Presented by: Paul Ferguson, Cizmic Consulting Atlantis, Paradise Island, July 2008.

Presented by: Paul Ferguson, Cizmic Consulting Atlantis, Paradise Island, July

2008

2Emerging Trends & Technologies

Topics

1. Industry Trends Industry in Transformation - shift New converged telecom and “infotainment”

industry Increasing complexity – all connected It is all about the customer …

2. Emerging Technologies & Implications IPTV and “triple play” Fiber-To-The-x VoIP The Road to 4G: WiMAX versus LTE Mobile TV Fixed Mobile Convergence

3. Is there a new role of the Government ? Regulatory e-Government and e-Society

Industry Trends

Cizmic Consulting - BTC Strategic Considerations

1


Industry Transformation

Early 90’s

Connectivity

•Mobile 1G•Ethernet• IP starting• Internet takes a hold

Late 90’s

Scale

•Mobile 2G•Large network build-outs• Internet bubble•VoIP

Early 2000’s

Post-Bubble

•Mobile 2.5G•Broadband ubiquity•Triple/Quad Play•Social networks

Late 2000’s

Empowerment

•Mobile 3/4G•Smart devices•Content anytime, anywhere•Convergence


Stand-AloneServices

Connectivity

Old telecomindustries

New converged telecom and “infotainment”industry

Integrated &

Converged

Bundles

Connectivity+ Content

Industry transformation well under way Industry transformation well under way

Industry Transformation


ContentContent

Service provider type and service

definitions determine

d by technology

Service provider type and service

definitions determine

d by technology

SubscriberSubscriber

ContentContent

Subscriber and content

moving closer together applies

pressure to conventional

model

Subscriber and content

moving closer together applies

pressure to conventional

model

SubscriberSubscriber

Industry Ecosystem Ecosystem Shift

Industry Shift


From Kilobits….Megabits……Gigabits

Yesterday Today

e.g. 28Kbps – dial up

e.g.5Mbps – ADSL (always on)


Photo

Music – Download

Podcast – News

TV Show – 40 min

Movie – Apple TV

SIZE

4 MB 21s

4 MB 21s

114 MB

10m 8s 9.1s

200 MB

17m 46s

1.5 GB 2h 13m 20m

2.5 GB 3h 42m

33m 20s

3m 20s

2m

2m 40s 16s

3.2s

3.2s .3s

1m 31 s

.9s

1.6s

12s

20s

.3s .03s

.03s

xDSL, 3G & WiMAX

<--Fibre-To-The-Home--> (FTTH)

Next Gen

0.5Mbps

63s

63s

30m 24s

53m 30s

6h 39m

11h 10m

Dial Up & 2G

1st Gen

Movie – Best Quality

1.5 Mbps

10 Mbps

100 Mbps 1 Gbps

Speed matters


TIME

Tens of Kbps Mid 90s

Hundreds of Kbps

Ones of Mbps

Tens of Mbps

Hundreds of Mbps

Mid 00s

Narrowband9.6 to 56 Kbps

1st Gen Broadband200 Kbps to 5 Mbps

Competitive Broadband10 to 15 Mbps

Advanced Broadband20 to 30 Mbps

Ultimate Broadband30 Mbps and up

BA

ND

WID

TH

Bandwidth Requirements: New Discontinuities

Speeds offered world-wide now heading into 10’s Mbps(requirement for IPTV)

Speeds offered world-wide now heading into 10’s Mbps(requirement for IPTV)


Basic Service Impersonal Single Service Best Effort Low Speeds Fixed Only Single Device Nice to Have Service

“OLD” VERSUS “NEW” BROADBAND

Full Service Personalized Multiple/Blended Services Guaranteed Performance Very High Speeds Fixed and Mobile Multiple Devices Must Have Service

“OLD” BROADBAND “NEW” BROADBAND

Changing Role of Broadband

Broadband has evolved to be a necessity Broadband has evolved to be a necessity


There is a recognition that more customers are seeking solutions that will allow them to move and share information seamlessly between their communication devices.

They want more control over how they experience content and they also want a compelling experience across their three primary “screens” - their television, personal computer, and mobile device, commonly referred to as “the 3 Screens of life”.

“Three Screens of Life”


Consumer expectation is changing … what is at stake

LOW

HIGH

Average Monthly Triple/Quad Play “connectivity” costs is approximately $120

“Triple/Quadruple Play” … a holy grail for carriers Customers expect one bill for multiple

services, with deep discounts for loyalty Currently multiple individual solutions of

voice, video, and data Triple Play struggling to gain acceptance

because the price is approximately 2 – 5x more what people at the bottom of the socio economic pyramid can afford


ControlConvenienceCustomizationMobilityProductivitySatisfactionSavingsUsage

=

Subscribers

Customer LoyaltyCompetitive Advantage i.e. Market Differentiation

Profit Margins

Revenue

Subscription

Churn+

Speed, convergence and bundling of services leads to:


=

Subscribers

Customer LoyaltyCompetitive Advantage i.e. Market Differentiation

Profit Margins

Revenue

Subscription

Churn+


=

Subscribers

Customer Loyalty

Competitive Advantage

i.e. Market Differentiation

Profit Margins

Revenue

Subscription

Churn

Operational Costs

+

… for Subscribers & Service Providers

Service Providers

Emerging Technologies


2


IPTV (Internet Protocol Television) - the delivery of both broadcast and/or on-demand TV and video over an IP network (Ovum 2007).

How big will the IPTV market be? Estimates show that IPTV subscribers will balloon from 3.7 million in 2005 to over 40 million by 2010 (worldwide), with Europe leading the market. The industry's revenues could reach nearly US$12 billion by that time.

For residential users, IPTV is often provided in conjunction with Video on Demand and may be commercially bundled with Internet services such as Web access and VoIP for a "Triple Play" (adding mobility for a "Quadruple Play").

IPTV… The key to service provider Triple Play

Still, the battle is for more than just the television; it's a struggle for the single entry

point into the home.

Still, the battle is for more than just the television; it's a struggle for the single entry

point into the home.

Example: AT&T is preparing to take on the big cable operators in major U.S. markets with its IPTV architecture, using fiber to the node (FTTN) technology, delivering at least 24 Mbps using ADSL 2+ and/or VDSL.


Building Blocks21st Century House

Homes Connect

edUS$700 – 1,300

US$500 – 1,600

Homes Passed

Computer

HDTV

SecurityMonitor

BroadbandModem

WLAN

Careful evaluation of fiber based business case required Careful evaluation of fiber based business case required

VoIP

Cost vary depending on several factors:Network TopologyBuilding DensityAerial vs Buried FiberConstruction/Labour Cost


VoIP (Voice over Internet Protocol)

What is VoIP?VoIP or Voice over Internet Protocol, also known as Internet voice, allows consumers to make voice calls over their broadband connection using a regular phone with an adaptor, an IP phone, or a PC

IP technology allows services such as voice and video to be treated exactly like data, namely as applications, that can be transmitted quickly and simultaneously over IP networks at significantly lower costs than those of the PSTN.

Internet

PersonalComputer

PersonalComputer

Modem

Phone Adapter

Telephone

Telephone


VoIP … the Industry Hype

No telecom technology in recent history has been more disruptive to the telecom industry than VoIP. ..In 2004 it was VoIP over DSL with Vonage leading the way… in 2005 it was free voice from Skype, in 2006 was cable VoIP.

VoIP consumer users currently stand at about 4 to 5% of US and European households.

Business customers show strong demand for VoIP services, but it is not clear that all operators are ready to meet their requirements.

Although many consumers have heard of VoIP few are interested. Operators plan to capitalize on consumers’ desire to save money in the short term.

In the future, successful operators will use VoIP networks to deliver mass service customization and accelerate service development.

Operators, vendors, and the media are

hyping VoIP


The Road to 4G: WiMAX versus LTE The Road to 4G: WiMAX versus LTE (long-term evolution)

– WiMAX - Worldwide Interoperability for Microwave Access (WiMAX), as defined by the WiMAX Forum, is "a standards-based technology enabling the delivery of last mile wireless broadband access as an alternative to cable and DSL." In other words, WiMAX technology enables the transport and delivery of wireless data from point-to-point links, to full mobile cellular type access, in several formats, and across long distances.

– WiMAX has a time to market advantage over LTE -- the standards are ratified and equipment is certified, a good two years ahead of LTE. Although, the reality is that (a) consumers will not have access to this technology via access points, laptops, dual mode cell phones, etc. for some time; (b) wireless access via 802.11b/g is more than sufficient for most users both in-home networking, internet access and even VoIP calls

– Speed: tens of Mbps– Availability: 802.16 d/e now; – Frequency: various, most common 2.3 GHz to 3.5 GHz– Main Supporters: multiple vendors/operators(Sprint)


The Road to 4G: WiMAX versus LTE

– LTE has the advantage being supported by a significantly larger mobile operator base allowing them to leverage some parts of their embedded infrastructure. LTE like WiMax, is a flat IP architecture and OFDM based (orthogonal frequency-division multiplexing), which have higher efficiency. It is planned to be deployed in lower-frequency bands (from 700 MHz to 2.6 GHz) which minimizes the number of base stations required for coverage and incrementally reduces capital and operational expenditure.

– Speed: tens of Mbps (similar to WiMAX in terms of data rate)– Availability: general consensus - commercial deployment in 2010, but

it likely will not gain significant traction until the 2013; mass adoption will occur around 2015

– Frequency: from 700 MHz to 2.6 GHz (incl. cellular and PCS bands, to be co-located with legacy networks)

– Main Supporters: multiple vendors and operators (i.e. China Mobile, Vodafone, Orange, T-Mobile International, KPN Mobile, and NTT DoCoMo)

WiMAX → Niche Underserved MarketsLTE → Cellular Evolution

WiMAX → Niche Underserved MarketsLTE → Cellular Evolution


Mobile TV - Broadcast TV on a mobile device

Around the world wireless carriers have been building their high-speed wireless network infrastructure, creating the scene for critical-mass mobile TV.

The real issue is not whether mobile TV will be disruptive, but which business model will win. The business models could take the shape of a cable model (different content packages with providers getting a percentage based on subscribers), an a la carte model (pick your own mobile TV channels), or an advertisement-based model (i.e. ESPN assembling all those sports fans for advertisers).

Mobile TV - Broadcast TV on a mobile device

Around the world wireless carriers have been building their high-speed wireless network infrastructure, creating the scene for critical-mass mobile TV.

The real issue is not whether mobile TV will be disruptive, but which business model will win. The business models could take the shape of a cable model (different content packages with providers getting a percentage based on subscribers), an a la carte model (pick your own mobile TV channels), or an advertisement-based model (i.e. ESPN assembling all those sports fans for advertisers).

Mobile TV

Hardly any wireless service provider has a revenue management or assurance program in place for mobile

TV revenue distribution

Hardly any wireless service provider has a revenue management or assurance program in place for mobile

TV revenue distribution


A killer app that's got all service providers' attention is fixed-mobile convergence (FMC). A particularly attractive spin is an integrated Wi-Fi/mobile wireless phone, using mobile wireless on cellular infrastructure when you are out and about, and Wi-Fi for free when you are in your home or office.

Here's the basic problem with this stellar vision: what's in it for mobile wireless providers? They get 30 percent of their revenue from users who are in reach of an office phone or are at home, often without wireline service to begin with. Besides, are mobile wireless providers going to end up subsidizing the dual-mode Wi-Fi cellular phone, only to see revenue shrink? Yes in some selected environments, and no otherwise.

A killer app that's got all service providers' attention is fixed-mobile convergence (FMC). A particularly attractive spin is an integrated Wi-Fi/mobile wireless phone, using mobile wireless on cellular infrastructure when you are out and about, and Wi-Fi for free when you are in your home or office.

Here's the basic problem with this stellar vision: what's in it for mobile wireless providers? They get 30 percent of their revenue from users who are in reach of an office phone or are at home, often without wireline service to begin with. Besides, are mobile wireless providers going to end up subsidizing the dual-mode Wi-Fi cellular phone, only to see revenue shrink? Yes in some selected environments, and no otherwise.

Fixed-Mobile Convergence

Is there a new role of the Government ?

What are the options? Stay out of the way Regulate the telecom to ensure competitive parity Eliminate the digital divide. Similar to roads…

should Governments provide free basic communications infrastructure ?

Use technology to become more efficient e.g eGovt initiatives


3


e-Government and e-Society

The establishment of an e-government infrastructure is a proven catalyst to help create a business-friendly environment by streamlining the interaction and improving the interface between government and business. By cutting out redundancies in procedures and emphasizing immediate and efficient delivery of services, e-government creates the conditions that attract investors/ investment. Willingness of Government to consistently push e-Gov and e-Society agenda for increased efficiency, increased communications between the agencies and the citizen or a business, conducting transactions, governance, etc. requires a ubiquitous broadband, government backbone, new applications, human capital, among other.

e-Government and e-Society Attractive for Businesses


e-Government and e-Society Examples from around the world

Germany

Italy

United Kingdom

Canada

Singapore

DubaiSwitzerland

Trinidad & Tobago

United States


e-Vision Segments Pipe Size (Speed)

Services Technology

E-Learning All learning centres, schools & libraries

1mbps–10mbps On-line Education, Virtual Classroom, Virtual lecture & share point

ADSL 2+, Ev-DO, WiFi, Wimax

E-Commerce SME & Large Enterprises

5mbps-100mbps

Business to Business, e-Supply chain & Online store

ADSL2+,Fibre+ Wimax

E-Culture All citizens 10mbps–1Gbps IPTV,HDTV & Video on demand

ADSL2+, Fibre

E-security Major cities, high traffic areas & gov’t institutions

10mbps–100mbps

Full Motion Video, Face Recognition, City Surveillance etc

Wimax, Fibre

E-Government Gov’t institutions

10mbps–1Gbps Video Conferences, Virtual Data bases etc

Wimax, Fibre

E-Health All major hospitals

100mbps-1Gbps

3D Imaging, Fle Sharing & Virtual Diagnostics

Fibre

e-Government and e-SocietyHow to deliver an e-Vision


Emerging technologies pose both a threat and opportunity to existing operators and vendors

The key to successfully deploying emerging technologies is the development of an investor grade business plan that addresses the need of the customers

Conclusion


Fiber-To-The-x

FTTN – Fiber to the Node

FTTC – Fiber to the Curb

FTTB – Fiber to the Building

FTTH – Fiber to the Home

DLC

DLC

Need to match access to the target segment(s) Need to match access to the target segment(s)

Presented by: Paul Ferguson, Cizmic Consulting Atlantis, Paradise Island, July 2008.

Documents

s mbps requirement

s xdsl

s narrowband

s connectivity mobile

s empowerment mobile

s scale mobile

industry trends industry

s postbubble mobile