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Broadband Issues PerspectiveMike Furby
Systems Engineering Manager
Redback Networks
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Redback Networks, An Ericsson Company
• Founded 1996 • Headquarters: San Jose, CA• Wholly owned subsidiary
of Ericsson• Tier 1 Customer Base– 500+ service providers– 16 of Top 25 globally
• Fastest growing SP router company• Support over 50MM DSL Lines• $400MM+ Investment in Next-
Generation Multi-Service Routing Portfolio
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Multiple Applications
In Top 20
Residential Triple Play
Business Networks
Mobile Broadband
Internet& VOD IPTV VoIP VPN
(L2/3)MetroE
(Agg/VPLS)Wi-Fi/WiMax
3G Data/MPBN
SmartEdge Highlights
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Broadband Issues
• Waves of change across the industry• Market dynamics & changing traffic patterns – Per subscriber traffic growth – Market saturation, growth is slowing– Service evolution– Increasing competition– Subscriber loyalty & the need to differentiate– Pressure on service margins & the need to reduce OPEX/CAPEX– P2P, DPI & QoS
• 21CN Wholesale Broadband Connect– Single step WBC strategy
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Technology EvolutionBroadband Capacity
1990 2000 2010 Year
ADSL
ADSL2+
SDSL
VDSL
VDSL2
FTTH
GPON
Last mileBandwidth
500kbps
2Mbps
10Mbps
100Mbps
1Gbps
CapacityBRAS/BNG
1st gen BRAS
Eth BNG
Next-gen Eth MSER
10Gbps
240Gbps
480Gbps
50x
2000x
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Network Traffic IncreasingBroadband and Video Driving Upgrades
Subscriber traffic in mobile networks
Traffic Patterns creating Pressure points for Fixed and Mobile
Subscriber traffic in fixed networks
50 000
100 000
150 000
200 000
250 000
300 000
350 000
2005 2006 2007 2008 2009 2010 2011 2012
Pet
abyt
e
Classic Voice Internet IPTV/VideoVoIP
Source: Ericsson and market estimate
0
1,000
2,000
3,000
4,000
5,000
2004 2005 2006 2007 2008 2009 2010 2011 2012
Pet
abyt
e
Voice Internet TV/Video
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0%
5%
10%
15%
Q2C Y 06 Q3C Y 06 Q4C Y 06 Q1C Y 07 Q2C Y 07
DSL Cable FTTX
WorldwideAmericas
EMEA APAC
Source: Point-Topic as of Q1 2007
0%
10%
20%
30%
Q2C Y 06 Q3C Y 06 Q4C Y 06 Q1C Y 07 Q2C Y 07
DSL Cable FTTX
0%
5%
10%
15%
Q2C Y 06 Q3C Y 06 Q4C Y 06 Q1C Y 07 Q2C Y 07
DSL Cable FTTX
-5%
0%
5%
10%
15%
Q2C Y 06 Q3C Y 06 Q4C Y 06 Q1C Y 07 Q2C Y 07
DSL Cable FTTX
Broadband Growth by Technology
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Service EvolutionsP2P Technology & Internet Video
2002 – 2006P2P dominates Internet traffic
(Video accounts for 60%)
2007HTTP overtakes P2P again
(YouTube accounts for 20%)
iPlayer
Driving the world towards adopting P2P as a commercial video distribution technologyDriving the world towards adopting P2P as a commercial video distribution technology
Source: Cachelogic
Source: Ellacoya
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BT Transformation
BRASSubscriber CP
Cisco 10k or JNPR ERX
20CN MSiP
(ATM network)
20CN Colossus
(IP network)
20C IP-stream
BRASSubscriber CP
SE800
20CN Colossus
(IP network)
21CN
(Ethernet MPLS)
21C IP-stream
BRASSubscriber CP
SE800
21CN
(Ethernet MPLS)
21CN
(Ethernet MPLS)
21C WBC
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Summary
• The way Broadband is being delivered is changing• Internet traffic is both increasing and changing shape• Growth is slowing– Driving the need to differentiate– Driving the need to reduce costs
• Redback is a key supplier to the industry– 16 of the top 25 DSL suppliers are Redback customers
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23 of the top 25 largest telecommunication companies by capex are Redback or Ericsson customers
22.9
17.9 17.7
12.9
9.8.
6.76.1
5.1 4.8 4.53.8 3.7 3.6 3.4 3.3 3.2 3.1 2.9 2.7
.
5.
10.
15.
20.
25.
NT
T G
rou
p
AT
&T
Veri
zo
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Ch
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ob
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Deu
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Sp
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BT
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etc
om
Top 20 Telecommunication Companies by CAPEX (billions)
Redback or Ericsson customerNot customer
CA
PE
X
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16 of the top 25 DSL operators by subscribers are Redback customers
23
13.4 13.2
8.88 7.3
6.6 6.65.2 5.1 4.7 4.3 3.9 3.7 3.3 3.2 3 2.6 2.4 2.4 2.4 2.2 2.2 2 1.9
0
5
10
15
20
25
Ch
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ele
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Ch
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etc
om
AT
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(S
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)
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Deu
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Tele
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Top 25 DSL Operators by Subscribers (millions)
Redback or Ericsson customerNot customer
Su
bsc
ribe
rs