Global Knowledge Partnership ConferencePanel Session 7 – The Future of Access: Global Knowledge Partnership Conference Panel Session 7 – The Future of Access Joe Doering Head, Sub-Region Asia South Nokia Siemens Networks


We are a 50-50 joint venture of: We are a 50-50 joint venture of Opportunities through deep consumer understanding End-to-end development of communications solutions Common Go-to-market and customer collaboration Insights and learnings of opportunities in different industries Strong global presence Connection to general infrastructure projects


Scale : Scale Ericsson (incl.Redback) Nokia Siemens Networks** Alcatel - Lucent* (incl. Nortel‘s UTRAN) Nortel* (w/o.UTRAN) Cisco Huawei* Motorola NEC All companies with comparable carrier business revenues. * estimated figures ** unaudited calendarised numbers


Vision of 2015 – the World connected: Vision of 2015 – the World connected Applications pre-dominantly in Internet Broadband Everywhere 5 Bn people connected Multitude of business models


Connectivity drives economic wealth: Mobile Penetration (%) GDP/Capita (Euro) Source: NSN Market Intelligence (status: 12/2006); OECD statistics and the CIA factbook 2006 Singapore Australia New Zealand South-Korea Japan Malaysia Brunei Thailand Philippines Maldives Fiji Sri Lanka Indonesia Cambodia Vietnam India Laos Bangladesh Nepal Myanmar Connectivity drives economic wealth Mobile, Internet and broadband penetration levels significantly contribute to countries’ economic wealth Enabling of a new paradigm: the growth of social networking Emerging Markets Mature Markets


Broadband initiatives have been successfully implemented in several countries: Broadband initiatives have been successfully implemented in several countries Korea continous programs since 1992, latest is IT839 (established in 2004) $24,200 $30,900 $12,700 $33,100 $7,600 $3,800 $3,700 Penetration rate and GDP/cap in some Asia countries Source: FitchRatings, IMF. _ _ _ _ _ 100 80 60 40 20 0 % GDP/cap Penetration rate S. Korea S'pore Malaysia Japan China Indonesia India Environmental benefits of Broadband Example BT: Around 10 percent of BT employees registered as home based teleworkers with remote office access. This reduced travel by 17% or ~70 million miles as well the pollution. (Source: British Telecom)


Slide7: Key trends 100-fold traffic increase Even more dramatic change will take place in traffic volume


HSDPA & Flat rates drive strong traffic growth: HSDPA & Flat rates drive strong traffic growth 1000GB Daily HSDPA traffic over example network (actual data) In many networks HSDPA traffic has grown significantly Exceeding 1200GB daily Reaching 1Mbps per NodeB Up to 160GB for single user per month, typically >500MB/month HSDPA traffic has exceeded voice volume quickly after launch In some networks HSDPA counts for up to 80% of the traffic volume HSDPA data volume Nov 06 Dec 06 Jan 07 Feb 07 Mar 07


We’ll face a major scaling challenge : 100-fold traffic increase We’ll face a major scaling challenge


… meaning we must move from 8 architectures: … meaning we must move from 8 architectures Fixed Access Aggregation Fixed Circuit Core Mobile Access Mobile CS Core Mobile PS Core Transport IP Core Apps Apps Apps Apps


Slide11: Operation and Business Support System Transport Access – wireline, wireless Service core and Applications Flat wireess architecture. Next generation DSL and optical access (PON) Embrace Internet Common identity management and session control Flat wireless architecture Next generation DSL and optical access (PON) Simple architecture Ethernet everywhere, IP where needed Common framework for charging, service & network management The Converged Architecture delivers: Cost & power efficiency Scalability Performance Ability to deliver any service Adaptability to support any business model … into a simple, converged architecture


Flat architecture option with I-HSPA: Flat architecture option with I-HSPA GGSN RNC HSPA R6 = user plane ASN GW WiMAX SGSN SAE GW LTE R8 GGSN Internet HSPA BTS BTS with RNC funct. eNB BTS GGSN HSPA R7 BTS RNC Direct tunnel Direct tunnel Slide for preparation of Customer Communication


Changing the Way BTS Sites are Built: Changing the Way BTS Sites are Built


Subscriber growth continues: Subscriber growth continues Source: Nokia Siemens Networks Business Intelligence * Size of bubble represents relative size of subscriber installed base Japan Estimated 60% of Asians live in rural or remote areas


Challenging developments for operators: 0 5 10 15 20 25 30 2004 2005 2006 2007 2008 2009 2010 Challenging developments for operators Source: Nokia November 2006 ARPU declining /€ monthly subscribers Pressures on network and customer acquisition net OPEX Source: Wireless Intelligence May 2007 Total EBITDA% varying 32% churn = 863 million subs 2006 Source: Wireless Intelligence May 2007 Source: Nokia Siemens Networks March 2007


Changing eco-system & telecoms landscape: Changing eco-system & telecoms landscape Network sharing possibilities - Domestic roaming Common networks – MORAN Infrastructure sharing possibilities - Tower sharing, e.g. India Common outside plant Network enabler providers - Hosting of technologies Managed services Virtual network operators Cost efficiencies Service, bundling & reach differentiation Franchising possibilities District & village level play Decentralization & unbundling Advertising-based models Internet-based models for access Subsidized communications Common transport networks Backhaul efficiencies Sustainable competition Content versus access plays Differentiation based on content Ubiquitous access


Innovation: Nokia Siemens Networks Village Connection: Innovation: Nokia Siemens Networks Village Connection GSM Access Point in a village X GSM handsets used Cost-effective “mini” network: village internal calls are connected locally Enables local operation and subscriber management IP connectivity for long-distance calls A new solution A new business model


Our Village Connection: Our Village Connection Economic local coverage with autonomous GSM Access Points Regional Access Centers switching traffic between villages and connecting to GSM and other networks Optimized switching and transmission capacity for calls within and between villages Cost-effective IP transport between villages and Access Centers GSM MS GSM MS GSM MS GAP 1 GAP 2 GAP 3 IP Network AC 1 GSM MS Rest of the world MSC AC 2 GAP AC Intra-village calls Intra-AC calls Inter-AC calls Rest of the world calls GSM Access Point Access Center


Conclusions: Conclusions Explosive growth in traffic expected, networks need to be ready Large unserved rural population requires innovative solutions, business models & cost-effective solutions Telecommunications landscape, eco-system to evolve based on economies of scale & efficiencies Environmental concerns must be addressed Vision for 2015 driven by UN’s Millennium Development Goals Deploying broadband can be a strong driver for global economic & social development