Is LTE Sufficient: Network Options for Data Management

Is LTE Sufficient?

Asia Pacific

2

Explosive Mobile Traffic Data Growth

2010 2011 2012 2013 2014 2015

0

1

2

3

4

5

6

7

Global Mobile Data

Exa

Byt

e/M

on

th

2010-2015 CAGR: 92%2010-2015 26X increase in traffic

* Source: Reformatted Cisco VNI mobile (2011) data

3

Growth of Smart Device

• The growth of smartphones and M2M applications is expected to fuel the growth of data and exacerbate the bottlenecks faced by wireless service providers.

Source: Frost & Sullivan.2009 2010 2011 2012 2013 2014 2015

0

100

200

300

400

500

600

Global Smartphone Growth

SymbianAndroidiOSBlackBerryWindows MobilewebOSOthers

Sh

ipm

ent

(Mil

lio

n)

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Diverging Growth Projections for ARPU and Traffic

• The decoupling of data revenues and increasing data reduce the profit margins from data services, thereby making the expansion of networks less sustainable and justified.

2009 2010 2011 2012 2013 2014 20150.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

APAC ARPU Evolution

Voice ARPU Data ARPU

$

Time

Revenues

Cost

Voice having a larger ARPU share

Data having a larger ARPU share2009 2010 2011 2012 2013 2014 2015

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%APAC - Data % of Total ARPU

Source: Frost & Sullivan.

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Network Relieve and Monetization

Managing Trafficand Revenues

IP BackhaulingIP Backhauling

Bandwidth ManagementBandwidth Management

Deep Packet InspectionDeep Packet Inspection

Femto OffloadFemto Offload Content Delivery Network

Content Delivery Network

WiFi OffloadWiFi Offload

App and Content StoreApp and Content Store

Frequency Re-FarmingFrequency Re-Farming


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Course of Action – Short-Run Solution

• Offloading of data traffic from mobile network’s precious spectrum onto WLAN/Femto and transporting it back over the underlying infrastructure like Digital Subscriber Line

• Limits the transfer of data over a period of time; provides a means of achieving higher network efficiency but not necessary to user’s experience

• Controlling the rate of different classes of traffic transversing the network and monitoring traffic for compliance with traffic contract

• With more protocols using tunneling and encryption, deep packet inspection (DPI) is increasingly being used to analyze the traffic and work in conjunction with network policy servers.

• Traditionally, placing content cached nearer to the edge of the network and to the end user reduces the traffic load across the network and latency and packet loss.

Radio OffloadRadio Offload

Bandwidth Cap

Bandwidth Cap

Traffic ShapingTraffic

Shaping

Deep Packet Inspection

Deep Packet Inspection

CachingCaching

• WLAN offload is explored by AT&T and PCCW. Femto offload is explored by most major Japanese service providers and Sprint.

• Various implementations would include bitrate limits, bursting, and individual bandwidth cap. These have been explored by many major operators in a bid to manage traffic.

• Implementations depend on overload conditions, traffic classifications, and self limiting sources.

• Increasingly deployed in mobile networks, with some vendors like Ericsson integrating the solution across wireless and wireline

• Mobile and online Content Delivery Network still differ in their capabilities; however, this gap is closing. Many mobile implementations encompass compression, adaptive streaming, and transcoding.

• With limited licensed spectrum, reuse of the existing 2G spectrum is becoming attractive. Due to the nature of radio propagation, this strategy can provide improved coverage and performance.

Frequency Re-Farming


• Considerations would include frequency planning, re-optimization, underlying 2G service impact, and handset availability. It is explored by Elisa, CSL, Optus, Vodafone, and AIS.

Solution Description

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Course of Action – Long-Term Solution

LTE & Radio EnhancementsLTE & Radio Enhancements Migration to All-IPMigration to All-IP

End-End Management and DeliveryEnd-End Management and Delivery Monetization of NetworkMonetization of Network

• LTE providing additional capacity relief, network capabilities and QoS support

• Software defined radios providing seamless evolution and CAPEX/OPEX savings

• Planned macro nodes & uncoordinated local node deployments

• Solutions like ALU’s LightRadio and NSN liquid radio with their smaller form factor & cloud like architecture

• LTE providing additional capacity relief, network capabilities and QoS support

• Software defined radios providing seamless evolution and CAPEX/OPEX savings

• Planned macro nodes & uncoordinated local node deployments

• Solutions like ALU’s LightRadio and NSN liquid radio with their smaller form factor & cloud like architecture

• Converging of disparate networks and converged platforms

• Improved scalability of networks• More effective management across different

networks• Clearly delineated control and data plane and

puts in place mechanisms that can be leveraged on for end-to-end QoS/QoE and network intelligence and exposure

• Converging of disparate networks and converged platforms

• Improved scalability of networks• More effective management across different

networks• Clearly delineated control and data plane and

puts in place mechanisms that can be leveraged on for end-to-end QoS/QoE and network intelligence and exposure

• Deep Packet Inspection, policy management, heuristic analysis, and charging capabilities enable more effective traffic management and enforcement.

• Support of appropriate quality of experience (QoE) for premium users

• Cloud-based caching and content distribution while maintaining mobility & Interactivity

• Deep Packet Inspection, policy management, heuristic analysis, and charging capabilities enable more effective traffic management and enforcement.

• Support of appropriate quality of experience (QoE) for premium users

• Cloud-based caching and content distribution while maintaining mobility & Interactivity

• Improved QoS, real-time subscriber knowledge, context, content filtering, and policy control to generate new business models

• Tiered pricing, speed boost or bandwidth on demand, new service offerings, and differentiated pricing options

• Network API exposures & ecosystem fostering allowing for new business models involving a two-sided model, API licensing, and application revenue sharing

• Improved QoS, real-time subscriber knowledge, context, content filtering, and policy control to generate new business models

• Tiered pricing, speed boost or bandwidth on demand, new service offerings, and differentiated pricing options

• Network API exposures & ecosystem fostering allowing for new business models involving a two-sided model, API licensing, and application revenue sharing

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• Strategies to address capacity constraint have to address the immediate constraints of the radio interface.

Radio Access

WirelineAccess

AggregationLayer

Edge and Core

Network

Alleviating Network Constraints


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Addressing Radio Interface Constraints

• Network capacity based on the current technology implementation and strategy of squeezing capacity out of the existing licensed spectrum would soon reach a critical point.

• Barring the migration to Long Term Evolution (LTE), network operators would soon be faced with a choke point where they are unable to address the demand for data growth.

Net

wor

k B

andw

idth

Time

TraditionalCapacityExpansion

Data Growth

Choke Point


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Addressing Radio Interface Constraints

• To address the immediate constraints of air interface capacities, network operators can implement various offloading strategies like frequency re-farming, WiFi offloading, and Femto deployment.

• Strategies like WiFi offloading and Femto deployment have additional benefits of offloading radio access network traffic onto the underlying infrastructure like Digital Subscriber Line

• It is expected that the growth of data traffic will outpace the growth of network capability, and traffic offload will still be a viable solution even after LTE migration.

Time

Data Growth


WiFI OffloadingFemto Deployment

Choke PointN

etw

ork

Ban

dwid

th

TraditionalCapacityExpansion


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Analysis of WiFi Offload Strategy

• Beyond upgrading of the existing node capacity or introduction of Macro/Micro/Pico nodes, operators are increasingly looking at WLAN/Femto offloading as a cost-effective alternative solution to manage the rapid growth in data.

• Offloading of data traffic onto WLAN and Femto is increasingly becoming attractive as it provides the following benefits: Data is offloaded from the Macro nodes and transported over the underlying transport

network, which alleviates traffic not only on the radio interface but also on the backhauling Reduced equipment cost, deployment/services cost, leasing and operating expenses Cost savings associated with the spectrum license fee, as WLAN operates in the unlicensed

spectrum• However, some factors such as the following have to be considered when implementing

these offload strategies: Constraint on whether the underlying infrastructure is owned by the operator or by a partner,

and quality of service (QoS) arrangements have to be considered Whether the underlying infrastructure is itself highly utilized The cost and complexity associated with a large mesh WLAN network Mobility considerations for WLAN likely to involve more complexities and cost WLAN runs on a unlicensed network; its performance would depend on the interference in the

area deployed

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3G (HSPA+)

3G (HSPA+) + LTE (MIMO 4x4)

3G (HSPA+)+ Refarming + LTE

Demand

0 5 10 15 20 25 30

Capacity Growth

Insufficient Capacity Growth to Meet Demand

• Acquisition of LTE and re-farming of the existing GSM band will be still insufficient to support the expected X26 increase in capacity growth over the next five years.

Gap has to be filled be by re-farming the additional available spectrum and/or other wireless offload strategies like WiFi, Femto, and coordinated small cells.

*Assumption that operators acquire equal bandwidth in LTE spectrum and re-farm their existing GSM band** Estimates are based on download capacities Source: Frost & Sullivan.

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For Additional Information

Donna JeremiahCorporate CommunicationsAsia Pacific+603 6204 [email protected]

Carrie LowCorporate CommunicationsAsia Pacific+603 6204 [email protected]

Mark KohSenior Industry AnalystICT+65 6890 [email protected]

Jessie LohCorporate CommunicationsAsia Pacific+65 6890 [email protected]