NEXT GEN MOBILE NETWORKS Dirk Wolter, Managing Director, Mobility, APAC
29th January 2016
Content
1. Global business and technology trends in Mobility
2. Implications for the Indian/SAARC market
3. Technology enablers for network evolution
4. Round table discussion
Global Trends in Mobility
Market Transitions for Mobile Network Operators
Adapt or Be Left Behind
New
Business Models
• Flexible, usage-based pricing
• Faster time to revenue
• Direct, In-direct and Pass
through
New
Technologies
• Nimble software defined
platforms in the Cloud • System on a chip
commoditization
• Emergence of M2M
New
Competitors
• Global market reach over the
top (OTT) • Reduced barriers to entry
• Accelerating pace of innovation
Optus
Telstra
VF NZ
KDDI
NTT DCM
Softbank Spark NZ VHA
M1
SingTel
StarHub
KT
LG U+
SKT
Grameenphone
Banglalink Robi CMCC
CT
Voda India
DTAC Mobitel
Indosat
Telkomsel
XL
Celcom
DiGi
Maxis
Mobilink
Globe
Smart
Dialog
AIS
AIS
China U
True 10%
20%
30%
40%
50%
60%
$0 $5 $10 $15 $20 $25 $30 $35 $40 $45
EBIT
DA
Mar
gin
(%
)
ARPU (US$)
Emerging Markets
Developed Markets
Low ARPU doesn‟t mean low margin: Some emerging market SP‟s enjoy >50% EBITDA.
Source: Cisco analysis, from 2014 annual reports.
$0
$5
$10
$15
$20
$25
$30
$35
$40
2010 2011 2012 2013 2014
ARPU (US$)
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
2010 2011 2012 2013 2014
EBITDA Margin
Emerging Markets
Developed
Developed markets managing business transition to Data.
Emerging are still challenged with declining ARPU and Profitability.
APAC Mobile SP Profitability
India/SAARC
Airtel
Innovation in OTT Strategies
Implications of OTT Partnerships: Encryption (dark pipe), Net-neutrality
Partner • „Free Zone„ Search,
Gmail, G+
• Plan add-ons for unlimited
collection of OTT apps
Increase APRU Gain Subscribers
• Free Basics in
18 SPs in 14 countries
• Music Stream
bundles or add-ons
• Video stream bundles,
add-ons, zero rating
• OTT Google and WhatsApp offer direct
services as MVNOs • Wyless global M2M solutions • Apple MVNO Rumours
Enable • Sponsored Data
• App APIs to manage NW QoS
New Revenue
• Direct operator billing for
Skype credits
• Cloud based RCS app Jibe
with network QoS
MVNO
• China Mobile Jego App provides free calls,
messages and cheap international calls.
• European operators offer Rich
Communication Services for messaging • EU regulator: “Mobile companies regularly
block VoIP and prevent services such as Skype from functioning on their networks”
Compete
Protect Revenue
• Indian cross-platform messaging App Hike is a joint
venture between Bharti Enterprises and Softbank
APAC
Focus
Started with US Cable Operators, but now mass MNOs adoption driven by Apple
•T-Mobile, USA offers VoWiFi
http://newsroom.t-mobile.com/issues-insights-blog/welcome-to-wi-fi-calling.htm
iOS 8 brings Wi-Fi calling for iPhones on T-Mobile
•3, UK launches VoWiFi app
http://www.mobileworldlive.com/three-uk-adds-vowifi-momentum-app-launch
•EE, UK plans VoWiFi to boast indoor coverage
“The aim of VoWiFi is to improve in-building coverage. Calls will be automatically routed via WiFi, for instance in a user‟s home or office, where there is an absence of cellular coverage.”
http://www.mobileworldlive.com/ee-launch-volte-2015-polishes-voice-credentials
http://www.telegraph.co.uk/technology/news/11519179/EE-launches-WiFi-Calling-to-combat-poor-reception.html
•Sprint prioritizes voice-over-Wi-Fi over VoLTE
Four Sprint devices with the client pre-loaded. When the user connects to a WiFi hotspot, calls are automatically routed to the Wi-Fi network until the user leaves the area.
http://www.rcrwireless.com/article/20140328/carriers/sprint-prioritizes-voice-over-wifi/
Challenges: Limited Mobility, High Density QoS, Enterprise IT, Regulatory.
Protecting and Enhancing Voice Voice over WiFi to fix coverage & protect from OTTs
Requires Device (Client App
or OS)
Network
Secure
Connectivity
iWAN (Interworking
Wireless LAN,
IPsec)
ePDG (Evolved Packet
Data Gateway:
Terminate IPsec to
connect UE to EPC)
VoIP Call
Management
IMS/SIP IMS/SIP
Bottom-line Challenge Operating Costs Reducing Margins and Stifle Innovation
Network complexities contributing to
OPEX growth:
Legacy technologies
Purpose-built hardware hardwired
Multiple OS
Multiple points of failure
Increasing provisioning and management
costs
Rigid Architecture: inefficient transport
routing
Slow to introduce: New capacity and
services Source: GSMA Intelligence
CAPEX
OPEX
Need to reduce overall expenditure, especially OPEX
Simplification and speed “is” innovation
Local Implications
APAC Region Mobile 5-Year Dynamics
Diverse growth drivers based on market maturity
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019
Note: The numbers above pertain to 2019, and the CAGR‟s are for 2014–2019 period.
REGION No. of Mobile
Users
No. of Mobile
Devices / M2M
No. of Users
2GB / Month
Average Mobile
Speed 2019
Forecast
Mobile Users Connections
(inc M2M)
Avg Speed Traffic/Device per
Month
Total Mobile Data
Traffic per Month
APAC 2,800 M (5% YoY) 5,400 M (8% YoY) 8 Mbps 1.8 GB (48% YoY) 9,500 PB (58% YoY)
China 1,050 M (4% YoY) 2,200 M (9% YoY) 9 Mbps 1.0 GB (51% YoY) 2,200 PB (67% YoY)
India 900 M (9% YoY) 1,200 M (6% YoY) 3 Mbps 1.0 GB (58% YoY) 1,100 PB (67% YoY)
Indonesia 195 M (5% YoY) 385 M (3% YoY) 2 Mbps 1.6 GB (54% YoY) 610 PB (59% YoY)
Philippines 57 M (3% YoY) 134 M (3% YoY) 5 Mbps 1.8 GB (51% YoY) 240 PB (57% YoY)
Rest of APAC 450 M (4% YoY) 840 M (4% YoY) 6 Mbps 3.4 GB (66% YoY) 2,900 PB (70% YoY)
Australia 22 M (2% YoY) 76 M (14% YoY) 25 Mbps 2.4 GB (26% YoY) 166 PB (41% YoY)
Japan 115 M (0% YoY) 380 M (18% YoY) 17 Mbps 5.0 GB (26% YoY) 1,500 PB (40% YoY)
Korea 46 M (1% YoY) 190 M (21% YoY) 19 Mbps 4.5 GB (24% YoY) 670 PB (43% YoY)
ANZ: More BW and
richer services
Emerging Asia:
More users and
Smartphone adoption
Developed Asia:
More connections
with IoT
13x Growth
Dynamics of Mobile Business Growth in India
• Tailwinds – Subscriber growth (highest in APAC 9% CAGR)
– Early in Smartphone adoption cycle (pent up demand)
– Market consolidation
– Mobile first innovation (inc OTTs)
• Headwinds – Spectrum – low supply, high demand
– Infrastructure; backhaul/fibre, site acq, indoor coverage, power
– Financial constraints – CapEx and borrowing
– Regulatory – ambiguity on net-neutrality
Spectrum Challenge
Source: Cisco, GSMA, 2016
QUESTIONS
1. What are the biggest challenges facing you in your networks today?
2. India is the most spectrum constrained country in the world, as a result we have
seen a lot of innovation in spectrum efficiency here. What other areas are you
considering to get more capacity out there?
3. How do you see the relationship with OTTs developing from here?
4. Do you think virtualisation and automation holds the key to lower TCO in the future?
5. How important do you see the IoT opportunity? What are your biggest concerns with
addressing this segment?
6. What other areas should Cisco be helping to meet your business objectives?
Technology Enablers
The Evolution of Mobile Technology
1980 1990 2000 2010 2020 2030
Voice
Digital
Data
IP
IoE
4G – WiMAX. LTE/LTE Advanced
3G WCDMA/HSPA. CDMA1x/DO
2G – GSM/GPRS/EDGE. DAMPS/CDMA
1G – TACS. AMPS
5G – …
R&D
R&D
R&D
R&D
R&D ?
5G Era
Unlicensed Spectrum 80 MHz 400 MHz 6000 MHz
Licensed Spectrum 60 MHz 90 MHz 120 MHz 200 MHz 300 MHz
Radio Access Evolution Converges to LTE and Wi-Fi
CDMA 1x
EVDO EVDO Rev. A/B UMB 3GPP2
WiMax 802.16d
WiMax 802.16e
WiMax 802.16m
IEEE
2000
GSM&EDGE UMTS HSPA+ LTE (FDD/TDD) LTE-A
3GPP
TD-SCDMA
2010
WiFi 802.11a/g
WiFi 802.11ac/ad/af
WiFi 802.11n
WiFi 802.11b
LTE-M 5G
WiFi 802.11ax
LAA, LWA
2020
802.11ah (IoT)
• What role does Wi-Fi play in your mobile network strategy?
1. Wi-Fi is an important element in our access network strategy - this also includes VoWiFi
2. Wi-Fi is a complementary technology for some hotspots
3. We consider only minor Wi-Fi investments – where useful in some niche cases
4. We do not see any use for Wi-Fi as a complement for mobile networks
Polling question
Internet of Things
Mobility 2020: Pillars Technology Enablers
RAN Diversity
(HetNet)
Virtualisation
• Lower TCO
• Increase Agility
• Create a service platform
• “5 Bars” Service
• Serve > 1000x Traffic in 10 years
• Cost effective access
• Serve new segments
• Optimise for M2M • Mass connectivity
KEY THOUGHTS
1. Globally we see more innovation in OTT partnerships and new
segments like IoT for revenue growth
2. Bottom-line TCO, especially OpEx, impacts profitability and
constrains growth
3. Indian/SAARC market has great potential, but faces challenges;
Spectrum, regulation uncertainty and high OpEx
4. Technology enablers are maturing to meet the growth and
profitability challenge: RAN Diversity, NFV, IoT
Round Table Discussion
QUESTIONS
1. What are the biggest challenges facing you in your networks today?
2. India is the most spectrum constrained country in the world, as a result we have seen a lot
of innovation in spectrum efficiency here. What other areas are you considering to get more
capacity out there?
3. How do you see the relationship with OTTs developing from here?
4. Do you think virtualisation and automation holds the key to lower TCO in the future?
5. How important do you see the IoT opportunity? What are your biggest concerns with
addressing this segment?
6. What other areas should Cisco be helping to meet your business objectives?
Back Up
Voice & Messaging Enterprise IoT
Cisco Mobile Internet Architecture
Macro Cells Any G / Any Vendor
Universal Small Cells
ASR5000 Series Packet Core 2G, 3G, LTE, WiFi, Femto GW, inline Services
ASR900 & 9000 Series Unified Mobile Backhaul TDM, ATM, IP, GE, 10 GE, L3VPN, SecGW, etc
Wi-Fi, 3G/LTE Small Cell, dSON
Mobile Service Enablers Policy Suite, Gi-Services, Analytics
vIMS Hosted Collaboration Suite (HCS) IoT Cloud Connect
Access
Services
Network
Heterogeneous
Intelligent
Telco Cloud
Unifie
d D
ata
Centr
e
NF
V I
nfr
astr
uctu
re
IP/M
PL
S
Ba
ckbo
ne
Universal RAN Orchestration Wi-Fi SON ANDSF 3G, LTE cSON
He
tNe
t Virtual Packet Core
(VPC)
NEW
NEW
NEW
NFV Management & Orchestration (MANO)
India: Mobile Device Growth by Type By 2019, Smartphones Will Attain Largest Share to Reach Nearly 54%
6% CAGR 2014–2019
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019
Millions of
Devices
* Figures (n) refer to 2014, 2019 device share
India: IoT Connections by Network Type Multi-Technology Access Growth
Millions of
IoT
Connections
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019
* Figures (n) refer to 2015, 2020 share
(Low Power Wide Area)
45% CAGR 2015–2020 IoT Proportion of
India total
2015 2020
Connections 1% 5%
Data Traffic (Mobile) 0.2% 1.2%
Revenue 0.7% 1.6%
India: Mobile Data Traffic Growth / Apps Video to Account for 66% of Mobile Data Traffic by 2019
13x (67% CAGR) 2014–2019
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019
Petabytes
per Month
* Figures (n) refer to 2014, 2019 mobile data traffic share
India: Mobile Data Traffic Offload* 31% of Mobile Traffic to be Offloaded by 2019
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019
Petabytes
per Month
*Offload includes traffic from dual-mode devices (i.e., supports cell & Wi-Fi, excl. laptops) over Wi-Fi/small cell networks
India: IP Traffic by Local Access Technology Mobile Traffic Grows 3.8x Faster than Fixed Access
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019
34% CAGR 2014–2019
Petabytes
per Month
India: Mobile Data Traffic Growth In India, 3G will still support >50% of Mobile Traffic in 2019
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019
Exabytes
per Month
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