An introduction to NTT’s NGN and new services in Japan introduction to NTT’s NGN and new...

ITU-T/ITU-D Workshop "Standardization and Development of Next Generation Networks" Dar es Salaam, 3-5 October 2006

International Telecommunication Union

An introduction to NTT’s NGN and new services in Japan

An introduction to NTTAn introduction to NTT’’s NGN s NGN and new services in Japanand new services in Japan

Naotaka MORITAVice Chairman of SG13, ITU-T

Senior Research Engineer, SupervisorNTT Service Integration Labs.

ITU-T/ITU-D Workshop "Standardization and Development of Next Generation Networks" Dar es Salaam, 3-5 October 2006 2

1. The current status and future direction of Japan’s telecommunications market

2. The worldwide telecommunications market and standardization activities

3. NTT’s plans for the deployment of its NGN

4. Future visions for the NGN

Outline


Japan today in 2005 (as of September 2005)

NOTENUMBERITEMS

06/2006, 0.85 M increase in Q2 of 2006, 84% coverage in 2004

6.3 MOptical

DoCoMo & Vodafone26.5 MW-CDMA

au21.8 Mcdma2000

06/2006, Saturated !!14.5 MDSL

0AB type has started.8.3 MVoIP

06/2006, 40% of householders24.2 MBroadband

03/2006, 6.7 M at peak in 19974.7 MPHS

70% growth last year48.3 M3G

03/2006, 79.8 M have internet access,70% of total population

91.8 MMobile

10 M at peak in 2001 8.0 MISDN

03/200559.6 MFixed lines

03/200550.4 MHouseholders

11/2005, 20% is older than 64.127.8 MPopulation


NTT Communications

NTT West NTT East

• NTT’s PSTN consists of several thousand switches.• Although a then-state-of-art switching system (NS8000) was developed around 10 years ago,the rapid progress in technology since then has resulted in the discontinuation of production of some components used in the system. Currently, we are trying to prolong the lifetime of the switches by re-establishing sources for such components.

• NTT’s PSTN consists of several thousand switches.• Although a then-state-of-art switching system (NS8000) was developed around 10 years ago,the rapid progress in technology since then has resulted in the discontinuation of production of some components used in the system. Currently, we are trying to prolong the lifetime of the switches by re-establishing sources for such components.

NW inside a prefecture

NW between prefectures

Transit switch

Transitswitch

Transitswitch

NW inside a prefecture

Transitswitch

Localswitch

Local switch

Local switch

Localswitch

Other carriersPOI

Other carriersPOI

Several tens

Several hundreds

Several thousands

Inte

grat

ion

degr

ee

Year

1.2µm1.0µm

90 95 00

0.8µm0.6µm

0.5µm0.35µm

0.25µm

5V PS

3.3V PS

1.8, 2.5V PS

Migration to more highly integrated LSI that operates with lower voltage power supply

Discon

tinue

d

05

NS8000(developed around 10 years ago)

Measures taken to prolong the lifetime of NTT’s PSTN facilities


IP telephony is spreading from business users (IP-PBX). Low rates (or free between specific points) offered by ISPs have increased the number of IP phone users in Japan to more than 10 million.NTT already provides an IP phone service “Hikari Phone” using the ordinary telephone numbering plan.

IP telephony is spreading from business users (IP-PBX). Low rates (or free between specific points) offered by ISPs have increased the number of IP phone users in Japan to more than 10 million.NTT already provides an IP phone service “Hikari Phone” using the ordinary telephone numbering plan.

Increase of subscribers to IP phone service

8.305

11.46

5.276

0

2

4

6

8

10

12

14

Num

ber o

f sub

scrib

ers

Million

March 2005 March 2006March 2004

*Source: NTT Communications, Inc.: http://www.ocn.ne.jp/english/personal/option/voip/

1 Free

2 Free

3 8.4 yen/3 min

4

5

6

7Int’l phone network

Affiliated ISP’s IP network

Mobile phone network

OCNOCNAffiliated ISP’s IP phone

PSTN phone

PSTN phone

Mobile phone

Int’l phone

OCN.Phone

8.4 yen/3 min

11.3yen/3 min

(178ISPs)

(13ISPs)

*1: not changed by distance

*1 Non-affiliated ISP’sIP phone

Discount rate

*1

*1

Maturing of IP telephony technology in Japan


PSTN

• Time is ripe for an IP network to replace PSTN.• Migration to the IP network will reduce both capital and

operational expenditure.


●

●

●

●●

•The number of mobile phone subscribers has far exceeded the number of subscribers to fixed-line telephony.

•The number of Internet users continues to increase.

•The number of mobile phone subscribers has far exceeded the number of subscribers to fixed-line telephony.

•The number of Internet users continues to increase.

Sources: Ministry of Internal Affairs and Communications, Consortium for Promotion of Mobile Computing, InfoCom Research Inc., and others.

3/94 3/95 3/96 3/97 3/98 3/99 3/00 3/01 3/02 3/03 3/04 3/05

20

40

60

80

100

Fixed-line-phone users:58.79 million

Internet users: 106.24 million

Broadband users:19.49 million

120

Subs

crib

ers

[mill

ion]

IP phone users:8.3 million

Internet(Fixed line + mobile phone)

Mobile phone users: 91.48 million

Mobile phone

POTS + ISDN

Broadband (Optical, ADSL, etc.)

Paradigm shift of Japan’s telecommunications market


•The revenue from broadband business has been picking up.•It is necessary to grow broadband business into carriers’ main revenue source.•The revenue from broadband business has been picking up.•It is necessary to grow broadband business into carriers’ main revenue source.

Consolidated revenue of NTT Group

49

7

9

46

8

11

45

8

30

40

12

32

40

12

33

41

13

34

38

16

34

36

18

32

0

10

20

30

40

50

60

70

80

90

100

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

(Billion US$)

Revenue frombroadband market

Japan’s broadband market

(Source: EC Research Corp.)

:Business:Consumer

Year

Billion US$

2005

20

10

24

2006

15

2007

19

30

4040

2116

31

12

12

MobileInternet and data communicationFixed-line analog telephone (POTS)

Shift of NTT Group’s main revenue source to broadband services


0

1

2

3

4

Fixed linetelephone service

IP phone IP phone +supplementary

services

IP phone +supplementaryservices (future)

Nor

mal

ized

AR

PU

•There is a shift from low-price IP telephony, exploiting IP technology, to the provision of value-added services, such as video delivery and videophone, exploiting the availability of broadband access.

•The provision of value-added services is increasing ARPU.

•There is a shift from low-price IP telephony, exploiting IP technology, to the provision of value-added services, such as video delivery and videophone, exploiting the availability of broadband access.

•The provision of value-added services is increasing ARPU.

Basic ARPU

Added ARPU

*1

*1: Broadband access charge (including ISP charge)

Increase in ARPU of broadband services


Revenue source of telecom carriers

Carriers need to shift their main revenue source from the telephony service to broadband services.


The Japanese government’s “u-Japan” Plan proposes the full development of broadband infrastructure by installing optical fiber networks nationwide.The Japanese government’s “u-Japan” Plan proposes the full development of broadband infrastructure by installing optical fiber networks nationwide.

Source: Proposed status of broadband networks in 2010 Proposed on Aug. 11, 2006

1. 100% broadband networkThe projected status of a 100% broadband network, through which broadband services are made available to all communities, is as follows:

(1) Overall, a variety of wireline and wireless technologies will be seamlessly linked.

(2) In areas where cost-effective investment is difficult, broadband infrastructure will be built taking both investment efficiency and the needs of communities into account.

(3) Of these varieties of broadband service, super-high-speed broadband access, mostly based on FTTH, will cover 90% of households nationwide.

Promotion of optical access by u-Japan Strategy


Optical access is being promoted so aggressively on the basis of the u-Japan Plan that the yearly increase in the number of FTTH subscribers has already exceeded that of ADSL subscribers. The number of ADSL subscribers will soon cease to grow and gradually begin to fall.

Optical access is being promoted so aggressively on the basis of the u-Japan Plan that the yearly increase in the number of FTTH subscribers has already exceeded that of ADSL subscribers. The number of ADSL subscribers will soon cease to grow and gradually begin to fall.

*Source: Ministry of Internal Affairs and Communications

0

5

10

15

20

ADSL

FTTHCATV

3/2002 3/2003 3/2004 3/2005 3/2006 3/2007 3/2008

Subs

crib

ers

[mill

ions

] Official data* forecast

Dramatic increase in the number of FTTH subscribers in Japan


National policy of Japan

The spreading of optical access is a national policy. There are positive signs that optical access will indeed become widespread.


•Competition has intensified into a price war, bringing down the charges for ADSL and even FTTH dramatically.

•This has resulted in a significant reduction in telecom traffic revenue.

•Competition has intensified into a price war, bringing down the charges for ADSL and even FTTH dramatically.

•This has resulted in a significant reduction in telecom traffic revenue.

3000

7000

9000

13000

2001 2002 2003 2004 2005

△

△

△

△

□

□

□

5000□

□

□□

□

B-flet’s

Flet’s-ADSL

YenChange in monthly charge for broadband access (examples)

Basic type

New Family Type

Condo Type1.5M

1.5M Type

Hyper Family Type

2500 yen

4100 yen

90

30

50

USD

70

Rapid reduction in the charge for broadband access in Japan


•NTT will not only increase traffic revenue but also seek to generate non-traffic revenue.

•NTT already attempts to create new businesses in collaboration with a variety of players outside the telecom industry.

•NTT will not only increase traffic revenue but also seek to generate non-traffic revenue.

•NTT already attempts to create new businesses in collaboration with a variety of players outside the telecom industry.

Examples of Examples of FMCFMC in servicein service““OCNOCN .Phone.Phone”” service series using service series using FOMAFOMA N900iLN900iL

NTT DoCoMo(FOMA)

VoIP infrastructure

Internet

OCN

Mobile connection

ASP groupware

ASP groupware

Cordless IP phone using wireless LAN

Linkage by groupware

Use of OCN content

PC-FOMA videophone, videoconference

Secure access to enterprise network

Linkage with business applications

Branch Head Office Away from office

FOMA®N900iL

FOMA®M1000 PC FOMA®

N900iLFOMA®M1000 PC FOMA®

N900iLFOMA®M1000

Enterprise system

emailBusiness applications

Groupware

Data

...

CAFIS

Highly secure download of electronic value using mobile terminal

Mobile e-commerce

system centerE-money

E-ticket content

Internet

PDA Contactless smart card

Mobile packet access point

Download e-value

Use e-money

as SF Automatic gate at subway

station

Buy drinksusing

e-moneyVending machine

Pass through

admission gate using

e-ticket

Event hallConcert hall

Examples of eExamples of e--commerce in servicescommerce in servicesElectronic money service using mobile terminalsElectronic money service using mobile terminals

Use of electronic value using contactless smart card

$$

SF: Stored Fare

Creation of new business


Status of competition in Japan

Competition has intensified into a price war, making it necessary to create new markets that will generate revenue.


It is urgent for NTT to increase profit by increasing revenue in addition to reducing capital and operational expenditure.It is urgent for NTT to increase profit by increasing revenue in addition to reducing capital and operational expenditure.

Revenue from Broadband

and ubiquitous

services

Revenue fromtelephony

Promote broadband & ubiquitous services like FMC and triple play> Revenue shift from telephony

Establish service delivery platform for new seamless businesses> Expand telecom market

Cost Migrate telephone network to IP> Reduce capital and

operational expenditure

NTT’s actions to deal with the competition


Technologies are being studied, with carriers presenting requirements and vendors proposing solutions. Standards organizations provide the fora for such discussions.Technologies are being studied, with carriers presenting requirements and vendors proposing solutions. Standards organizations provide the fora for such discussions.

ITUITU--T, ETSI/TISPAN, ATIS, IETF, 3GPP, OMA, MSF, etc.T, ETSI/TISPAN, ATIS, IETF, 3GPP, OMA, MSF, etc.

ArchitectureProtocol

SNI Testing of interoperability

Present requirements for network components by defining Network Architecture

Present requirements for network components by defining Network Architecture

Discuss Network Architecture with carriers and propose solutions to meet the requirements.

Discuss Network Architecture with carriers and propose solutions to meet the requirements.

Requirements Solutions

CarriersCarriers VendorsVendors

Roles of carriers and vendors and their collaboration


Telecom carriers should meet the requirements of the new age by building the NGN

The external environment of carriers worldwide has changed from one where the telephone network was the main national infrastructure. All carriers are striving to face this challenge by restructuring and transforming themselves into carriers fit for the new age.

The external environment of carriers worldwide has changed from one where the telephone network was the main national infrastructure. All carriers are striving to face this challenge by restructuring and transforming themselves into carriers fit for the new age.

Provide FMC and triple play services:to meet customer’s demand,extending mobile and Internet features.

Reduce capital and operational expenditure:by leveraging IP-technology to achieve a competitive price

Collaborate with other business areas:e-commerce, banking, physical distribution, home appliances, etc.

FMC: Fixed-Mobile Convergence

Be versatile as a service providing company

Save cost as a facility operating company

Technical innovation Changes in

lifestyle

Changes in telecom policy

Competition

Restructuring

National infrastructure

based on POTS

CarriersCarriers

Future direction sought by all carriers


Strengthen competitive edge and financial base, and contribute to achievement of u-Japan

Strengthen competitive edge and financial base, and contribute to achievement of u-Japan

Smooth migration from existing fixed-line to IPtelephony, and from copper to optical access

Develop and spreadbroadband and ubiquitous services that allow fixed-mobile convergence (FMC)

Expand business opportunities by exploiting broadband and ubiquitous services

xSP:Provide new business opportunities

Open network that allows collaboration with other carriers and xSPs

Build NGN that is of high quality, flexible and secureBuild NGN that is of high quality, flexible and secure

Approach to NGN


•Migrate 30 million customers to optical fiber access and next-generation network services

•Increase annual sales of solutions and non-traffic businesses by US$ 5 billion•Maintain the same level of equipment investment for fixed-line communications operations (cumulative total, 2006-2010: US$ 50 billion)

•Reduce annual costs for PSTN operation by US$ 8 billion.

•Migrate 30 million customers to optical fiber access and next-generation network services

•Increase annual sales of solutions and non-traffic businesses by US$ 5 billion•Maintain the same level of equipment investment for fixed-line communications operations (cumulative total, 2006-2010: US$ 50 billion)

•Reduce annual costs for PSTN operation by US$ 8 billion.

Sales of solutions and non-traffic businesses using the next-generation network

Equipment investment for fixed communications operations

Costs for the fixed-line communications business

Sale

s in

crea

se

Present 2010

Solutions

Non-traffic businesses

Increase annual sales by US$ 5 billion

by 2010

Inve

stm

ent i

n eq

uipm

ent

2002 2003 2004

Billion US$

89

9.4 About equal to the present level

Optical fiber access/Next-generation network

Existing fixed-line telephone network

2010

Cumulative total:US$ 50 billion

Cos

ts fo

r fix

ed-li

ne

com

mun

icat

ions

bus

ines

s

Present 2010

Reduce annual costs by US$ 8 billion

by 2010

Major targets of NTT’s NGN by 2010


NGNNGN

Community,e-commerce

Lifestyle support,home appliance

manufacture

Broadcast, content providers

SNI

ASPs and various service players

Safe, secure, and convenientnetwork equipped with features

of both the existing fixed-line telephone and IP networks

Disclose Service Node Interface (SNI)

to enable various service

players to provide a wide

array of applications on

the NGN

SDP: Service Delivery PlatformIMS: IP Multimedia Subsystem

IMSIMSSDPSDPIP-based network enabling

provision of seamless fixed and mobile services

Office, hotspot, etc.

Home network

Basic concept of NTT’s NGN


Fiscal year

Steps in introducingthe NGN

Core network

Service controlfunctions

Servicedevelopment

2006 2007 2008–

Field trialsField trials

ConstructConstructaccess networksaccess networks Seamless integration Seamless integration

with mobile networkwith mobile network

Deploy service control functionsDeploy service control functions

Trial servicesTrial services<For limited<For limitedregions and users>regions and users>

STEP 1

STEP 2

STEP 3

Provide optical access to 30M Provide optical access to 30M users (End of fiscal 2010)users (End of fiscal 2010)

Construct Construct transit networktransit network

•Broadband Internet access•IP telephony•Multicast transmission for video distribution•Bi-directional video (data) communication•Ethernet services, etc.

FullFull--scale development scale development of nextof next--generation generation servicesservices

IMS deployment(conforming to ITU standards)

-deploy core nodes-deploy optical wavelength

transmission equipmentdeploy edge nodes

Roadmap to building NTT’s NGN


•Trial period: One year from Dec. 2006•Areas: Tokyo and its surroundings and Osaka

Base station

End-to-end quality controlSecurity

functions

IP multicast function

FMC

Internet access

IP telephony

NGN

Open connectivity functions

Various services through tie-ups with IT-home appliance manufacturers and ASPs

Video distribution

Overview of Field Trials of NTT’s NGN


- Provide broadband and IP telephony services at attractive prices- Reduce capital and operational expenditure

- Provide seamless services, such as triple play and FMC services- Create non-traffic services

- Disclose Service Node Interfaces- Provide the Service Delivery Platform, to promote collaboration.

Create new markets by collaborating with various service players on the network

Deploy new broadband services

Upgrade the fixed-line telephone network to an IP telephone network by applying the latest broadband IP technology

New activities for the NGN


Conclusion

As one of the first carriers in the world

to implement an NGN,

NTT will be happy to share with other

countries our experiences and

expertise of NGN trials and deployment.

An introduction to NTT’s NGN and new services in Japan introduction to NTT’s NGN and new...

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