Scenario Planning on LTE mobile network Virtualization Xue Bai Supervisor : Prof. Heikki Hämmäinen Instructor : Nan Zhang MSc. in Communications Ecosystem Aalto University

Agenda Research Objectives Background of LTE & LTE virtualization Methodology Scenario planning Brainstorm(PEST model) Key Findings Conclusion Future work

Objectives What is the role of key stakeholders in LTE virtualization? The mobile networks are expensive and scarce Network virtualization reduces the amount of infrastructure reduces energy usage  What are the alternative scenarios of virtualized LTE network for next 5 years? Supporting strategic questions: What is the role of key stakeholders in LTE virtualization? How will different scenarios influence the mobile network virtualization in the future?

Background --- LTE(Long-Term Evolution ) A standard for wireless communication Core network Radio access network Long-Term Evolution (LTE) was defined by the 3rd Generation Partnership Project (3GPP) as a standard for wireless communication Figure  1:  Basic LTE system architecture(Harri&Antti 2011)

Background --- LTE Core network virtualization OpenFlow: Approach that enables a logically centralized control plane with a view of the whole network and actual packet forwarding in the distributed switches. S- and P-GW: The intelligence, decision making and signaling termination is in the centralized part Only the packet forwarding capability is distributed. Figure  2:  3GPP compliant OpenFlow controlled gateway architecture (Jari 2013)

Background --- LTE Access network virtualization(Air interface) In  order  to  virtualize   the   LTE air  interface,   the   eNodeB (LTE   base   station)  has to  be virtualized A “Hypervisor”  is   added   on top  of  the   physical  resources. The  hypervisor  is   responsible   for virtualizing  the   eNodeB and  scheduling  the  air  interface   (OFDMA)   resources (PRB physical radio resource blocks)  among  the   Virtual   Operators  (VOs). It  is   responsible   for:  virtualizing the  eNodeB  scheduling the airinterface resources among the Virtual  Operators  (VOs) It collectsall relevant information (from all VOs)   :  users channel conditions  traffic  load  VO  requirements  VO  contracts Based  on that,   the   hypervisor  tries   to  allocate the  resources   to  the   VO Figure 3:  Virtualized LTE eNodeB protocol stack (Yasir 2012)

Methodology ---Scenario Planning(1/2) To forecast the future? Too difficult To envision alternative futures (= scenarios) Not just the probable futures, but also the improbable ones Not to forecast, but to bound the uncertainty The scenario planning is a method for imaging the possible futures. It takes several uncertainties into consideration. As a result, the futures in the end of the analysis include both probable and improbable ones.

Methodology ---Scenario Planning(2/2) Figure  1:  Scenario  planning process (Schoemaker 1993)

Methodology ---Brainstorm An individual or group process of idea generation To identify key trends and uncertainties PEST analysis Economic / industry forces Social forces Technological forces Political / regulatory forces Importance Uncertainty Key uncertainties Key trends PEST analysis describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. 1) Individual thinking 2)Plz write down the idea on the note 3) plz explain your idea to us. XXX, can u start first please? If anyone has the similar idea with XXX, feel free to have a discussion. I’ll try to group the similar issues together. an individual  or   group  process  of   idea  generation  

Key findings ---Major stakeholders(value network) Mobile virtual network operator & mobile network provider can be the same mobile operator. Network equipment provider: 1) provide equipment to mobile operators. 2) maintain and update software for operators. Big service provider like Google and Amazon have their own cloud service.

Key findings ---Scenario analysis(1/5) Key uncertainties: U1: Will LTE virtualization result in intense competition in the mobile market ? U2: Will virtualization of LTE lower the costs? MNO: Mobile Network Operator CSP: Cloud Service Provider NEP: Network Equipment Provider MVNO: Mobile Virtual Network Operator

Key findings ---Scenario analysis(2/5) Sc.1:Regulator-driven competition Regulator has the power to increase the competition. MNOs will be pushed to give the cloud out. NEPs may own the network, since they operate the network now. CSPs may establish their own mobile network to compete with MNOs. CSPs/NEPs may challenge the leadership position of MNO in the market. More new players will entry the market. Price to consumers may decrease. (probably by issuing licenses). Regulator may leave some licenses to CSP.

Key findings ---Scenario analysis(3/5) Sc.2: MNO-driven mobile market MNOs may try to replace the role of CSPs. CSPs may rent the network from MNOs to reduce the cost. NEPs may need expand to provide ICT solutions to keep their profit. High barrier will be set for new entrants. The price for consumers may not decrease significantly. Less infrastructures will be needed because of the virtualization of LTE, so because the cost reduction happens to MNOs, not NEPs. MNO can rent the network out to increase the revenue.

Key findings ---Scenario analysis(4/5) Sc.3: Cooperation between NEP and MNO MNOs may sale the network to NEPs/MNVO to compete with CSPs. The price for consumers may decrease. High barrier will be set for new entrants. The level of virtualization is not high.

Key findings ---Scenario analysis(5/5) Sc.4: Balance between CSP and NEP MNOs will not take the role of CSPs. MNOs may rent/sale the cloud services to CSPs. MNOs may rent/sale the network to NEPs.(No threaten to MNOs) The revenue of MNOs may increase because of the better performance. The price for consumers may not decrease. High barrier will be set to new entrants. If the network efficiency/QoS/QoE/performance of virtualized LTE network is better than LTE network.

Conclusion & Future work The level of LTE virtualization will be determined by the cost reduction. LTE virtualization may change the market value network in the future. Scenarios are built from the perspective of LTE virtualization. Key uncertainties are correlated to a certain extent. Strategic planning can be done by any given key stakeholder in the future. Cost reduction can be measured in OPEX and CAPEX. MNOs are most powerful players in the market

Thank you!