Wireless Network Optimization (2010)

Marc Jadoul
September 2010
Addressing Wireless
Network Optimization
Opportunities

2 | Wir eless Optimization Ser vices | September 2010 All Rights Reser ved © Alcatel-Lucent 2010
Preamble
Life was so much easier
when Apple and BlackBerry
were just fruits.
Anonymous quote on Twitter
“
”

Mobile Data Traffic is Booming
Several regions of the world will transfer
more mobile data per month in 2014 than
they did for the entire year of 2008.
Total Mobile Network Data Traffic, World Market, 2008 to 2014
Africa
Middle East
Latin America
North America
Asia-Pacific
Eastern Europe
Western Europe
0
5,000
10,000
15,000
20,000
2008 2009 2010 2011 2012 2013 2014
(Petabytes)
Source: ABI Research (2009)

New Services and Devices Boost Mobile Broadband Adoption
Accessed news or info via browser
Accessed web search tools
Watched mobile TV and/or video
Watched on-demand Video
Accessed social network site or blog
Listened to music on mobile phone
Market Average iPhone Users
84.8%
58.6%
30.9%
20.9%
49.7%
74.1%
13.1%
6.1%
4.6%
1.4%
4.2%
6.7%
Source: M:Metrics, Inc. (2008)
Mobile data-users growth rate 2008 to 2012
Source: Pyramid Research (3/2009)
Video +419%
Browsing +204%
Music +286%
Games +197%
Messaging +98%
Ringtones +127%

Smartphones and Laptops Drive Mobile Data Usage
While handsets and cellular modems accounted for 95% of
the world’s mobile data traffic in 2008, mobile computing
devices with embedded cellular/4G modems will represent
more than 52% of global mobile data traffic by 2014.
Source: ABI Research (2009)
Monthly Data Consumption per Subscriber
(Smartphones)
Monthly Data Consumption per Subscriber
(Notebooks, Netbooks, Smartbooks, …)
Source: Rysavy Research (2010) Source: Rysavy Research (2010)
2010 2011 2012 2013 2014 2015 2016
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
(Gigabytes)
2010 2011 2012 2013 2014 2015 2016
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
18.0
(Gigabytes)

Video and Internet Drive Demand for Mobile Data Capacity
Mobile Network Data Traffic by Traffic Type,
World Market, Forecast: 2008 to 2014
Source:ABIResearch(2009)
0
5,000
10,000
15,000
20,000
2008 2009 2010 2011 2012 2013 2014
(Petabytes)
Web/Internet
VoIP
Video Streaming/TV
Audio Streaming
They don’t even realize how
much data they’re using.
Gene Munster, senior analyst at Piper Jaffray
“
”

User Demand will soon Surpass Network Capacity
What we have done and continue to do is have a buffer of
capacity above what our demand is at any given point in time.
When we see consumer demand begin to feed into that capacity,
we scurry out there to add more capacity. This is a very simple
concept and something we have done religiously over the year.
“
Dick Lynch, CTO at Verizon Wireless
”
Average Demand vs. Average Capacity per User
Source: Rysavy Research (2010)
2010 2011 2012 2013 2014 2015 2016
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
(Gigabytes)
Demand
Capacity

Bandwidth Hungry Low ARPU Services are
Bypassing the Telco Value Chain
Top 3% of smartphone users are
consuming 40% of all smartphone data,
while they represent less than 1% or
AT&T’s total postpaid customer base.
They are consuming 13 times the data of
an average smartphone user.
Ralph de la Vega, AT&T Mobility and Consumer Markets
“
”
John Petter, Managing Director of BT Retail’s consumer business
We can’t give the content providers a completely
free ride and continue to give customers the
[service] they want at the price they expect.
“
”There is not a single Google service that is
not reliant on network service.We cannot
offer our networks for free.
René Obermann, CEO of Deutsche Telekom
“
”

Challenge #1
Offering Bandwidth at the Lowest Cost
95 percent of mobile data traffic is best effort Internet.
The issue is how can operators handle that traffic
at the lowest cost with acceptable quality.
Gabriel Brown, Heavy Reading (2010)
Quantity
Time
Data dominant
Voice dominant
Revenues
Traffic
Source: Heavy Reading (2009)
Operator
revenue & traffic
decoupled

Bandwidth Hungry Low ARPU Services May
Eventually Lead to Reduced Quality of Experience
BT Customer (source: TG Daily, June 2009)
From about 17:30 onwards using the BBC
iPlayer becomes impossible. It's fine during
the day but come the evening, it's a no go.
“
”
AT&T has installed a massive Wi-Fi
hotspot in Times Square to reduce the
mobile data traffic congestion. The
carrier continues to be challenged by
serious traffic congestion as a result of
high-bandwidth demand on its network
due to excessive data usage by the
iPhone customers.
Source: Zack’s Investor Research, May 2010
“
”

Challenge #2:
Optimizing Network Performance and Quality of Experience
There is a growing role for traffic optimization, in-network
analytics and network intelligence across network layers
and devices to coordinate with smart policy control
practices for traffic management and user knowledge.
Source: Strategy Analytics (2009)
Volume, Signaling, and Airtime all contribute to customer’s experience
Device
&
Apps
RF Capacity
&
Airtime
Signaling
Backhaul
Bandwidth
CPU/DCN
load

SFRDoing nothing
Add an overlay network to
support new services and try
to increase revenue growth.
Optimizing the network
Optimize the existing network
assets to drive down costs by
5%-10% and free up cash for
re-investment.
Transforming the network
Migrate legacy networks to
an IP-based architecture to
enable new revenues and
service delivery at lower cost.
What are the Alternatives for a Network Operator?
Adding new overlays on the existing
architectures doesn’t scale.
Alcatel-Lucent is working with a large
European Tier-1 with 14 overlays
looking for help to reduce costs.
Optimization means reducing costs,
improving QoE, increasing utilization
and improving performance.
It can payback in as little as 3 months
and free up cash for re-investment.
Migration can reduce costs by up to 30%.
But the business case is complex,
requires major capital investment and
the implementation cycle may be long.
2
1
3

Challenge #3:
Cost Effective Operations and Migration from Legacy to All-IP
I’m paying millions per year to my equipment vendor
inmaintenance fees, and I have the feeling that I’m
paying for […] that haven’t been used for years.
Tier-1 Service Provider
TDM voice switch utilization decreases as subscribers abandon
their fixed lines and move onto mobile & VoIP.
Frame Relay and ATM ports are dropping below the 50%
utilization mark as traffic is migrated onto IP infrastructure.
To lower cost of ownership of their legacy networks, operators
are putting stronger focus on utilization and consolidation.
“
”

Operation and Service
Transformation
Transforming Your Mobile Business
The way forward depends on your market conditions,
network infrastructure and services roadmap
Network
Optimization
Network
Transformation
time
1 2
3
voice data data voice
> >

Optimization — What does it Mean?
‘Optimization’ means: reducing costs, improving QoE,
increasing utilization and boosting performance
while positioning the network for growth
or evolution towards a HLN architecture.

Optimization Savings Can Be Sizable
Source(s): actual cash flow savings from Alcatel-Lucent optimization project customers
RF
Capacity Gain
10-20%
Optical BH
Cost Reduction
18-63%
Ethernet BH
Cost Reduction
56%
TDM Hubbing
Cost Reduction
10-52%
Optical
Bandwidth
Recovery
15-25%
Data Cash
Flow Savings
$2.5M/Yr
Toll Bypass
Cost Reduction
37-38%
Wireless GW
Consolidation
19-35%
Overall savings: 10-63%

Keeping Transformation Costs under Control
Balancing transformation investments is a major concern for MNOs
Current network Transition network Target network
Shorter
Flatter
time
OPEX required for
network migration
CAPEX required for
network modernization Ideal transition OPEX
costs

Cost Reduction through Network Optimization
Source(s): Alcatel-Lucent, Bell labs (2009)
Mobile
aggregation
and
backhaul
From TDM/ATM to optimal combination of
new technologies (Ethernet, packet
microwave, …)
Assess “owning vs leasing” model
Service discrimination enabling better
resource management
Consolidate backhaul and core transport
over IP and optics
Two key areas Methods to reduce costs OPEX savings
Radio
Sites
Modernize RAN by swapping out legacy
Astute radio network planning
Indoor coverage solutions
RAN sharing / site sharing / outsourcing
Low power solutions
Up to
50%
Up to
65%

The Need for a Partner that Understands Your Business
Increased adoption of smart phones, social networking
technologies, and the continued transitions to a unified IP
infrastructure will drive market demand for highly skilled
network consulting and integration services capabilities.
Source: IDC (2009)
Leveraging a network of skilled consultants, supported
by Bell Labs innovations and tools, Alcatel-Lucent has the
global reach, deep communications network capabilities,
and program management experience to support service
providers from vision to execution.

Alcatel-Lucent Optimization Solution
1 Business Consulting Services
Network Quality Assessment & Optimization Services
Network Consolidation & Evolution Services
Mobile Backhaul Services
Helping service providers to identify cost saving and value creation
opportunities and translate them into a profitable executable plan.
Exploiting existing Network assets while delivering the performance
that meets customers’ quality and operational standards in access,
switching, transport, wireless, enterprise LAN/WAN and data networks.
2
Consolidating and aligning multiple and disparate Network assets and
their operations processes to realize a reduction of operating costs and
a safer evolution.
Consulting, design, integration, deployment and maintenance services
to meet operator business goals and plans on time and within budget.
3
4

Alcatel-Lucent Value Proposition
Maintain customer satisfaction in the face of
Optimize the network by
Benefit from Alcatel-Lucent’s Global experience
in Fixed and Mobile Data
Exploding data traffic
Unpredictable applications
New, bandwidth-hungry multi-media devices
Preventing congestion and identifying additional capacity needs
Consolidating assets while preparing for growth and/or evolution
Improving end to end QoE and Network performance KPIs
End-to-End mobile and fixed network solutions:
access, backhaul, core and applications
Consult, Design, Integrate, Optimize, Migrate and Managed Services
Free up more cash from operations with quick payback projects
to fund future programs or contribute to EBITA growth KPIs
Global Competence: Bell Labs, IPTC, GNEIC and Network Design &
Optimization Centers

Alcatel-Lucent Key Differentiators
Focus on customer’s economics
Ability to take commitments
Total Cost of Ownership, not only CAPEX
On KPIs, Schedule and Financials
Multi-vendor capabilities
“Broadband” Services focus
Combining Alcatel-Lucent and Multi-Vendor Network System expertise
Methodology and tools
Leveraging Bell Labs, in-house tools and global Partnerships
End-to-End focus
Targeting Quality of Experience & IP
Strong customer references
With the ability to duplicate these best practices Worldwide

Why Work with Alcatel-Lucent?
Optimal results in network optimization and capacity
control through partnering with Alcatel-Lucent
Applications experience
Multi-skills (radio,
backhaul, core) expert
engineering teams
Multi-networks
experience
Multi-vendor experience
Technology maker
expertise thanks to
unparalleled R&D skills
and resources
Applications
Master one of churn
main factors by
identifying the path to
maximize capacity
Get solutions to prevent
congestion
Drive down OPEX
through operations
efficiency enhancement
Anticipate network’s
extension decisions and
therefore improve
CAPEX control
Flexible and scalable
service delivery
Detailed snapshot on
your current network
capacity
Analysis formalized
through assessment
report with
recommendations for
actions
Local follow-up of
recommendations’
implementation
Expertise Execution Business Value

www.alcatel-lucent.comwww.alcatel-lucent.com

Wireless Network Optimization (2010)

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