RAN Evolution An introduction to Evo RAN Hans Beijner Portfolio Marketing Manager, Business Unit Networks, Ericsson This presentation may contain forward looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read our earnings reports and our most recent annual report for a better understanding of these risks and uncertainties. 42/221 09-FGB 101 220 Uen Rev B 2 2009-09-24 Agenda Market trends GSM, WCDMA, LTE Evo RAN Conclusion 42/221 09-FGB 101 220 Uen Rev B 3 2009-09-24 Global trends Strong growth in mobile More than 6B subscriptions Packet data The Mobile Internet revolution Opens tremendous opportunities Voice Sustainability High on all agendas 42/221 09-FGB 101 220 Uen Rev B 4 2009-09-24 2009 + 55 m subscribers/month > 4.3 B Subscriber! Cumulative subscribers / standard (Milj) 2008 2009 December 31 July 31 Market Share Dec -08 , July-09 GSM W-CDMA CDMA 3 253 3 512 + 46 M / month 2008 +37 m / month 2009 290 387 + 9 M / month 2008 +14 m / month 2009 391 428 81.9% => 80.6% 7.3% => 8.9 % 9.8% = 9.8% +5 m / month 2009 TD-SCDMA SUM: +1.3 M / month 2008 (China, India, US/Can) - 1 3 972 000 000 4 358 000 000 (+54 M / month 2008) (+55 M / month 2008) Source: EMC 2009 Aug 24 42/221 09-FGB 101 220 Uen Rev B 5 2009-09-24 GSM PS data volume per BSC 1 2500 0.9 0.7 0.6 1500 Erlang EDGE 10 times! 0.5 0.4 1000 0.3 500 Packet data traffic volume increase 0.8 2000 0.2 GPRS doubled 0.1 0 0 dec-06 mar-07 jun-07 Sum of TCH Traffic (Erlang) dec-07 sep-07 mar-08 jun-08 sep-08 Sum of GPRS Traffic Volume (Mbit/s) dec-08 Sum of EDGE Traffic Volume (Mbit/s) Strong growth for GSM data 42/221 09-FGB 101 220 Uen Rev B 6 2009-09-24 HSPA traffic growth World average 8 21 19 17 15 13 11 6 9 7 5 3 4 1 6 Relative Network Load 4 2 4 Packet data 8 6 2 8 Voice 8 Jan Mar May Jul Sep Nov Jan Mar May July Sep Nov Jan Mar May Jul 07 07 07 07 07 07 08 08 08 08 08 08 09 09 09 09 Source: Ericsson Enormous data traffic growth 42/221 09-FGB 101 220 Uen Rev B 7 2009-09-24 The success of HSPA 267 commercial HSPA networks – Ericsson: 126 (47%) >345 million WCDMA/HSPA subscribers Commercial HSPA networks HSPA network launch commitments 1470 HSPA devices 171 suppliers 2000 1500 42/221 09-FGB 101 220 Uen Rev B 1000 200 500 100 0 2007 Source: GSA – Global mobile Suppliers Association and Informa: May 2009 8 Devices Suppliers 0 2008 2009 2009-09-24 Global LTE Commitments 35+ Operators in over 19 countries Vodafone …and more to come Up to 14 LTE networks are expected to launch commercial services in 2010 Source: Press releases and GSA (26 August, 2009) 42/221 09-FGB 101 220 Uen Rev B 9 2009-09-24 Insights GSM Continued growth in GSM subscriber base Strong data traffic increase WCDMA HSPA = mobile broadband LTE Global choice 42/221 09-FGB 101 220 Uen Rev B 10 2009-09-24 Faster market adoption with each mobile generation Subscription forecast 10,000 1,000 Millions 100 10 1 2G 0.1 3G 0.01 4G 0.001 1989 1993 1997 2001 2005 2009 2013 GSM, WCDMA and LTE will coexist for the overseable future 42/221 09-FGB 101 220 Uen Rev B 11 2009-09-24 Operator scenarios Expand or modernize GSM and prepare for WCDMA and LTE Expand or modernize WCDMA and prepare for LTE and/or GSM modernization Deploy LTE with potential GSM/WCDMA modernization Network migration 42/221 09-FGB 101 220 Uen Rev B 12 2009-09-24 Operator main drivers Enable more business growth Reduce cost Future proof investments Drivers for modernization 42/221 09-FGB 101 220 Uen Rev B 13 2009-09-24 42/221 09-FGB 101 220 Uen Rev B 14 2009-09-24 Evo RAN - RBS Multi standard radio sites Multi Standard Meet site space challenges Flexible and efficient site transport Antenna System Site O&M RBS Site Power Transmission Multi- Standard Radio Give operators flexibility to choose best solution 42/221 09-FGB 101 220 Uen Rev B 15 2009-09-24 Evo RAN - Transport All IP RAN - The way forward Optimize the networks for new subscriber growth Increase Mobile Backhaul capacity as the traffic increases Reduce costs per bit of transporting data traffic Lower OPEX & CAPEX with Ethernet RAN evolve towards IP - Backhaul becomes Ethernet based 42/221 09-FGB 101 220 Uen Rev B 16 2009-09-24 Evo RAN – Controllers BSC, RNC and Evo Controller 8000 GSM HD BSC – WCDMA RNC 3820 – Highest capacity the market Increased capacity Evo Controller 8000 – Combined GSM and WCDMA controller Today's demands and ready for tomorrow 42/221 09-FGB 101 220 Uen Rev B 17 2009-09-24 Evo RAN – O&M O&M and Service Assurance Manage more will less effort – – – OSS-RC to common access all infrastructure OSS Navigator for service performance management ENIQ multi vendor performance monitoring Synergy assurance – – Benefits from multiple radio technologies in overlapping areas Traffic driven HW activation/deactivation Future holds new challenges 42/221 09-FGB 101 220 Uen Rev B 18 2009-09-24 Operator main drivers Increased traffic Improved RF performance Enable more business growth Enhanced voice AMR Wideband Increased speed EDGE Evolution, HSPA Evolution, LTE New coverage Extended range Reduce cost Future proof investments Enabling new end-user offerings 42/221 09-FGB 101 220 Uen Rev B 19 2009-09-24 More business growth GSM modernization example Site integration gives improved link budget gives increased traffic Linkbudget improved +2dB 42/221 09-FGB 101 220 Uen Rev B 20 2009-09-24 Increased income from more traffic Field measurements shows 1.5 dB improvement in link budget give 3 % more traffic in the cell 3 % more traffic give increased revenue of 32000 € Link budget improvement give 32 000 € extra revenue per year 42/221 09-FGB 101 220 Uen Rev B 21 2009-09-24 Operator main drivers Enable more business growth ….For RAN Complexity Reduce Site complexity Reduce cost for O&M ….For Energy Consumption Less Site Energy cost Reduce cost ….For Transmission Abis Optimization IP RAN Future proof investments 42/221 09-FGB 101 220 Uen Rev B 22 2009-09-24 Less Site Energy cost modernization example BBS 2202 AC/DC RBS 2202 3x4 TRX typical 2 kW RBS 6201 3x4 TRX Typical 0.8 kW RBS energy consumption down 60% 42/221 09-FGB 101 220 Uen Rev B 23 2009-09-24 Lowering energy cost Energy savings not only in RBS RBS 2202 3x4 – – – 2kW Traffic model Climate model RBS Site 3.6 kW RBS 6201 3x4 – – – RBS energy consumption AC/DC and aircon: 1.6 kW Total consumption: RBS energy consumption Additions for AC/DC and aircon: 0,64 kW Total consumption: Savings – – 0,8 kW Climate Eqm AC/DC 1,44 kW 2.16kW Savings per year 365 * 24 * 2,16 = 18 920 kWh Cost savings 2 838 € /year and site, Eff. 65% Eff. 85% 2 800 € savings per site and year! 42/221 09-FGB 101 220 Uen Rev B 24 RBS 2009-09-24 Eff. 15% Case for modernization ? More revenues – Traffic revenue from improved linkbudget 32 000 €/year – Additional revenues from AMR-WB, EDGE and EDGE Evolution Reduced cost – Lower energy consumption savings 2 800 €/year – Additional savings from traffic driven HW activation/deactivation, Abis Optimization, IP RAN and common O&M 34 800 €/year from increased traffic and energy reduction ! 42/221 09-FGB 101 220 Uen Rev B 25 2009-09-24 Operator main drivers Enable more business growth Reduce cost Reuse installed base Future proof investments RBS 2000/3000/6000 Complete Site Offering 42/221 09-FGB 101 220 Uen Rev B 26 2009-09-24 Taking RBS 2000/3000 into the future Evolved RBS 6000 modules in empty slots RBS 6000 RBS 2206 RBS 2216 RBS 3206 Evolved Modules RBS 2106 RBS 2116 42/221 09-FGB 101 220 Uen Rev B RBS 3106 27 2009-09-24 Conclusion Evolution of RAN Coexistence of GSM, WCDMA and LTE to 2020 and beyond One RAN to handle all technologies Strong case for GSM modernization Evo RAN – Manage more with less effort – More revenue, lower cost – Protect investments Ericsson leadership, increasing operators’ revenues 42/221 09-FGB 101 220 Uen Rev B 28 2009-09-24 42/221 09-FGB 101 220 Uen Rev B 29 2009-09-24