Evolution of IMS or How Service Providers in North America are moving toward converged networksg g

Manuel VexlerChief Marketing Officer IMS/NGN

HUAWEI TECHNOLOGIES

Overview

The evolution of IMS in the US and Canada is taking a different path than the other developed countries. Competition between cable and service providers created an unique market dynamic in which IMS, WiMAX and LTE are part in offering triple and quadruple play services, and in competing for customers. The presentation will cover the key competitive aspects, the role of Net Neutrality regulation in the US and how IMS is viewed by US fixed, cable and mobile operators.

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Agenda

Introduction to Huawei The US environment

Regulatory

Competition

Broadband infrastructure

IMS and convergence in the USC bl C i Cable Companies

Carriers

Conclusions Conclusions

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Serving 36 of the world's top 50 operatorsServing 36 of the world s top 50 operators Deepen long-term strategy partnership Providing UMTS solutions for Vodafone in Spain Greece Hungary Romania

Strong strategic infrastructure partnership Major GSM/UMTS/HSPA network supplier Major supplier of Broadband Transmission and Metro Ethernet for the whole group

Providing UMTS solutions for Vodafone in Spain, Greece, Hungary, Romania, South Africa, Turkey etc.

Major supplier of Broadband, Transmission and Metro Ethernet for the whole group

S l l ibl f t ti PS t k i G B it i th

Deployed networks in 20+ countries Corporate strategy partner for 2G/3G, FTTx, transition etc

Solely responsible for constructing PS core networks in Germany, Britain, the Netherlands, Austria, and the Czech Republic

Deployed GSM network in Czech republic IMS, NG WDM, GPON, Core router, IP Microwave, Femtocell supplier

Mobile broadband partner for building UMTS/HSPA networks in Italy and Brazil Mobile broadband partner for building UMTS/HSPA networks in Italy and Brazil Major FTTx supplier in Italy

To provide TELUS with LTE-ready HSPA network, which is the first such network in North Americain North America

Chosen by TeliaSonera to deploy the worlds first LTE/SAE commercial network in Oslo, Norway, bringing the unique advantages of mobile broadband service

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About Huawei

30

35

30

Contract sales from the international market (USD in billions)

25

30

23.3

30

15

20

1675%

5

1011

5.68.2

65%

72%

0

5

2004 2005 2006 2007 2008 2009E

41%58%

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Huaweis IMS Market Position

Quadrant of IMS/NGN IMS assessmentHuawei Ericsson

ALU NSN

3029 29

30

29

28

29 29

27

Huawei Ericsson ALUNSN

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Huaweis IMS Deployments

As of Q2/2009 Huawei has deployed 95 IMS commercial and trial networks for leading global telecomsnetworks for leading global telecoms

Highest level of interoperability demonstrated in IOT testing. Examples: DT PoC test in 2008. DT described Huawei IMS solution to be a crystal ball

not only provides the functions that DT wants now but also prepares thenot only provides the functions that DT wants now, but also prepares the functions that DT will need in the future

Best rating in two performance testing held by TI (pass 100%) Best rating in comprehensive France Telecom testing (2007)

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Best rating in comprehensive France Telecom testing (2007)

Main achievements of Huawei IMS

Fewer devices, low cost, save investment;

Multiple services for new market exploration and ARPU increase Low risk, professional engineers enables TM to implement of network transformation2008Q3

Simple architecture, centralized core network Open service platform, easy to deploy new service

Wide coverage, reduce user churn rate; Increasing MoU indoor, increasing ARPU Future oriented architecture unified billing and operation;2008Q2

2009Q1

Advanced services provided for internet and voice user; Improve the competitive edge Fully converged network, simplified O&M; Full service seizing the market opportunities

Future oriented architecture, unified billing and operation;

2008Q1

Support blended voice and multimedia services via SDP; Easy new service deployment Simplified network, lower TCO; Abundant services assist business success

Low cost and wide coverage of network; Fast service deploy and enter into the market

2006Q4

Low cost and wide coverage of network; Fast service deploy and enter into the market Simple network architecture and unified operation; Advanced services for end users

Smoothly evolution toward FMC network Improve the profitability through innovative convergent services2008Q1

2006Q4

p p y g g Fast and flexible deployment shorten time-to-market

Fast project delivery, contract signed to network delivery in 4 months. One network to support VoBB, IP PBX and PSTN/ISDN replacement,

S t i h lti di i i i t d ti h t TTM

2008Q1

2009Q1

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Support rich multimedia service, easy service introduction, shorten TTM.

IMS Convergence Vision Network ConvergeService Convergence

g

Separated Core 2 3

1Mobile

Extension

One CoreIMS Migration

MSX SXIMS

One node, One network

MSX

Simplified testing and operation

AS AS AS All services on a single platformFixed, Mobile voice, converged apps

Fi d

One Core

AS AS AS

One architectureEasy to design, plan and support

Fixed BBMobile

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Agenda

Introduction to Huawei The US environment

Regulatory

Competition

Broadband infrastructure

IMS and convergence in the USC bl C i Cable Companies

Carriers

Conclusions Conclusions

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History of US Regulation

1934: FCC established to regulate radio and Tv broadcasting and interstate telecommunications (wire, satellite and cable) and all international communications that originate or terminate in US.

1960s: FCC allows long-distance companies (MCI) competition. 1982: Split the Bells from AT&T; 1984: LD equal access 1996: New telecom act. FCCs six goals for 2006-11 1996: New telecom act. FCC s six goals for 2006 11

Broadband: All Americans should have affordable access Competition: for communication services Spectrum: promote growth to efficient communication services Media: promote competition and transition to digital modes of delivery Public Safety and Homeland Security Modernize the FCC

2008 N t t lit C t li i t bl ki f it 2008: Net neutrality. Comcast ruling against blocking users of its high-speed Internet service from using file sharing

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A new social contract: net neutrality

FCCs 6 principles of Net Neutrality Consumers are entitled to access whatever lawful internet contentCo su e s a e e t t ed to access ate e a u te et co te t Consumers are entitled to run whatever applications and services

they want, subject to the needs of law enforcement Consumers can connect to networks whatever legal devices they

want, so long as they do not harm them Consumers are entitled to competition between networks Consumers are entitled to competition between networks,

applications, services and content providers Service providers are not allowed to discriminate between

applications, services and content outside of reasonable network management

Service providers must be transparent about the network Service providers must be transparent about the network management practices they use

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IMS and net neutrality

Misinformation in the media about IMS and Net neutrality leads to statements such as IMS is breaking net neutrality

IMS policy and control mechanisms are targeted as the critical ff ti t t litareas affecting net neutrality

In reality many technologies, including fire walls, deep-packet inspection (DPI) and Session Border Controllers used with SIPinspection (DPI) and Session Border Controllers used with SIP can be also used to selectively block traffic

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Agenda

Introduction to Huawei The US environment

Regulatory

Competition

Broadband infrastructure

IMS and convergence in the USC bl C i Cable Companies

Carriers

Conclusions Conclusions

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Competition: network service providersCompetition: network service providers

Video (Tv Fixed Voice High Speed

Mobile EnterprisePrograms)

Fixed Voice High SpeedServices (revenues)

Comcast 23.9M 7M (3rd in the US)

15.3MNew WiMAX 2Go

Services2% of revenues growing 50% Y/Y(3rd in the US) growing 50% Y/Y

Time Warner 13M 4M 8.9M WiMAX MVNO

Cox 5.9M 2.5M(8th in the US)

4.25MCDMA and LTE

with Huawei$1B revenues

estimated

ATT 1 8M 61 6M 16 3M 77M $10 6BATT 1.8M 61.6M 16.3M 77M $10.6B

Verizon 4M 39.5 6.1M 78M $11.5B

Sprint 0 0 0 49M MSOs are pushing triple play

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Service Providers moving to quad play

Mirror image competition

MSOs Service Providers (Tier One) Video delivery including video

programming (linear Tv), Video on Demand and DVR

( ) Residential voice (analog/TDM)

High Speed Internet (DSL, FTH)on Demand, and DVR

Residential voice (digital Voice)

High Speed Internet (DOCSIS)

Business voice and data

Wireless voiceg p ( )

MSOs are targeting the following additional markets

Wireless data

SP are targeting the following additional marketsadditional markets

Business data and voice

Wireless data

additional markets

Video delivery including video programming (linear tv), Video

Wireless data on Demand, and DVR

MSOs and Service Providers business

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Agenda

Introduction to Huawei The US environment

Regulatory

Competition

Broadband infrastructure

IMS and convergence in the USC bl C i Cable Companies

Carriers

Conclusions Conclusions

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Broadband infrastructure (lines over 200Kbs)

80,000,00090,000,000

100,000,000ADSL29.6%

All O ther23.9%

30 000 00040,000,00050,000,00060,000,00070,000,000

SDSL 1.1%

Fiber2.7%

010,000,00020,000,00030,000,000

Jun Jun Jun Jun Jun Jun Jun Jun Jun

Cable Modem42.8%

Cable modems dominate residential high speed internet

2000 2001 2002 2003 2004 2005 2006 2007 2008June 2008, FCC

Cable modems dominate residential high speed internet Aggressive deployments of fiber to the home by Verizon (FiOS)

and fiber-to-the node by ATT (U-Verse)and fiber-to-the node by ATT (U-Verse) Service providers are planning for IMS-based VoIP and IPTv

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Over the Top competition

USB 2.0 for music, movies and photos t d j d i C tiblstored on a jump drive. Compatible

formats include JPEG, MP3, MPEG2/4

Connect TV to cable/DSL modem, for RSS feeds

Roku

Use Ethernet port to stream movies, music and photos from a PC or any DLNA media server

Optional Wi-Fi adapter to connect to the home network

Internal flash memory stores content for later viewing

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New competition: open source Tv multimedia

Boxee is a free, open-source software platform that integrates personal media with the Internet and social networking

Based on open source project XBMC incorporates the XUL framework (which Based on open-source project XBMC, incorporates the XUL framework (which is the basis for the Mozilla browser)

Boxee is designed for your TV and use of a remote controlAll t h i f ti b t h t th li t i t Allows users to share information about what theyre listening to or watching with other Boxee users on twitter, facebook, etc.

Tv will become part of social networking MSOs need to follow

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Agenda

Introduction to Huawei The US environment

Regulatory

Competition

Broadband infrastructure

IMS and convergence in the USC bl C i Cable Companies

Carriers

Conclusions Conclusions

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Cable industry today

Moving from analog to digital. Started plan to move from digital to IP 60% of subscribers are now on digital Tv

Growth of digital voice (VoIP) and slower growth in cable modem HSI Slow reduction in number of video subscribersSlow reduction in number of video subscribers

Increased ARPU from Video on Demand; also resulting in more churn Strong competition. Moving to over the top with Tv Everywhere

S i P id (AT&T V i ) Service Providers (AT&T, Verizon) Digital satellite offering more programs than terrestrial cable Over the top content: Hulu, YouTube, Netflix, Boxee, etc.

Americans watched 16.8B videos online in April 09 (comScore) More than 40% were on Googles YouTube Hulu (joint venture between Fox and NBC) delivers free movies and Tv Hulu (joint venture between Fox and NBC) delivers free movies and Tv

Committed to VoIP over IMS Accelerated investment in IP

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23 Strong competition in video

Focus on a single IMS network

Single Network

Telecom + InternetManaged IT Multimedia

Core Network

Tele CoreWeb Core ngMDN

Core NetworkUnified Subscriber CenterService

ProviderContent Provider

Cloud Computing

2G 3GFTTxDSL 2G 3G4G

FTTxxDSLPOTS Always on servicesValue chain

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IMS Core layered architecture overview

LDAPI SM

M T

USC PoolingApplication Servers Provisioning

M SCC

MTel

TAS

Unified ProvisioningConvergent ServicesSIP LDAP

DiameterM

Unified ProvisioningConvergent Services

UCN Pooling Charging

Diameter MSC-S

IMS

MM

EPC

RF

Unified ChargingUnified Access Control

H.248/SIP SIP GTP

M IM

SA G B

Unified Access Control

EAN-V EAN-PEAN-MSAN

MG

WM

RFP

SBC

M-M

GW

AE-G

WG

GSN

BR

AS

PDG

DPI

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UCN: Unified Control Node USC: Unified Subscriber Center EAN: Edge Access Node

MSOs moving to 4G with Clearwire

Largest WiMAX deployment MVNOs with Comcast, TWC and Cox

Comcast investment $1 5B Comcast investment $1.5B TWC investment $550M

51% owned by Sprint Nextel, y Received $3.2 billion in capital from Intel,

Google, Comcast, TWC; merged with Sprint's WiMAX t t th d f 2008WiMAX assets at the end of 2008

CEO Ben Wolff has said that the company needs an additional $2B in capital over the nextneeds an additional $2B in capital over the next few years to meet its aggressive buildout plans.

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Carriers One voice uses IMS for LTE

Proposal jointly developed by AT&T, Orange, Telefonica, TeliaSonera, Verizon, and Vodafone

One Voice will use the IMS to route voice calls between the IP and circuit-switched networks

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ATT: Reorganizing for convergence

Service Service InnovationInnovation

MarketingMarketing

NGN NGN Core Core

OperationsOperations

MarketingMarketingFinanceFinance

HRHR

ServiceServiceOperationOperation

Shifting focus from operations to revenuesShifting focus from operations to revenues

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ATT re-organizing for IMS

It's ``not just bundling services and saying, `You can buy this bundle of services from us,' but the services actually working together,'' Coe said. ``We're obviously hoping to accelerate the g , y p geffort with this reorganization.''

AT&T th l t U S h i t i k th AT&T, the largest U.S. phone company, aims to quicken the introduction of products accessible from any AT&T device. The company will roll out more products similar to a current feature that lets customers program TV recorders from their phones, Coe said. AT&T is spending $6.5 billion over five years on network upgrades to sell bundles of TV and phone service. p

(AT&T Press Release)

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Verizons IMS Plans

SharedBilling

SubscriberData

AS

SubscriberData

AS

SubscriberData

AS

SubscriberData

AS

AccessNetwork

#1 D d

SharedMedia

Resources

BillingServices

NetworkPolicy

Policy andQoS

C t l

AS AS AS AS

Service Orchestration

VoIP Peering

Partners Network

#1

Access

UE

Verizon IP/MPLS

SessionManagement

DecomposedAccess

Functions

DecomposedAccess

Functions

Network Subscriber

UE

ResourcesControl

NetworkAccessNetwork

#2

Subscribersto Verizon

Network

Transit Routing

NetworkRouting

SubscriberData

IMSIMS-basedServices

DecomposedAccess

Functions

MGCF

IM-MGWIM-MGW

IMSCore

Wholesale Customers

PSTN

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Conclusions

Cable Companies are leading US IMS deployment Service providers have more complex plans:

Organizational convergence Fixed-to-mobile integration

IMS based LTE Voice IMS-based LTE Voice Split 4G strategy

Cable companies follow WiMAX with Clearwire Cable companies follow WiMAX with Clearwire Verizon is leading LTE deployment and one voice initiative

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