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2009/TEL40/DSG/WKSP/013

Don’t Let the Goose Get Strangled

Submitted by: Tata Communications  

Workshop on IPv6: Facing the Future of Internet

Cancun, Mexico24 September 2009

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©2008 Tata Communications, Ltd. All Rights Reserved

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Don’t let the goose get strangled

APEC-Tel 40 Cancun, Mexico,September 2009

Yves PoppeDirector Bus.Dev. IP Services

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A goose laying golden eggs

Telecommunications is a $ 1.2 trillion market in the OECD

Telecommunications represent 3% of GDP

Share of data revenues continues to increase

NTT: 25.7% mobile voice, 26.5% fixed voice, 24% data

Bell: $4.1bill mobile, $4.8bill fixed, $3.6bill data (2007)

source: OECD 2009 Telecom Outlook

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Where does telecom revenue come from?

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Mobile DataFixed Data

From: Nokia March 2006

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Let us continue to provide new services and grow revenues

The growth in Broadband subscriptions has helped fuel the expansion of the internet and also been one source of its growing pains. This growth in the number of networks – and devices attached to those networks – has led to a shortage of unique addresses used to identify individual devices connected to the internet. As a result here is a need for all network operators to upgrade to a new internet addressing scheme, internet protocol versio 6 (IPv6). Based on allocation trends, experts estimate that the addresses in the current scheme (IPv4) will run out late 2011 or early 2012

quoted from OECD 2009 Telecommunications Outlook p 147

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Broadband digital access increasingly prevails

DSL and Cable350+ million by end 2008 It took mobile phones 5.5 years to go from 10 to 100 million subscribersworldwide; Broadband achieved this in 3.5 years.

Wi-Fi and Wi-Max440 million wi-fi chipsets shipped in 2008 (ABI Research)100,000+ public hotspots worldwide (primarily airports,hotels)2.7 million subscribers end sept 2008

FTTx28.8 million subscribers mid 2008FTTC versus “real” FTTH debate

3G and HSDPA/HSUP600+ million 3G subscribers end 2008

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The growth of Broadband continues unabated

The global broadband market grew by 12.9 million lines in the second quarter, to reach a total 445 million at the end of June, according to figures from Point Topic for the Broadband World Forum. Net additions were strongest in south and east Asia, which grew by 4.5 million lines to a total base of 105.4 million. Western Europe remained the largest region with 109.7 million users, up by 1.8 million from March… . On a country basis, China remains the largest with 93.6 million broadband users, followed by the US at 86.2 million and Japan with 31.1 million.

source Point Topic sept 2009

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The coming age of everyone, everything, always, anywhere connected

The future growth of the Internet lies in the hands of mobile phone users, not computers, …

… Vint Cerf in Bangalore, February 2007,

Even more so two years later with the advent of the smartphone phenomenon ushered by the iPhone,

Growing emphasis on energy saving and concerns for global warming are ushering an age of Sensor networks.

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July 2009: One billion telephone subscribers in China

The number of telephony users in China hit 1.03 billion at end-July, up by 48.99 million since January. The number of fixed-line users contracted by 12.42 million during the period to 328 million, the People's Daily Online reports citing statistics from the Ministry of Industry and Information Technology (MIIT). The number of mobile users, however, went up by 61.41 million to 703 million, exceeding 700 million for the first time.

Source: Telecom Paper sept 4th 2009

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Mobile revenues are driven by mobile broadband

Mobile operator service revenues in 2008 were up 13 per cent on the previous year hitting US$624 billion. InfoneticsResearch forecasts that this number will reach US$877 billion in 2010, driven largely by mobile broadband service-derived revenues which are predicted to more than double in the period to 2013...…The good news for mobile operators currently planning to expend considerable capital on upgrading to LTE is that service revenues from this source will grow rapidly reaching US$41.7 billion in 2013

source: Fierce Wireless sept 11th 2009

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Blurring distribution models

The old order: discrete and distinctTelecom: voice, data Broadcasters : radio, TVMusic industryMovie industryPrint and publishingAdvertisingGaming, gamblingHome entertainmentProduction control, goods trackingServices: banking, travel, auctions, stores

The e-world is ratherdisruptive for most existingcarrier and service industry

business models

Everything which can be dematerialized will ultimately

be dematerialized

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Mobile internet makes new applications and revenue streams possible such as location Based Services (LBS)

GPS localisation is the best method but adds cost to the handset; alternative is GSM localisation (based on nearest tower)A second category is defined as NLBS relying on Bluetooth, Wi-Fi and RFID

Applications: mobile commerce, health, goods and resource tracking, mobile advertising, emergency (911). Often offered in combination with SMSInteresting updates on the LBS applications and market at lbszone.com

$1.6 billion market in 2008 (Insight Research)

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IPTV & web TV

The february 10-16th 2008 North American issue of The Economist, pp65-66, noted in an article on the future of television:

“Combined with other information, such as the computer's IP address and hence its location, advertisers will be able to target their spots much more accurately—all “Desperate Housewives” fans in a particular neighbourhood, for example—and thus ought to pay a premium”.

Europe is the biggest market for IPTV, growing 51 percent (year to june2009) to 13.6 million subscribers, led by France according to Point Topic

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Cloud Computing

Most hyped service these daysApplication software and data reside on servers in the net and are accessed

through webbrowsers ex. Salesforce.com, Google Apps Through ‘virtualisation’, users pay for a service and avoid initial capital

expenditure. Cost of servers are reduced due to shared usage.Heavily promoted by IBM/Sun, Google, Amazon, Microsoft, Yahoo

Seen by Merril Lynch as a $95 billion market by 2013 (12% of software market) ?Carriers such as AT&T and Level3 enter marketIssues: safety and privacy of data and QoS

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Do you play with us?

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Do you contribute to User Generated Content (UGC) ?

The phenomenon which took everybody by surpriseYoutubeFacebookLinkedInFlickrMyspaceWikipedia….

UGC represents circa 40% of the internet traffic

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Do you Tube?

5.5 billion videos watchedin april 2009! (Nielsen)

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Aren’t you a blogger yet?

Numbers vary but are impressive

•According to comScore MediaMetrix (August 2008)

•Blogs: 77.7 million unique visitors in the USA

•Facebook: 41.0 million | MySpace 75.1 million

•Total interner audience : 188.9 million

•According to eMarketer (May 2008)

•94.1 million blog readers in the US in 2007 (50% of Internet users )

•22.6 million bloggers in the US in 2007 (12%)

•According to Universal McCann (March 2008)

•184 million worldwide have blogged | 26.4 US

•346 million worlwide have read blogs| 60.3 US

•77% of active Internet users read blogs

Doubled sinceend 2006

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Everything will communicate anytime anywhere

January 2005: The bandwagon started rolling Wal-Mart Stores and DoD mandatoryGeneralized RFID implies terabytes of traffic daily.

RFID for authentication and for traceability: drugs, passports, banknotes, secure papers,

concert entry ticket, casino chips, luggage tags ….Privacy concernsTake-off slower than originally forecast but accelerating

Source: Robert W. Baird in the Economist june 7th 2007 issue

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The battle for the communicating living-room

titanic battle between the computer industry (Intel, Microsoft) and the electronicsindustry (Sony, Philips, Toshiba, Panasonic..)The essence of the battle is a kind of a home « mediacenter » with all devicesconnected in a plug and play mode, preferably wireless. CES 2009 saw the entrry of new players such as Cisco

Las Vegas Consumer Electronic Show january 2009:“The connected home—especially wireless links to video devices and Internet-connected TV sets—was on display throughout CES. Panasonic is building its VieraCast feature—with an Ethernet connection—into all its large-format plasma sets. Samsung unveiled LED HDTV sets with Web widgets from Yahoo!, intended to bring a "cinematic Internet" to consumers “as reported by Tvtechnology.com 26/01

Huge stakes: $150 billion consumer electronics market in the US alone. Market grew 5.4% in 2008, .6% decline forecasted for 2009

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That bad ? Are we really running out of IP addresses?

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Couldn’t we just do with the IPv4 addresses we have?

In order to reach 20% of the world population of 6.6 billion with one address per person, 808 IPv4 /8’s would be needed. IPv4 only has 256 « slash 8’s »and as of june 2009 only 28 slash 8’s were left for distribution.

The IPv4 address space clearly cannot sustain further internet penetration worldwide. 20% penetration defines a massively adopted technology.

Emerging economies are on a roll. End of june 2008 China passed the USA as number one with 253 million internet subscribers comprising 214 broadbandaccesses! 56.2% growth from 162 million subs a year before!

The mobile phone market by itself has already outgrown the IP address space

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And what would happen if we just wait? do nothing?

The internet will continue but its growth will be stunted and it will fragment and ultimately whither.

Forget the revenues associated with new services and hyperconnectivityForget IP converged networks and a truly mobile internetForget IP address based billingForget your global competitivenessForget your survival in the telecom ecosystem

Probability of this scenario?The push for revenue generation and growth will just be too strong. A number of ISP’s will be trampled, some will ride a new growth wave, somenew ones could emerge.

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The promises of IPv6

Solves address shortageRestores p2p communicationMobility

Much easier roamingBetter spectrum utilizationBetter battery life!

SecurityIPsec mandatory

MulticastBetter QoS (flow labels)

Auto configurationMobile Ad-Hoc networkingMobile networksSensor networksPlug and Play networks

Permanent addressesIdentity (CLID)Traceability (RFID)Addressability!IP address based billing

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National Policies: ICT and GDP growth

National and regional policies:China’s CNGIKorea’s u-IT839Malaysia’s MyICMSJapan’s U-JapanSingapore’s Next Gen NII an IN2015India’s 10 point AgendaUSA’s DoC (Department of Commerce) and DoD guidelinesEuropean Union i2010

Common objectives:Ubiquitous, affordable high speed communication over converging networksFacilitate substantial growth of IT share of GDP and job creationPosition the country for competitiveness in a Global Economy.

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International Organizations and Governments endorse the IPv6 push

WE DECLARE that, to contribute to the development of the Internet Economy, we will: 

a) Facilitate the convergence of digital networks, devices, applications and services, through policies that: 

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Encourage the adoption of the new version of the Internet protocol (IPv6), in particular through its timely adoption by governments as well as large private sector users of IPv4 addresses, in view of the ongoing IPv4 depletion. 

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The European Union urges its member Countries to move

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What should APEC- tel members do?

Act by giving an example and setting the pace

Governments should mandate IPv6 support in their procurements for all IT services, hardware and software as of end 2010

One pragmatic reason even if you don’t care about IPv6:

What Government procures today should be good for the next fiveto ten years. It is good policy to show responsible management of tax payer dollars and as a bonus it will provide a sizeable incentive

for its national telecom industry base to move faster.

The internet has been good to us, let us be good to the internet. The goose has many more golden eggs to lay.

www.tatacommunications.comBUSINESS

« These days all competitive advantagesare fleeting. So the smartest companiesare learning to create new ones – again

and again and again »

Robert D. Hof , Business Week,