VMT - Telco Research 2x - Transition Networks

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Dec 12, 2013 (3 years and 6 months ago)

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Telco VMT

Global Mobile Subscriber Growth


Total Mobile Subscribers to exceed 6B by
end/2012 (there are more mobile
subscribers than homes that have
electricity in the world)



LTE subscribers are expected to grow at a
35% percent annual growth rate through
2016 reaching 450M subscribers by 2016



Global service provider revenue for 2012
should come in at $1.9 trillion, up 4% from
2011. Asia Pacific will account for about a
third of global service provider revenue by
2016, propelled by China Mobile, the
world's largest mobile operator by revenue
and subscribers





Forecast to grow 81 percent
between 2012 and 2016.




The key trend driving demand for
Ethernet access devices (EADs) is
rapid service provider rollout and
customer uptake of Ethernet
connections and services.


Fiber EADs currently make up 70
percent of all EAD purchases.


Global Carrier Ethernet Forecast

Business Services and Mobile
Backhaul


Ethernet Business Services:


Longest
sustained double
-
digit growth

of
any
wire
-
line service


14
%
CAGR projected thru
2016.


Source: Vertical Systems
Group, July 2012



Ethernet for MBH


IDC expects Ethernet equipment

&
solutions
of 45
% CAGR 2012
-
2016


The global mobile backhaul equipment market
grew 8 percent last year to $7.4 billion.


Service Provider
Ethernet equipment
expenditures

to
exceed $10 billion by
2016“


Infonetics

forecasts a cumulative $39 billion will
be spent on mobile backhaul equipment from
2012 to 2016.



Source: IDC, July 2012 &
Infonetics


2012

2016

Mobile Backhaul Stats


Macrocell

mobile backhaul equipment will
see slow but steady growth over the next
five years,
Infonetics

Research says,
reaching $9.7 billion by 2016.

•Verizon
Wireless (NYSE: VZ) and ATT
(NYSE: T) are winding down their first big
wave of LTE, this is a large market and
there’s still room for growth,” said Michael
Howard

•We’re
expecting a cumulative $43.6 billion
to be spent on
macrocell

mobile backhaul
equipment over the 5 years from 2012 to
2016, as operators outside of North
America continue to buy


Mobile Backhaul Stats


Infonetics

forecasts the global small cell market to
grow rapidly, with about 3 million small cells shipping
and the market worth about $2.1 billion in 2016


Small cell market growth is being driven by operators
seeking to enhance saturated
macrocellular

networks
that are currently struggling to maintain a decent
mobile broadband experience for subscribers


Infonetics

expects public space
femtocells

to make up
more than 50% of all small cells shipped in 2012


In 2013,
Infonetics

expects 3G small cells to make up
63% of global small cell shipments, with 4G small cells
kicking off and ramping up rapidly to make up 37%


4G small cell shipments will overtake 3G small cells by
2015


By 2015, without microcells, we expect the Capacity
Shortfall to be 50%.


G
lobal
femtocell

revenue is up 37% for 4G LTE
femtocells


From a geographic perspective, early
femtocell

adopters such as

AT&T, Softbank
, and

Vodafone

and
macro network density dictate which regions represent
the largest small cell opportunities, with Asia Pacific
expected to lead with 44% of all units shipped in 2012,
followed by EMEA with 32%




29% of mobile traffic will NOT be handled
by macro BTS by


2013 or later
Infonetics

forecasts 3 million
micro,
pico

and public space
femto

cells to
ship worldwide in 2016


Mobile data traffic will increase 18X by
2016


Small cell requires up to 500mb per cell
site


Position 1KM


Requires full gigabit aggregation.


Compliment Macro Cells


Data Offload
(hot spots), Gap Fillers (not spots



Small Cell

The EAD market is growing nicely on an
annual basis, strongly influenced by
healthy Ethernet service uptake. We
expect operators to spend close to $5.6
billion cumulative on EADs over the five
years from 2012 to 2016.”


MARKET HIGHLIGHTS:


Globally, the Ethernet access device market
fell 4% in the first half of 2012 (1H12) from
the second half of 2011 (2H11)


Infonetics

forecasts the EAD market to top
$1.3 billion by 2016


While North America, where EADs first took
off, remains the largest market with 54%
revenue share in 1H12, Latin America is the
fastest
-
growing region for EADs


Ethernet Access Device (S3280 Line)

Growth Area Stats


Cloud & SDN


Combining
mobile network assets with cloud
-
based
services
to enhance
& differentiate to a wide range
of
applications


The
Telco opportunity is twofold:


Cloud
Services Merchandizing and Brokerage:
Leveraging
the
Telco’s
trusted position in the value
chain to package & deliver a
variety of
cloud
-
based
services and applications to businesses and
consumers


Mobile
Cloud Services Enablement: Offering the
Telco’s Network as
a
Service
to enhance &
differentiate Cloud Services delivery through
the Telco
channel:


Key Carrier Ethernet 2.0 features in


support of delivering dynamic Cloud


services


Multi
-
CoS

and Performance


Service OAM


Interconnectivity


Traffic management and BW profile


extensions

SDN/SDS Hybrid

Today there are still many security issues
to fully implement SDN (DNS) and lack of
OAM (Fault and Performance Monitoring)
features

An open flexible framework is needed for
existing networks to transcend to an
instant
-
on pay
-
per
-
use communication

This transition will need to be a seamless
integration into a service providers
ecosystem. Avoiding lost revenue
opportunities from a disruption.

Don’t get caught up on an architecture, focus
instead on your network needs and TCO

Cloud

SDS/SDN
Apps

Converge ™
EMS

SDN /
Openflow

Controller

Northbound Open API

SNMP

OpenFlow

Protocol

NID/Switch

S3280

NID/Switch

S3280

NID/Switch

S3280

NID/Switch

S3280

NID/Switch

S3280

Transition Networks’ Converge™ ROI


Provisioning time


↓ 60%


Troubleshooting


↓ 55%


Truck Rolls/Tech Dispatch







↓ 40%


Trouble
-
Tickets


↓ 25%


SLA Violations


↓25%


Labor Cost



↓ 60%







OpEx

Efficiencies




CapEx

Savings




Access platforms

↓ 25
-
40%


Test Sets

↓ 50
-
70%


Trucks

↓ 40
-
50%


Service Providers save time, money, and resources
by dramatically reducing a service provider’s time
-
to
-
revenue or time
-
to
-
service


Service providers benefit tremendously from a
reduced Total Cost of Ownership (TCO) owing
primarily to the recurring OPEX savings derived
from minimizing truck rolls, provisioning,
configuration and the complexity/expense to
manage the devices in an automated fashion


Increase customer satisfaction with appropriate
proactive fault measures to increase network
uptime


Converge™ eliminates the need to maintain the
latest software version on inventory in the field
and spares.

Next Gen CE Requirements

New Customers= New
Revenue

NEED: Accelerate
Service turn
-
up

Automation of complex
provisioning tasks

Simplify Service
Activation Testing

RFC 2544 and
Y.1564 with multiple
simultaneous flows

Centralized point for
Service Activation
testing, collection of
birth certificates and
test reports

Flexible, elastic

NEED: Dynamic
Bandwidth allocation

Differentiated
services

granular service
offerings


easily
created using
Service templates

Reliable, SLA
Compliance

NEED: On going
Service Assurance

Automation of OAM
setups

point
-
and
-
click
loopback, linktrace,
service OAM
configuration,
monitoring

Multi
-
vendor
environment

NEED:Interoperability

Open Service
Provisioning and
operations APIs
enable flow through
automation

MEF Standard CE
2.0 service
definitions

TMF based standard
service delivery
model

www.transition.com

North America


Looking ahead, major areas of operator investment through 2015 will include fiber
-
based
wireline

broadband access, 2G mobile network capacity expansion, 2G migration to 3G, and migration to LTE
projects, the report forecasts.


Small Cell and Big Bandwidth are key Development Areas


Small Cell deployments have overtaken the
number of
macrocells

during the first quarter 2012 (8.6 million small cell sites by 2017 globally)



Brazil prepares to host 2014 FIFA World Cup and 2016 Olympics


Brazil will have 4G in place


Brazil reached $120 billion in telecom revenues in 2012
-

4G
Rollouts top the charts


Brazil to reach more than 18 million LTE users by 2015.
Pyramid Research


Brazilian Mobile data traffic is forecast to multiply 19 times
from 2011


2016 with an annual growth rate of 79% in 2016

Latin America

Brazil Fixed
-
lin
,
Broadband,
and mobile Statistics 2010
-
2012

Fixed
-
Line

2010

2011

2012

Total
Subscribers
(mill)

42.14

42.8

43.4

Penetration Rate

21.3

21.4

21.4

CAGR

1.6

1.6

1.4

Broadband







Total
Subscribers
(mill)

13.8

16.6

20

Penetration Rate

7

8.3

9.9

CAGR

21

20

20

Mobile Subscribers







Total
Subscribers
(mill)

206.26

246.38

293

Penetration Rate

104

123

145

CAGR

17

19

19

Asia
-
Pacific

China


Largest Mobile Market


More than a Billion
Subscribers


2012


Wireless Penetration is only at 77.6%
-

Leaving 23% untapped


Bulk of the country still on 2G services

Japan


Softbank 2.6 Billion dollar deal with
eAccess



Also
entered into 20.1 billion dollar agreement to acquire
70% of Sprint

Southeast Asia


cloud market for SMEs is growing at CAGR of 58%.


Africa


By the end of 2012, mobile subscribers in

Africa will top the 750
million

mark with one billion users expected to come in the next few
years.


Highest rate of growth in mobile subscriptions among major world
regions


Africa forecasted to grow mobile subscriptions by 17.5 percent over the
year to end
-
2012, a higher rate than in any other major world region and
above the world average of 10.75%


A projected compound annual growth rate (CAGR) of 4.3 percent, the
report states the continent’s service revenue will beat the worldwide
average by more than two fold.


Mobile connections have leapt to 475 million, compared to just 12.3
million fixed line connections

Middle East


Gulf States are awash with cash
-

The
Economic slowdown in the US and Europe
coupled with the economic boom in the
oil
-
rich gulf region



142.7 mobile penetration rate



Data Revenues are low at only 13% of
mobile revenues


New tier services is a
huge initiative to change this.



One of the first countries in the world to
fully deploy and launch 4G services.
Adding 25,000 new operational base
stations in 2013



By 2016 Africa and Middle East will
overtake Europe as the second largest
region for mobile subscribers Africa.

Europe


The European broadband market continues to
develop despite the ongoing economic turmoil


500 million subscribers


Several Member States Achieved full broadband
coverage (Denmark, Finland, France, Luxembourg,
Latvia, Malta, Netherlands and the UK)


Choosing Target Accounts?

1.
Fit the current Telco Strategies of:

1.
Backhaul

2.
Business Services

3.
Datacenter/Collocation

2.
Varying account types

1.
Tier 2

2.
Data Centers

3.
Carrier’s Carrier

4.
Manufacturers

3.
Are not being worked or have not been successfully penetrated
by the regional territory teams

What do we need to do to grow Telco?

Focus:


Revisit SMART plans


Strategic Leadership
and Management Accountability


Specific Vertical Objectives


Set Objectives that promote and reinforce “TEAM SELLING”


Per Account Strategic Planning


Team Based Roles


Strategic Marketing on specific accounts


Target Account Tracking


Increase technical sales capacity with more SE resources (1 per territory)


Telco Focused Sales Unit


ROW like group



The Story”


Positioning/Selling against an incumbent vendor


For Rural
-

Focus on Influencers:
Indatel


http://ig.affiniscape.com/displaycommon.cfm?an=1&subarticlenbr=2







S3280 Lab Trials

Currently Testing



Intelleq
/Dobson
Telephone


CFN


Reserve Telephone


Xittel


City Utilities/Springnet


Dalton Utilities


Cascade


WIN




Will Test






IPC



Bay Ring



Windwave

Communications



Balsawest

Fibernet



Vinakom



Fiberlight



DukeNet



IFN



Gigabit Squared



Nsight


\
\
Amber
\
Anyuser
\
VMT
\
Telco
\
Strategic Tracking
\
Product Testing.xlsx



TN Europe Lab Trials


VZW


IPC


Telus


Fiberlight






EAD Market

EAD MARKET HIGHLIGHTS


For the full year 2012, the global Ethernet access
device (EAD) market grew 3.5%, to $860 million,
with growth hesitating as a result of economic
conditions and a lull in carrier spending in the 2nd
half of
2012


5.8 billion over the next 5 years


10/100M copper and 1G fiber dominate EAD ports
today, but 10G fiber is growing fast, forecast by
Infonetics

to grow at a 117%

CAGR

through 2017


Though in slow decline, Ethernet
over

TDM

(
EoTDM
) bonded circuits will remain a
niche market, providing an inexpensive way to
combine several E1s or T1s


For the second consecutive year, the top 5 revenue
share leaders in the EAD market are (in alphabetical
order)

Actelis
, ADVA,
Ciena
, Overture
, and

RAD


fiber
EADs represent the majority of the EAD
market, operators
to spend a cumulative $1.5 billion
on EFM bonded copper EADs over the next 5 years
(out of a cumulative $5.8 billion total for all EADs) as
they increase the capacity and efficiency of mobile
backhaul networks and business connections.”





Hosted VoIP and UC grew by 17 percent
last year.


And the expectation is for significant growth in the years
ahead


Infonetics

projects that the combined business
and residential VoIP services will grow to $82.7 billion in
2017; it’s $63 billion now.

The
macrocell

wireless backhaul market will begin to decline in 2017, but
metrocell

backhaul,
expected to grow to US$4.7 billion in 2018, will more than compensate for the decline. The end result
of the diverging trends is a healthy total wireless backhaul market of over US$10 billion projected for
2018,
according


Another key finding from the research is that the growth in the wireless backhaul market will take place
despite a context in which
wireline

solutions will dominate
metrocell

backhaul for up to 69% of
deployments. "The predominance of
wireline

metrocell

backhaul will be driven by the need for
converged fixed
-
mobile carriers to leverage costly investments in
FTTx

before spending money on
dedicated
metrocell

wireless backhaul networks," said Esteban
Monturus
, author of the report.

to
Maravedis
-
Rethink's new report

Wholesale Ethernet

As shown in the excerpt below, wholesale Ethernet revenues from U.S. wireless carriers are projected
to grow from $399 million in 2011 to $1.37 billion by 2016. While percentage growth will moderate over
the forecast period, absolute revenue growth will accelerate in the near term as wireless bandwidth
growth for video and data continues and its migration from TDM to Ethernet deepens.
Wireline

carrier
revenues are projected to grow from $504 million in 2011 to nearly $1.5 billion in 2016. Web
-
based
player revenues are projected to grow from an estimated $317 million in 2011 to $1.35 billion in 2016,
at a 34 percent CAGR. This segment's growth will accelerate in percentage terms at least until 2014,
peaking at an estimated 35 percent that year.






Whether measured by carrier spending or
subscriber growth, LTE is coming on fast:
Infonetics

projects 164 million LTE
subscribers

by 2014.

LTE Mobile Backhaul Challenges and Requirements

Backhaul networks are inherently complex, using a variety of topologies and technologies
to collect data from standalone towers or from

building rooftops in cities and suburbs, with a variable number of hops taken before being
aggregated onto a metro network. As a result,

operators highly value simplicity in deployment and operation of a technology, as they
plan to scale networks to support LTE growth with

a lower total cost of ownership (TCO). Operators also want the technology choice to allow
network designs for deterministic and resilient

services, so delay (latency) can be small and the impact of network failures on backhaul
service performance minimized. Automation of

network and service configuration and ongoing service performance is also critical.
Operators are looking for automation and simplicity of

operations to deploy or upgrade 100s to 1,000s of cell sites per city or metro region

tools
that reduce human involvement in planning,

provisioning, deploying, and managing the network.

LTE Needs Higher Backhaul Capacities


Operators planning the evolution of their backhaul
architecture must be prepared to handle much greater
capacities over the next
few years
. In the early LTE
rollouts that started in 2010, carriers are deploying
50Mbps to 100Mbps cell site backhaul speeds per
mobile operator
. Backhaul transport providers serving 3

5 mobile operators per cell site are installing 1GE uplinks
today, with many planning


for 10GE uplinks at high usage cell sites now, and for
most of their cell sites over the next few years. LTE
-
Advanced will provide 10Mbps


to 100Mbps peak downstream bandwidth per user with
up to 100
-
200 active users per cell site, so backhaul
requirements will increase


further. Rings must allow capacities to carry traffic of all
the cell sites connected to the ring, which puts the
planning requirement quickly


at 10GE and multiple 10GEs for aggregation. At
aggregation points in metros, even with statistical
multiplexing, the long term planning


requirements run quickly to 40GE and 100GE.


As operators move to packet backhaul, they need to
simplify and automate their tools. A metro can have
1,000s of cell sites. An
operatormight

need to turn up 20
-
30 cell sites per day since operators are not looking for
bandwidth upgrades or a 2G/3G
-
to
-
LTE upgrade just
fora

couple of sites; they want to turn on the service for
as many customers as possible.

Service Providers Tracks to Gain a
Competitive Advantage


Modernization: Business transformation that is product
based to support services and lines of business that
improve the customer experience


Rationalization: Leveraging opportunities to improve
operational efficiency and reduce costs and total cost of
ownership


Optimization: Improving current business processes,
customer service channels, sales, and the business
value of doing things more efficiently

Small Cell Gold Rush


51% of
opperators

will invest in entirely new platforms
(SON)


The combined geographic on
-
net availability of enterprise network services grew 11% in 2012
(see figure 1). Ten carriers (BT Global Services, Orange Business Services, Level 3, NTT,
Pantel
,
Tata Communications, TI Sparkle, Telekom Malaysia, Verizon Business Services and
Zayo

Bandwidth) extended their on
-
net enterprise service coverage to five or more new cities between
2011 and
2012



On
-
net services in Africa grew 54%, with carriers adding 28 new on
-
net sites in 20 cities. On
-
net
enterprise service availability grew 14% in the Asia
-
Pacific region, 13% in Latin America, 8% in
Europe, and 7% in the US and Canada.



Only 15% of service providers indicated they can configure customer bandwidth needs
dynamically, and only 31% allow customers to burst beyond their contracted port speed
commitments. Customer service portals are more widely available, with 65% of profiled carriers
offering online service portals that allow enterprise service customers to track and monitor network
performance and billing.


85% of carriers indicated that they offer T
-
1/E
-
1
interfaces, 81% offer 10
-
Mbps Ethernet, 96% offer 100
-
Mbps
FastE

and 84% offer GigE. Just 50% of carriers
offer 10
-
GigE ports


Proactive services and network efficiency is the key for
Telco's keeping customers happy. (faster than light
response)


From Overture Networks


at Overture Networks as we pride ourselves on making
Ethernet easy for customers and guiding the overall
transition to Carrier Ethernet services and
networks.


Anticipating its expanding role, we made an
acquisition to address the growing backhaul demands,
boosted our product line with new features and are
significantly enlarging our team at a time when many
companies are scaling back business and
innovation.


The focus has paid off for us as we’ve been
able to expand business and revenue numbers, but it
has also been a huge asset for our customers who
depend on our products, now more than ever, to
increase service income and streamline operational
costs.


In the bigger picture, it has really helped us define
what critical role these solutions play in the success and
overall performance of modern
-
day service provider
networks.

Associations


European operators use fiber where cost
-
effective, but they are equally comfortable
with wireless backhaul, which accounts for
65% of links according to Deutsche Bank. In
Japan and South Korea, fiber is widely
available and more extensively used, but in
overall APAC wireless accounts for 60% of
mobile backhaul. In North America, major
operators use wireless where they have no
other choice, or in 15% of links
.


In the long term, virtually all operators are
committed to move to fiber where it is cost
effective.




http://www.telecomasia.net/content/small
-
cell
-
backhaul
-
strategies?page=0%2C1


The small
-
cell industry has established a $5,000 average target cost for each small
-
cell
implementation and is aiming for backhaul to constitute 20
-
30% of this cost, namely between
$1,000 and $1,500. This price target challenges conventional backhaul solutions and has resulted
in a variety of innovations, such as highly integrated and purpose
-
built architectures, seamless
carrier grade Ethernet, and the use of both licensed and unlicensed radio spectrum for wireless
links
.


Small
-
cell backhaul providers including Alcatel
-
Lucent,
BLinQ
, E
-
Band, Ericsson,
Ceragon
,
Cambridge Broadband,
Radwin

and
Silku

have introduced a variety of innovations to lower the
small
-
cell backhaul equipment costs with integrated solutions that aim to deliver zero
-
footprint
form
-
factors
.


For most implementations, further innovations are still needed to reach the price targets that are
being pursued by the industry. Given their impact on backhaul costs, we expect that many of the
innovations being pioneered for small
-
cells will ultimately be applied to macro
-
cellular solutions in
the
future


Unlike traditional macro
-
cellular backhaul, which consists of carefully architected point
-
to
-
point
solutions, backhaul solutions for small
-
cells must have sufficient flexibility to enable radio base
station sites to be implemented rapidly and cost effectively. This calls for point
-
to
-
point and point
-
to
-
multipoint solutions that are optimized among a tapestry of transmission solutions available,
whether fixed fiber or copper or microwave radio. In most cases operators lack fiber or copper
resources at the small
-
cell sites, and must use radio technologies for lateral connections to these
sites
.


When small
-
cell solutions are implemented at scale, conventional backhaul optimization
solutions cannot achieve the operational efficiencies needed. In response, small
-
cell
backhaul solutions are increasingly embracing the principles of
self
-
organizing network
(SON) technologies
, which include automated infrastructure provisioning, configuration
management and optimization, and self
-
healing capabilities.