small cell deployments: poised for rapid growth
DESCRIPTION
Hosted by Mindspeed and Radisys, this webinar outlines developments in the small cell base station sector. Join Todd Mersch, director, product line management, and Mindspeed speakers Dr. Doug Pulley and Rupert Baines as they cover key trends in the small cell base station industry, including mobile broadband industry market drivers and enabling technologies for LTE and 3G. Panelists will discuss case study deployments of small cells and will contrast developments in South Korea, the United States and Europe.TRANSCRIPT
Small Cell Deployments: Poised for Rapid Growth
Market and Technology Analysis
Hosted By:
&
June 29, 2012
NASDAQ: MSPD NASDAQ: RSYS
Forward-Looking Statements
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This presentation contains forward-looking statements within the meaning of applicable federal securities laws. Such statements include statements regarding the Company’s expectations, goals or intentions, including but not limited to, statements regarding: product features and their benefits; the Company’s expectations and estimates for growth of the small cell market; anticipated small cell product deployments and the Company’s customer engagements; and the depth and breadth of the Company’s small cell product portfolio. Forward-looking statements are subject to substantial risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. The Company’s existing business is subject to numerous risks and uncertainties, including fluctuations in its operating results and future operating losses; loss of or diminished demand from one or more key customers or distributors; the ability to successfully develop and introduce new products; pricing pressures; and the potential for intellectual property litigation. Additional risks and uncertainties that could cause the Company’s actual results to differ materially from those set forth in any forward-looking statements are discussed in more detail under the caption “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2012 and in the Company’s future filings with the SEC. All forward-looking statements are qualified in their entirety by this cautionary statement. The Company is providing this information as of the date of this presentation and does not undertake any obligation to update any forward-looking statements contained in this presentation as a result of new information, future events or otherwise.
Small Cell Market Status
Why Carriers are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
Agenda
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Doug Pulley CTO Wireless Mindspeed Technologies
Rupert Baines VP, Marketing Strategy & MarCom Mindspeed Technologies
Todd Mersch Director, Product Line Management Radisys Corporation
Significant Momentum for LTE Small Cells
AT&T “launches RFI for Small Cells” ...up to 100,000 units (Light Reading, June 21, 2012) “AT&T has been an advocate of small cells for several years, and we’ve spent a lot of time with our vendors working on a strategy for deployment” – Kristin Rinne, SVP, Architecture & Planning (speaking at CTIA Wireless trade show May 9, 2012)
Planning on deploying small cells to enhance LTE capacity
– Hans Leutenegger, VP of Network: South Region (speaking at CTIA Wireless trade show May 2012)
“The end goal of our plans is a completely heterogeneous network. Small cells are a fundamental part of this.” over 600,000 residential femtocells today; moving to indoor small cells this year and outdoor small cells “to add much needed capacity” in 2013 – Iyad Tarazi, VP Network Engineering (May 2012)
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FCC
· Announced launch of small cells for residential & enterprise across Europe & Latin America · Now deploying multi-mode small cells for LTE
Opens up 100MHz for small cell LTE (3.5GHz – 3.6GHz)
Small Cell SoC TAM to Reach $1 Billion in 2016
Market forecast to grow from <$100 million in 2012 to over $1 billion in 2016*
Informa predicts 91 million small cells deployed by 2016
– 4.6 million small cells currently deployed
– By the end of 2012, there will be 6.4 million small cells outnumbering the forecast 6 million macrocells worldwide
Currently, 43 small cell commercial deployments in 23 countries
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0
5
10
15
20
25
30
35
40
2009 2010 2011 2012 2013 2014 2015 2016
Public Access
Enterprise
Consumer
$7.8B TAM, 92% CAGR -- ABI 4Q11 Number of Operator Deployments 2Q12: Informa
* SOURCE: Industry and Company Estimates
Uni
ts
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Deployments Already Underway
LTE deployments beginning in 2012 with ramp in 2013-2014 Carriers deploying small cells now
– 43 commercial launches – > 100 trials
Metrocell requires multimode (3G + 4G + WiFi) 9 out of the 10 largest operators now have small cell deployments
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Small Cell Forum Industry Players
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76 vendors and 67 operators representing nearly 3 billion subscribers
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
Agenda
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Motives for Small Cell Deployments
Future: Applications and New Services
Problem: - Data loads exceeding capacity - Limited macro expansion ability - Increase capacity economically
by offloading to femtocells
Small Cells: - Provide localized capacity - Expand overall capacity/ARPU - Clear acceptance and support
from carriers - Benefit: Increase capacity,
increase customer satisfaction with lower CapEx, OpEx
Cap
acity
Problem: - Basic RF coverage holes - Particularly affects affluent homes - Requires improved voice coverage - Rural areas “Greater Femto”
Femtocells: - Provide basic service coverage - Primarily residential - Some success stories (eg SPRINT,
SFR) and carrier support - Benefits: reduce churn, increase
customer lifetime value
Cov
erag
e
Voice
Data
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Data Demand Increasing Exponentially
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Source: Cisco VNI Source: Heavy Reading
Revenues
Traffic
Revenues & Traffic Gap Widening
Revenue vs. Traffic Growth
Voice Era
Data Era
Traffic is more than doubling every year (Cisco MVNI 108% CAGR) ARPU flat: Carriers need to increase capacity and efficiency
Capacity: Technology Reached Limits
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Increase performance
Cooper’s Law: increasing the number of cells has always been the primary way to add capacity
Need more cells and tighter interference control (HetNet, SON) to increase capacity
Most gain from shrinking cells
Shrink cell
Small cell
macro
“Spectral efficiency can improve capacity by 1.5x. Spatial efficiency Increases capacity by 10x or more” - Alcatel-Lucent
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Small Cells and WiFi – Solving Problems Together
All operators now require WiFi with their pico / metro cells WiFi alone is insufficient for carriers
– Short range requires too many sites, not economic compared to WiFi + cellular small cell
– Poor performance and customer experience concerns Multi-mode dramatically
improves economics – Increase usage, value – Minor impact on CapEx – TCO dominated by per site,
power, backhaul
Best of Breed Outdoor Wi-Fi
LTE Small Cell
Economic Drivers for Small Cell Deployments
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Hierarchical Cell Structure / Self-Organizing Network / HetNet
Mobile Experts Macrocell is 2.5x – 8 x
more expensive than a small cell
Signals Research (Carrier Data Costs) Macro = $8/GB Small cell = $5/GB Femto cell = <$1/GB
Small cells reduce mobile network operator CapEx, OpEx and TCO
Telefonica: Small Cells Across Europe & LatAm
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Triple mode: 3G HSPA + WiFi + 4G LTE
“Small cells are the only way for future capacity, even factoring in extra spectrum and LTE-A” -- Robert Joyce, Chief Radio Engineer
Vodafone Committed to Small Cells
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• Small cells increase coverage and reduce churn • Core part of marketing strategy • Improved customer satisfaction: 96% “would
recommend” • Small cells as dominant part of LTE deployment
AT&T: Largest Deployments to Date
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AT&T launched residential femto service in March 2010
Several hundred thousand deployed – Informa estimates 800,000
Emphasis on coverage and churn reduction
Light Reading reported RFI for 100,000 multi-mode small cells for 2013
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
Agenda
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Small Cell Product Categories
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4-8 users
16-32 users
64-128 users
256+ users
Number of Concurrent Users
128-256 users
Enterprise Femto
Business Metro Business
Macro Micro Pico (indoor, outdoor)
Residential Femto
Small Cell Supply Chain
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OEM
TXN FSL BRCM System-on-Chip
Mobile Network Operator
QCOM CAVM
Product Development Strategies: A Changing Paradigm
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In-House Resell SW + SoC
TTM X Agility X Control X
Shared Base X X Differentiation X
Margins X
Software + SoC integration Balance between control, cost and TTM
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
Agenda
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Transcede®: First application-specific, single-chip SoC for LTE small cells
The only TD-SCDMA SoC on the market First to market with 3G and 4G solutions;
Supporting 25* customer engagements worldwide
Broadest portfolio of small cell SoC solutions available today
T22xx and T33xx family addresses growing multi-mode 3G/4G residential, enterprise and metro mobile infrastructure markets
Mindspeed: Powering Next Generation Mobile Broadband Communications
Winner Finalist 2010
Winner
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Winner
2010
Finalist Finalist
Finalist Winner Winner
Winner Finalist 2011
Finalist
*as of March 31, 2012
Mindspeed’s Small Cell Portfolio
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3G
3G + 4G Dual-mode
Enterprise Femto
Business Metro Business
Macro Micro Pico (indoor, outdoor)
Residential Femto
Small Cell Adoption Already Underway
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2015-16
2013-14
2012
2011 3G small cells deployed in
over 23 countries South Korea
United States
Europe Japan
UK China
India
Mindspeed leading the wave of LTE small cell deployments
Mindspeed Leading in Korea
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Supporting the world’s first LTE small cell commercial deployments
Mindspeed: 2012 Small Cell Industry Award Winner
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Mindspeed in designs in Korea for Transcede 4G/LTE SoCs
Commercial Deployment Award Jointly with Contela and SK Telecom Technology Enablement Award Radisys for KT – based on Transcede
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
Agenda
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Embedded Wireless
Infrastructure Solutions
Wireless Software
Professional Services
COTS Platforms Media Server / MRF
Single Solutions Source Worldwide Customer Base
Embedded Wireless Infrastructure Solutions
Radisys At a Glance
Dual-mode Small Cell Software
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3G Femtotality LTE TOTALeNodeB Multi-mode
‒ 3G + LTE + Wi-Fi
60+ LTE / 3G Small Cell Customers
Coverage
Cap
acity
Macro
Micro Pico
Metro
Femto
Our Focus: Small Cells
Best Enabling Technology:
TOTALeNodeB
Radisys Company Snapshot
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Mike Dagenais Chief Executive Officer
Brian Bronson President and Chief Financial Officer
Manish Singh Chief Technology Officer
Radisys Executive Leadership 2011 Revenue Employees
~ $350M 950 in 12 locations worldwide 500 Hardware & Software Engineers 150 Professional Services 100 Operations
Long Life Markets
Telecom / Networking
Aerospace & Defense
Public Safety Medical
Agenda
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
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Small Cells Already Deploying Today and Ready to Explode
Carriers deploying small cells today – A strong ramp expected starting in late 2012 – Growing semiconductor TAM to roughly $1B by 2016
Solves key problems for carriers Mindspeed and Radisys in core leadership positions
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Thank You
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Questions? Please contact us for additional information or to set up a briefing. Kevin Trosian Vice President Business Development and Investor Relations +1 949-579-3111 [email protected]