global trends in mobility

NEXT GEN MOBILE NETWORKS Dirk Wolter, Managing Director, Mobility, APAC

29th January 2016

Content

1. Global business and technology trends in Mobility

2. Implications for the Indian/SAARC market

3. Technology enablers for network evolution

4. Round table discussion

Global Trends in Mobility

Market Transitions for Mobile Network Operators

Adapt or Be Left Behind

New

Business Models

• Flexible, usage-based pricing

• Faster time to revenue

• Direct, In-direct and Pass

through

New

Technologies

• Nimble software defined

platforms in the Cloud • System on a chip

commoditization

• Emergence of M2M

New

Competitors

• Global market reach over the

top (OTT) • Reduced barriers to entry

• Accelerating pace of innovation

Optus

Telstra

VF NZ

KDDI

NTT DCM

Softbank Spark NZ VHA

M1

SingTel

StarHub

KT

LG U+

SKT

Grameenphone

Banglalink Robi CMCC

CT

Voda India

DTAC Mobitel

Indosat

Telkomsel

XL

Celcom

DiGi

Maxis

Mobilink

Globe

Smart

Dialog

AIS

AIS

China U

True 10%

20%

30%

40%

50%

60%

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45

EBIT

DA

Mar

gin

(%

)

ARPU (US$)

Emerging Markets

Developed Markets

Low ARPU doesn‟t mean low margin: Some emerging market SP‟s enjoy >50% EBITDA.

Source: Cisco analysis, from 2014 annual reports.

$0

$5

$10

$15

$20

$25

$30

$35

$40

2010 2011 2012 2013 2014

ARPU (US$)

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

2010 2011 2012 2013 2014

EBITDA Margin

Emerging Markets

Developed

Developed markets managing business transition to Data.

Emerging are still challenged with declining ARPU and Profitability.

APAC Mobile SP Profitability

India/SAARC

Airtel

Innovation in OTT Strategies

Implications of OTT Partnerships: Encryption (dark pipe), Net-neutrality

Partner • „Free Zone„ Search,

Gmail, G+

• Plan add-ons for unlimited

collection of OTT apps

Increase APRU Gain Subscribers

• Free Basics in

18 SPs in 14 countries

• Music Stream

bundles or add-ons

• Video stream bundles,

add-ons, zero rating

• OTT Google and WhatsApp offer direct

services as MVNOs • Wyless global M2M solutions • Apple MVNO Rumours

Enable • Sponsored Data

• App APIs to manage NW QoS

New Revenue

• Direct operator billing for

Skype credits

• Cloud based RCS app Jibe

with network QoS

MVNO

• China Mobile Jego App provides free calls,

messages and cheap international calls.

• European operators offer Rich

Communication Services for messaging • EU regulator: “Mobile companies regularly

block VoIP and prevent services such as Skype from functioning on their networks”

Compete

Protect Revenue

• Indian cross-platform messaging App Hike is a joint

venture between Bharti Enterprises and Softbank

APAC

Focus

Started with US Cable Operators, but now mass MNOs adoption driven by Apple

•T-Mobile, USA offers VoWiFi

http://newsroom.t-mobile.com/issues-insights-blog/welcome-to-wi-fi-calling.htm

iOS 8 brings Wi-Fi calling for iPhones on T-Mobile

•3, UK launches VoWiFi app

http://www.mobileworldlive.com/three-uk-adds-vowifi-momentum-app-launch

•EE, UK plans VoWiFi to boast indoor coverage

“The aim of VoWiFi is to improve in-building coverage. Calls will be automatically routed via WiFi, for instance in a user‟s home or office, where there is an absence of cellular coverage.”

http://www.mobileworldlive.com/ee-launch-volte-2015-polishes-voice-credentials

http://www.telegraph.co.uk/technology/news/11519179/EE-launches-WiFi-Calling-to-combat-poor-reception.html

•Sprint prioritizes voice-over-Wi-Fi over VoLTE

Four Sprint devices with the client pre-loaded. When the user connects to a WiFi hotspot, calls are automatically routed to the Wi-Fi network until the user leaves the area.

http://www.rcrwireless.com/article/20140328/carriers/sprint-prioritizes-voice-over-wifi/

Challenges: Limited Mobility, High Density QoS, Enterprise IT, Regulatory.

Protecting and Enhancing Voice Voice over WiFi to fix coverage & protect from OTTs

Requires Device (Client App

or OS)

Network

Secure

Connectivity

iWAN (Interworking

Wireless LAN,

IPsec)

ePDG (Evolved Packet

Data Gateway:

Terminate IPsec to

connect UE to EPC)

VoIP Call

Management

IMS/SIP IMS/SIP





































































Bottom-line Challenge Operating Costs Reducing Margins and Stifle Innovation

Network complexities contributing to

OPEX growth:

Legacy technologies

Purpose-built hardware hardwired

Multiple OS

Multiple points of failure

Increasing provisioning and management

costs

Rigid Architecture: inefficient transport

routing

Slow to introduce: New capacity and

services Source: GSMA Intelligence

CAPEX

OPEX

Need to reduce overall expenditure, especially OPEX

Simplification and speed “is” innovation

Local Implications

APAC Region Mobile 5-Year Dynamics

Diverse growth drivers based on market maturity

Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019

Note: The numbers above pertain to 2019, and the CAGR‟s are for 2014–2019 period.

REGION No. of Mobile

Users

No. of Mobile

Devices / M2M

No. of Users

2GB / Month

Average Mobile

Speed 2019

Forecast

Mobile Users Connections

(inc M2M)

Avg Speed Traffic/Device per

Month

Total Mobile Data

Traffic per Month

APAC 2,800 M (5% YoY) 5,400 M (8% YoY) 8 Mbps 1.8 GB (48% YoY) 9,500 PB (58% YoY)

China 1,050 M (4% YoY) 2,200 M (9% YoY) 9 Mbps 1.0 GB (51% YoY) 2,200 PB (67% YoY)

India 900 M (9% YoY) 1,200 M (6% YoY) 3 Mbps 1.0 GB (58% YoY) 1,100 PB (67% YoY)

Indonesia 195 M (5% YoY) 385 M (3% YoY) 2 Mbps 1.6 GB (54% YoY) 610 PB (59% YoY)

Philippines 57 M (3% YoY) 134 M (3% YoY) 5 Mbps 1.8 GB (51% YoY) 240 PB (57% YoY)

Rest of APAC 450 M (4% YoY) 840 M (4% YoY) 6 Mbps 3.4 GB (66% YoY) 2,900 PB (70% YoY)

Australia 22 M (2% YoY) 76 M (14% YoY) 25 Mbps 2.4 GB (26% YoY) 166 PB (41% YoY)

Japan 115 M (0% YoY) 380 M (18% YoY) 17 Mbps 5.0 GB (26% YoY) 1,500 PB (40% YoY)

Korea 46 M (1% YoY) 190 M (21% YoY) 19 Mbps 4.5 GB (24% YoY) 670 PB (43% YoY)

ANZ: More BW and

richer services

Emerging Asia:

More users and

Smartphone adoption

Developed Asia:

More connections

with IoT

13x Growth

Dynamics of Mobile Business Growth in India

• Tailwinds – Subscriber growth (highest in APAC 9% CAGR)

– Early in Smartphone adoption cycle (pent up demand)

– Market consolidation

– Mobile first innovation (inc OTTs)

• Headwinds – Spectrum – low supply, high demand

– Infrastructure; backhaul/fibre, site acq, indoor coverage, power

– Financial constraints – CapEx and borrowing

– Regulatory – ambiguity on net-neutrality

Spectrum Challenge

Source: Cisco, GSMA, 2016

QUESTIONS

1. What are the biggest challenges facing you in your networks today?

2. India is the most spectrum constrained country in the world, as a result we have

seen a lot of innovation in spectrum efficiency here. What other areas are you

considering to get more capacity out there?

3. How do you see the relationship with OTTs developing from here?

4. Do you think virtualisation and automation holds the key to lower TCO in the future?

5. How important do you see the IoT opportunity? What are your biggest concerns with

addressing this segment?

6. What other areas should Cisco be helping to meet your business objectives?

Technology Enablers

The Evolution of Mobile Technology

1980 1990 2000 2010 2020 2030

Voice

Digital

Data

IP

IoE

4G – WiMAX. LTE/LTE Advanced

3G WCDMA/HSPA. CDMA1x/DO

2G – GSM/GPRS/EDGE. DAMPS/CDMA

1G – TACS. AMPS

5G – …

R&D

R&D

R&D

R&D

R&D ?

5G Era

Unlicensed Spectrum 80 MHz 400 MHz 6000 MHz

Licensed Spectrum 60 MHz 90 MHz 120 MHz 200 MHz 300 MHz

Radio Access Evolution Converges to LTE and Wi-Fi

CDMA 1x

EVDO EVDO Rev. A/B UMB 3GPP2

WiMax 802.16d

WiMax 802.16e

WiMax 802.16m

IEEE

2000

GSM&EDGE UMTS HSPA+ LTE (FDD/TDD) LTE-A

3GPP

TD-SCDMA

2010

WiFi 802.11a/g

WiFi 802.11ac/ad/af

WiFi 802.11n

WiFi 802.11b

LTE-M 5G

WiFi 802.11ax

LAA, LWA

2020

802.11ah (IoT)

• What role does Wi-Fi play in your mobile network strategy?

1. Wi-Fi is an important element in our access network strategy - this also includes VoWiFi

2. Wi-Fi is a complementary technology for some hotspots

3. We consider only minor Wi-Fi investments – where useful in some niche cases

4. We do not see any use for Wi-Fi as a complement for mobile networks

Polling question

Internet of Things

Mobility 2020: Pillars Technology Enablers

RAN Diversity

(HetNet)

Virtualisation

• Lower TCO

• Increase Agility

• Create a service platform

• “5 Bars” Service

• Serve > 1000x Traffic in 10 years

• Cost effective access

• Serve new segments

• Optimise for M2M • Mass connectivity

KEY THOUGHTS

1. Globally we see more innovation in OTT partnerships and new

segments like IoT for revenue growth

2. Bottom-line TCO, especially OpEx, impacts profitability and

constrains growth

3. Indian/SAARC market has great potential, but faces challenges;

Spectrum, regulation uncertainty and high OpEx

4. Technology enablers are maturing to meet the growth and

profitability challenge: RAN Diversity, NFV, IoT

Round Table Discussion

QUESTIONS

1. What are the biggest challenges facing you in your networks today?

2. India is the most spectrum constrained country in the world, as a result we have seen a lot

of innovation in spectrum efficiency here. What other areas are you considering to get more

capacity out there?

3. How do you see the relationship with OTTs developing from here?

4. Do you think virtualisation and automation holds the key to lower TCO in the future?

5. How important do you see the IoT opportunity? What are your biggest concerns with

addressing this segment?

6. What other areas should Cisco be helping to meet your business objectives?

Back Up

Voice & Messaging Enterprise IoT

Cisco Mobile Internet Architecture

Macro Cells Any G / Any Vendor

Universal Small Cells

ASR5000 Series Packet Core 2G, 3G, LTE, WiFi, Femto GW, inline Services

ASR900 & 9000 Series Unified Mobile Backhaul TDM, ATM, IP, GE, 10 GE, L3VPN, SecGW, etc

Wi-Fi, 3G/LTE Small Cell, dSON

Mobile Service Enablers Policy Suite, Gi-Services, Analytics

vIMS Hosted Collaboration Suite (HCS) IoT Cloud Connect

Access

Services

Network

Heterogeneous

Intelligent

Telco Cloud

Unifie

d D

ata

Centr

e

NF

V I

nfr

astr

uctu

re

IP/M

PL

S

Ba

ckbo

ne

Universal RAN Orchestration Wi-Fi SON ANDSF 3G, LTE cSON

He

tNe

t Virtual Packet Core

(VPC)

NEW

NEW

NEW

NFV Management & Orchestration (MANO)

India: Mobile Device Growth by Type By 2019, Smartphones Will Attain Largest Share to Reach Nearly 54%

6% CAGR 2014–2019


Millions of

Devices

* Figures (n) refer to 2014, 2019 device share

India: IoT Connections by Network Type Multi-Technology Access Growth

Millions of

IoT

Connections


* Figures (n) refer to 2015, 2020 share

(Low Power Wide Area)

45% CAGR 2015–2020 IoT Proportion of

India total

2015 2020

Connections 1% 5%

Data Traffic (Mobile) 0.2% 1.2%

Revenue 0.7% 1.6%

India: Mobile Data Traffic Growth / Apps Video to Account for 66% of Mobile Data Traffic by 2019

13x (67% CAGR) 2014–2019


Petabytes

per Month

* Figures (n) refer to 2014, 2019 mobile data traffic share

India: Mobile Data Traffic Offload* 31% of Mobile Traffic to be Offloaded by 2019


Petabytes

per Month

*Offload includes traffic from dual-mode devices (i.e., supports cell & Wi-Fi, excl. laptops) over Wi-Fi/small cell networks

India: IP Traffic by Local Access Technology Mobile Traffic Grows 3.8x Faster than Fixed Access


34% CAGR 2014–2019

Petabytes

per Month

India: Mobile Data Traffic Growth In India, 3G will still support >50% of Mobile Traffic in 2019


Exabytes

per Month

global trends in mobility

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