services convergence - a new challenge for the operators

1ELIS - Rome 13th February 2008 -Ovidio Michelangeli – Wind Telecomunicazioni

SERVICES CONVERGENCE

A NEW CHALLENGE FOR THE OPERATORS

OVIDIO MICHELANGELI

Technology Innovation

WIND Telecomunicazioni S.p.A MobileNetwork

Bluetooth/WLANAccess Point

Bluetooth, WLANGSM

Fixed PSTN andIP Network


- INTRODUCTION

- MARKET & TECHNOLOGIES TRENDS

- KEY DRIVER TO FIXED MOBILE CONVERGENCE

- PATH TO MIGRATE IN A CONVERGENT NETWORK

- CONCLUSION

INDEX INDEX


INTRODUCTION INTRODUCTION


TELCO PLAYERS

INTERNET PLAYERSINTERNET PLAYERSOUTSOURCEROUTSOURCER

IBM,HP,EDSManufacturer (Ericsson,Nokia,Alcatel,etc)

MVNO (Mobile Virtual Network

Operators)

Pressure on mobile operators

Mobile OperatorsMobile Operators

Voice saturationData servicesMobility (3G,WiFi)Broadband access

Wireline OperatorsWireline Operators

Increased competitionIPFMS (Fixed Mobile Substitution)FMC

REGULATED PLAYERSREGULATED PLAYERS


Mobile operators are pursuing Fix-Mobile Substitution, FMS offers mobility and simplicity and has already gained some traction in areas with sufficient coverage and service quality. Many customers have already eliminated landline service in favor of mobile communications often reducing the total cost services.

Fix players are instead promoting broadband data services and plan to contrast FMS wit fix mobile convergence (FMC) by integrating in one terminal traditional mobile service with voice over WiFi or Bluetooth for fix environments.

Even Though Fix voice services are reducing, fix voice represent an important market for the telecommunication, bigger than the Fix data.

- Voice and messaging are interesting for Internet Players

The existing ARPU for the Operators are much higher than internet Players.

This service are for the internet players a natural extension of the existing one (For instance E-BAY buyer and seller need to communicate)

NEW COMPETITORS FOR THE OPERATORS


MARKET & TECHNOLOGIES TRENDSMARKET & TECHNOLOGIES TRENDS


TRAFFIC AND REVENUE DIVERGENCE

Data Era

Voice Era

Revenues

Traffic Traffic and Revenue

Divergence

Time

– Unlimited voice and new data services increase traffic and revenue

– End user application value is unrelated to bit volume

– Revenue per bit is dropping, driving need for lower cost transport


GLOBAL TRAFFIC FORECAST

Mobile Networks Fixed Networks

0

50 000 000

100 000 000

150 000 000

200 000 000

250 000 000

300 000 000

2005 2006 2007 2008 2009 2010 2011

Terabyte

IPTV

Internet

Voice0

750 000

1 500 000

2 250 000

3 000 000Terabyte

Voice

Multimedia

0

750 000

1 500 000

2 250 000

3000000

Terabyte

2005 2006 2007 2008 2009 2010 2011

Sources: Ericsson estimates


FIXED AND MOBILE OPERATOR REVENUES

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

BU

SD

In Western Europe, 7,000 subs leave fixed operators every day

Fixed

Mobile

Sources: Ericsson estimates

Voice

Voice

Data

Data


- PSTN VOICE (Declining slowly)

• PSTN Voice will decline due to fixed-mobile substitution & VoIP

- DSL GROWING

DSL is experiencing strong growth

- WiMAX

Yankee Group says 15-20% of broadband market is underserved and could use WiMAX.

- FMC Growing interest in fixed–mobile convergence (FMC) solutions, particularly solutions based on dual-mode phones.

MAIN TRENDS


- INCREASE OF THE MOBILE MARKET High penetration of mobile users moving to third generation networks.

• Growing Demands for Wireless Data Applications

- STRONG INVESTMENT IN IPTV AND MOBILE TV• IPTV services is growing, with the number of worldwide subscribers set to rocket from

1.6 million to 37.8 million by 2010• Many Fixed operator are launching triple/quad play services

- DIFFUSION OF WI-FI HOTSPOTS


PSTN VOICE REVENUE ARE DECLINING

PSTN VOICEDeclining slowly

- 80% of home will still have a PSTN line in 2009. - VoIp is growing but will still represent a tiny portion of revenues by 2009


BROADBAND BECAMING PERVASIVE


WiMAX PREDICTED MARKET GROWTH

802.16 Fixed Indoor/Outdoor Wireless Subscriber Forecast (Source: Gartner)


TOTAL NUMBER OF DSL SUBSCRIBERS 3Q 2007

Source : Point Topic


WORLD WIRELESS MARKET


MOBILE BROADBAND MARKET


GLOBAL UMTS/HSPA SUBSCRIBERS GROWTH FORECAST

Informa Telecoms and Media, November 2007 forecast


0

50

100

150

200

250

300

350

400

450

2005 2006 2007 2008 2009 2010

2G

3G

Source: Gartner Group , 2006

W EUROPE SUBSCRIBERS (M)

2G Substitude 3G subscribers


– Telefonica (Integrated SP) bought O2 (mobile Service provider) – BT (wire line SP) launched “Fusion Services” with the partnership of Vodafone.

– Orange UK announced it would begin to offering a wire line services to enterprise.

– Vodafone CEO declared that DSL is in its future.

– Vodafone launched home-zone tariffing , which offers users free (or very inexpensive) voice calls from a defined radius from their home, such as Vodafone’s “ZuHouse service in Germany and “Vodafone Casa zero” service in Italy.

FIXED MOBILE CONVERGENCE. - A GLOBAL TREND IN THE DEVELOPED COUNTRIES


KEY DRIVER KEY DRIVER

TO FIXED MOBILE CONVERGENCETO FIXED MOBILE CONVERGENCE


Today, the telecommunications world remains separated into two worlds:

• The world of mobile

• The world of fixed line communication

with different business models, different networks tailored for their specific purposes, different organizations, and different services.

Fixed Mobile Convergence (FMC) is a transition point in the telecommunications industry that will finally remove the distinctions between fixed and mobile networks.

• It will provide a superior experience to customers by creating seamless services using a combination of fixed broadband and local access wireless technologies.

TWO SEPARATE WORLDS


• The separation was reasonable in times of stable and strong vertical market growth for each respective domain, but now falling voice ARPUs (Average Revenues Per User) and low rates are exerting tremendous pressure on both mobile and fixed operators as they increasingly compete for the same subscriber and service revenues.

• The dynamics of fixed-mobile convergence are interesting with, in principle, the wireline operators and the wireless operators trying to eat parts of each others' revenue.

• Fixed operators are attracted to the deal by the higher revenue growth prospects and EBITDA margins of wireless.

• Wireless operators are looking to limit revenue decreasing into the value-add enterprise communications markets so far dominated by wireline operators.

THE MOVE TO CONVERGENCE


65% of users would prefer to have a single phone number for office, home and mobile.

Source: Yankee Group

~43% of mobile calls are made

• from home (31%)

• from the workplace (12%)

WHERE ARE MADE THE MOBILE CALLS?


ONE PHONE SERVICE

MobileNetwork

Bluetooth/WLANAccess Point

Bluetooth, WLAN

GSM

Fixed PSTN andIP Network

One Phone Service allows use of a single mobile handset to make and receive calls on the mobile or the fixed network (PSTN or VoIP)


RESIDENTIAL USERS

• Cheap mobile calls when in Unlicensed Coverage

• Personal communication with

ONE number, ONE phone and ONE voicemail Single list of missed calls Single directory Access at the same services (SMS,MMS,etc.)

• Individual communication for every family member• Possibility to lower all rates in Home Zones• Improved indoor wireless coverage• One converged service: one number,one handset, one phone book and

one bill• Improved GPRS speeds for data applications

END USER OPPORTUNITIES


ENTERPRISE USERS

• Reduce the total cost of ownership for telecom services as a single handset has to be provided instead of two.

• VoWLAN reduce cabling requirements (only access point need to be connected) and a voice and data services share the same infrastructure.

• Wireless phones reduce the modifications required when an employees are relocated from one office to another.


• Service specific networks.

The current infrastructures are based on the Multilayer networks model. :

• Dedicated equipment

• Duplication of function

This approach cause a tremendous impact on the CAPEX and OPEX of the TELCO Operators. In fact they have to purchase, install, and manage separate devices for each new network technology, and build out separate access networks for each new type of customer interfaces.

• Continous pressure from the market to provide the existing service cheaper. [Legacy networks in the existing infrastructure increase the risk with cost of the services (too expensive)]

CHANGE IN THE OPERATORS NETWORK INFRASTRUCTURES


• Wireless Networks Will Be Packet Networks

• Wireless Phones Will Be IP Phones With Internet Connectivity

• Users Will Be Able to Connect to Any Service on the Internet

Most of the new services and application will be IP based and a change of the network architecture in the Telco operators infrastructures is mandatory.


PATH TO MIGRATE IN A

CONVERGENT NETWORK


Mobile TDMMobile TDM

Fixed TDMFixed TDM

Converged IMSFixed/Mobile

Converged IMSFixed/Mobile

Mobile NGNMobile NGN

Fixed NGNFixed NGN

FIXED - MOBILE CONVERGENCE THROUGH IMS


IMS SERVICE ENABLERS


IMS SERVICE ENABLERS

A standardAn enabler

of newapplications

Next-gen network

architecture

Service-layer

Control-layer

Transport-layerIMS Services are emerging today

IMS is key to fixed/mobile convergenceMigration to NGN/IMS is an evolution processNeeds to support interworking with legacy

IMS Services are emerging todayIMS is key to fixed/mobile convergence

Migration to NGN/IMS is an evolution processNeeds to support interworking with legacy

IP NetworkSIP

SIP

SIPSIP SIP

At Home In the OfficeOn the Move

IMS

SIP

Push-2-TalkPush-2-View

Push-2-X

Presence, Location- based Services

Interactive Services,

Interactive Gaming

Games, Music

Downloads

Picture Messaging,

MM Messaging

Voice

Video ClipsSports, News

E-mailIM

Streaming Audio, Video

Converged ServicesRich

Communications

An enablerfor innovativeconversational

serviceoffers

Man

ag

em

en

t P

lan

e

Picture Source: Alcate - Lucent


TWO ALTERNATE VIEW ON THE IMS

Operators

(Traditional View)

Operators

(Alternative View)


• Promoting convergence (Fixed and mobile,voice,data and video)– The applicability of the IMS concept extends to any kind of access, and should overtake

present first attempts at service convergence of mobile with wireless access.

• Reduce OPEX

• Enable faster service develop– The IMS platforms will help the Operators to introduce new services and to increase their

revenues.

• for users: rich service offering, enhanced experience• for operators: platform convergence, operating efficiency, protection of investment and decoupling of

application and transmission layers

• Protect future investments

TRADITIONAL VIEW


MIGRATION PATH

GSM/EDGE

PSTN

UMTS(R5)

Softswitch

SOFTSWITCH

SHORT TERM MEDIUM TERM

UMTS(R6)

FIXED IMS

UMTS(R7)

FIXED Access

IMS

LONG TERM

IMS


IMS OPEN ISSUES

• IMS is an environment to build new services that still to be defined and implemented.

• Some delays in vendors roadmap.

• Some doubt in the TLC vendors community:

• IMS will become a commercial product or will be only a guideline to provide multimedia services?

• The Operators Organisation are completely suitable to manage the IMS?

• Today the network are managed and operated by technology : SDH,IP,ATM,etc, In case of IMS there is not more a distinctions between the competence in the O&M department.


• The operators are still concentrated to migrate their legacy platform toward IP to reduce the operational cost.The migration toward IMS platform is not yet a priority in the short term for many operators.

• The IMS Deployment require new OSS systems and Billing System

• Without a sophisticated billing system, the full potential of fixed-mobile convergence in the IMS environment will not be realised.

• The Operators must manage a distributed architecture

• Multiple suppliers

• Physical locations

• Support integrated transport and switch networks

• Separation of network operation and services.


• Potential waste of time and money

• IMS still fails to separate connectivity from services

• Market evolution can be triggered by making use of non-IMS FMC solutions

– Pre-IMS: UMA access,etc.

OPERATORS ALTERNATIVE VIEW


Three solutions available to provide FMC and Fix Mobile call hand over:

– Integration on the access level: UMA solution for residential

– Integration on the core level: SIP based solutions for residential and business (support also IP Centrex and IP-PBX customers)

– Integration on IP-PBX for business

FMC TECHNOLOGY CHOICE

PRE IMS - FMC SOLUTIONSPRE IMS - FMC SOLUTIONS


THE UMA SOLUTION

• Standardized in 3GPP GERAN

• Called GAN in 3GPP

• Originally developed as a way to extend coverage/reduce cellular congestion

• Extends GSM call control to WLAN/Bluetooth accesses

• Handset uses GSM/GPRS call control

• PLMN services provided

• Transparent to mobile core network


• UMA technology enables access to mobile voice, data and IMS services over IP broadband access and unlicensed spectrum technologies (Bluetooth and WiFi).

– Service providers can enable subscribers to roam and handover between cellular networks and public and private unlicensed wireless networks using dual-mode mobile handsets.

– Subscribers receive a consistent user experience for their mobile voice, data and IMS services as they transition between networks.

– Unlicensed Mobile Access (UMA) technology provides access to GSM and GPRS mobile services over unlicensed spectrum technologies, including Bluetooth and 802.11.


Fix and mobile access network are interconnected with different core network:

• Legacy (CS and PS) for mobile access

• IP - SIP for the fix access.

The integration is realized by emulation/gateway box placed between the core networks and using intelligent network’s services.

Call control and hand over is mainly managed by the SIP network.

SIP BASED FMC SOLUTIONS


Many pre standard solutions in the market including:

• Bridgeport Network,

provide NomadicONE Network Convergence Gateway (NCG),

in 2005 founded MobileIngnite alliance (33 companies including Converging)

• New Step Converged Services Node (CSN)

• Outsmart SmartFMC™ solution integrates SIP-based telephony (VoIP) into the mobile core network

• UTStarcom Continuity FMC solution

• Alcatel IMR solution

• Longboard OnePhone

SIP BASED SOLUTIONS


• Not yet standardised up to 2007

Only some solution will be 3GPP VCC easily upgradable

User terminals not available in the market, suppliers typically provide specified client running on PDA (Windows Mobile, Symbian,…)

• SIP VoIP user terminals don’t promote user fidelity

Will users phone use Skipe or other VoiP low cost company?

• Convergence operator are developing IMS/NGN solution for fix triple play services. This networks are usually provided by different vendors from the mobile core network one.

two different core networks: IMS for fix applications and mobile evolving to IMS.

SIP BASED SOLUTIONS ISSUES


• IP-PBX solution are able to provide FMC solution for enterprise

• This solution are SIP based but

• The call control is managed by IP-PBX, not by mobile operator network

• No standardisation

• First solution was developed by SCCAN (Seamless Converged Communication Across Networks) Forum

founding members of SCCAN are Motorola, Proxim and Avaya

• Other solutions on the market including Cisco solution that uses Nokia Terminals

IP-PBX SOLUTIONS


CONCLUSIONCONCLUSION


• Convergence is now a reality for

Operators: new services, user fidelity, one network

Users: one bill, one phone, one number

• Residential Fix-Mobile convergence now is possible with UMA.

• We have to wait for IMS

But...

• There are now pre-IMS solutions to provide Fix Mobile Convergence


FUTURE TELECOM INFRASTRUCTURE


WWW.Wind.itWWW.Wind.it

THANK YOUTHANK YOU

services convergence - a new challenge for the operators

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