wireless network optimization (2010)
TRANSCRIPT
Marc Jadoul
September 2010
Addressing Wireless Network Optimization Opportunities
2 | Wir eless Optimization Ser vices | September 2010 All Rights Reser ved © Alcatel-Lucent 2010
Preamble
Life was so much easier when Apple and BlackBerry
were just fruits.Anonymous quote on Twitter
“”
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Mobile Data Traffic is Booming
Several regions of the world will transfer more mobile data per month in 2014 than
they did for the entire year of 2008.
Total Mobile Network Data Traffic, World Market, 2008 to 2014
AfricaMiddle East Latin AmericaNorth AmericaAsia-PacificEastern EuropeWestern Europe
0
5,000
10,000
15,000
20,000
2008 2009 2010 2011 2012 2013 2014
(Petabytes)
Source: ABI Research (2009)
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New Services and Devices Boost Mobile Broadband Adoption
Accessed news or info via browser
Accessed web search tools
Watched mobile TV and/or video
Watched on-demand Video
Accessed social network site or blog
Listened to music on mobile phone
Market Average iPhone Users
84.8%
58.6%
30.9%
20.9%
49.7%
74.1%
13.1%
6.1%
4.6%
1.4%
4.2%
6.7%
Source: M:Metrics, Inc. (2008)
Mobile data-users growth rate 2008 to 2012
Source: Pyramid Research (3/2009)
Video +419%
Browsing +204%
Music +286%
Games +197%
Messaging +98%
Ringtones +127%
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Smartphones and Laptops Drive Mobile Data Usage
While handsets and cellular modems accounted for 95% of the world’s mobile data traffic in 2008, mobile computing devices with embedded cellular/4G modems will represent more than 52% of global mobile data traffic by 2014.
Source: ABI Research (2009)
Monthly Data Consumption per Subscriber(Smartphones)
Monthly Data Consumption per Subscriber(Notebooks, Netbooks, Smartbooks, …)
Source: Rysavy Research (2010) Source: Rysavy Research (2010)
2010 2011 2012 2013 2014 2015 2016
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
(Gigabytes)
2010 2011 2012 2013 2014 2015 2016
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
18.0
(Gigabytes)
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Video and Internet Drive Demand for Mobile Data Capacity
Mobile Network Data Traffic by Traffic Type, World Market, Forecast: 2008 to 2014
Source
: ABI R
esearch
(2009)
0
5,000
10,000
15,000
20,000
2008 2009 2010 2011 2012 2013 2014
(Petabytes)
Web/InternetVoIPVideo Streaming/TVAudio Streaming
They don’t even realize how much data they’re using.
Gene Munster, senior analyst at Piper Jaffray
“”
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User Demand will soon Surpass Network Capacity
What we have done and continue to do is have a buffer of capacity above what our demand is at any given point in time. When we see consumer demand begin to feed into that capacity, we scurry out there to add more capacity. This is a very simple concept and something we have done religiously over the year.
“Dick Lynch, CTO at Verizon Wireless ”
Average Demand vs. Average Capacity per User
Source: Rysavy Research (2010)
2010 2011 2012 2013 2014 2015 2016
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
(Gigabytes)
Demand
Capacity
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Bandwidth Hungry Low ARPU Services areBypassing the Telco Value Chain
Top 3% of smartphone users are consuming 40% of all smartphone data, while they represent less than 1% or AT&T’s total postpaid customer base. They are consuming 13 times the data of an average smartphone user.
Ralph de la Vega, AT&T Mobility and Consumer Markets
“
”
John Petter, Managing Director of BT Retail’s consumer business
We can’t give the content providers a completely free ride and continue to give customers the [service] they want at the price they expect.
“”
There is not a single Google service that is not reliant on network service.We cannot offer our networks for free.
René Obermann, CEO of Deutsche Telekom
“”
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Challenge #1Offering Bandwidth at the Lowest Cost
95 percent of mobile data traffic is best effort Internet.The issue is how can operators handle that traffic
at the lowest cost with acceptable quality.Gabriel Brown, Heavy Reading (2010)
Quantity
Time
Data dominant
Voice dominant
Revenues
Traffic
Source: Heavy Reading (2009)
Operatorrevenue & traffic
decoupled
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Bandwidth Hungry Low ARPU Services MayEventually Lead to Reduced Quality of Experience
BT Customer (source: TG Daily, June 2009)
From about 17:30 onwards using the BBC iPlayer becomes impossible. It's fine during the day but come the evening, it's a no go.
“”
AT&T has installed a massive Wi-Fi hotspot in Times Square to reduce the mobile data traffic congestion. The carrier continues to be challenged by serious traffic congestion as a result of high-bandwidth demand on its network due to excessive data usage by the iPhone customers.
Source: Zack’s Investor Research, May 2010
“
”
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Challenge #2: Optimizing Network Performance and Quality of Experience
There is a growing role for traffic optimization, in-network analytics and network intelligence across network layers
and devices to coordinate with smart policy control practices for traffic management and user knowledge.
Source: Strategy Analytics (2009)
Volume, Signaling, and Airtime all contribute to customer’s experience
Device &
Apps
RF Capacity&
Airtime
SignalingBackhaulBandwidth
CPU/DCNload
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SFRDoing nothing
Add an overlay network to support new services and try to increase revenue growth.
Optimizing the network
Optimize the existing network assets to drive down costs by 5%-10% and free up cash for re-investment.
Transforming the network
Migrate legacy networks to an IP-based architecture to enable new revenues and service delivery at lower cost.
What are the Alternatives for a Network Operator?
Adding new overlays on the existing architectures doesn’t scale.
Alcatel-Lucent is working with a large European Tier-1 with 14 overlays looking for help to reduce costs.
Optimization means reducing costs, improving QoE, increasing utilization and improving performance.
It can payback in as little as 3 months and free up cash for re-investment.
Migration can reduce costs by up to 30%.
But the business case is complex, requires major capital investment and the implementation cycle may be long.
2
1
3
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Challenge #3: Cost Effective Operations and Migration from Legacy to All-IP
I’m paying millions per year to my equipment vendor inmaintenance fees, and I have the feeling that I’m paying for […] that haven’t been used for years.
Tier-1 Service Provider
TDM voice switch utilization decreases as subscribers abandon their fixed lines and move onto mobile & VoIP.
Frame Relay and ATM ports are dropping below the 50% utilization mark as traffic is migrated onto IP infrastructure.
To lower cost of ownership of their legacy networks, operators are putting stronger focus on utilization and consolidation.
“”
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Operation and ServiceTransformation
Transforming Your Mobile Business
The way forward depends on your market conditions, network infrastructure and services roadmap
NetworkOptimization
NetworkTransformation
time
1 2
3
voice data data voice> >
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Optimization — What does it Mean?
‘Optimization’ means: reducing costs, improving QoE, increasing utilization and boosting performance
while positioning the network for growth or evolution towards a HLN architecture.
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Optimization Savings Can Be Sizable
Source(s): actual cash flow savings from Alcatel-Lucent optimization project customers
RF Capacity Gain
10-20%Optical BH
Cost Reduction
18-63%
Ethernet BHCost Reduction
56%
TDM HubbingCost Reduction
10-52%
Optical Bandwidth Recovery
15-25%
Data Cash Flow Savings
$2.5M/Yr
Toll BypassCost Reduction
37-38%
Wireless GWConsolidation
19-35%
Overall savings: 10-63%
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Keeping Transformation Costs under Control
Balancing transformation investments is a major concern for MNOs
Current network Transition network Target network
ShorterFlatte
r
time
OPEX required fornetwork migration
CAPEX required for network modernization Ideal transition OPEX
costs
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Cost Reduction through Network Optimization
Source(s): Alcatel-Lucent, Bell labs (2009)
Mobile aggregation
and backhaul
� From TDM/ATM to optimal combination of new technologies (Ethernet, packet microwave, …)
� Assess “owning vs leasing” model� Service discrimination enabling better resource management
� Consolidate backhaul and core transport over IP and optics
Two key areas Methods to reduce costs OPEX savings
Radio
Sites
� Modernize RAN by swapping out legacy� Astute radio network planning � Indoor coverage solutions � RAN sharing / site sharing / outsourcing� Low power solutions
Up to
50%
Up to
65%
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The Need for a Partner that Understands Your Business
Increased adoption of smart phones, social networking
technologies, and the continued transitions to a unified IP
infrastructure will drive market demand for highly skilled
network consulting and integration services capabilities.
Source: IDC (2009)
Leveraging a network of skilled consultants, supported
by Bell Labs innovations and tools, Alcatel-Lucent has the
global reach, deep communications network capabilities,
and program management experience to support service
providers from vision to execution.
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Alcatel-Lucent Optimization Solution
1 Business Consulting Services
Network Quality Assessment & Optimization Services
Network Consolidation & Evolution Services
Mobile Backhaul Services
Helping service providers to identify cost saving and value creation opportunities and translate them into a profitable executable plan.
Exploiting existing Network assets while delivering the performance that meets customers’ quality and operational standards in access, switching, transport, wireless, enterprise LAN/WAN and data networks.
2
Consolidating and aligning multiple and disparate Network assets and their operations processes to realize a reduction of operating costs and a safer evolution.
Consulting, design, integration, deployment and maintenance services to meet operator business goals and plans on time and within budget.
3
4
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Alcatel-Lucent Value Proposition
Maintain customer satisfaction in the face of
Optimize the network by
Benefit from Alcatel-Lucent’s Global experience in Fixed and Mobile Data
� Exploding data traffic
� Unpredictable applications
� New, bandwidth-hungry multi-media devices
� Preventing congestion and identifying additional capacity needs
� Consolidating assets while preparing for growth and/or evolution
� Improving end to end QoE and Network performance KPIs
� End-to-End mobile and fixed network solutions:
access, backhaul, core and applications
� Consult, Design, Integrate, Optimize, Migrate and Managed Services
� Free up more cash from operations with quick payback projects
to fund future programs or contribute to EBITA growth KPIs
� Global Competence: Bell Labs, IPTC, GNEIC and Network Design & Optimization Centers
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Alcatel-Lucent Key Differentiators
Focus on customer’s economics
Ability to take commitments
� Total Cost of Ownership, not only CAPEX
� On KPIs, Schedule and Financials
Multi-vendor capabilities
� “Broadband” Services focus
� Combining Alcatel-Lucent and Multi-Vendor Network System expertise
Methodology and tools
� Leveraging Bell Labs, in-house tools and global Partnerships
End-to-End focus
� Targeting Quality of Experience & IP
Strong customer references
� With the ability to duplicate these best practices Worldwide
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Why Work with Alcatel-Lucent?
Optimal results in network optimization and capacity control through partnering with Alcatel-Lucent
� Applications experience
� Multi-skills (radio, backhaul, core) expert engineering teams
� Multi-networks experience
� Multi-vendor experience
� Technology maker expertise thanks to unparalleled R&D skills and resources
� Applications
� Master one of churn main factors by identifying the path to maximize capacity
� Get solutions to prevent congestion
� Drive down OPEX through operations efficiency enhancement
� Anticipate network’s extension decisions and therefore improve CAPEX control
� Flexible and scalable service delivery
� Detailed snapshot on your current network capacity
� Analysis formalized through assessment report with recommendations for actions
� Local follow-up of recommendations’implementation
Expertise Execution Business Value
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