1 © Nokia 2015

Nokia next generation PON

Ana Pesovic, Fixed Networks Marketing Nokia October 2016

Speed & … convergence define the access network of the future

Eric Festraets - Director Business & Network Strategy Fixed Networks

2 © Nokia 2015

Speed & convergence define the access network of the future

View on

technologies

View on FTTx

deployments View on

apps & services

Fibre as the cornerstone of the network

Better quality of experience…

Fixed complements

wireless…

3 © Nokia 2015

Speed & convergence define the access network of the future

View on

technologies

View on FTTx

deployments View on

apps & services

Fibre as the cornerstone of the network

Better quality of experience…

Fixed complements

wireless…

4 © Nokia 2015

Prediction is very difficult, especially about the future.

Robert Storm Petersen Danish cartoonist, writer, animator, illustrator, painter and humorist

The enigma of ever changing consumer behaviour…

5 © Nokia 2015

Backhaul Business (Retail & Wholesale)

Residential (Retail & Wholesale)

Main service trends for today and tomorrow

GIGABIT Bandwidth vs. speed

MULTI PLAY One stop shop – Smart

Home

INTERNET OF THINGS

Ecosystem

FTT OFFICE Passive Optical LAN

CLOUD IT Integration

INTERNET OF THINGS

New business models

MOBILE X-HAUL Front/Mid/Backhaul

WIFI OFFLOAD Seamless handover

SMALL CELLS Coverage & Capacity

6 © Nokia 2015

Vide

o Ba

ndw

idth

(Mbp

s)

0

10

20

30

40

50

60

70

80

90

100

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

4K 3D 2160p 4K TV 2160p 3DTV 1080p HDTV 1080p

3DTV 720p HDTV 720p SDTV 15% CAGR

Sustained bandwidth BW

Time

Downstream average IPTV, Internet, voice

Downstream peak OTT Video download Speed test

Upstream average Gaming, Video communication

Upstream peak Speed test Video upload File sharing Cloud storage

Peak bandwidth

High bitrates are required to provide premium customer experience and differentiate from competition

Gigabit : how much do you really need?

7 © Nokia 2015

Human impatience is the killer app for a gig

-1500 -1000 -500 0 500 1000 1500

HD video (4x)

Web & Cloud apps

Home security

4K Video (4x)

Online backup / storage

8K video (4x)

Virtual Reality (consumer)

Immersive VR

Instant Gratification

Cloud interactivity

Upstream (Mbps)

Peak bandwidth is key for the user experience (human impatience is the killer app)

Sustained bandwidth (all users, all the time) is basic enabler

Downstream (Mbps)

8 © Nokia 2015

Multi play for the consumer – From bundling to converged offerings

TELEPHONE • Voice services

DUAL PLAY • Voice services • Internet services

TRIPLE PLAY • Voice services • Internet services • Video services

QUAD PLAY • Voice services • Internet services • Video services • Mobile services

QUINT PLAY • Voice services • Internet services • Video services • Mobile services • Smart Home

1

2

3 4 5

Downgrade churn by target ing convergent households

9 © Nokia 2015

Multi play for the consumer - The smart home challenge & opportunity

Integrated ONT/RGW/IOT hub or Ethernet CPE/Gateway/IOT hub

Single app in the mobile Multiple apps – one per hub

Multiple hubs – one per vendor

Too many vendors/protocols/hubs/apps Simplified, integrated & handy Smart Home solution

10 © Nokia 2015

Digital Health

Health

Efficiency Comfort

Security

Home Security

Home Automat

ion

Smart Energy

HOME SECURITY 36B€ worldwide market (@2017, Goldman Sachs) Proven willingness-to-pay

by subscribers

ENERGY MANAGEMENT IoT can make smart homes

40% more energy efficient In developed countries,

30% of energy consumption is in homes - significant overall savings!

REMOTE HEALTH Remote patient / elder

monitoring/assisted living Potential savings, just in North-

America, $300B per year Opportunity (US alone) $30B

Multi play for the consumer - Smart home service area’s

11 © Nokia 2015

Bringing a gig to every home is just the start

PON, xDSL, DOCSIS, 3G/4G/5G, GE

Wi-Fi

IPTV, VoD, Internet TV, Gaming

Home Security, Digital Health, Smart Energy, Automation…

Communication

Home networking Home networking

Entertainment

Convenience

Smart home

Connected home

IOT

vSTB

RGW ONT

vRGW vSTB vIoT

12 © Nokia 2015

ENHANCE CUSTOMER

EXPERIENCE

BUILD THE MODERN

WORKPLACE

ADOPT CLOUD

SERVICES

DIGITAL TRANSFORMATION

OF ENTERPRISE

MANAGE SECURITY &

PRIVACY TRANSFORM IT

CAPABILITY

EXPLOIT BUSINESS

INFO

CONNECT PHYSICAL

WORLD

MODERNIZE LEGACY

SYSTEMS

Business & IT change significantly Need to find better ways to communicate & collaborate

Connect people, offices & applications smoothly

Can Slack replace email?

By 2020, 62% of CIOs say running 100% of IT

in the cloud

75% of M2M projects lead to new business models Data trust should be

guaranteed in each Data Centre

Customer Loyalty Programs rule

13 © Nokia 2015

• Horizontal and Vertical cabling using fibre instead of copper CATx cabling

• GE connectivity to ethernet devices • Active Core switches replaced with single

centralised node • Aggregation switches replaced with

(passive) splitters and CPE devices to terminate fibre

Fibre to the Office : Passive Optical LAN

v’s Traditional copper LAN

Premium service experience • High capacity, market proven

solution • All services converged on one LAN

- voice, video, data, WiFi, surveillance, signage, etc

Lower cost to operate • Simple network, easy to operate • Low power consumption • Low floor space

Long term solution • Fiber life span: 50+ years • Low cost evolution:

- same cables - same access node

14 © Nokia 2015

Fibre to the Office : 50% TCO savings with Passive Optical LAN E

quip

men

t C

ablin

g

Floo

r spa

ce

Pow

er

Office building with 5 floors, 124 desks/floor

-50% TCO

30 switches

1 fiber OLT + ONT access points

25m2 <1m2 Bulky CATx Cable bundles

small-diameter fiber bundle

2.5KW 1.5KW

Traditional LAN Passive Optical LAN

15 © Nokia 2015

Internet of Things : opportunity to improve people’s lives

Fatalities each year worldwide by not following doctor’s prescriptions3

Possible yearly economic impact of IoT applications in cities in 20256

Water lost each year in the US because of aging and leaky pipes, broken mains and faulty meters2

Estimated energy waste in US buildings due to inefficient and outdated HVAC systems5

2.1T gallons 1 mio

50% $1.6 trio

Fatalities in car accidents are often due to human error and slow reaction1

Mobile glucose monitoring tools can cut diabetes management costs by4

90%

50% 1 International Organisation for Road Accident Prevention; 2 NPR; 3 Huffington Post; 4 fiercehealthcare; 5 American Physical Society ; 6 McKinsey

16 © Nokia 2015

Internet of Things : validate the solution… technically and marketwise

Innovation ecosystem Agile prototyping Concept showcase Market trials

refine

Automotive & transportation

Hospitality

Health & wellness

Media & entertainment

Service providers Tech industry

Consumer electronics

Education

Public sector

Retail & e-commerce

Ideate

Prototype

Test

Business models

Prototypes Execution partners

Joined efforts of global leaders & innovators

17 © Nokia 2015

Internet of Things : ecosystem to build the right partnerships

265 members 375 members/1500 products 450 members >550 members/>30,000 products

ng connect program is Nok ia in i t iat ive next to be ing par t o f Z-Wave / Z igBee / WiFi a l l iance

18 © Nokia 2015

Operators massively backhaul their macro cell traffic over fibre

Bus stops Lamp posts Advertising panels…

92% of PT cell sites have fibre for

mobile backhaul

Adding small cells (+ wifi) Equip urban locations with fibre

Wireless Backhaul : market clearly moves to fibre

19 © Nokia 2015

Mobile Transport Fixed networks for backhaul/ midhaul, especially for smart cells

Hybrid access Boost peak speeds with hybrid fixed/LTE CPE; instant activation; resilience & troubleshooting

Fixed Wireless Fixed wireless LTE as primary broadband connectivity in hard to serve areas; 5GTTH in ultra-dense urban areas, and for fast initial coverage

Wireless complements fixed

20 © Nokia 2015

Backhaul Business Residential

All “customer” segments have their needs

Enlarge revenue opportunities by combining B2C with B2B

21 © Nokia 2015

Speed & convergence define the access network of the future

View on

technologies

View on FTTx

deployments View on

apps & services

Fibre as the cornerstone of the network

Better quality of experience…

Fixed complements

wireless…

22 © Nokia 2015

Cloud Minimize TCO with an optimal mix of virtual and physical functions

COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED.

Cloud &

CO Edge Cloud

Our vision: A seamless fixed network connecting everyone and enabling every thing

vRGW

vOLT

vSTB

Digital Home Bring gigabit into every home, and enable the Internet of Things

Last mile Gigabit speeds over fiber, copper, coax – innovation pushing the boundaries of physics

Converged Access Range of ultra-broadband options to connect every home, enterprise, and antenna

NG PON, 10G P2P XLG-PON

Vectoring, Vplus, G.fast, XG-FAST

XG-CABLE FTTA

FTTN

FTTx

LTE, FastMile FTTH

FTTDesk

23 © Nokia 2015

Is all traffic going mobile? The facts and predictions

Mobile share

Wi-Fi will support >40% of data traffic

Traffic by network type

CAGR of 24%

Wi-Fi data consumption/user : from 30M (‘13) to 300 M (‘16)

(video)

Source : OVUM

UK, France & Germany

leading countries

Source : Analysis Mason

For 2020, fixed will show stronger growth than mobile in most developed markets

Smartphone boom nearly over… Heavy demand for video data :

Despite 4G, economics drive to fixed Connected TV

24 © Nokia 2015

3G :100s of nodes 4G :1000s of nodes 5G :100,000s of nodes

The world is going wireless, but wireless is going fixed

25 © Nokia 2015

0 5000 10000 15000

Wireless today (LTE)

Wireless tomorrow (5G)

DSL today

DSL tomorrow

Cable today

Cable tomorrow

Fiber today

Fiber tomorrow

Sustained / Peak speeds (Mbps)

XLG-PON and beyond

XG-CABLE, DOCSIS 3.1 Full Duplex

G.fast, XG-FAST

NG-PON (XGS / TWDM)

DOCSIS 3.0

Vplus, G.fast

5G

LTE

Access technology is converging to gigabit speeds

26 © Nokia 2015

FTTHome

“X marks the spot”

FTTBuilding FTT DistributionPoint

FTTCurb FTTNode

X FTTX GPON/EPON, P2P Vectoring, G.fast, Vplus

XGS/TWDM-PON XG-FAST XG-CABLE Next-gen fiber, dsl & coax

“X as the Roman 10”

Copper

Fibre

27 © Nokia 2015

0

200

400

600

800

1000

0 100 200 300 400 500 600 700 800 900 1000

Agg

rega

te b

itra

te [

Mbp

s]

Distance [m] Note: .5mm cable

Copper technologies : finding the right “DSL” is key

>1000m

550m

300m

VDSL2 Vectoring (17a)

Vplus

G.fast

Shorter distanceIncreased bitrates

Increased cost

G.FAST NOTCHED FOR VDSL2 22 to 106MHz

VDSL2 VECTORING VDSL2 17a

G.FAST Up to 106MHz

VDSL2 35b VECTORING Vplus

28 © Nokia 2015

Fibre technologies : PON evolution in a nutshell

Speed (DS & US)

1G 1.25G

2.5G

10G

EPON GPON 10/1 EPON

XG- PON1

XGS-PON & 10/10 EPON

Universal-NGPON (TWDM PON)

Fixed Optics Tunable Optics

Multiple Wavelengths

(4 or 8)

29 © Nokia 2015

It is reality : XGS/TWDM demos and trials

39 Trials (21 completed)

56 Demo (all completed)

7 customers!

Trial completed

Demo completed Trial planned

Customer win

Demos:

Deployments:

30 © Nokia 2015

Small cell backhaul

Residential FTTH

Business services

FTTB and Remote node backhaul TWDM tunable (10/10 or 10/2.5)

TWDM tunable (10/10 or 10/2.5)

TWDM tunable (10/10 or 10/2.5)

TWDM tunable (10/10 or 10/2.5)

XGS (10/10 or dual-rate 10/10+10/2.5) GPON

XGS dual-rate

A single network for all your services and faster network monetization

Backhaul increasing cell sites volumes and traffic, over existing residential network

Increase revenue potential with high revenue generating business services

Backhaul large number of micro-nodes to boost bandwidth on copper loops

Add more wavelengths to cover more residential users or boost their bandwidth

31 © Nokia 2015

Speed & convergence define the access network of the future

View on

technologies

View on FTTx

deployments View on

apps & services

Fibre as the cornerstone of the network

Better quality of experience…

Fixed complements

wireless…

32 © Nokia 2015

Today’s view on the FTTH/B Market in Europe

≈ 3M users

≈ 3M users

Early 2016 in EU28 : 60M FTTH/B homes passed

16M FTTH/B users (26% adoption) 75% have GPON as

FTTH/B/dp technology

≈ 2M users

≈ 1M users

≈ 1M users

≈ 2M users

Incumbent deploying GPON

Incumbent deploying P2P

Today in Finland : 1.7M fixed broadband users

94K users have FTTH Lowest in Nordics/Baltics

How to increase?

Stimulate Demand

Public Funding

Infra Sharing

Reuse copper for last drop?

33 © Nokia 2015

Note: 30% take rate 0

1000

2000

3000

4000

5000

6000

7000

Fiber drop Dark Fiber

Trenching ducts Engineering

Network HW Home HW

Fiber drop Dark Fiber

Trenching/ducts

Engineering

Network HW Home HW

Fiber drop

Dark Fiber

Trenching/ducts

OSP engineering

Network HW Home HW

FTTH CAPEX (€/subs)

Pay back period

~4 years ~8 years > 20 years

Dense Urban Area Rural Area Suburban Area

With fibre deployment, the business case rules

Investors take lesser and lesser risk

34 © Nokia 2015

Compliment FTTH with FTTx

Dense Urban (2500 HH per Sq-Km)

FTTx relative CAPEX per sub (ADSL baseline) INVESTMENT • From FTTN (4x) to FTTH (15x) to 5G

(22x) • Civil works and cable drives cost TIME TO MARKET • Deploying FTTH is time consuming • Re-using existing copper and wireless

sites can speed up deployment

BANDWIDTH • FTTH: 1Gbps (GPON),10 Gbps

(uTWDM) • FTTx: 100M (VDSL2), 100s M G.fast • Fixed Wireless: 1Gbps (5G) OTHER FACTORS • (-) Aerial fiber, existing ducts • (+) difficulty to enter the home • Availability of wireless spectrum

0

2

4

6

8

10

12

14

16

18

20Civil Works and Cables

Network Electronics & Optics

Cabinets/POPs/Splitters

Home Equipment

Home connect & Install

Spectrum

35 © Nokia 2015

G.fast for solving issue of last drop Five deployment models, five use-case optimized Vplus/G.fast platforms

FTTtelcoroom

• 1RU 19” rack- and wall-mountable

• Active cooling with fans • Front access for all

interfaces • AC powered

FTTbuilding

• Optimized for indoor, basement deployment without telco room

• Passive cooling • Anti-tempering • AC & remote powered,

future evolution to reverse

FTTdoor&floor

• FTTH enabler, avoid entering the appartment

• GPON to G.fast conversion

• Reverse powered

FTTcurb

• Optimized for low-end cabinet deployment

• AC or DC powered

FTTpole&hole

• Environmentally hardened for extreme outdoor conditions

• AC, DC or remote powered, future evolution to reverse

Copper Indoor Copper Outdoor

36 © Nokia 2015

56 VDSL2 VECTORING CUSTOMERS

9 13

Vplus CUSTOMERS Vplus Trials

It is reality : powering the largest & most advanced FTTx deployments

25M+ VECTORING LINES SHIPPED

AT&T

9 42

G.fast CUSTOMERS G.fast Trials

37 © Nokia 2015

The converged access platform : bringing all puzzle pieces together Mix of FTTH/X connects more people, sooner & at lower cost

GPON

TWDM- PON

10G EPON DPoE

P2P

FTTN

VDSL2 Vectoring

Vplus

FTTFrontDoor

FTTdp

FTTB

G.fast

FASTER TTM LOWER COST

HIGHER SPEED

POL

38 © Nokia 2015

Speed & convergence define the access network of the future

View on

technologies

View on FTTx

deployments View on

apps & services

Fibre as the cornerstone of the network

Better quality of experience…

Fixed complements

wireless…