Today’s Products Addressing
Tomorrow’s Needs
Scott Wickware
Director, UMTS Product Solutions
Nortel Networks
scotware@nortelnetworks.com
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Agenda
• Market situation
• Technology Requirements
— Access Network Requirements
— Core Network Requirements
— Service Requirements
— System Requirements
• Conclusion
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Today’s Market Reality
Global Subscriber Growth
Global Voice Revenue Decline
1,800
$40
1,600
$35
1,400
$30
1,200
$25
1,000
RoW
NA
W Europe
Asia
800
600
$20
$15
$10
400
$5
200
$0
0
2001
2005E
2001E
2005E
More and more paying less and less
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Operator Revenue Opportunity
SKT (Korea)
Average Revenue per User
SK Telecom
$25
10000
$20
8000
$15
6000
4000
$10
2000
$5
0
$0
1998
1999
2000
2001 2002E
1999
2000
2001E
M
ar
'0
1
1997
9.2%
9.0%
8.8%
8.6%
8.4%
8.2%
8.0%
7.8%
7.6%
60
'0
1
12000
pt
$30
Se
14000
Previous 12 months - Vodafone, 2001
'0
1
DoCoMo
Vodafone Non-Voice
Revenue
Ju
n
I-mode
Average Revenue per User
50
ARPU
Growth
Model
40
Voice
Data
30
20
10
0
1999
2001E
2003E
2005E
Data ARPU will grow
Significantly with 3G
Source: Nortel Forecasts
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
The New Market Reality
2G
3G
Circuit Voice
Circuit Data
Voice only
Subscription
driven
Time Division
Low Speed
Symmetric
Traffic
Significant increase in network load
Revenue
Voice ARPU dropping, data filling the gap
Access
Massive investment shift to Code Division
Packet Voice
Packet Data
Multiple
applications
Margin driven
Code Division
High Speed
Asymmetric
Cost Structure lower, revenue potential higher
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Agenda
• Market situation
• Technology Requirements
— Access Network Requirements
— Core Network Requirements
— Service Requirements
— System Requirements
• Conclusion
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Today’s Network – GSM/GPRS
HLR
MSC
GMSC
Circuit Network
GSM/GPRS
PSTN
GGSN
SGSN
Packet Network
Internet
SIP
Server/Enablers
Separate Networks for low data penetration
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Rel4/Rel5 All IP/Packet Network
HSS
Wireless
GTW
PSTN
GTW
Voice, DSL, Cable
Modems…
Packet Network
ATM/MPLS/IPv6
GSM/GPRS/
EDGE/UMTS
Tandem MSC
SIP
Server Server/Enablers
CS
GGSN
Internet
W-LAN
Single Network for voice and data
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Key UTRAN requirements
IP in the
UTRAN
• Reduce Cost in Transport
• Simplify operations
Node-w
• Secure “WLAN type” technology
• Cost effective Hot-spot coverage solution
HSPDA
• Increase peak data rate throughput beyond 2 Mbps
• Increase overall capacity per carrier
UTRAN developments essential for reducing cost
and driving revenue
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Network Reliability
Data Networks
80%
Reliability
Downtime:
Average 4 Hours
Telecom Networks
99.999%
Reliability
Downtime:
<Milliseconds
UMTS Must Approach Carrier Grade Performance
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
(Pre-) Release 4 to Drive Down the Cost
Cost
Reduction
• Transmission costs for voice can be reduced by 30%
• Network operations are simplified
Packet
Investments
• Build a common Packet core for Voice & Data
• Rationalise investments in single technology
Multimedia
Preparation
• R5 Multimedia domain requires some R4 features
• Enable an early multimedia offer
Deployment of R4 is dependant on Cost Structure
R3 and R4 can co-exist
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
(Pre-) Release 5 to Drive the Revenue
Multimedia
Services
• Standard set of defined multimedia services defined
• Improved user interfaces
Quality of
Service
• Mechanisms to deliver realtime services over Packet
• Services to be available when roaming
Cap TDM
Investments
• All new services can be developed in Packet domain
• TDM switching can be capped or phased out
R5 is focused on driving revenue
R3, R4 and R5 can co-exist
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Service Layer Requirements
Open Systems • Independent applications and service enabler layers
Architecture
• Goal is to reduce Time To Revenue (TTR)
Simplified
APIs
• Development must not be complex
• Need to leverage “web based programming” world
Rich Enabling
Network
• Enabler layer must provide “detail” for apps layer
• Billing systems must be flexible
Operators must be able to make money from data
services in a simplified way
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
What are the Services?
Intranet
(Corporate)
Location
Presence
Messaging
Internet
(Consumer)
Collaboration
Real time
Services
Wireless
Applications
New Revenue Opportunities using existing
business models
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
System Requirements
Infrastructure
IOT
• Vendors must work together
• Operators must help facilitate
Device
IOT
• Devices are key to success of any mobile standard
• Standards must be flexible, yet strict!
Applications
IOT
• Applications will be the key to UMTS success
• Ease of 3rd party service introduction is essential
IOT is essential for industry to grow – sounds
obvious, but it can be difficult
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Agenda
• Market situation
• Technology Requirements
— Core Network Requirements
— Access Network Requirements
— Service Requirements
— System Requirements
• Conclusion
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002
Conclusions
• 3G is real – it will happen, it must happen
• For 3G to be successful, we must learn our lessons
from WAP and GPRS – sell value, not technology
• Standardization is key to ensure competitiveness
— To drive down cost
— To drive up revenue
• Vendors must work together, leveraging the
standards, to push the industry forward
ITU Seminar on IMT-2000 and systems beyond, Ottawa, 28 May 2002