Wireless Network Optimization (2010)

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

“”


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)


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%


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)


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

“”


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


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

“”


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


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

“

”


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


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


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.

“”


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> >


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.


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%


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


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%


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.


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


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


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


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


www.alcatel-lucent.comwww.alcatel-lucent.com

Wireless Network Optimization (2010)

Technology

Transcript of Wireless Network Optimization (2010)