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Broadband Everywhere, Global Perspective – Charilaos Christopoulos – page 88

Broadband Everywhere

Global Perspective FTTx Industries

Dr. Charilaos ChristopoulosDirector Systems Management

Business Unit Multimedia

Ericsson, Sweden

Mr. Yosuke Yamazaki, Session Chairman:

Let me introduce our first speaker in this session, Mr. Charilaos Christopoulos.

He joined Ericsson in 1995. He has worked with multimedia technologies, standards and applications, including mobile TV, IPTV and IMS.

He has had various positions, including head of MediaLab at Ericsson

Research, business development manager at Multimedia Solutions and recently director of Systems Management at Business Unit Multimedia.

He has a BSc in Physics from Greece, a MSc in Software Engineering from UK and a Ph.D. in image and video processing from Belgium.

Dr. Christopoulos please take the floor.

Dr. Charilaos Christopoulos:

Thank you for coming to this session. You see the title is “Broadband

Everywhere”. This is what we are using in Ericsson when talking about what is

happening in the broadband world, what are the trends, what is the technology

and what are the different marketing options. Of course, a lot will be heard about about the fiber-to-the-home (FTTH) trends.


The “digital natives”

The life of a typical 21-year-old entering the workforce today

5,000 hours of video game playing

3,500 hours of online social networking

25,000 emails,

IM, and SMS

10,000 hours of mobile phone use

MySpace/YouTube

Constantly

connected

Different expectationsabout work and play

Sharing/

Blogging

Technologically literate

Content creators and multi-taskers

Source: The Digital Natives Project (2007), Pew Internet & American Life Project (2007), Financial Times (September 20, 2006)

Before I start the presentation I think I need to start with a definition. When I look at myself or at most of you here, I would not really consider us as

what I describe in this slide as “digital natives”. If you look at a person at

age 21, which is joining the workforce, this person has been using about

10,000 hours of mobile phone, has sent and received at least 25,000

emails, IM and SMS, has been spending about 5,000 hours on games on the computer and about 3,500 hours of social networking. Not to mention

that this person is using YouTube everyday downloading videos, and he is

not actually a consumer, he is also a producer. He is uploading his home

videos. I don’t think, you and me are doing this. We are “digital

immigrants”. There is a big difference between these people and us. We know how the world was before everything became digital. We really don’t

know why these people are spending so much time doing that thing and

they don’t know why we are not spending more of our time in this digital

world.


Drivers for broadband growth

TV, media, Online gaming

Internet access

(Mobile) mail, remote access

E- education, e- health

Information & communication

Government info, declaration

Machine-to-Machine services

User generated content

Maps and directions

Plentitude of services benefiting individuals, enterprises,

society

More advanced

devices

PC/Laptops/notebooks

Mobile Phones & Communicators

HDTV & LCD screens

Game consoles, MP3 players

Media players

Digital (video) cameras

Health care tools

Cars, fridges, surveillance,...

Increased network capabilities

Increased no. of subscribers

Fiber, VDSL2

Mobile broadband with HSPA

Gbyte HSPA

>100 Mbit/s with LTE

Multiple service support (Voice,

broadband, TV...)

If this broadband was driven by us, then we would not need the 50 Mbit/s. I think it is driven by these young people and these are applications that

we are not really doing, but these applications are actually driving

broadband. We have to understand, what the everyday activities of these people are.

Now we are seeing that people are even approaching high-definition TV. I think, we have to look at the trends of the society and what applications

these “digital natives” are going to use. The drivers for broadband growth

are the number of services we see now. There are, of course, much more

advanced devices. A lot of devices are networked at home. In addition, we have the increased network capabilities.


91

0

20

40

60

80

100

120

2005

2011

Tota

l m

ark

et re

venues (

EU

R b

illio

ns)

Networked Television Networked Music

Networked Gaming Networked Video

Networked Radio Networked Print

2005 – valued just under €20 billion

2011 – overall market size will grow to €107 billion

Networked media market valueA shared opportunity between the industries

Source: Analysys

Research (2006)

Looking at the market we notice two big industries, the media and the telecom working together. We call it networked media. If you see these two industries combined you will see a huge potential. Looking at the telecom market you know you can deliver media efficiently. If you look at the trends we have television, gaming, print, music and video, which is quite a big market. In 2005 the market was just under €20 billion and there is a forecast for 2011 of about €107 billion. Most of this will be in gaming and TV, which has the highest growth. There is a huge demand now for delivering TV content and video-on-demand content over the telecom network, which will make the demand for broadband much higher. That is the market we are trying to capture here.


Program production

”linear” TV

Terrestrial

Satellite

Cable TV

Program adaptation

”interactive” TV

Web TV

Fixed wirelessbroadband

Cable TV

FTTX/DSL

Mobile TV

BroadcastingDVB-H

Media-Flo,DMB

3G Unicast

3G MBMS

”IPTV”

The new TV world– From analogue to Digital TV (HDTV)

– From broadcasting to interactive TV

Since TV is the big market, we also have to understand that there will be a

big change in the TV environment. First we know that analogue TV will stop

in a few years. In Sweden we have already digital TV. In Europe it will be

digital around 2012 or so, in Japan around 2011. At the same time we will see, that pure broadcasting or linear TV (on the left side) will fade away and

we will move to interactive TV (on the right side), which will be delivered via

fixed or wireless broadband networks. What I mean here with interactive is

that the users are not really passive anymore. When we see TV and video

services, it is important to notice that the trend is going to IPTV. Even though it means Internet Protocol TV, you can also say that it means

interactive personalized TV.


Bandwidth Requirements

per household – today example

� 50-100 Mb/s downstream

� 25-50 Mb/s upstream

� Future proof/scalable

� Quality & Security

� Serving for example;

3 HDTV channels

1-2 SDTV channels

HQ Audio

High speed Internet

Video conferencing

� Initially requiring; 30-50 Mb/s downstream15-30 Mb/s upstream

MB/s

10’s of kb/s

GB/Month

Mb/Month

When you look at the bandwidth which will be required, you notice that most of the TV sets sold now are high-definition. If you encode the HDTV

channel with MPEG4 technology, this is about 8 to 11 Mbit/s, if you use

standard definition TV (SDTV) it is about 1.5 to 2.5 Mbit/s, if you use

MPEG2 you have to double these figures, so it will be 5 Mbit/s for

standard and about 20 Mbit/s for high-definition. Then you can argue do I have 3 TVs at home, that everybody is watching at the same time with

high-definition and in addition 1 or 3 SDTV channels? Why shouldn’t this

be the case in the near future? Assuming such a situation 30 to 50 Mbit/s

will be required for downstream. So, these are the requirements we see

already today. Then given the fact that we are discussing uploading videos and sharing videos, the uplink becomes quite high, too, maybe 15

to 30 Mbit/s. This is what we see as bandwidth requirement for

households today. Certainly, delivering 2 or 8 Mbit/s to a household is not

going to work in the near future. At Ericsson we get the requirements of

50 Mbit/s and more from operators.


0

100 000 000

200 000 000

300 000 000

400 000 000

2005 2006 2007 2008 2009 2010 2011 2012

Fixed traffic to grow tenfold by 2012

Subscriber traffic in fixed access networks

Source: Internal Ericsson

IPTV

Internet

Classic

Voice & VoIP

Yearl

y T

era

byte

If you see the forecast on the fixed traffic by 2012 we expect a tenfold growth. In this graph you see on the left that Voice-over-IP is almost zero.

Most of the traffic increase is in Internet and IPTV. You will see some

300mil TBytes requirement, which is the forecast for 2012. Data has

overtaken voice in the year 2000, so this is not even shown in this graph.

This forecast deals with the last meters to the subscriber. How you do it in the backbone will depend on what aggregation model the operator has

used. This is quite consistent with what we get from the operators.


Mobile traffic to grow tenfold by 2012Data traffic tripled in 2006

Voice continue growing, but information based services will grow moredriving the need for more mobile broadband spectrum

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

Sources: Internal Ericsson 2007

Yearl

y T

era

byte

2004 2005 2006 2007 2008 2009 2010 2011 2012

TV/Video

Internet

Voice

In the fixed networks:• data overtook voice

year 2000

In the mobile networks:• data will overtake voice

around 2010

The growth with mobile broadband is similar to the fixed traffic. Data will overtake voice in 2010. In Japan this has already happened. Internet and

TV will be dominating in 2012. We cannot really compare the TBytes of

the fixed and the mobile traffic, that means 300mil to 4mil TBytes,

respectively.


3G-HSPA

3G-LTE

Others

xDSL

Fiber (PON & P2P)

Fiber/VDSL2WiMAX

Fixed Mobile

HSPA/LTE

Satellite/Terrestrial

Unlicensed

(WiFi etc)

Others

Cable (DOCSIS2 3)

Broadband comes in many flavors

Fixedaccess

Fixed/nomadicwireless

Mobileaccess

0

300

600

900

1200

1500

1800

2100

2005 2006 2007 2008 2009 2010 2011 2012

Su

bscri

ptio

ns (M

illio

ns)

Mobile Fixed

If you look at the graph in the lower right side you see that in 2010 we expect more than 1 billion broadband subscribers, of which half of them

will be fixed and half of them wireless. This number is only half of the truth,

because the fixed subscription comes normally from home members. So

if you look at the number of users we expect half a billion subscriptions but

we expect about three times more users, i.e. 1.5 billion users in the fixed broadband, then about 600 million users in the mobile broadband in the

year 2010, so 2 billion users basically in broadband in total. That is quite

an impressive figure, in 2012 this number of users increases to 2.5 to 3

billion broadband users, not only subscriptions.

Now, broadband comes in many flavors, as you can see on the slide.

Looking at the capacity and speeds, I would say, that with fixed access we

can assume that it is kind of unlimited. Of course, with mobile this is not the case. But anyway, all of these will be delivering more than 10 Mbit/s

downlinks.


Main drivers for FTTH/FTTC

� Provides current and future bandwidth needs

� Competition from Cable TV and associated triple play revenues

� Enabler for IPTV Services

� Potential of significantly reducing OPEX

compared to copper access

� Regulatory relief for incumbents deploying fiber networks to speed

up broadband penetration

Now, what are the drivers for fiber-to-the-home (FTTH)? Basically fiber has unlimited capacity. If you do wavelength multiplexing you can talk

about Gbit/s. If the biggest drivers are TV and video applications, we have

to ask who are the main competitors? They are the cable TV companies.

But in fact today they are mainly using the coaxial cables. From that point

of view fiber is the much better technology if you want to provide broadband TV and IPTV services.

There is a big potential for reducing the operating expenses (OPEX)

compared to copper access.


Broader view at FTTx CAPEX

Source: Ericsson analysis

"Typical" FTTx cost distribution

8%79%

13%Active electronics

Civil Works

Passive equipment

If you look at what is the cost for installing fiber. Most of it is in the civil works. From what we have seen from the various operators, basically

about 80% is civil works. Of course, this looks like a lot of money, but the

important thing is, from the moment you have done it, there is almost zero

maintenance cost for the coming 20 years compared to other

technologies. So, there is of course a potential to reduce significantly the OPEX by using fiber compared to copper.


Worldwide map of PON

GPON

GPON

GPON

GPONBPON

EPON

GPON

BPON

GPON/EPON

GPON/

EPON

GPON/

EPONGPON

GPON

Most countries in the world have now understood the reasons for deploying fiber to speed up broadband penetration. A lot of governments

are trying to support that.

Gigabit Passive Optical Network (GPON) is the technology to which most

of the operators are going. It seems to be the technology for the future.


PON and p2p FTTH forcasts

In the bottom graph, where you can see the FTTH subscribers, if you take the year 2010, we expect about 47 million subscribers, of which about 40

million will be in PON technology, while 6.6 million subscribers will have

Ethernet FTTH.

In the top graph, which shows the Ethernet FTTH subscribers by

geographic region, you see in the top line, that this is basically Europe. So

Europe with about 58% will be Ethernet FTTH.

We think that PON is the way to go, which we see in the bottom graph.


Network Management

Service Layer

Transport

IMS / Standard Services

Multi Access Edge

Wireline Access Wireless Access

Service layer

Full Service Broadband NetworkHarmonization of Applications, content and network

Multimedia services to a screen of your choice

As for broadband access we have fixed access, we have wireless access

and we talk about a lot of services, which can be delivered over both kinds

of access networks. But we will not be able to compare the speed which is

coming from the mobile broadband to the fixed broadband. That will be another scale, not even the data which will be transferred from the mobile

broadband to the fixed broadband. But what we will see from an operator

trying to compete, we will not see an operator either providing fixed or

mobile access. Most of the operators want to provide triple play services.

The users want to take the services with them.

Besides providing the access technology, there is the challenge for the

operators to provide backbone networks and efficient IP transport networks and how to create services which can be delivered to any access. In this

context, you will hear many times the magic word of convergence, which

has been defined in numerous ways.


Increased capacity,

efficiency &

bandwidth through Fiber/VDSL

Group &multimediacom

Media streaming& VoD

IPTV

Networkeddevices

HDTV Revenue from new high bandwidth

services with strict demand on QoSGaming

Broadband every-

where through efficient

HSPA

Revenue from

mobility & increased broadband coverage

Browsing, email, messaging

Downloads and filesharing

Web communities Revenue from

broadband over

ADSL & cable

Broadband connectivity is your business foundation

New Service RevenuesThe Full Service Broadband opportunity

How can an operator make money with these broadband services? If we look at the current situation, where we make revenues with ADSL and

Cable, it is more or less saturated. You can assume that everybody has a

fixed line or cable. If you got stuck in that one, then there will be a

saturation in the income you get.

There are 2 ways an operator can improve his situation, if we talk about broadband everywhere. Wireless is the service where you transport the

services over the mobile network, i.e. address many more users than with

just the fixed network. Mobile broadband is basically now comparable to

ADSL or even better now.

If you want to deliver high quality services, like HDTV, then it means investment in your technology like fiber and VDSL technology.


Broadband market

Operator challenges & solutions

Sustainable business models to meet new players and consumer

demands

Increased speeds to cater for new services, solved by GPON,

VDSL2, HSPA, LTE

Seamless, everywhere connectivity enabling multiple

services, using Full Service

Broadband

Move towards all-IP and deep fiber architectures to handle

increased usage

Cost effective & quick

rollout, enabled by fiber network technologies

There are a lot of challenges for the operator. What is the business model you are going to have? How do we prepare a cost effective rollout? How do I deliver

the contents on GPON, VDSL? Shall I move to all-IP and deep fiber

architecture? How do I deliver the services?

This summarizes basically my presentation:Broadband comes in many flavors

Broadband momentum is shifting to Deep Fiber and Mobile Access enabled

applications, enabling increased capacity, efficiency & bandwidth through FTTx

Harmonization of applications, content and networks is happeningNeed for ”Full Service Vendor”

Thank you very much!

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