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SEVEN Open Channel™ for Mobile Traffic Optimization Open Channel is an end-to-end mobile traffic optimization solution that eliminates unnecessary network signaling generated by chatty mobile apps on wireless networks.

Legal Notice © 2012 SEVEN Networks, Inc. All rights reserved. The information contained in this document represents the current view of SEVEN Networks, Inc. SEVEN, and Open Channel are registered trademarks or trademarks of SEVEN Networks, Inc. in the United States and/or other countries. Other product or company names mentioned herein may be the trademarks of their respective owners. SEVEN Networks, Inc. 2100 Seaport Boulevard Redwood City, CA USA

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White Paper - SEVEN Open Channel™ – April 2012

1. Introduction………………………………………………………………….…….……. 4 2. Mobile Users, Devices and Applications…………………………………… 4 3. Consumers’ expectations are set……………………………………….…..… 6 4. Resulting Network Congestion and Signaling

Storm……………………………………………………………………………….……….. 7 5. Current Solutions………………………………………………………………….….. 8

1. New standards such as Fast Dormancy…..……………….….…. 9 2. Increasing capacity and network upgrades…………....……... 9 3. Traffic Avoidance………………………..………………………….…….… 9 4. Transport Optimization……………..……………………….……..…… 9

6. Optimizing the Mobile Ecosystem……………………………….…………. 10 7. SEVEN Open Channel™……………………………..……………….……….…. 10

1. Features………………………..……………………………..……….….…. 12 2. Benefits………………………………………………………………..…..…. 13

8. Economic Benefits to Mobile Operators……….…..……………..….…. 14 9. About SEVEN Networks…………………..……………………….…….…….…. 15

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1. Introduction

Wireless networks are under siege! The mass adoption of smartphones and the explosion

of chatty mobile apps are placing an unprecedented burden on wireless networks which

were initially designed to handle voice, not data. The accelerated growth in mobile traffic is

driven by a mass migration to everything mobile and the rapid adoption of increasingly

sophisticated smartphones and tablets by more and more users worldwide. Faster networks

and more elaborate connected applications are also driving up data usage anywhere from a

factor of 30 to 40 globally (Cisco, 2011).

There is no sign that this growth, which is often referred to as a “data tsunami” and a

“signaling storm”, will slow down anytime soon. Mobile data traffic growth continued

unabated doubling again in 2011 for the eighth straight year. The signaling traffic is

expected to grow in even faster (Chetan Sharma, 2012).

As a result, mobile operators are forced to rethink they way they manage data services.

They face increased economic pressures as network upgrades and related investments

required to maintain their quality of services must grow faster than subscribers’ data

revenue.

Mobile data traffic was 8x the size of the entire

global Internet in 2010 (Cisco 2012)

More than half of Facebook users access the social network

from a mobile phone (Facebook 2012)

30% of smartphone users average more than 1 Gigabyte/month

(Chetan Sharma, 2012)

Users will download more than 182 billion mobile apps in 2015

(IDC, 2011)

US wireless networks already running at 80% of total capacity

(Credit Suisse, 2011)

50% of US mobile users own a smartphone

(Nielsen, 2012)

Android smartphones are being adopted at a pace of 850,000 new

devices per day (Google, 2012)


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Network and traffic optimization solutions enable operators to effectively manage data

traffic and maintain their margin while improving the performance of mobile devices and

the user experience with the mobile Internet and smartphone applications.

2. Mobile Users, Devices and Applications

The number of mobile subscriptions is expected to grow to over 6 billion in 2012

worldwide. With less than 1 billion smartphone users today, the conversion cycle from

feature phones to smart devices has barely started, yet more than 15 Billion application

downloads have been registered on the Apple App Store and the Google Play Store.

Many wireless operators around the world have already faced highly publicized problems

due to network congestion:

• In January 2012, NTT Docomo suffered a major network issue that left 2.5 million

subscribers unable to make voice or data calls for about four and a half hours.

• In November 2011, KDDI president Takashi Tanaka commented: “By 2014 data traffic is

predicted to overflow KDDI’s capacity even if we use LTE capacity as well as the 3G

capacity. This traffic issue is a top priority.”

• In October 2010, an Android Instant Messaging app launched on the Android Market

bought the T-Mobile network in the US to its knee.

• In 2010, O2 in the UK suffered a significant amount of dropped calls in the London area

and AT&T has found it very difficult to manage the iPhone data demands.

A 2011 Tellabs study shows that operators’ profitability is at risk. “Operators need to do

things differently to stay ahead of the revenue cost curve," said Stuart Benington, director of

global portfolio planning at Tellabs.


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Estimates show that a single smartphone

produces as much data traffic as 35 traditional

feature phones. Converting 10 million people to

smartphones is like adding 350 million new

feature phone users, in terms of impact to

networks (Cisco 2012).

3. Consumers’ expectations are set

Smartphones and tablets are becoming the new

standard way to connect with the world, friends

and family, Internet, cloud services and social

networking. More than half of Facebook users

access social networks from a mobile device and

27 percent of Americans now get their news

using mobile devices (PEW Research, 2012).

More importantly, users’ expectations for

mobile have been set: they want desktop-like

connectivity from their mobile device:

immediate access to news, applications, games,

music, streaming content and more. Mobile

users expect the same quality of service and

experience across networks and do not

differentiate between the various networks they

need to connect to.

Adding to the mobile data tsunami is the free-

reign users have to download any application

from the multiple online app stores available on

smartphones. This creates an incredible

challenge for operators as any stakeholder in the

mobile ecosystem - content providers,

application developers and device

manufacturers - can tap into their networks’

limited bandwidth and signaling resources

without their oversight.


Global Mobile Data Traffic Forecast by Region

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4. Resulting Network Congestion and Signaling Storm

The combination of always-on, data-hungry smartphones and the rapid change of users’

behavior towards everything mobile leads to network congestion and degraded quality of

service. Congestion disrupts mobile users by decreasing the speed and consistency of

network connections and even leads to network ‘brown out,’ where no access is available

and users cannot even place phone calls.

Many solutions have already been deployed to help with network congestion. 4G and LTE

upgrades promise to deliver more capacity. At the same time, it sets users’ expectations

even higher for easy access to more connected applications and data, generating an even

greater load of signaling traffic and requests to the network.

What’s really needed to help operators cope with network congestion must go beyond the

addition of capacity and requires a different approach that redefines how devices,

applications and the network interact which each other.

Network Congestion has three forms


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5. Current solutions

Solutions available today are fairly siloed, primarily focused on increasing bandwidth and

releasing 3G networks from the rising waves of data traffic. Adding capacity, as well as

introducing more sophisticated technologies to handle the traffic on wireless networks,

which were initially designed for voice, have been the most commonly deployed solutions.

Fast Dormancy and New standards

Smartphones are increasingly ‘always on’ with chatty applications receiving frequent

updates and polling the network. These requests cause the radio to switch on and off

constantly which drains the device battery. New approaches by companies like Nokia

Siemens Networks and Huawei address this issue by rapidly disconnecting the device from

the network once updates are sent or received. Fast dormancy succeeds in improving

battery life, however, it puts a heavy load on wireless networks. The constant connections

and disconnections increase the amount of signaling traffic which lowers the performance

of the network overall.

More sophisticated versions of fast dormancy are being rolled-out to improve battery life

and reduce signaling overload. These require both the device and the network to be

upgraded to support new standards and eliminate signaling one application at a time, but

do not help with the coordination of radio usage across multiple applications.

Solution type Limitations

Standards

(Fast Dormancy, 3GPP Release 8)

Require both devices and networks to be upgraded

Eliminate signaling one application at a time, but does not coordinate radio usage across multiple applications

Network Upgrades

(to 4G and LTE)

High CAPEX

Take years to deploy

Demand and traffic increases faster than upgrades

Traffic Avoidance

(data caps, pricing policies, traffic

off-loading)

Offloading wireless traffic to alternative networks (i.e:

Wifi) is not yet transparent enough to consumers to

make it a viable solution for the mass market

Traffic offloading artificially moves the network costs to

another network

Studies have shown that data caps do not solve traffic

congestion at peak time

Transport Optimization Not ubiquitous enough, typically focused on one type of

content or usage such as video or browser


Increasing Capacity and Network Upgrades

As end users turn to their mobile devices to view and share rich media content such as

video, photos or music, mobile operators have invested heavily to increase the amount of

bandwidth and make room for more data. Network upgrades such as 3G to 4G address the

need for ‘bigger pipes’ to transport more data, but it does not take into account the type of

data being shared. More bandwidth helps to manage mobile video applications, but fails to

address the vast array of network connected applications that create a new emerging

problem: signaling capacity.

Traffic Avoidance

Offloading traffic to other networks such as Wifi is a popular way to encourage consumers

to reduce the load on wireless networks. This approach benefits subscribers by extending

their potentially capped data plans. However, it is still limited to specific use cases where a

Wifi network is available and it is not yet deployed broadly or in a way that is transparent to

consumers.

Pricing and usage policing also falls in the category of traffic avoidance by controlling and

reshaping users’ behavior. However, while capping data and introducing tiered plans can

address abusive usage, studies have found that this does not address the challenge of traffic

at peak times.

Transport Optimization

Numerous solutions have emerged as a result of the pressures on 2G and 3G networks to

support increasingly rich data, far more data than these networks were designed for. These

solutions can now be used on 4G and LTE networks and applied to reduce the amount of

data transported. While still valid, they remain limited to specific applications or content

and are focused on solving the bandwidth issue rather than the bottleneck of signaling. 9

“There is no one easy fix. The key word is

minimize since there is no “cure” for wireless

network overload. Regardless of how much

more capacity we create, if the demand

continues to increase, the issue of network

congestion will continue to be with us.” - Andrew Seybold, 2012


6. Optimizing the Mobile Ecosystem from Users to Devices, Wireless Operators and Application Providers

The solutions listed in (5.) bring significant improvements, but none of them tackle the

optimization of traffic from end to end: from end user behavior to applications, devices and

the network.

7. SEVEN Open Channel™

SEVEN has taken a unique and innovative approach that solves the problem from end-to-

end: from the user and device to the network and the application. SEVEN Open Channel

scales mobile for the Internet by truly reshaping and coordinating the interaction between

the device and the network in an effective way: optimizing traffic across all mobile apps

rather than addressing the challenge one application, one type of content, one cell tower or

one category of users at a time.

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By utilizing software components on the mobile device and in the operator network, Open

Channel can optimize the way devices interact with the network and minimize their

consumption of the wireless world’s limited resources: battery, signaling and bandwidth.

Open Channel reduces the time the device is on the network by up to 40 percent without

impacting the user experience.

Open Channel works by monitoring requests for data made by mobile apps and only

connecting to the network if updates are available. Currently, applications like Facebook,

email, Twitter, chat, weather and others, send hundreds of uncoordinated requests daily

consuming significant signaling resources and network bandwidth. Using a virtualized proxy

and caching technology, Open Channel mediates the exchange of control information

between the device and the network and eliminates unnecessary mobile app chatter.

It relies on both a device and server component, and remains protocol and application

transparent, making it the first optimization solution to work with all apps on a device. It

requires no application rewrite, nor does it have to be built into new applications. The

software resides on the handset and in the cloud and acts as a virtual proxy, monitoring all

data network transmissions to cache the control and data transfer requests. Never before

has there been the capability to coordinate the disparate network access requests and

polling of all apps on a device.

Every mobile app can take advantage of the optimization because no application rewrite is

required. This drives a reduction in signaling and data traffic in a world where operators

have little or no control over the apps a user chooses.

Additionally, Open Channel can help operators target heavily used services by delivering

deep application and protocol knowledge so that the operator and service provider can tap

into the SEVEN service via APIs to further optimize traffic for content delivery.

Open Channel reduces the time the device is on the network by

40% without impacting the user experience.

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Key Features of Open Channel

Eliminate unnecessary signaling on the network

Chatter from mobile apps is eliminated with Open Channel. This stops unnecessary

connections to the network, especially when no new information needs to be exchanged.

Coordinate the use of the mobile device radio

Open Channel monitors requests that are made by applications to turn on the device radio

and coordinates these to optimize the amount of signaling placed on the network.

Reduce the amount of data transported on the network

Open Channel only connects the device to the network when new updates are available,

and also decreases the amount of bandwidth utilized by connected applications.

No application rewrite required

When deployed by operators or device manufacturers, Open Channel is completely

transparent to connected applications and requires no changes or special integration by

application developers.

Support for any network technology

Open Channel works independently of the network technologies in use (2G, 3G, 4G, LTE,

WiFi or others), requires no changes to wireless networks and can operate in conjunction

with new standards for fast network dormancy, smart signaling and other network

optimizations, further enhancing the value and longevity of these investments.

Open Channel Dashboard

Measure network activity including

signaling activity, application data traffic,

network requests and cached data.

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Key Benefits of Open Channel

Up to 40 percent in signaling and 70 percent reduction in data traffic

With better coordination of the radio usage across applications and services, the radio is

turned on and off less often which results in increased battery life by up to 25 percent.

Take control over the risks of network congestion

Open Channel brings relief to operators faced with the increasing risks of network

congestion brought by the accelerated adoption of smartphones and the proliferation of

mobile applications downloaded by millions of users from open application stores.

Maximize ROI on network upgrades

Open Channel requires no changes to the network and is fully compatible with network

upgrades. It also augments the return on other network optimization approaches and new

standards for fast dormancy.

Benefits to mobile users

Users benefit from the SEVEN optimization technology through the reduction in three types

of network congestion (geographic, behavioral, and application) to improve device

performance regardless of location. As a result, users experience a higher quality of service

and improved battery life.

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“Open Channel is a truly urgent and much needed solution that addresses key and critical issues for today's exponentially growing mobile broadband networks.“

- GSMA Awards Judge


With Open Channel, carriers no longer need to monitor data traffic one app, one user or

one cell tower at a time.

8. Economic Benefits to Mobile Operators

The current smartphone data tsunami has the dangerous potential of limiting innovation

and slowing down the value delivered to users by mobile operators as they get pressured to

introduce gatekeeping technologies on their networks (data caps, limited pricing policies,

throttling, restricted application downloads) to maintain quality of service and margins on

data ARPU.

Open Channel turns the challenge into opportunities for operators (and other players in the

mobile ecosystem) giving them the desired flexibility. This might include the option to

maintain their unlimited plan structure, open their network to more applications and

services, and innovate faster. Open Channel provides a better understanding of the

behavior of applications and end users on wireless networks, enables highly personalized

services based on usage, and most importantly improve the overall user experience. SEVEN

allows operators to pursue new business models to maximize revenue associated with the

explosion of demand for mobile data.

The SEVEN solution is completely transparent to end users who benefit from improved

application interactivity, improved battery life and less network congestion - minimizing the

times when they cannot place a call, experience increase latency or cannot access the

application of his/her choice.

Open Channel has the potential to change the economics of the mobile industry – this

innovative solution enables operators to not only keep pace with the explosion of data

traffic and maintain the quality of service their brand is known for, but it also enables them

to support more smartphone users on the same network infrastructure and improve their

margins on data.

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“SEVEN’s new platform is uniquely positioned to single-handedly address these challenges while

maximizing an operator’s available network resources.”

-Michael Thelander, Founder and CEO Signals Research Group LLC


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9. About SEVEN Networks SEVEN Networks is a global provider of software and services for mobile operators and device manufacturers. Our innovative solutions reduce the amount of traffic generated by mobile apps on wireless networks and deliver data from the cloud to smartphones in a way that is network and battery efficient. Open Channel is SEVEN’s breakthrough mobile traffic optimization solution that cuts network signaling by up to 40 percent and bandwidth usage by up to 70 percent. It provides immediate capacity and financial relief to carriers faced with the exponential growth of mobile data usage. Open Channel won numerous industry recognitions, including the 2011 GSMA Technology Breakthrough award. SEVEN products are in production in 20 languages across the five continents. The company is based in Redwood City, California, with local offices around the globe.

More information is available at www.seven.com

Mobile Technology Breakthrough


2011 Finalist CEO Ross Bott

2011 Winner Creating new opportunities in

mobile technology

http://www.seven.com/





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