing technology Not All-IP Data Signaling SGSN Op AOp B MSC Voice ENUM

Future: LTE connects via IP 18 Op A IPX Op B CSCF MGW CSCF MGW BG SIP Proxy SIP Proxy PSTN (LEC + LD) STP LTE/All-IP SGSN MSC Data Voice Signaling ENUM Packet Voice

Choosing the Least Cost Route for Voice Connections 19

IPX Provides Voice & Data Connectivity FNOs ASPs SPs MNOs ISPs GSM, GPRS/UMTS Operators CDMA Operators A Common Connection Point for Voice & Data TNS IPX Circuit Voice Packet Voice Packet Data

Benefits of Native (IP) Connections ↓ Cost <10% of Current ↓ ComplexityFlat ↑ QoSFewer vocoders ↑ FeaturesUnobstructed operation International LD: $0.0500/MOU Current LEC interconnect: $0.0025/MOU Current VoIP interconnect: $0.0005/MOU  100X less revenue/minute

Observing this Trend in Use International LD (greatest margins) use of IP  2006: 2% to 4% of all VoIP traffic goes through a peering service  2010: Over 50% International Voice via IP 2010: Mobile-Mobile use of IP eXchange (IPX)

Greater Market Growth (30%) in Int’l VoIP MOU 23

INTER-NETWORK FUTURE An IP eXchange (IPX)

© GSM Association 2009 All Operators Can Use IP eXchange (IPX) FNOs ASPsSPs MNOsISPs IPX Applicability – Mobile Network Operators (MNOs) – Fixed Network Operators (FNOs) – Internet Service Providers (ISPs) – Application Service Providers (ASPs)

Bridging the Mobile World TM Aicent Inc. Proprietary and Confidential 26 Aicent IPX Viewpoint Market Needs MNOs needs to support a wide range of multimedia-based application with high quality. FNOs are developing Next-Generation Networks ISPs & ASPs are offering more content/application services All entities want to interconnect each other in a controlled, efficient, profitable and cost-effective manner. IP Interworking IP is the common protocol of above networks and service. IP Packet eXchange (IPX) is a standardized solution for interconnecting various service providers over a global IP network with high QoS.

Confidential 27 IPX Interconnect Principles Mobile ISP FNO MNO IPX TRUSTED ENVIRONMENT Private IPX Domain IPX 1 IPX 2 IPX 3 Fixed ISP FNO MNO INTERNET Openness –Open to everyone –Ubiquitous access (fixed, mobile, ISP or ASP) –choice (in addition to open Internet) Quality –guaranteed QoS (E2E SLA, Reliability, Capacity) –quality relationship with your IPX Provider –security (accountability, spam reduction) Cascading payments –cascading of revenues from End to End –Payment by whoever perceives the value –transparent value-based service pricing Efficiency –ubiquitous Service via single Gateway –multilateral commercial agreements –flexibility & scalability

© GSM Association 2009 Peering Ensures Competition, Choice of IPX Provider FNOs SPs IPX MNOs ISPs ASPs

Layers of IPX Functionality 29 Clearing Network Signaling ENUM Billing Media Conversion Traffic Detection for routing, charging, and multi-lateral destination policing Service Aware for event-based and stream-based traffic Routing and Addressing Fixed & Mobile Termination VoIP Inter-Carrier Billing

© GSM Association 2009 Key Components of IPX IPX traffic has managed QoS at various levels of performance Payments associated with the business model are identified and settled between operators Operators are free to select bi-lateral or the efficient multi-lateral modes of interconnection for different types of traffic All IP traffic is protected Services not requiring premium quality can use less demanding QoS bearers

Implementers: IPIA Board Members Representation Mobile Operators 8 Fixed Operators 8 International Carriers 9

Benefits Simple –Subscriber access to content/services while roaming Secure –Private network access to e-commerce, public internet, corporate intranets and systems Efficient –Operator gains efficiencies by utilizing a common network for multiple business systems –Single point on the network for routing management Interoperability –Common solution for 2G/3G/4G Mobile, Fixed, ISPs

Openness Quality Cascading Payments Efficiency For more information, please visit or us at Thank you

BREAK

NETWORK ROAMING Why? How?

Roaming Network eXchange Network Mobile Network

Why Roam? ↑ Coverage ↑ Revenue  Roam out of your Network(Retail revenue)  Roam in to your Network(Wholesale revenue) Who benefits?  Subscriber  Your network(“Home” network)  Roaming partner network (“Serving” network)

Data Access Data Access Steps: 1) Mobile:Select system 2) Mobile& System: Attach and establish session 3) Serve: Authenticate Mobile 4) Serve:Authorize Mobile 5) System:Connect 6) System:Accounting Home AAA Subscriber Database Home Network User Data (Mobile IP) AAA signaling (RADIUS) Data Gateway Radio Control     Service Internet

Data Access when Roaming Data Access while Roaming: 1) Mobile:Select system 2) Mobile & System: Attach and establish session 3) Serve: Authenticate Mobile 4) Serve:Authorize Mobile 5) System:Connect 6) System:Accounting Roaming eXchange Home AAA Subscriber Database Home Network Serving AAA Subscriber Database Serving Network Radio Control Proxy AAA Rating & Billing User Data (Mobile IP) AAA signaling (RADIUS) Data Gateway Radio Control         Service Internet

Data Access when Roaming on Wi-Fi Data Access while Roaming: 1) Mobile:Select system 2) Mobile & System: Attach and establish session 3) Serve: Authenticate Mobile 4) Serve:Authorize Mobile 5) System:Connect 6) System:Accounting Roaming eXchange Home AAA Subscriber Database Home Network Serving AAA Subscriber Database Serving Wi-Fi Network Proxy AAA Rating & Billing User Data (Mobile IP) AAA signaling (RADIUS) Data Gateway Radio Control         Service Internet Internet

NETWORK ROAMING As a network offload solution

Reducing the Cost of Data: Wi-Fi Roaming as an Extension of CDMA Roaming November 3, 2010 Marcio Avillez VP, Network Offerings Robert Duncan Director, Product Management

Agenda Problem: Exponential Cost (Data use) [“How to Cope with Future Demand for Data Services,” CDG IRT, Tokyo, April 2009] Solution: Reuse Established CDMA Data Roaming Benefits –Reduced OPEX(Cost of Roaming) –Reduced CAPEX(Increased Capacity, Coverage) –Reduced Churn Implementation

A Tsunami of Connected (Mobile Internet) Devices 44 Proprietary & Confidential

Problem: Traffic (Cost) Growing Faster than Revenue 45 Sources: Cisco, from Operators’ network data and Analysts; “Mobile data revenue will double by 2012,” Dan Locke, Analyst Insight, Pyramid, 4/2008] Forecast: 25X traffic increase Forecast: 2X revenue increase “How to Cope with Future Demand for Data Services,” Robert Duncan, TNS, Tokyo CDG IRT, April 2009]

Exponential Cost - if not Controlled - will Exceed Revenue “Service providers deploying a multi-access offload strategy can expect savings in the range of 20 to 25 per cent per annum”

Leading Operators Adopt Data Offload to Wi-Fi AT&T+ Wayport Investment + Builds Korea Carriers+ 3 Operators build Wi-Fi Vodafone + BT OpenZone O2 UK+ The Cloud (UK) T-Mobile + T-Mobile Verizon + Boingo Current deployments validate Wi-Fi as beneficial across multiple carrier and user scenarios

Wi-Fi Roaming Solution (looks like Data Roaming via CRX) Visited Wi-Fi Operator Home Operator CRX Visited Operator Reporting/ Customer Service HLR Proxy/ AAA Proxy Rating / Clearing Signaling Gateway Reuses CRX functionality (looks like Data roaming) to reduce impact on Operator Wi-Fi Connection Manager

3G Wi-Fi Offload – Primary Use Cases International Use cases –Cost Avoidance: Leverage Wi-Fi to lower roaming costs for international users –Revenue/Coverage Expansion: Leverage Wi-Fi to expand adoption and coverage of international roaming services Domestic Use Cases Capex Avoidance/Management: offload as a capex management tactic or a hedge against unpredictable or exponential data growth –Owned Networks or Commercial Networks Roaming Cost Avoidance: regional domestic players who pay to roam on national carrier networks Potential Concerns –Cannibalizes roaming revenue –Operator sets Retail Price & therefore revenue

Benefits of Data Offload via Wi-Fi Roaming OPEX Cost Savings Wi-Fi per MB rates lower than equivalent roaming costs CAPEX Savings Increased Capacity with offload in high-usage venues: Airport, Hotel, Conference center, City, Cafe, etc. Indoor Coverage Reduced Churn (avoid sticker shock) No network impact Reuses existing Data Roaming solution (CRX)

Device Form Factor Trends Smartphones consume 65% of bandwidth –Android, iPhone, Symbian and RIM comprise ~90% Source: Gartner (August 2010) Forecast: Smartphone Sales by OS Source Data: Morgan Stanley, 2009; Cisco VNI, 2010, iPass estimates Forecast: Global Smartphone and Modem Monthly Data Consumption

SUMMARY Interconnection of Networks  Why: _______  How: _______ Future: All-IP Network Interconnection using ______ Roaming among Networks  Why: _______  How: _______ “How to Make a lot more Money from your Network”

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Thank you! Q & A

Data Revenue Overtaking Voice 2004: 5% of US wireless operator’s ARPU ($4B) 2010: >30% ($45B) and growing at over 20%/year Rampant global growth –Mobile data revenue globally in 2009 was $220B or 26% of the total wireless service revenues. Annual growth rates range from 15% to 40% depending on the region Non-SMS services dominant –Non-SMS data revenues continue to increase as a % of overall data revenue. In the US ~60% of data revenue is non-SMS, ~70% for Japan/Korea and ~30% for Europe (this is a good trend for us as SMS is not included in data roaming revenue via CRX) 56

… and we are only at the beginning of Mobile Internet adoption! 2009: 660 M Mobile Internet users (vs. 2,400 M SMS subs) 2014: 2,100 M Mobile Internet users Mobile Data subs

Further Adoption of Broadband, “All-IP” Networks LTE deployments begin in 2010 All CDMA and GSM 3G networks evolve to LTE! 200 M subscribers by 2014 to 2017, making it the fastest-adopted wireless technology ever $42B LTE service revenues by 2013 WiMAX mobile deployments ongoing 92M Mobile WiMAX subscribers by 2015, a CAGR of 69% [Yankee] > 500 deployments and 6M+ subs (about 25% mobile-enabled) $15B WiMax Mobile service revenues by