TMN Quarterly 2014 issue 07

The Mobile Network // www.the-mobile-network.com

ALSO FEATURING Making sense of the world’s mobile networks

22 M APPING THE MOBILE NETWORK // THE CORE 40 MADE IN TAIWAN // MORE...

2014 // Issue 07

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REGULARS GLOBAL CORRESPONDENTS // ANATOMY OF A MOBILE OPERATOR: AMÉRICA MÓVIL

#07

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CONTENTS

FEATURE

10

Anatomy of a Mobile Operator Mexico’s América Móvil faces up to change home and away.

32

FEATURE

FEATURE

16

22

The stable world of the wireless air interface is being shaken up by a clutch of upstarts with their eye on the 5G prize. Michelle Donegan takes you through the contenders.

Our Mapping The Mobile Network project moves on to the core network, a project that required a flexible outlook and the ability to think outside the box.

Radio Revolution

MTMN

FEATURE

26

Clearing the Data Jungle Operators need to clear a path through the forest of data, and then sort the results. Keith Dyer looks at what weapons they have at their disposal.

From our Correspondent

Video Delivery Network

06 North America

A mobile network of the future will need to be a video delivery network. But what would a network optimised for video look like. Patrick Lopez sets out the vision.

08 Mexico

4 TMNQUARTERLY

07 Ireland 07 Egypt 09 Spain 09 Myanmar

FEATURE

EDITOR Hello and welcome

Hi!

to this deliberately disorganised issue of The Mobile Network Quarterly.

36

40

Are we doomed to repeat our love affairs? As Google floats a satellite project, Guy Daniels looks back at a long history of mobile satellite launches.

The engine shop of the world’s consumer electronics goods is turning its attention to the wireless industry.

Satellites of Love

Taiwan

43

Picture Story Dude, Where’s My Car?

Commercial Director: Shahid Ramzan // shahid@the-mobile-network.com Editorial Director: Keith Dyer // keith@the-mobile-network.com Creative Direction and Design: Shona Gow // hello@shonagow.co.uk // www.shonagow.co.uk

Issue Seven of The Mobile Network is our first for a while that doesn’t have a particular organising focus, with the past issues being labelled the Threat Level Issue, Next Level Issue and LTE Progression Issue. But looking at the features – especially Radio Revolution, Big Data for the Network, A Network for Video – you could easily impose order where none seemed at first obvious. The features all address something about how networks are evolving, and look at what technologies operators may have at their disposal to build the networks of the future.

Radio Revolutions looks at the recent seeding of a number of radio technologies that all offer something revolutionary in the mobile radio air interface – can any of these seedlings come to flower?

The Big Data Jungle asks if the customer aware, profitaware network can actually be built, and if so how operators can clear a path through the data jungle to do so.

Our feature on how to build a network optimised for data starts with the jumping off point that if the majority of data will be video, shouldn’t you be building a video distribution network rather than a “mobile” network – and then describes what that actually means.

So all of these features take a clear look at the future, giving a sense of where the industry is heading across the network.

For history students, or those who would be history students, there is a fascinating article from Guy Daniels looking back at mobile’s seemingly irresistible attraction to satellites. Why is this a love that won’t die? So although there’s no deliberate theme, TMN Quarterly’s features continue to offer a glimpse of the future, as well as the past.

KD

Keith Dyer keith@the-mobile-network.com

© 2014 TMN Communications Ltd.

TMNQUARTERLY 5

FROM OUR CORRESPONDENT

FROM OUR CORRESPONDENT

CORRESPONDENT : Anon

“From Our Correspondent” collects writing from around the world, covering mobile network stories in local markets.

A third of all mobile subscribers in North America are now on LTE, according to a body called 4G Americas, which from its title might be presumed to know a thing or two about both LTE and America.

That’s a pretty startling number – a high rate of transition from 2G/3G to LTE in just a few short years. Consider this – North America is now responsible for 45% of all the LTE connections worldwide. In absolute terms, of the 280 million global LTE connections as of the end of June 2014, 140 million of them were in North America. Truly, the North American market has taken to LTE in huge numbers – 33% of all connections are now LTE connections. Of course, there are reasons for that.

First, the dire state of our wireless networks before the investment round

spurred by the advent of LTE. Second, the competition amongst the operators to be the best network by having the best network meant that LTE networks got built and got built quickly. For the most part, barring one or two teething problems, they also got built well. Third, market competition, typified by T-Mobile’s Uncarrier strategy and presenting as a symptom in the uncertainty around Sprint’s ownership, meant that consumers were given (relatively speaking, this is America after all where mobile tariffs remain amongst the highest in the world) sweeteners to move on to LTE devices. Finally, and not to be sniffed at, is the high penetration of smartphones, and particularly the

In absolute terms, of the 280 million global LTE connections as of the end of June 2014, 140 million of them were in North America.

6 TMNQUARTERLY

If you would like to contribute to this section, mail TMN’s editor keith@the-mobile-network.com KD

Apple 5 devices which included LTE in this market.

The impact of the supporting infrastructure for the IP mobile networks that we now have can be seen in the services coming to market.

For instance, T-Mobile has become the latest carrier to offer enhanced VoWiFi availability (offering free home routers, for instance). Why? Well, three main reasons. One – Apple iPhone 6 with its VoWiFi support, and two, the requirement operators see for quality voice outside of areas of LTE coverage. Lastly, the strategic business for operators of utilising the IMS they have deployed to support VoLTE introduction.

FROM OUR CORRESPONDENT

While the rest of Europe debates the perfect number of operators in a market – the power of four? the magic three?

– we in Ireland have been getting on with the business of finding our own equilibrium.

In network terms that has seen a recent extension of one of the longer running network sharing deals – the shared infrastructure known as Mosaic that hosts O2’s and eircom’s networks.

Now that deal, running since 2011, has been extended right out to 2030, fulfilling one of the commitments Three entered into as part of receiving EU Commission approval for its acquisition of O2 in Ireland earlier this year. When O2 was bought by Three, Eircom was worried about its network sharing deal with O2, so Three made a commitment to play nicely – hence this renewed and boosted agreement. That’s been good

business for Nokia Networks, which has won the work to carry out the network upgrade and integration as part of an overall EUR300 million investment plan.

Over the next three years an additional 2,000 sites will come under the joint management of Mosaic. Three and eircom will share site equipment, power supply, towers and transmission throughout the country – but not spectrum. Existing sites of both operators will be consolidated and new sites will be jointly built as both operators gear up their LTE capability.

Given the earlier acquisition of Meteor

by Eircom, we now have a market with three national operators – Vodafone, eircom, Three - two of whom will be increasingly tightly connected at a grid level. Are we forming a model for the rest of Europe?

In Egypt, national incumbent Telecom Egypt (TE) has long-fancied a pop at the mobile market. To date, it has achieved its aims vicariously through building up a 45% share in Vodafone Egypt. That is set to change however as the three mobile operators and TE have now been given sight of a new national telecoms license that will give them all new rights and responsibilities in the market.

In simple terms, TE is going to give the mobile operators access to its fixed infrastructure to enable them to sell fixed-mobile deals (if for some reason they would want to). In return, the mobile operators - Vodafone Egypt, Mobinil and Etisalat Egypt - will give TE wholesale mobile access. Of course, there’s money going around in return.

Each operator must pay EGP100 million (about $14 million) for the right to landline access while TE has agreed to pay EGP2.5 billion ($349 million) for its licence.

TE has agreed to pay EGP2.5 billion ($349 million) for its licence.

The terms of this deal form a new Unified License, which was supposed to be cleared in June but has made it into law a little later. TE now has until December 2015 to find a buyer for its 45% stake in Vodafone Egypt.

Additionally, TE will no longer be responsible for building telecoms infrastructure, with a national infrastructure company to be set up, under the management of the government, but with all the telcos able to invest in a share of ownership.

TMNQUARTERLY 7

FROM OUR CORRESPONDENT

Mexico’s market is in flux given recent regulatory statements that (See Page 10 for América Móvil profile) may see a reorganisation of our market.

The most recent move has seen Ricardo Salinas’ eponymous corporation Grupo Salinas take control of lusacell, the “troubled”, “struggling” “insert adjective of choice here” operator.

He’s stumped up north of $700 million for the 50% of the company he didn’t own, giving media group Televisa a somewhat less than brilliant return on the $1.6 billion it paid for the stock three years ago. In the last three years, lusacell doubled its customer base to eight million, and increased its revenue by approximately 50%.

Taking to the platform beloved of media and telco moguls, Twitter, Salinas told the world that Grupo Salinas will be lining up a “strategic partner” for future operation of the telco. That partner would take an equity stake in lusacell, and really be the operating entity.

Given previous speculation that Telefonica was interested in lusacell assets, some have wondered if the Spanish giant is who Salinas has in mind, although as Telefonica already operates as Movistar in the country, that wouldn’t exactly increase plurality of ownership in our country.

8 TMNQUARTERLY

So we’re probably looking at a foreign player – someone who fancies taking on América Móvil’s current 69% market share from a number three market share position. It is not obvious who might want to take that on – certainly it’s not hard to envisage one of the North American operators wanting to roll up its sleeves and scrap in this market and perhaps that’s what Salinas meant when he said he was looking for a “world class” strategic partner.

Will the new rules in Mexico - which give rivals access to the “preponderant’s” (ie América Móvil) infrastructure, asymmetric interconnection, national roaming at a regulated price, and the unblocking of prepaid terminals that allows users to switch companies without the subsidy cost to the new operator – be enough to attract that “world class partner”? We’re about to find out.

FROM OUR CORRESPONDENT

TMN expertly uncovered the thwarted plans Telia Sonera had for Yoigo earlier this year (Issue 5, folks “The untold story”) and so it is a little sad to see those dreams finally come to an end as the Finnish-Swedish owners line up a buyer for this “challenger” operator.

Having put the company up for sale, the operator confirmed that it is in talks with Spanish ISP Jazztel to offload the unit. It also said it was talking to “other parties” although that may have been a tactic to stop it looking too keen to sell to Jazztel.

Jazztel itself already operates as an MVNO, so getting its hand on a network and some spectrm may make sense.

Remember, Yoigo is a very “light” operator operationally, so there’s not a huge amount to take on in terms of a structure of people and processes.

But there is still a network there, and one that is in competition with three of Europe’s biggest group players – Orange, Telefonica and Vodafone. Even though the company only has around 4 million customers, that’s still well over double Jazztel’s existing mobile subscribes, so that is another step up for the ISP. Do we “need” a fourth operator in Spain, though? Previously the consumer would have said yes, given the previously uncompetitive nature of the market. But with MVNOs in operation and the group operators themselves feeling the pinch of a severe economic downturn, it’s a brave player that takes on such a clear number four operator in such a market.

Myanmar was always going to prove uncertain ground for the two operators building out services in the newlyconnected country. It is also revealing interesting cultural differences between our Northern European and Gulf State holding companies.

Ooredoo has forged ahead, and states it already has 1 million customers less than three weeks after launch, while Telenor is yet to launch and is holding itself to a 5 October license commitment. Telenor has admitted that it has unwittingly, through contractors, been employing a small number of children to build its sites, after inspections revealed teenagers working on installing mobile towers. No such concerns trouble Ooredoo, it seems.

Ooredoo has a 3G only, UMTS 900 network and launched with limited coverage, while Telenor will have support for 2G and 3G and will be able to cover more territory at launch.

One nasty shock, and an example of the uncertainty that Myanmar offers, is that the country is actually now officially nine million citizens smaller than previously thought, after a new census – the first since 1983 – suggested that Myanmar’s population is 51.4 million – not 60-61 million.

TMNQUARTERLY 9

IS YOUR NETWORK VoLTE READY? The iPhone 6 blast is coming...

VoLTE: innovating voice

Voice calls remain central to mobile operator’s business model as they receive over 60% of their revenues from voice and SMS traffic. Operators know there is no room for error. It is therefore necessary to have a viable and standardized solution to provide these services and protect this revenue. LTE is designed as a complete IP system for carrying data exclusively where initially operators have to carry voice by reverting to 2G/3G networks through CS Fall Back. Today, VoLTE has become the next logical move for handling end-to-end voice calls over IP. South Korean pioneers introduced VoLTE in mid 2012 and this year, operators worldwide will multiply lab and field tests to offer innovative voice experience.

Thierry JACQ 4G Business Marketing Director - Astellia

What are the VoLTE promises?

VoLTE provides a range of advantages that includes: - Better call quality: as VoLTE introduces High Definition voice and faster call establishment.

- Higher spectral efficiency: an operator refarming its 2G bands into 4G will be able to handle 6 times more voice calls.

- Rich Communication Services: with VoLTE, mobile operators can deliver a new conversation experience of enriched voice, generate new and attractive services and unlock new revenue potential. Moreover, VoLTE is an excellent vehicle to build a key differentiator to compete with OTT players such as Skype and WhatsApp: universal reachability through a standard MSISDN phone number.

How can Astellia help operators ensure on-time VoLTE introduction?

As with any new network feature introduction, VoLTE comes with a lot of challenges to be tackled within a very aggressive time schedule. Astellia provides a troubleshooting solution with dashboards to efficiently benchmark vendors, detect malfunctioning handsets and assess interoperability issues between vendors. On top of its product portfolio, Astellia offers consulting services consisting of on-site experts engaged with operator’s teams during Lab Tests, Field Interoperability and Friendly User Tests. They generate dedicated reports, pinpoint issues, find out root causes, and provide evidence to transfer tickets to the right vendor.

eUTRAN

2. Ensuring voice call continuity When a subscriber leaves the LTE coverage area a handover to 3G/2G layer is automatically performed thanks to Single Radio Voice Call Continuity (SRVCC) bridging VoIP IMS Core with the legacy Core CS. Astellia brings KPIs to monitor, analyze and troubleshoot E2E call traces and hand-over efficiency between Core IMS, EPC, legacy Core CS and 2G/3G RAN. Through E2E KPIs, Astellia masters the global performance of SRVCC and pinpoints origin of delays occurring during handover.

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1. Ensuring voice call establishment For a good voice call experience it is crucial to be always reachable and get fast access to your respondent. Astellia addresses the needs of Core EPC and Core IMS teams. In addition to reporting 4G bearer setup success or delays, Astellia monitors SIP at S1-U interface to detect interworking issues between 4G network layers and SIP voice service layers. Furthermore, Astellia provides in-depth monitoring, analysis and troubleshooting of SIP/Diameter at the Core IMS.

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3. Ensuring voice and data quality Subscribers moving to VoLTE expect the highest voice experience as HD voice is marketed. But they don’t have a clue of the difficulty for operators to handle VoIP end-to-end down to the handset. Astellia provides VoIP call quality metrics including Mean Opinion Score (MOS), packet delay, jitter, packet loss and latency. Through relevant Key Performance Indicators (KPIs) CSPs get precious information which helps them troubleshoot areas with poor quality, investigate customer complaints and hence improve the customer experience.

FEATURE: NEXT GENERATION RADIO FEATURE

Are you up to speed with the latest developments in radio access technology – the possible bearers for the delivery of very fast data in the future? Michelle Donegan is, and she runs a keen eye over the contenders.

Amidst the 5G hype, there are some real technological advances underway in radio communications. Whether 5G will embody a revolution in radio technology or an evolution of existing technologies or both, the following highlights some of the more radical ideas that have emerged recently in the quest for ever higher capacity, lower latency, and cost efficiency in future wireless networks.

Personal Cells for All? With a certain Silicon Valley panache, serial entrepreneur Steve Perlman (of Quicktime and WebTV fame) launched Artemis Networks in February this year with claims that pCell technology could overcome the capacity limitations of today’s cellular networks. pCell - short for “personal cell” - is based on distributed input distributed output (DIDO), which Perlman first revealed in 2011. The idea is that small, discreetly located pWave radios, each with multiple antennas, transmit radio signals that deliberately interfere to synthesize tiny pCells with a diameter of just one centimetre around each mobile device.

Rather than sharing capacity from one large base station, 16 TMNQUARTERLY

each user would have an unshared pCell that provides full LTE capacity.

Software defined radios, cloud RAN, IP fronthaul and data centres with Linuxbased servers are all part of the pCell picture. The pCell technology can operate in licensed or unlicensed spectrum and Perlman has hinted that there are bigger applications for the technology beyond mobile broadband. Artemis selected PureWave Networks to supply the pWave radios for upcoming trials planned for the fourth quarter of 2014.

Some suggest that the company’s technology is related to known concepts such as network MIMO, massive MIMO or coordinated multipoint (CoMP).

FEATURE: NEXT GENERATION RADIO

Going for the Full Duplex Full duplex wireless, which allows radios to transmit and receive simultaneously on the same frequency channel, has not been possible due to the limitation of signal interference. But startup Kumu Networks - spun out from Stanford University in 2012 and backed by $20.4 million in venture capital funding - has developed a technology that cancels “self-interference,” which results from unwanted signals that leak into a radio’s receiver when transmitting.

By eliminating the interference, the radio is then free to send and receive signals over the same frequency.

The benefits of full duplex are potentially significant, the most striking of which is doubling the spectrum capacity of today’s networks. Applications for Kumu’s technology include wireless backhaul, self-backhauled small cells, global LTE roaming and high-capacity WiFi networks in densely populated locations.

As recently reported by TMN, Kumu Networks aims to have its technology commercially available next year.

More WAM, Less QAM In a more fundamental development, MagnaCom Ltd. claims to have a “totally new modulation system for the 21st century.” The startup, with offices in California and Israel, has invented a digital modulation technology called wave modulation (WAM) and says it offers significantly better performance than legacy quadrature amplitude modulation (QAM), which powers most wireless and wired digital communications today.

First revealed in December 2013 and demonstrated at the Consumer Electronics Show in Las Vegas in January this year, MagnaCom says WAM can deliver a 10dB system gain improvement without having to make changes to existing RF, antennas or analogue front ends. Other potential benefits include longer transmission distances, lower power and more efficient spectrum usage compared to QAM.

TMNQUARTERLY 17

FEATURE: NEXT GENERATION RADIO

Seeing the Light Even LED light bulbs could one day provide wireless data communications, thanks to Li-Fi technology - also known as visible light communications (VLC) - that uses the visible light part of the electromagnetic spectrum to transmit information, which was pioneered by Professor Harald Haas at the University of Edinburgh.

His startup, PureLiFi, was spun out from the university in 2012 with reportedly £1.5 million from angel investors. The company has shipped its first product, called Li-1st, to more than a dozen partners, including Tier 1 operators, infrastructure vendors, and lighting infrastructure providers.

The product, which was designed to be a platform for pilot projects, can deliver full-duplex communications up to 5 Mbps in both directions up to three metres while also providing desk space light.

PureLiFi is working on miniaturizing its products to integrate them with new LED lighting fixtures. It’s also working with mobile operator and OEM partners on ways to incorporate Li-Fi technology, such as possibly integrating it into handset designs and hybrid RF/Li-Fi networks.

Alcatel-Lucent’s Bell Labs in Dublin, Ireland, is working with Haas’s team at the University of Edinburgh in an exploratory research project to study how lasers can be used to supply backhaul capacity as well as power to small cells to make them easier to deploy in densely populated areas.

Massive Amounts of Antennas Massive MIMO, which can comprise up to 100 antenna elements, is touted as a way to improve capacity and efficiency in cellular networks. According to Ericsson, such antenna systems can also be used for advanced beamforming technologies to improve coverage as well. While introducing so many antennas can improve performance, it also creates new challenges, such as making many low-cost, low-precision components that work well together, according to a recent Bell Labs paper published in IEEE Communications Magazine.

National Instruments and Lund University launched in February a test bed that prototypes a massive MIMO system, which will allow researchers to test the antenna technology theory.

18 TMNQUARTERLY

FEATURE: NEXT GENERATION FEATURE RADIO

Moving up to Millimetre Waves

A Wave of New Waveforms There’s an alphabet soup of new acronyms brewing in academic papers and within research programs like the EU-funded METIS2020 and 5GNow in their efforts to identify and evaluate alternatives to orthogonal frequency division multiplexing (OFDM), which is used in LTE networks. The aim is to arrive at a waveform that is better than OFDM at handling many diverse traffic types and devices, ranging from machine-tomachine communications to the tactile Internet, and there appear to be many candidates. One such example is called non-orthogonal multiple access (NOMA).

Alcatel-Lucent’s Bell Labs is working on universal filtered multi-carrier (UFMC), which is close to OFDM - and as such, it is also referred to as universalfiltered OFMD (UF-OFDM). The goal is to avoid the drawbacks of OFDM in 5G networks, such as sensitivity to timefrequency misalignments and inefficiency in fragmented spectrum scenarios, according to the company.

Researchers are eyeing higher frequencies for radio access, such as the millimetre wave bands between 30GHz and 300GHz, given the large amounts of unlicensed and licensed spectrum that is available. Google’s acquisition of little known Alpental Technologies Inc. in June - which is understood to be developing wireless technology for 60GHz spectrum - highlighted the potential of millimetre wave spectrum as well as fuelled speculation about the Internet giant’s 5G intentions.

But millimetre waves present many challenges for mobile access applications, such as short coverage distance, line of site requirements and signal deterioration from rain or fog. The UK-based startup Blu Wireless, which develops 60GHz technology for Wireless Gigabit (WiGig) and wireless backhaul applications, is working with the University of Bristol on a beam steering technology that could overcome some of those challenges.

The company demonstrated in June multi-gigabit beamforming and mobile tracking up to 100 metres from a base station, which showed how signal blocking from trees or buses could be avoided.

Evaluating new technologies for millimetre waves, as well as other frequencies above 6GHz, is a key part of NTT Docomo’s 5G experiments.

Nokia Networks, for example, is leading the Docomo experiments on beamforming and super-wideband single carrier transmission in the 70GHz band, while Samsung is working on super-wide hybrid beamforming and beam tracking in 28GHz spectrum.

Ericsson’s role in the Docomo experiment is to test new air interface concepts and Massive MIMO for 15GHz, which it demonstrated in July.

And NEC is conducting experiments on time-domain beamforming with a large number of antennas in the 5GHz range.

In July, Ericsson announced that it had achieved 5 Gbps throughput using 15GHz spectrum in an over-the-air demo of what it called pre-standard 5G network technology. The test used a new radio interface concept and advanced MIMO technology, but the vendor revealed scant details about these. In an emailed reply to TMN, Ericsson described the new interface concept as providing “wider bandwidths and shorter transmission time intervals compared to today’s technologies,” which increases data rates and reduces latency as well as allows for advanced antenna solutions like Massive MIMO.

TMNQUARTERLY 19

FEATURE: MAPPING THE MOBILE NETWORK: CORE NETWORK

REVEALING COMPLEXITIES Mapping the core network threw up several revealing complexities, writes Keith Dyer.

FIRST, the definition of the core network, which we viewed as being comprised of the elements that carry out the following functions: call and data session control and management of traffic flows; routing traffic flows in the data plane; management of location and mobility; manage subscriber data, rights and privileges; provide gateways to public and private IP networks; manage and control security and authentication.

These functions are performed by the switching centres, routing platforms, gateways and databases that make up the control and delivery of traffic flows across the network. Although the core network can be a complicated beast, if you think of it in terms of this enabling architecture that manages sessions and calls, routes traffic, handles user mobility, uses databases and rules-based engines to handle subscriber services, you can begin to get a handle on the core network.

SECOND complexity, the core network must deal with multiple access technologies on the radio interface, facing the GERAN (GSM/GPRS), UTRAN (UMTS technologies, which includes HSPA) and E-UTRAN (LTE releases). That requires a definition of the Circuit Switched, Packet Switched and Evolved Packet Core, as well as the relationships between them.

Worth bearing in mind then, that we are often talking in real world terms of core networks than the core network, until operators switch off legacy networks and merge onto true all-IP. However, despite the increasing complexity on one hand, note the increasing flattening and simplication visible as the maps move from CS Core to EPC. THIRDLY, the issue of boundaries and defining what lies within the core. Our core elements must also interface to IP networks, and to the application enablement layer of the IMS, as well as to elements such as Policy and Charging that do not exist as part of the defined Core network but make sense to define in alignment with the Core.

You can see how we are evolving the definition and mapping of the Core network, providing more detail on individual elements and functions, and listing where companies play within it, at

www.mappingthemobilenetwork.com

22 TMNQUARTERLY

FOURTHLY, should we incorporate the incipient virtualisation of the EPC – the move to instantiate these functions as virtual images on common hardware elements – thereby breaking down the physical restrictions of dedicated hardware platforms? Well, in a word, not yet. Firstly because these are very nascent moves.

Secondly, because it makes little difference as yet to the actual purposes of the functions themselves. Thirdly, because the cloud-based and cloud-managed telco core will itself evolve as requirements for throughput and latency evolve, and that may bring about physical redistribution of platforms rather than functional shifts.

As for the companies playing within the core, virtualisation will offer much more of a disruption, and also an opportunity.

Witness, for example, the NFV push from the IT hardware and software players (HP, Dell, Oracle, for three examples) into the telco space. This will certainly be a fascinating area to map and track over time.

FINALLY, is it important to understand how all the elements interconnect, and the names of the interfaces between them?

It can be a bewildering soup of seemingly arcane interfaces, forming a spider’s web of connections that can actually confuse.

We’ve done our best to pull out these key interfaces as a list for your reference.

So yes, by revealing the complexity we hope to understand more about how this network domain is developing.

RADISYS, PRINCIPAL SPONSOR OF TMN’S MAPPING THE MOBILE NETWORK

ENABLING NETWORK TRANSFORMATION The transformation underway in mobile networking is significant. Radisys’ wireless infrastructure solutions span the mobile network, from Radio Access, through the Core, to the IMS, matching the ecosystem that TMN is mapping.

RADIO ADVANCES The ongoing trends towards mobile users needing ever increasing bandwidth and throughput are driving mobile operators to increase radio access network capacity.

LTE provides a technology delivering improved spectrum utilisation and data speeds, but the availability of spectrum is increasingly a scarce commodity, as evidenced by the billions of dollars that operators are spending on spectrum auctions or acquisitions. An additional strategy beyond spectrum additions is to maximise spectrum reuse through small cell technology (as mapped by The Mobile Network in Issue 5). Radisys is a leader in small cell software stacks, offering our TOTALeNodeB solutions pre-integrated with the world’s leading radio access silicon technologies. Radisys continues to invest in software solutions for LTE Advanced, Self Organising Networks (SON), and small cell integration with Distributed Antenna Systems (DAS).

CORE PERFORMANCE In the core network, mobile operators are looking to deploy cost-efficient and flexible infrastructure based on Network Function Virtualisation (NFV) and Software Defined Networking (SDN).

While deployment of Virtualised Network

Functions (VNFs) for signalling and control applications is possible today using Enterprise-class Virtualised Platforms, the challenges of supporting Terabit throughput for data plane applications and broadband media flows with telcograde reliability and performance are significant. Radisys T-Series Platforms, based on COTS silicon deliver the required economics and specifically designed and optimised for SDN and NFV data plane applications. Radisys differentiates our NFV platforms with the recent introduction of FlowEngine™, which integrates performance-boosting software features into the platform switch such as wirespeed DPI, integrated VNF load balancing, and service chaining for the most demanding data plane VNF applications, including Policy Control Enforcement Functions (PCEFs), Gi-LAN, or Security Gateways.

MONETISATION IN THE IMS Once a robust LTE radio access based on small cell technology is interconnected with a telco-grade NFV-based core network, the mobile operators still need to monetise their investments beyond mobile broadband data plans. This is where VoLTE, RCS, and other value added services, all based on the IP Multimedia Subsystem (IMS), come to the forefront.

All these revenue-generating services share an underlying need for realtime audio and video media packet processing. Radisys media processing products, including our virtualised Media Resource Function (vMRF) and MPX-12000 Broadband MRF, deliver a common, shared, multimedia processing resource for mobile service revenue generation. More broadly, Radisys MRF products are increasingly being specified for WebRTC media services and gateway requirements, as well as real-time broadband media transcoding and transrating.

TMN’s Mapping the Mobile Network is a unique and informative resource for the telecommunications industry.

Radisys hopes that you share our enthusiasm with TMN’s efforts to map the various technologies together for the benefit of our industry.

To understand more about enabling NFV transformation, download this eBook: “Solving NFV’s Data Plane Paradox”

TMNQUARTERLY 23

FEATURE: MAPPING THE MOBILE NETWORK: CORE NETWORK

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the continuing evolution and listings of the companies working Mapping The Mobile Network. www.MappingTheMobileNetwork.com

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in each technology area, go to

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MAPPING THE MOBILE CORE NETWORK & IMS

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CORE NETWORK ELEMENTS & INTERFACES

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NETWORK ELEMENTS RADIO ACCESS NETWORK BTS Base Transceiver Station BSC Base Station Controller PCU Packet Communication Unit Node-B 3G base station RNC Radio Network Controller eNodeB LTE base station

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MSC Mobile Switching Centre BSS Base Station Subsystem SGSN Serving GPRS Support Node GGSN Gateway GPRS Support Node HLR Home Location Register VLR Visitor Location Register EIR Equipment Identification Register SMSC Short Message Service Centre GMSC Gateway Message Service Centre MGW/SWGMedia/Signalling Gateway

24 TMNQUARTERLY

MGW

KEY INTERFACES EPC

S-GW (Serving Gateway) PDN-GW (Packet Data Network Gateway) MME (Mobility Management Entity) HSS (Home Subscriber Service)

IMS

CSCF Call Session Control Function I-CSCF Interrogating CSCF S-CSCF Service CSCF P-CSCF Proxy CSCF AS Application Server BGCF Border Gateway Control Function MGCF Media Gateway Control Function IBCF Interconnection Border

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MRF-C MRF Controller MRF-P MRF Processor SLF Subscriber Location Function

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X2 eNodeB to other eNodeBs (user and control plane) S1 eNodeB to EPC S1-U eNodeB to S-GW (user plane) S1-C eNodeB to MME S3 MME to SGSN S4 S-GW to RNC S5/S8 S-GW to PDN-G S6a MMME to HSS S7 S-GW to PCRF S10 MME to MME S11 MME to S-GW SGi PDN-GW to IP/Packet networks

FEATURE: BIG DATA AND THE NETWORK

CLEARING THE DATA JUNGLE The dream is to be able to mine customer data, usage data and network data and do something with it that involves building a responsive, self-aware network. Dream or reality?

What’s the dream of what we might call only want to know about it, but you want big data for the network? It’s a vision that to be able to do something about it. says the network can understand itself, Even better, you want systems that can by crunching data. predict for you when something bad is But there are those who think they What do you need to pull this together? about to happen – predicting a congestion can take a machete to this data – slicing You probably need probes sitting on event on a specific element or link, or cell off the extraneous information that you the key network interfaces, analysing site – and then taking action to prevent don’t need, and fast tracking for analysis traffic – service and application type – that from happening. If you can do that the interesting bits. and also performance – speeds and feeds. in a way that makes sure your most Of course, there have been players You probably want to bring in the actual important customers are not affected by out there building up systems - what we element level information - statistical adverse network events, you can begin to know as SON - that that are designed to counters within enable the automated But there are those who think they can take a machete to a switch, say, optimisation of that tell you how this data – slicing off the extraneous information that you networks based on that element is network level data. don’t need, and fast tracking for analysis the interesting bits. performing.

That’s why we have You will want to be able to correlate what build a network focussed on profit. seen a coming together of assurance you know about how your core network If you think about what that all entails, vendors with optimisation players. Witness elements are performing with actual RAN real time (or near real time) understanding Arieso at JDSU, Aircom at TEOCO, or conditions – so you know not only that of where your customers are, what bit of Amdocs’ integration of Actix and we have you served the right content but that you network they are on, what device they are also seen assurance players “integrate” did so at the appropriate codec to the using, what they are trying to do, what you DPI from other vendors – for instance right user, and that that event was rated think they might be about to try to do, and Empirix and Polystar are both companies and charged accordingly. if you have the network capacity to help that use Qosmos DPI engines – to carry If something goes wrong – a call is them do that, it starts to look like a vast, out the necessary application recognition dropped or a video fails to play – you not unknowable jungle of data. at packet level that can then inform

26 TMNQUARTERLY

FEATURE: BIG DATA AND THE NETWORK

analytics engines as to what is going on.

Allied to this, we have seen companies continue to add analytical capabilities to their “raw” data collection capabilities.

Just in August 2014 Empirix acquired a “real-time analytics” solution company called Verios Software & Systems to create a service operation center management (SOC) solution that “will analyse and troubleshoot wireless network customer experience from their end-user devices to the core network in real time.”

Interestingly, Empirix announced that “the integration will provide a complete end-to-end vision from access to core network. This will enable mobile service providers to identify and focus on their

most profitable customer segments, most notably roaming customers who are likely to have service issues on the radio access segments of wireless networks.”

“The radio access network is a vital, expensive and often unpredictable link in the mobile network. Verios provides insight that enables network operators to enhance service levels and predictability of service for their customers,” says Empirix CEO John D’Anna. “Verios’ solution provides complete visibility

into radio access network operations, down to the individual user. Integrating that functionality into our IntelliSight platform will enable wireless providers to know exactly what their customers are experiencing, when and where. At the strategic level, that intelligence will help providers target their investments at the areas most likely to yield more revenue.”

TMNQUARTERLY 27

FEATURE: BIG DATA AND THE NETWORK

Or you could look at what iPoque’s infrastructure – load balancing across load balanced group you can then specify owner, Rohde & Schwarz, is hoping to the compute power that you have. This how you want network traffic distributed do by aligning iPoque’s DPI-based Net is the structure that a company like to each tool. Going further, as operators Reporter analytics tool with its own Ixia has, to be seen as a platform that introduce virtual network functions, they test and assurance solutions – creating gives access to the monitoring tools need assurance tools that verify these new some strategic vision of the network. Net on the network. Constantly fluctuating environments. Ixia is virtualising its IxLoad Reporter delivers information such as network traffic volumes can create testing appliances to help service providers application usage, device, location, ARPU several problems with monitoring tools. evaluate network functions virtualisation and QoE/QoS statistics to (NFV) in the mobile various departments within Another approach to the jungle is to do away with the core. Operators and network operator, developers can now machetes and get yourself equipped with something for example, Customer run instances of the much more powerful.

Service or Network testing technology Planning. Tying that directly on the hosts into ongoing test and performance Specifically, network traffic spikes can where the NFV virtual network functions methodologies could give a more ongoing lead to monitoring tool oversubscription, reside. and holistic view of the network. creating blind spots that slow or prevent “Virtualisation won’t happen with the There are other ways to cut through remediation of critical network outages flip of a switch, it’s a major challenge for the data jungle. If you’re going to look at and performance problems. To get operators. Blended networks, consisting every interface, you better know what around this situation, some operators may of both physical and virtual components, you’re looking for, as we’ve discussed, even deploy duplicate monitoring tools will exist for some time to come,” says Joe but you can also not afford to have a for redundancy and availability purposes.

Zeto, senior director, product marketing at probe provisioned for peak capacity on Since traffic spikes are the exception Ixia. “In displacing vital network functions every interface. How much better would and not the rule, redundant tools sit idle — putting user satisfaction at risk — the it be if you could somehow re-use your or operate at minimal utilisation levels practical steps and impact must be fully more often than not. If you pool similar understood each step of the way. A mix of monitoring appliances together into a physical and virtual assessment capabilities are required and a key ingredient to fully validate success.” Another approach to the jungle is to do away with the machetes and get yourself equipped with something much more powerful. This is where we are

28 TMNQUARTERLY

FEATURE: BIG DATA AND THE NETWORK

seeing new real time big data platforms spot an opportunity – the likes of Guavus, for instance, that structure the management and analysis of data in a different manner. That’s what big data actually means, after all.

There are other companies who are taking a view that if you want to penetrate the jungle, you need to get right to the edge. Of course, there’s long been a view that if you really want to understand the device experience, then you need to be on the device itself. Procera is one company that has evolved a RAN Insights solution that includes a device SIM applet. The company’s new RAN Perspectives product works by installing an applet on the SIM. Procera’s applet sees signalling information like signal strength, and delivers that along with cell ID location information over the air to Procera’s RAN Pro engine which allies that information with its Packet Logic DPI-based product. That means that information about user location and the signalling strength they experience can be correlated with actual application usage.

The proposed benefit of this is that instead of having merely network level information about a cell site - but not visibility into actual user experience - or conversely lots of knowledge about application usage but no idea of QoE, now you can have both. Another benefit is that you can gain some insight into network conditions without having to roll out a network of high performance probes

sitting on network interfaces (Abis, IuB, X2).

So what is different about what Procera is doing? Well, it’s the device-side aspect combined with the IP/application intelligence.

Sure there are plenty of assurance + DPI players out there attempting to do something similar. What we’ve seen is probe-based companies also partner with DPI providers to add richness to the network-level data they get from the probes. So, for example CommProve, Empirix and Polystar all use Qosmos for DPI, while Radcom partners with Allot.

Rhode & Shwarz comes at this from a more test-based background, but is another company looking to get into more a cross-network assurance play, and to that end recently acquired DPI specialist ipoque.

The upside of the probe approach is you get much more richness of data than is reported by Procera’s applet, and can “see” a lot more devices that just devices enabled with an app. The downside is it costs a lot more. It really depends on the level on information you want and the use cases you are trying to fulfil.

One probe based assurance provider said to TMN, “Our [approach] is better in terms of scalability because we pick up all the users and we are not limited by having to transfer information captured on the handsets to some central location over the air interface. We also have to transfer information but we can do it over the fixed line data network without having to consume precious radio resources.” But that same vendor also agreed that Procera was onto something different: “[We] do

agree that their approach is unique and first of a kind, to some degree. It is so, because of the combination of DPI and handset side radio info based on the SIM app.”

And there have been device-side apps and clients before. Most famously the behavioural visibility of something like a CarrierIQ. What else goes on the device?

Well, there are device agents that act as “policy on the device” clients - with something like ANDSF being invoked.

This is about having control of the device to do something like select the same network, and here there are companies such as GreenPacket and SmithMicro.

As making a network selection requires an assessment of the network, companies here too have seen the potential for using these device-side agents for carrying out performance monitoring.

But Procera’s approach is slightly different. Its applet on the SIM is a lot more limited in what it can “see” than an app like CarrierIQ, which has behavioural and usage visibility. But when combined with what Packet Logic knows about the application usage, you get that single view of QoE information.

So we have the probe based monitoring players, accessing information from the network and carrying out analysis via DPI engines for application recognition and analysis. We have the SON providers, working to turn reports from the network into actions to be taken. We have the coming together of the two – driven by new data analysis platforms, the ability to virtualise and load balance in the network, the requirement for integrated data analysis that is presented as meaningful reports to different users within the business.

Gradually, in this data jungle, you might begin to see a path through.

TMNQUARTERLY 29

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FEATURE: VIDEO DELIVERY NETWORK

If you had to build a mobile network optimised for the delivery of video, what would it look like? And what about if you had to start from today’s mobile networks?

Patrick Lopez outlines the ideal mobile video distribution network.

32 TMNQUARTERLY

FEATURE: VIDEO DELIVERY NETWORK

percentage of mobile data traffic that is video

2014

2013

I

n 2014, mobile video is a fact of life.

It has taken nearly 5 years for the service to transition from novelty to a growing habit that is quickly becoming an everyday occurrence in mature markets. Nearly a quarter of YouTube and Netflix views nowadays are on a tablet or a smartphone. Of course, users predominantly still stream over wifi, but as LTE slowly progresses across markets, users start to take for granted the network capacity to deliver video.

Already, LTE networks start to show signs of weariness as video threatens the infrastructure and the business model of mobile content delivery.

For those who are familiar with the work of {Core Analysis}, we have been proposing for a while that mobile carriers are not doing enough to make their networks more video capable. You would think that with anywhere between 40 to 70% of the data traffic, video would warrant more interest and effort than what we see today. Many studies show that although video is the dominant and fastest growing application in mobile, its service quality is mediocre. Conviva claims that about 15% of videos in wifi and cellular networks never actually start, while Skyfire shows that close to 50% of consumers experience video problems “often” or “all the time” in the US. Of course, part of the issue here is that 85% of these videos streamed over mobile networks are from OTT properties.

In many cases, network operators and content providers are at odds when it comes to managing the service. Mobile carriers essentially see these services as non-paying passengers on their transport networks and are either looking at

A ROLE FOR BROADCAST? encouraging the offloading of this traffic or to at the very least limit the space that they occupy, particularly in congested areas.

Content providers are predominantly designing services for the internet. It just happens that some of its delivery (increasingly) occurs on mobile devices in cellular networks. The technology and economics of their service is based on the internet model, where bandwidth is plentiful and they are already paying for reach (CDNs) and access (transit and peering). Paying wireless carriers for essentially the same services was a non-starter until a significant part of their customer based started accessing their services wirelessly on smartphones and tablets. As multiscreen and mobile becomes an important use case, content providers offer a download of a streaming player into your devices when you start playing web video on your browser or enjoin users to use their apps. These are defensive moves aimed at extending the control of the user experience. The reality today is that there are too many players with diverging controlling interests in the delivery of mobile video to make it a good experience. Soon, one will hope, the actors will recognise that no one can control the mobile delivery service end-toend, forcing cooperation. We are starting to see signs of this with announcements such as the exclusive partnership between Vodafone UK and Netflix.

We are now at the crossroads where the penetration of mobile devices, the ubiquitous access to fixed and mobile broadband have redefined how video is produced and watched, but not yet how it is delivered.

If you are trying to build a network fit for video then some have wondered if Broadcast could yet have a role to play. Like a sluice gate that you open when the pressure gets too much in the main channel, LTE Broadcast, or eMBMS to give it its standards-based name, is proposed mainly as something to relieve pressure points, rather than be a contiguous national bearer network. So it will be activated only in areas where the existing infrastructure is unlikely to be able to cope, which could mean a sports event or a cell where systems sense that more than a handful of users are watching the same content. Indeed, it is sports events where we have seen the most trials and live demos in late 2013 and into 2014 – from cricket in Australia (Telstra and Ericsson) to the SuperBowl (Verizon and Alcatel Lucent), the Commonwealth Games (EE and Huawei), Youth Olympics (China Mobile and Huawei), football in The Netherlands (KPN and Ericsson) and Poland (Polkomtel and Ericsson).

There are larger area trials as well. Nokia has a “single frequency network” trial running in Munich using part of the 700 MHz band to broadcast over a 200 km2 area.

When mobile video content spiked during the World Cup, video stalling times

DOUBLED.

TMNQUARTERLY 33

SO WHAT ARE THE ATTRIBUTES OF A VIDEO DELIVERY NETWORK? Well, ideally it would be designed for both mobile and fixed IP delivery. If we look first at the services it will enable and at the business models it is likely to foster, such a network will need to be able to accommodate both live linear video, as well as on demand streaming. It will have to be designed to unlock advertising in a contextually relevant manner and provide frictionless compensation and service level agreement (SLA) management between the actors. Furthermore, models such as pay per use, duration passes, service vouchers, gift cards and sponsored usage will also have to be built in. The corollary from these assumptions is that, in essence, a collaborative service management method is necessary between consumers, announcers, networks and content providers.

1.5x

LTE subscribers more likely to watch video than 3G

GLOBAL MOBILE VIDEO BY DATA VOLUME

ABOUT THE AUTHOR: Patrick Lopez is Founder of {Core Analysis}, a company that provides technology vendors, service providers and investors with advisory services on video, OTT, payTV and mobile. www.coreanalysis.ca

34 TMNQUARTERLY

VIDEO

WEB

INTERNET RADIO UPDATES

OTHER

FEATURE: VIDEO DELIVERY NETWORK

AND WHAT WOULD THIS NETWORK LOOK LIKE, FROM A TECHNOLOGY STANDPOINT? We have some examples today of partial implementation of these services, in a disjointed, vertical manner. Netflix has transitioned from using commercial CDNs to implementing their Open Connect network. Google Global Cache is extending the content provider’s reach into carrier networks. If we draw this trend to its logical conclusion, a well managed video network will need to have end-toend managed quality of experience.

QOE MANAGEMENT The only way to achieve this is to integrate player/app/browser/user experience with Radio Access Network (RAN) congestion management, which itself provides explicit data to the Core network for active traffic management that is policymanaged by a negotiated SLA/QoE between content provider, announcer and network. Effectively, this would force network operators to open APIs for announcers and content providers to control the delivery of the content from a quality/speed standpoint. This is the carrier’s contribution to the bargain. The resulting quality of delivery for premium services will be a negotiation in real-time between the demand (content provider and announcer) and the supply (network conditions) at this point in time, for

that service, for this user in a specific location. The quality rating at the end or throughout the session should be used as a metric in the calculation of the transfer price of the service. All this can be arbitrated and managed by SLA as it is the case on the internet today.

DATA MANAGEMENT For freemium, free to air and advertising based services, privacy and regulatory provisions would warrant that each party involved in the ad targeting would retain the use of the data they collect and provide a geographic / demographic / contextual abstraction layer to determine the ad selection. As a result, carriers will need to fundamentally change the way data is collected and analysed, transitioning from operational to marketing view if they wish to monetize the user segmentation.

ENCRYPTION, ENCODING The ad insertion itself should occur as close to the user as possible to enhance contextual and individual granularity.

This requirement implies that for encrypted traffic, encryption as well occurs at the point of ad insertion and not before to enable targeting. Technically, the delivery method should rely on

A well managed video network will need to have end-to-end managed quality of experience. The only way to achieve this is to integrate player/app/browser/user experience with Radio Access Network (RAN) congestion management, which itself provides explicit data to the Core network.

adaptive bit rate DASH to make best use of the network resources, but the encoding should occur in the carrier’s network, with mezzanine files pre-cached and controlled by the content providers.

That ad insertion, encoding and encryption location has been a moving target in the past years because it is where the control point is from a content provider’s perspective. They have allowed CDNs in the past to perform these tasks because they had no other choice, they will need to allow carriers to perform the same to unlock this jigsaw. This is the content provider’s contribution to the bargain.

Advertisers will have to create an inventory of ads that are mobile specific, not only targeted at devices but at contexts of mobility.

AN INTELLIGENT EDGE At last, at the device and radio level, there is no reason that content that is popular would have to go all the way to the content provider’s origin servers to be delivered.

An intelligent video service would be able to detect if the service requested is live and linear and watched by others in the area and switch to a broadcast delivery. If the service is on demand, but the content exists closer to the user’s location that is where it should be served from, being from someone else’s device, a network PVR or a cache in the RAN or the core network.

This is where network virtualisation will offer its full benefits, when virtualised storage and networking functions can be pushed down to the device level, peer-topeer transmission will become possible.

What these trends indicate is that a future network, built and optimised for video, will need to be vertically integrated.

The boundaries between devices, radio, core and content provider networks will subside, with automatisation, programmability and virtualisation enabling the efficient delivery and management of highly reliable and profitable video services.

TMNQUARTERLY 35

FEATURE: SATELLITES OF LOVE

LET SLEEPING SATELLITES LIE It seems Google might be scratching an itch the mobile industry has had for 30 years. For the love of satellites, asks Guy Daniels, why?

W

hat is it with space and satellites? Why, despite billions of dollars wasted, are telecoms and internet firms still obsessed with the idea of creating mobile networks using satellites as base stations?

Did nobody consult the history books?

Rumours persist that Google is planning something big, and all the evidence points to an “Internet in the Sky” venture. Sounds ambitious, but haven’t we been here before? Multiple-satellite networks were all the rage in the 1990s, using the benefits of low-earth orbit (LEO) to enable global coverage.

Low orbit means less cost to put the birds into space, they can be smaller and hence cheaper to produce than geostationary ones, and their circular or elliptical orbits means that a constellation can cover the entire planet.

So long as you possess the engineering skills to manage what are effectively very fast moving orbiting base stations, then you should have a viable network.

However, despite the technical capabilities, the business case for LEO satellite networks failed to materialise.

But that’s not to say that it won’t.

36 TMNQUARTERLY

FEATURE: SATELLITESFEATURE OF LOVE

A MESSY HISTORY THE LEO CRAZE started back in 1993 when Motorola developed its $3.7bn IRIDIUM CONCEPT – an ambitious constellation of 77 satellites criss-crossing the earth to provide global mobile voice communications.

So-named as the element Iridium has 77 electrons, the clever name seemed not so clever when the design changed to 66 satellites.

The scheme was already dated, having first been conceived by Motorola engineers in 1987. The problem was that in 1993 GSM was only just being deployed and the idea of a truly global system of terrestrial cellular coverage was viewed with some scepticism. GSM worked in Europe, but there were other incompatible standards elsewhere, so the idea of blanket coverage via satellite was a sound one (and even more so in 1987).

The telecoms sector is accused today of developing too slowly, and not as fast as Internet businesses. But back in 1993 it was positively motoring along compared with the snail-like pace of the space industry.

Needless to say, GSM caught on, and the need for a satellite alternative soon disappeared. After all, who would pay over $3,000 for a phone? Turns out, not very many.

Iridium launched its fleet in 1997 and began operation in 1998. By then, GSM was fast becoming the de facto global system for mobile. Iridium filed for bankruptcy protection in 1999. Today, the company exists as a service mainly for government and selective commercial users, under the leadership of exTelcordia CEO Matt Desch. Iridium may have been the first, but it wasn’t the last.

GLOBALSTAR had a constellation scheme of 48 LEO satellites and planned to sell exclusive access to local terrestrial service providers. The system cost was estimated at $1.8bn (later increased to $2.2bn), plus additional third-party gateways. It was created in 1991 as a joint venture between Qualcomm and spacecraft manufacturing firm Loral, with later investment from companies including Alcatel and Vodafone.

A launch failure in 1998 meant the loss of 12 satellites and full commercial service was delayed to 2000. Globalstar filed for bankruptcy protection in 2002.

A new Globalstar company emerged a year later and 24 second-generation satellites were launched between 2010 and 2013. It now continues to offer services mainly to commercial customers.

TMNQUARTERLY 37

MARKET FOCUS: TAIWAN

TAIWAN

HOT COMPETITION, BUT PLAYING CATCH UP

40 TMNQUARTERLY

MARKET FOCUS: TAIWAN

Taiwan’s hotly competitive mobile operator sector is mirrored by its manufacturing sector, which develops

TAIWAN MOBILE NETWORK

and delivers communications products to the rest of the world in massive volumes.

T

TOTAL CONNECTIONS

133%

14AI%D

P PRE & 3G) (2G

35% 5% CHT BILE 2 % O 24 N M TONE A W TAI R EAS 10% FA APT 0% O1 VIB 6% PHS

WiMAX operators convert licenses to LTE

LTE spectrum auction commenced in October 2013

LTE licensing completed in 2014 following completion of spectrum auction. (Taiwan has remained the only major market in the region without LTE over the past few years.)

FROM WIMAX TO 4G

T

RKE

MA

RE SHA

aiwan, the country whose manufacturing sector delivers so many of the world’s smartphone and consumer electronic devices, is catching up on LTE. Licenses were only awarded this year, and operation has only just begun. That puts it 5-6 years behind market leaders like South Korea and Japan.

Notwithstanding, there has been rapid progress since the license award, and the delay has really been a result of a historical situation which saw operators initially back WiMAX as a technology – a result of their desire to lead rather than follow. Nor could you accuse Taiwan of being in any way a sluggish consumer market – with fierce competition amongst up to six national operators.

For instance, after obtaining its 4G license in October last year, Taiwan Star has already begun commercial operation of its 4G services, which start from NT$599 per month for unlimited data transmission and free calls within Taiwan Star’s network with a two-year contract.

The low-cost data plan is part of the company’s promotional campaign for launching 4G services and it plans to continue it until October.

The nation’s three major 4G operators - Chunghwa Telecom, Taiwan Mobile and Far EasTone Telecommunications - launched their 4G services in late May and early June respectively. However their contracts, which include free calls, cost at least NT$1,299 per month and allow unlimited data transmission for as long as six months.

Taiwan Star president Cliff Lai said the company is aiming to get at least 250,000 subscribers for its 4G service by the end of this year, or a roughly 20 percent share of Taiwan’s 4G market, thanks to the company’s aggressive pricing strategy.

“Taiwan Star’s pricing packages definitely have the highest cost-performance ratio on the market,” Lai told a press conference.

However, he admitted that Taiwan Star is unlikely to turn a profit for the next two years due to its heavy initial spending on infrastructure and fierce competition.

He said Taiwan Star now has a 4G coverage of 85 percent in the nation, and he expects the figure to reach 96 percent by the end of the year.

Each of Taiwan’s three major carriers said they have signed up about 150,000 4G service subscribers over the past three months.

TMNQUARTERLY 41

MARKET FOCUS: TAIWAN

MOBILE MAKERS: Last month, research firm IDC forecast Taiwan would have more than 1 million 4G LTE service subscribers by the end of this year.

The introduction of 4G has brought some turmoil and consolidation to the market, as new players seek to enter a market, using 4G licenses as their entry ticket.

Just this year, the board of Asia Pacific Telecom (APT) approved a plan to merge with 4G newcomer Ambit Microsystems via a share swap deal. In a statement filed to the Taiwan Stock Exchange, the company says that under the merger every Ambit share can be exchanged for a 0.4975 share in APT. Upon completion, Ambit’s parent company Foxconn Technology Group will see its stake in APT upped to 23% from 14%; it took its initial stake holding via a new share offering last month.

However, the plan faces a stumbling block in that the two companies hold a combined 30MHz in the 700MHz and 900MHz bands – exceeding the 25MHz limit set by the National Communication Commission. To assuage regulatory concerns and smooth the deal, Ambit reportedly commenced talks over a potential bandwidth swap with another Taiwanese player, Far EasTone.

According to the China Post, Far EasTone will initiate a trade with Ambit under which it will swap its A2 frequency block in the 700MHz band for the A3 block in the same band held by Ambit. Once complete, this would mean that both operators would benefit from operating adjoining blocks of the 4G network.

MOBILE OPERATORS

42 TMNQUARTERLY

Away from the operators jockeying for position in the consumer market, Taiwan is best known for its ODM market – from the giant FoxConn and its Apple contracts to a host of manufacturers providing consumer electronics at high volumes.

For the telco infrastructure market that has meant small cells and femtocells markets that have leant themselves well to the requirements of low cost and high volume manufacturing.

A number of small cell developers have called on the services of these manufacturers to fulfil their needs for small cell access points that must have the price profile of a mass produced consumer electronics item. These may be standalone femtocells or, as is increasingly the case, integrated WiFi routers and small cells,

or set top boxes with femtocell capability.

As our list below shows, that demand for a low cost manufacturing base has led to a growth industry for Taiwanese ODMs providing their manufacturing services to European, US and other Asian vendors.

The work might include producing complete small cells to be rebranded by a European vendor, produced to that company’s specification. Or it might mean taking chip technology and a software and protocol stack from a reference designer and producing products that can be white-labelled by operators and service providers. Without these manufacturing partners, it’s difficult to know if the femtocell access point vendors could have made their markets.

GROWTH BY THE NUMBERS

TAIWAN’S MOBILE INFRASTRUCTURE ODMs

The Taiwanese telecom market generated $12.5BN in service revenue in 2012, a 3.0% increase over the previous year.

Mobile data was the most important driver behind this trend, generating $390M more revenue in 2012 than in 2011.

Thanks to the widespread adoption of smartphones, coupled with smartphone users generating ARPU of $48, mobile data revenue grew by 23.5% in 2012. Most mobile data traffic is over GSM networks at present, with LTE networks to begin service in 2014. Mobile data will grow at a 12.9% CAGR to $4.2BN. In 2013 there were 23 million 3G subscribers, making up over 75% of the total mobile subscriber base, although 4G licences had yet to be awarded.

ALPHA NETWORKS: WHU-FAP10 WCDMA and Wi-Fi Small Cell based on Qualcomm technology, including UltraSON ASKEY: Integrated small cells based on Alcatel-Lucent software license GEMTEK: WiFi/LTE home routers, outdoor LTE small cells, MiFi access points SERCOMM: Multimode small cell based on Ubiquisys software platform TECOM: 3G femtocells QUANTA COMPUTER: Qcell LTE small cell solution based on Broadcom SoC WISTRON: will manufacture residential and SoHo/SME small cells in high volume for ip.access ZYXCEL: Integrated small cells based on Alcatel-Lucent software license

Dude,

Where’s My Car? At CTIA’s Super Mobility Week, held in Las Vegas in September, visitors got a chance to try out some VR applications with Oculus Rift headsets, including this gentleman (main image) who got to grips with a virtual Indycar on the Verizon booth.