1. “How to Make a lot more Money from your Network”
TLEN 5510
Future of Inter-Networking
Robert Duncan Transaction Network Services +1 (303) (m)
If you can, cover all of Chapter 10
(it is mostly 2G to 3G network evolution to packet data, and is based on this section of class notes:
Attached are a couple of slides I typically use for it. I want to cover the basics, but feel free to adapt any of it
But feel free to emphasize whatever you feel is more important, and glance over or even skip things. TS

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

3. Intro 20 years in Mobile networks 30 years in Telecom (see “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

4. Inter-Network Connections
Why?
How?

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

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

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

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

9. Connecting Networks Creates Value
Metcalfe’s Law
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 1 2 …
S1,000,000
1,000,000 1 2 …
S1,000,000
1,000,000 1 2 …
S1,000,000
S2,000,000
1,000,000
2,000,000 + =

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

11. Convergence Ahead
Inter-Network Future
From Circuit to Packet

12. Cellular Calls Connect via _____?

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

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

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

16. Today: Mobile Connects via Public Telephone (PSTN)
PSTN (LEC + LD)
STP
Signaling
Voice
MSC
MSC
GRX BG BG
Data
SGSN
SGSN
Evolution of All-Circuit to All-Packet
Op A
Op B
Circuit Voice
Circuit Voice
Circuit Voice

17. Tomorrow: Mobile connects via IP
PSTN (LEC + LD)
Existing technology Not All-IP
STP
MSC
MSC
MSC
Server
MSC
Server
IPX
Signaling BG BG
Data
SGSN
SIP
Proxy
SGSN
CLARIFY: Should we even show MGW, is this vocoder-free?
Voice
MGW
ENUM
MGW
Op A
Op B
Circuit Voice
Packet Voice
Circuit Voice

18. Future: LTE connects via IP
PSTN (LEC + LD)
LTE/All-IP
STP
MSC
MSC
CSCF
CSCF
IPX
Signaling BG BG
Data
SGSN
SIP
Proxy
SGSN
ADD: LTE-specific nomenclature, but not too much
Voice
MGW
ENUM
MGW
Op A
Op B
Packet Voice
Packet Voice
Packet Voice

19. Choosing the Least Cost Route for Voice Connections

20. IPX Provides Voice & Data Connectivity
A Common Connection Point for Voice & Data
ISPs
MNOs
TNS IPX
Packet Data
Packet Voice
GSM, GPRS/UMTS Operators
Circuit Voice
ASPs
CDMA Operators
SPs
The IPX designed to interconnect any type of service provider for any type of IP service for both voice and data.
FNOs

21. Benefits of Native (IP) Connections
↓ Cost <10% of Current
↓ Complexity Flat
↑ QoS Fewer vocoders
↑ Features Unobstructed operation
International LD: $0.0500/MOU
Current LEC interconnect: $0.0025/MOU
Current VoIP interconnect: $0.0005/MOU
100X less revenue/minute

22. 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)

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

24. Inter-Network Future
An IP eXchange (IPX)

25. All Operators Can Use IP eXchange (IPX)
MNOs
ISPs
Applicability
Mobile Network Operators (MNOs)
Fixed Network Operators (FNOs)
Internet Service Providers (ISPs)
Application Service Providers (ASPs)
IPX
SPs
ASPs
The IPX is GSMAs proposed solution. It is designed to interconnect any type of service provider for any type of IP service, via common commercial agreements guaranteeing the appropriate standard of end to end quality and security.
FNOs

26. Aicent IPX Viewpoint Market Needs IP Interworking
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.

27. IPX Interconnect Principles
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
Mobile
ISP
FNO
MNO
IPX TRUSTED ENVIRONMENT
Private IPX Domain
IPX 1
IPX 2
IPX 3
Fixed
INTERNET

28. Peering Ensures Competition, Choice of IPX Provider
MNOs
FNOs
IPX
IPX
The IPX is designed to deliver an efficient commercial and technical solution for all the key stakeholders.
The IPX is provided in normal competitive market conditions, allowing choice and global or regional specialisation.
The IPX is designed to allow global interconnectivity, either via bi-lateral arrangements or multi-lateral arrangements where one contract provides access to many destinations.
SPs
ASPs
ISPs

29. Layers of IPX Functionality
Clearing
Inter-Carrier Billing
Billing
ENUM
Routing and Addressing
Service Aware for event-based and stream-based traffic
VoIP
Signaling
Traffic Detection for routing, charging, and multi-lateral destination policing
Clearing is not part of IPX by GSMA definition - but is part of IPX, in practice
Media Conversion
Fixed & Mobile Termination
Network

30. 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
The IPX provides several functions to service provider users.
SPs may choose to use bi-lateral or multi-lateral modes of interconnect according to their commercial preference on a per service basis.
Accordingly the IPX bills the service provider according to the agreed rate for each service and passes payments on to other parties in the chain.
The quality of service required by each service is signalled by the originating service provider and invoked by each IPX in the chain.
Only contracting parties are connected to the IPX and the IPX is isolated from the internet, ensuring security and traceability.

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

32. Benefits Simple Secure Efficient Interoperability
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

33. For more information, please visit www.gsmworld.com/technology/ipi
Quality
Openness
For more information, please visit
or us at
Thank you
Cascading
Payments
Efficiency

34. Network Roaming
Why? How?

35. Roaming
eXchange
Mobile
Network
Network
Network
Network

36. Why Roam? ↑ Coverage ↑ Revenue Who benefits?
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)

37. Data Access       Data Access Steps: Mobile: Select system
Service
Home Network 
Internet 
Radio Control
Data Gateway    
Home AAA
Subscriber Database
Data Access Steps:
Mobile: Select system
Mobile& System: Attach and establish session
Serve: Authenticate Mobile
Serve: Authorize Mobile
System: Connect
System: Accounting
User Data (Mobile IP)
AAA signaling (RADIUS)

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

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

40. Network Roaming
As a network offload solution

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

42. Solution: Reuse Established CDMA Data Roaming Benefits
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

43. A Tsunami of Connected (Mobile Internet) Devices
Chris laid out the trends we see shaping the market, and how TNS as a company, is responding.
I’m going to share with you a more detailed response plan and then open the floor for feedback from you as to how we can better help your company respond.
Let me begin by saying I understand your pain – I live it on a daily basis. I not only run TSD, but serve as the COO for TNS as well. Over the past few years we’ve invested more than $100M to ready ourselves for the ‘anywhere’ evolution. The most important things we’ve done to date are uplift our core backbone to MPLS/IP and build intelligence into our networks so we’re able to support a ubiquitous ‘anywhere’ experience.
A lot of services you have relied on to generate revenue in the past are subject to price pressure. This is true for TNS as well. TNS’ focus going forward is two-fold: mitigate cats for our customers AND, as importantly, increase our customer’s revenue. With respect to increasing revenue, we will do so not only by introducing new services but also by helping you monetize assets that you currently have. I personally think it is an exciting time from a business perspective…challenging no doubt…but exciting.
<Corbis Images catch wave>
Proprietary & Confidential

44. Problem: Traffic (Cost) Growing Faster than Revenue
Forecast: 25X traffic increase
Forecast: 2X revenue increase
Latest forecast: “Data traffic over mobile networks will be 100 times greater in 2015 than in 2008, according to Yankee Group. Over the same period, revenues from mobile data will be just 1.9 times greater in the same period, according to ABI Research.
This makes a compelling case for Wi-Fi Offload, as data costs have to come down in every way possible, and the RAN is the biggest cost.
———
120% Growth/year for = 25x (2.2 ^ 4)
Consistent with other forecasts, if a bit conservative
“How to Cope with Future Demand for Data Services,” Robert Duncan, TNS, Tokyo CDG IRT, April 2009]
Sources: Cisco, from Operators’ network data and Analysts; “Mobile data revenue will double by 2012,” Dan Locke, Analyst Insight, Pyramid, 4/2008]

45. 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”
Many service providers are beginning to adopt a range of strategies including optimization of 3G networks using intelligent policy control, mobile data traffic offload, and transformation to 4G to reduce costs and alleviate congestion. Together, these strategies could reduce data delivery costs by more than 60 per cent over the next three years.1 In an era of huge mobile data growth, this holistic approach to the congestion management conundrum is vital to long-term success. [Chetan Smarma, 2009]
Service providers deploying a multi-access offload strategy can expect savings in the range of 20 to 25 per cent per annum. In the US market, service providers could save between $30 and $40 billion per year by [Chetan Smarma, 2009]

46. 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
Vodafone/Everything Everywhere/O2 work with BT Openzone and The Cloud in the UK T-Mobile uses its own network in the US Verizon wireless is offering the Boingo network (through a Verizon contract vehicle) included with every Mobile data plan it offers in the US. Sprint is lagging.
2008
2009
2010

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

48. 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
Robert:
Here is some more color behind the use cases:
International Use cases
Data Roaming Cost Avoidance – Provider looking to leverage Wi-Fi to improve data roaming experience and expand adoption within their customer base
Coverage Expansion – Typically CDMA or WiMAX providers seeking to expand relevance of service to customers with international usage patterns
Domestic Use Cases
Capex Avoidance/Management – typically use Wi-Fi offload as a capex management tactic or an insurance policy against unpredictable data growth
Can be on Owned Networks or Commercial Networks
Roaming Cost Avoidance – typically smaller, regional domestic players who pay to roam on national carrier networks, thy already receive coverage from roaming agreements, and Wi-Fi is a way to potentially reduce roaming costs

49. 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)

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

51. --------------------------------------------
Thank you!
Q & A

52. Data Revenue Overtaking Voice
2004: % 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)
5252

53. … 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

54. 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 2014