How to Make a lot more Money from

“How to Make a lot more Money from your Network” TLEN 5510 Future of Inter-Networking Robert Duncan Transaction Network Services rduncan@tnsi. com +1 (303) 810 -2634 (m)

Topics n Interconnection of Networks ¨ Why? ¨ How? Future: All-IP Network Interconnection (IPX) n Roaming among Networks n ¨ Why? ¨ How?

Intro n n n 20 years in Mobile networks 30 years in Telecom (see “Bellhead”) Author (“Wireless Intelligent Networks”) Standards contributor, Chair Experience in Network Planning, Engineering, Operations ¨ AT&T, Qwest/U S WEST Wireless ¨ TDMA, CDMA, GSM, Wi. Max, Wi-Fi, LTE

INTER-NETWORK CONNECTIONS Why? How?

Recurring Pattern Hub Connections: n*(n-1) n

Telephone Toll e. Xchange Local e. Xchange WHY Interconnect networks? More subscriber connections, traffic, revenue

Network Interconnection e. Xchange Network WHY use an e. Xchange? Network Fewer network connections, Lower cost

New Network Interconnection e. Xchange New Network > 1000 Mobile networks! WHY use an e. Xchange? Fewer network connections, Lower cost

Metcalfe’s Law Connecting Networks Creates Value (Network A) + Value (Network B) = ? ? ? n Example: n ¨ Value (Network A) = 1, 000 subscribers’ traffic ¨ Value (Network B) = 1, 000 subscribers’ traffic 2 1, 000 … 1 1 2… S 1, 000 1 2 1, 000 + 1 = 2… S 1, 000 … S 2, 000 1 2 1, 000 1 2 2, 000 … S 1, 000 … 2… … 1

Why Inter-Networking? n Maximize Revenue … at Minimum Cost (Metcalfe’s Law)

Convergence Ahead INTER-NETWORK FUTURE From Circuit to Packet

Cellular Calls Connect via _____?

Current Inter-Network Connections Fixed Network Mobile Network IP Network Telephone e. Xchange Any Disadvantages? Fixed Network Mobile Network IP Network

Disadvantages of Public Telephone Connections Fixed Network Mobile Network IP Network Telephone e. Xchange ↑ Cost ↑ Complexity ↓ Qo. S ↓ Features Fixed Network Mobile Network IP Network

Native Inter-Network Connections Fixed Network Telephone e. Xchange Mobile Network Fixed Network Mobile Network IP e. Xchange IP Network

Today: Mobile Connects via Public Telephone (PSTN) PSTN (LEC + LD) SGSN ice Vo MSC Si gn ali ng STP Data MSC BG GRX BG SGSN Op A Circuit Voice Op B Circuit Voice 16

Tomorrow: Mobile connects via IP PSTN Existing technology (LEC + LD) Not All-IP STP MSC MSC Server Signal ing Data SGSN ce MGW Voi BG IPX SIP Proxy BG ENUM Op A Circuit Voice MSC Server SGSN MGW Op B Packet Voice Circuit Voice 17

Future: LTE connects via IP PSTN LTE/All-IP (LEC + LD) STP MSC CSCF Si gna ling Data CSCF SGSN ce MGW Voi BG IPX SIP Proxy BG ENUM Op A Packet Voice SGSN MGW Op B Packet Voice 18

Choosing the Least Cost Route for Voice Connections 19

IPX Provides Voice & Data Connectivity A Common Connection Point for Voice & Data ISPs MNOs TNS IPX Packet Data Packet Voice GSM, GPRS/UMTS Operators uit c Cir ic Vo e ASPs CDMA Operators FNOs

Benefits of Native (IP) Connections ↓ Cost n ↓ Complexity n ↑ Qo. S n ↑ Features n International LD: <10% of Current Flat Fewer vocoders Unobstructed operation $0. 0500/MOU Current LEC interconnect: $0. 0025/MOU Current Vo. IP interconnect: $0. 0005/MOU 100 X less revenue/minute

Observing this Trend in Use n International LD (greatest margins) use of IP ¨ 2006: 2% to 4% of all Vo. IP traffic goes through a peering service ¨ 2010: Over 50% International Voice via IP n 2010: Mobile-Mobile use of IP e. Xchange (IPX)

INTER-NETWORK FUTURE An IP e. Xchange (IPX)

All Operators Can Use IP e. Xchange (IPX) MNOs ISPs IPX SPs ASPs FNOs ¢ Applicability – – – © GSM Association 2009 – Mobile Network Operators (MNOs) Fixed Network Operators (FNOs) Internet Service Providers (ISPs) Application Service Providers (ASPs)

Bridging the Mobile World TM Aicent IPX Viewpoint Market Needs MNOs needs to support a wide range of multimedia-based application with high quality. FNOs are developing Next-Generation Networks ISPs & ASPs are offering more content/application services All entities want to interconnect each other in a controlled, efficient, profitable and cost-effective manner. IP Interworking IP is the common protocol of above networks and service. IP Packet e. Xchange (IPX) is a standardized solution for interconnecting various service providers over a global IP network with high Qo. S. Aicent Inc. Proprietary and Confidential 26

IPX Interconnect Principles Openness Cascading payments –Open to everyone –cascading of revenues from End to End –Ubiquitous access (fixed, mobile, ISP or ASP) –Payment by whoever perceives the value –choice (in addition to open Internet) –transparent value-based service pricing Quality Efficiency –guaranteed Qo. S (E 2 E SLA, Reliability, Capacity) –ubiquitous Service via single Gateway –quality relationship with your IPX Provider –multilateral commercial agreements –security (accountability, spam reduction) –flexibility & scalability IPX TRUSTED ENVIRONMENT ISP FNO MNO Private IPX Domain IPX 1 IPX 2 ISP FNO MNO IPX 3 INTERNET Confidential Mobile 27 Fixed

Peering Ensures Competition, Choice of IPX Provider IPX MNOs IPX FNOs IPX SPs ASPs ISPs © GSM Association 2009

Layers of IPX Functionality Billing ENUM Inter-Carrier Clearing Billing Routing and Addressing Service Aware for event-based and stream-based traffic Signaling Network Vo. IP Traffic Detection for routing, charging, and multilateral destination policing Media Conversion Fixed & Mobile Termination 29

Quality Openness For more information, please visit www. gsmworld. com/technology/ipi or email us at ipi@gsm. org Thank you Cascading Payments Efficiency

NETWORK ROAMING Why? How?

Roaming e. Xchange Mobile Network

Why Roam? ↑ Coverage n ↑ Revenue n ¨ Roam out of your Network ¨ Roam in to your Network n (Retail revenue) (Wholesale revenue) Who benefits? q Subscriber q Your network q Roaming partner network (“Home” network) (“Serving” network)

Data Access Home Network � Radio Control �Data Service Internet Gateway � ��� Home AAA Subscriber Database Data Access Steps: 1) Mobile: 2) Mobile& System: 3) Serve: 4) Serve: 5) System: 6) System: Select system Attach and establish session Authenticate Mobile Authorize Mobile Connect Accounting User Data (Mobile IP) AAA signaling (RADIUS)

Data Access when Roaming Service Home Network Internet Radio Control Subscriber Database Roaming e. Xchange Data Gateway �� Home AAA Serving Network � � Proxy � � AAA Rating & Billing � Data Access while Roaming: 1) Mobile: Select system 2) Mobile & System: Attach and establish session 3) Serve: Authenticate Mobile 4) Serve: Authorize Mobile 5) System: Connect 6) System: Accounting Data Gateway � � Radio Control � �� Serving AAA Subscriber Database User Data (Mobile IP) AAA signaling (RADIUS)

Data Access when Roaming on Wi-Fi Service Home Network Internet Radio Control Subscriber Database Roaming e. Xchange Data Gateway �� Home AAA Serving Wi-Fi Network � Internet � � Proxy � � AAA Rating & Billing � Data Access while Roaming: 1) Mobile: Select system 2) Mobile & System: Attach and establish session 3) Serve: Authenticate Mobile 4) Serve: Authorize Mobile 5) System: Connect 6) System: Accounting � � Data Gateway � � �� Serving AAA Subscriber Database User Data (Mobile IP) AAA signaling (RADIUS)

NETWORK ROAMING As a network offload solution

November 3, 2010 Reducing the Cost of Data: Wi-Fi Roaming as an Extension of CDMA Roaming Marcio Avillez VP, Network Offerings Robert Duncan Director, Product Management

Agenda • Problem: Exponential Cost (Data use) [“How to Cope with Future Demand for Data Services, ” CDG IRT, Tokyo, April 2009] • • Solution: Reuse Established CDMA Data Roaming Benefits – Reduced OPEX (Cost of Roaming) – Reduced CAPEX (Increased Capacity, Coverage) – Reduced Churn • Implementation

A Tsunami of Connected (Mobile Internet) Devices Proprietary & Confidential 43

Fo re ca st : 2 5 X tra ffi c in cr ea se Problem: Traffic (Cost) Growing Faster than Revenue increase Forecast: 2 X revenue “How to Cope with Future Demand for Data Services, ” Robert Duncan, TNS, Tokyo CDG IRT, April 2009] Sources: Cisco, from Operators’ network data and Analysts; “Mobile data revenue will double by 2012, ” Dan Locke, Analyst Insight, Pyramid, 4/2008] 44

Exponential Cost - if not Controlled - will Exceed Revenue “Service providers deploying a multi-access offload strategy can expect savings in the range of 20 to 25 per cent per annum”

Leading Operators Adopt Data Offload to Wi-Fi • • • AT&T Korea Carriers Vodafone O 2 UK T-Mobile Verizon + Wayport Investment + Builds + 3 Operators build Wi-Fi + BT Open. Zone + The Cloud (UK) + T-Mobile + Boingo Current deployments validate Wi-Fi as beneficial across multiple carrier and user scenarios 2008 2009 2010

Wi-Fi Roaming Solution (looks like Data Roaming via CRX) Reuses CRX functionality (looks like Data roaming) to reduce impact on Operator Visited Operator Home Operator CRX Rating / Clearing Wi-Fi Connection Manager HLR Proxy/ AAA Proxy Visited Wi-Fi Operator Reporting/ Customer Service Signaling Gateway

3 G Wi-Fi Offload – Primary Use Cases International Use cases – Cost Avoidance: Leverage Wi-Fi to lower roaming costs for international users – Revenue/Coverage Expansion: Leverage Wi-Fi to expand adoption and coverage of international roaming services Domestic Use Cases • Capex Avoidance/Management: offload as a capex management tactic or a hedge against unpredictable or exponential data growth – Owned Networks or Commercial Networks • Roaming Cost Avoidance: regional domestic players who pay to roam on national carrier networks Potential Concerns – Cannibalizes roaming revenue – Operator sets Retail Price & therefore revenue

Benefits of Data Offload via Wi-Fi Roaming ü OPEX Cost Savings • Wi-Fi per MB rates lower than equivalent roaming costs ü CAPEX Savings • Increased Capacity with offload in high-usage venues: Airport, Hotel, Conference center, City, Cafe, etc. • Indoor Coverage ü Reduced Churn (avoid sticker shock) ü No network impact • Reuses existing Data Roaming solution (CRX)

Device Form Factor Trends • Smartphones consume 65% of bandwidth – Android, i. Phone, Symbian and RIM comprise ~90% Forecast: Global Smartphone and Modem Monthly Data Consumption Source Data: Morgan Stanley, 2009; Cisco VNI, 2010, i. Pass estimates Forecast: Smartphone Sales by OS Source: Gartner (August 2010)