1 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Mobility Trends Convergence of Services Using IP-based Network Solutions Dan Kurschner Strategic Business Manager Latin Am. Mobility Segment Cisco Systems June 21, 2006

2 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions The Challenge People have embraced the personal computer for communication, work, education, shopping, and entertainment. Now they want all these capabilities to “Go Mobile”. The route to successfully filling this need is through IP-based convergence of the Wireline and Wireless networks. This includes what we traditionally placed in the realms of Television, ISPs, as well as Fixed and Mobile Telecom Providers.

3 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions The Need Service Providers need to become Multiple Service Providers – Provide Voice, Data, Video, Mobility, etc… Provide seamless handoff between Fixed and Mobile devices Bundle services for convenience and cost benefits Allow flexibility so end users can personalize their services We need to change the way we think about our processes and operations as well as our network technology

4 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions The Way Use Intelligent IP Network solutions to truly converge networks Support both IMS and Non-IMS over the same network Identify “Points of Convergence” – To Reduce Expense – To Build Revenue Enable Self-Service Bundle to keep your customers and defray costs Embrace Content Providers and Over-the-Top Services – Make them an ally or they may become your nemesis Work with a IP-Savvy Strategic Partner that can help you address Voice, Video, Data, Mobility via true IP solutions

5 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Agenda Drivers for Network Convergence by Perspective: The Fixed-Line SP The Mobile SP What Convergence can mean to: The User The Service Provider Areas of Convergence Core Service/Control Applications Building the Converged Network today with focus on the future SP-NG with IMS Migration Summation

6 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Drivers for Convergence

7 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Fixed-Line Drivers for Convergence Win back voice minutes from mobile operator Offernew level of convenienceto customers Grow ARPU Drive Broadband Adoption with services Reduce OPEX FMC Opportunities Access line and Revenue erosion PSTN voice Grow Broadband in a profitable way High OPEXdue to parallel networks Customers demand Mobilityand service convenience Pressure on Enterprise Business Challenges

8 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Mobile Operator Drivers for Convergence Strengthen Enterprise business Reduce churnthrough sticky service Attract new customer through service innovation Improve in building coverage FMC Opportunities Need to control OPEX Gain traction in Enterprise market Pressure on termination rates Data service adoption slow Churn In Building Coverage Challenges

9 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Market Drivers for Fixed-Line SP Fixed line operators are increasingly looking for alternatives Access line loss continues while VoIP and Mobility adoption is accelerating A converged wireless/wireline offer could slow the line erosion and drive ARPU

10 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Fixed-to-Mobile Substitution will accelerate Even the mature population are considering a single mobile device Fixed-to-mobile substitution by age group. % of respondents Will substitute after 2 years Will substitute within 2 years Have substituted >55Age

11 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Consumers and Business already seeing the first stages of Convergence Operators bundling minutes for use in either fixed or mobile Mobile minutes provided in service plan can be used for free fixed long distance calling Operators bundling services to provide common bill and lower cost to consumer E.g.: SBC delivers fixed phone, DSL, satellite video and mobile voice (with Dish Network and Cingular) Operators building in-building expanded mobile coverage solutions E.g.: Nextel in-building picocells with Radioframe

12 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions What Convergence can mean to the End User and to the Service Provider

13 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions The subscriber should not need to think about FMC. However, they do want benefits that FMC can provide Easy and affordable - Anywhere, anytime. Voice, messaging, multimedia, presence, VPN, corporate apps, etc. Home, Work, Roaming, No service interruption due to lack of signal Converged Functionality Phones, smartphones, PDAs, laptops, entertainment systems, etc. Voice, Data, Video, Business Tools, Fun Bundled Offerings One bill – many services, Follow-me calling, Voice, Data, Entertainment, Business tool. If I give you all my business, give me a discount and a cool device. End User Perspective Residential

14 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions End User Perspective Enterprise Callers have to try multiple numbers to reach a mobile worker Feature: Single business number reach Mobile workers must check two voice mail boxes (cell and enterprise) Feature: Single voice mail box Mobile workers must interrupt conversations when changing locations Feature: Desktop pickup and Cell phone pickup Cellular roaming costs are high, particularly when crossing technologies Feature: Dual-Mode Cellular users cannot access the IPT network resources Feature: Data Service Roaming

15 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions FMC from the SP’s View-Point Reduce costs and build subscriber-ship and billable usage New technology needs to help reduce OPEX and CAPEX expenditures What is implemented today should serve as the foundation of the next generation network Need to reduce churn Need to offer more services – some that we simply do not have at this time A bundle of Fixed-Mobile-Broadband is required

16 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Seamless Mobility Handover between WLAN and cellular Voice and Data Services Dual Mode Terminals Single Number Reach One Number One Mailbox One Directory Data Service Roaming GPRS+WLAN Service Roaming Dual Mode Terminals Service Integration Service Convergence Single Bill Voice+Data+Mobile Bundle Discounts Seperate Terminals Bundled Service

17 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Areas of Convergence

18 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Convergence can occur in four areas Areas of Convergence Three Layered Network Core Service/Control Applications Devices

19 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions INTELLIGENT INFORMATION NETWORK 3 Layered Network APPLICATION CONVERGENCE SERVICE CONTROL CONVERGENCE Transport O P E R A T I O N A L L A Y E R S E C U R I T Y L A Y E R NETWORK CONVERGENCE Application & Policy Function Policy Enforcement Points Application & Policy Function Policy Enforcement Points Service Exchange Parental Control VoIP over Mobile Picture Messaging Entertainment Anywhere Push to Talk Mobile Gaming RAN Aggregation RAN Aggregation Radio IP/MPLS Core IP/MPLS Core RAN Cellsite RAN Cellsite RoutingRouting MulticastMulticastSecuritySecurityQoSQoS AvailabilityAvailability PerformancePerformance ResilienceResilience InterworkingInterworking Service Aware L2/L3 VPN

20 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions INTELLIGENT INFORMATION NETWORK The Foundation – Core Plane APPLICATION CONVERGENCE SERVICE CONTROL CONVERGENCE Transport O P E R A T I O N A L L A Y E R S E C U R I T Y L A Y E R NETWORK CONVERGENCE Application & Policy Function Policy Enforcement Points Application & Policy Function Policy Enforcement Points Service Exchange Parental Control VoIP over Mobile Picture Messaging Entertainment Anywhere Push to Talk Mobile Gaming RAN Aggregation RAN Aggregation Radio IP/MPLS Core IP/MPLS Core RAN Cellsite RAN Cellsite RoutingRouting MulticastMulticastSecuritySecurityQoSQoS AvailabilityAvailability PerformancePerformance ResilienceResilience InterworkingInterworking Service Aware L2/L3 VPN

21 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions The Core Plane The foundation of the network Capable of supporting the transport of all network services Voice, Data, Video, Signaling, IT, OSS/BSS, etc Flexible enough to handle network problems Flexible enough to support rapid deployment of new services Both product trials and full deployment Foundation for IMS as well as today’s needs

22 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions MPLS Converged Core Mostly connectionless IP/MPLS aware end-to-end Reduced provision replication Highly scalable More CAPEX and OPEX efficient Multiple Interworked Networks Often connection oriented End-to-end provisioning Scalability issues CAPEX intensive Less OPEX efficient SP Core Networks are Evolving Frame-Relay RPR Metro Ethernet TDM Internet MPLS DSL ATM

23 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions INTELLIGENT INFORMATION NETWORK The Service and Control Plane APPLICATION CONVERGENCE SERVICE CONTROL CONVERGENCE Transport O P E R A T I O N A L L A Y E R S E C U R I T Y L A Y E R NETWORK CONVERGENCE Application & Policy Function Policy Enforcement Points Application & Policy Function Policy Enforcement Points Service Exchange Parental Control VoIP over Mobile Picture Messaging Entertainment Anywhere Push to Talk Mobile Gaming RAN Aggregation RAN Aggregation Radio IP/MPLS Core IP/MPLS Core RAN Cellsite RAN Cellsite RoutingRouting MulticastMulticastSecuritySecurityQoSQoS AvailabilityAvailability PerformancePerformance ResilienceResilience InterworkingInterworking Service Aware L2/L3 VPN

24 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions The Service and Control Plane Identifies the subscriber Notes services available Controls access, charging, quotas, etc Service set-up and take-down Supports dynamic changes, upgrades, etc. Service and Control Plane must have the flexibility to support both IMS and Non-IMS Architecture

25 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions INTELLIGENT INFORMATION NETWORK Subscribers View – Application Plane APPLICATION CONVERGENCE SERVICE CONTROL CONVERGENCE Transport O P E R A T I O N A L L A Y E R S E C U R I T Y L A Y E R NETWORK CONVERGENCE Application & Policy Function Policy Enforcement Points Application & Policy Function Policy Enforcement Points Service Exchange Parental Control VoIP over Mobile Picture Messaging Entertainment Anywhere Push to Talk Mobile Gaming RAN Aggregation RAN Aggregation Radio IP/MPLS Core IP/MPLS Core RAN Cellsite RAN Cellsite RoutingRouting MulticastMulticastSecuritySecurityQoSQoS AvailabilityAvailability PerformancePerformance ResilienceResilience InterworkingInterworking Service Aware L2/L3 VPN

26 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions The Application Plane What your subscribers see and use Traditional Telephony Services VoIP Data Services (Fixed, Nomadic, Mobile) Push-to-Talk Multimedia Messaging Entertainment (IPTV) Commerce Etc…

27 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions BROADBAND Subscriber IPTV VoIP MP3 Internet Gaming VoD Service Provider Dynamics Broadband Defining New Service Models TV PSTN Internet Mobile Provider A Provider B Provider C Provider D Subscriber % Planning to Switch Bundle Providers in the Next 12 Months Yes, Another Bundle Provider Yes, Separate Providers Source: IDC Consumer Survey, 2005 US Bundled Churn Rates 3.5% 8.5% Not Sure 22.1% No 65.9%

28 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Who is a Service Provider? Internet MVNO Mobile Fixed- Line Conten t Over- the-Top Combined Revenues Reduce Churn “Stickiness” Share common core

29 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions IMS Migration

30 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Is IMS the Next Killer Application? What is “Killer” about IMS is no single application, but rather the flexibility to quickly introduce and bundle new applications to market. And if successful, the ability to quickly scale as market demand dictates. Also, the ability to develop new applications in- house and to select from a variety of IMS Application Development companies. A truly Flexible network will support both IMS and Non-IMS with equal grace.

31 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Today’s Universe of Applications Requires Support for IMS and Non-IMS Applications Session Based Non-Session Based Web, HTML P2P Business IP - VPN Messaging – SMS, MMS Voice Push-to-Video Streaming Video IM Group Chat Video on Demand Online Games IPTV Dual Mode Enterprise Integration E-Commerce IMS (SIP) Apps IMS (SIP) OR Non-IMS Apps Real Time Non-Real Time Push-to-Talk

32 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions In Summation

33 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions There is no single panacea IMS is a valuable NGN component, but it is not the complete solution for all services—flexibility is key IMS is not your OPEX reduction plan There are immediate service/revenue opportunities that are not supported by current IMS specs and applications Network, subscriber and application awareness, in addition to IMS capabilities, are crucial for broad SP success

34 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions In Closing Users are Access Agnostic – The network needs to reflect that The Network is Delivering Value To Individuals – One size does not fit all A well designed IP Network creates Flexibility, Convenience and Convergence – Next-Gen SP Solutions provide enhanced services, and reduced OPEX today. It is also to foundation for IMS Migration. Cisco’s Vision - Connecting customers with services, services with networks, and networks with each other We can help you get there! Users are Access Agnostic – The network needs to reflect that The Network is Delivering Value To Individuals – One size does not fit all A well designed IP Network creates Flexibility, Convenience and Convergence – Next-Gen SP Solutions provide enhanced services, and reduced OPEX today. It is also to foundation for IMS Migration. Cisco’s Vision - Connecting customers with services, services with networks, and networks with each other We can help you get there!

35 © 2006 Cisco Systems, Inc. All rights reserved. Cisco Public Mobility Trends: Convergence of Services Using IP-based Network Solutions Thank you