Ovum ZTE Presentation Jakarta

www.ovum.com
© Copyright Ovum 2015. All rights reserved.
A glimpse on the Next Broadband
Generation
Dario Talmesio
Principal Analyst and Practice Leader
Ovum
19th November 2015, Jakarta

2© Copyright Ovum 2015. All rights reserved.
A glimpse on the Next Broadband Generation
 The Global wireless broadband technology evolution
 Market developments – the state of LTE
 Data Services projections
 Video traffic and monetization
 Ovum View on the path to network transformation
 Network transformation roadmap to 2025
 Cases studies from US and Europe
 The road to 5G
 Defining the 5G networks by requirements
 Early adopters and expectations – Japan, Korea, China

LTE is the fastest adopted mobile technology ever!
0
500.000.000
1.000.000.000
1.500.000.000
2.000.000.000
2.500.000.000
3.000.000.000
3.500.000.000
4.000.000.000
4.500.000.000
5.000.000.000
Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
On path to 1bn
LTE subscribers

4G LTE goes mass market in most regions…
1% 0%
5% 5%
7%
52%
20%
21%
3% 3%
15%
11%
19%
71%
42%
50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
LTE LTE LTE LTE LTE LTE LTE LTE
Africa Central &
Southern Asia
Eastern Europe Latin America &
the Caribbean
Middle East North America Oceania, Eastern
& South-Eastern
Asia
Western Europe
Sum of Sep 15 Sum of Dec 17
2017 - LTE nearing / exceeding the
50% subscriptions mark in key
regions

...meaning that Mobile Broadband video traffic will
explode!
38,4%
Mobile Network Traffic (%)
2015
Video Games
Music Web browsing
Social Networking Communications
Other Data
68.0%
Mobile Network Traffic (%)
20120
Video Games
Music Web browsing
Social Networking Communications
Other Data

But also that Telecom Operators have
new opportunities and new threats
Telecom
Operators
Digital Service Platform
Traditional VAS
Connectivity
Telco Opportunity to build an
ecosystem to drive distribution
of new Digital Services
Protect existing busies and
drive efficiencies
Monetize internet experience
and OTT service

…and operators try to monetize video traffic
e.g. Vodafone - OTT partnership model works

…but also bundling fixed-mobile TV offering
e.g. KPN’ s quad-paly with focus on TV
 Goals for KPN's multiplay/bundling strategy are to: reduce churn, stabilize revenues, aid
the move of mobile customers from prepaid to postpaid service plans.
 Key differences from other quad-play: 1) not based on offering heavy discounted
services 2) mobile is the anchor product for all bundles.
 KPN allows customers to continue to run their service contracts separately - customers
maintain contracts because they want to continue benefit from the “bundle offer”. e.g.
benefits (double mobile voice, texts, and data; family calling; and additional TV and film
channels).

…all supported by a wave of LTE innovation
 420+ operators have commercially
launched LTE in 143 countries.
 20% of all LTE operators (approx. 90
operators) have commercially launched
LTE-Advanced.
 15 LTE-Advanced networks support
Category 4 devices (above 100 Mbps up to
150 Mbps peak downlink speed) while 73
networks support Category 6 devices
(above 150 Mbps up to 300 Mbps).
 LTE1800 is now used in 187
commercially launched networks in 89
countries representing over 44% of LTE
network deployments.
 Most operators (90%) deployed LTE
networks in paired spectrum using the FDD
mode, the LTE TDD mode (TD-LTE) for
operators with unpaired spectrum continues
to develop in all regions.
 Currently 59 operators, which is almost 1 in
7 of all LTE operators, have commercially
launched LTE service using the TDD
mode in 35 countries.
 Converged FDD and TDD LTE networks
is gaining traction amongst many
operators.
 The VoLTE market continues to advance.
The report confirms that 103 operators are
investing in VoLTE deployments, 13
VoWiFi launches in 8 countries.
Source: Ovum, GSA

 The Global wireless BB technology evolution
 Data Services projections
 Video traffic and monetization
 Ovum View on the path to network transformation
 Network transformation roadmap to 2025
 The road to 5G

The road to network transformation to 2025

Ovum’s outlook for SDN and NFV to 2025

Case Study: AT&T’s transformation strategy
 User-Defined Network Cloud Initiative - a cloud-based architecture
 Virtualize hardware functions, cut costs, put more control of the network
(actually network services) in users hands, emphasize open source
software.
 AT&T Integrated Cloud Nodes: Physical sites running virtualized
functions, plans for 29 nodes with 40 more by the EOY 2015, 4,600 COs
will look more like DCs
 Domain 2.0 supplier program (announced in September 2013)
 Changing how AT&T works with the supplier community, AT&T is
building its own ecosystem of vendors – 10 announced vendors
 Set objective targets
 All IP network by 2020, convert 150 network functions, 75% of network
virtualized by 2020, 5% in 2015 starting with connected car applications
and MVNO services
Goal is the transformation of AT&T’s network, and
driving AT&T to become a software company

Case Study: AT&T’s transformation strategy
 Employ “beachhead” programs to progress towards goals
 “AT&T Switched Ethernet Service” provided by AT&T Network
on Demand service available in 100 US cities, 4 customers
 vEPC for connected core and MVNO services
 Virtualized VoIP and VoLTE networks
 Manage organizational and cultural change
 Education and training – helping employees to acquire
software skills.
 Udacity and Georgia Tech. University (500,000 course
enrollments)
 Hiring and compensation – to attract and retain people with
needed software skills
 $3bn reduction in 2015 capex partially credited to SDN/NFV

Case Study: Telefonica evolving towards a fully
Virtualized Network
Strategy: make progress through TCO-driven use cases
with no need to wait for a “Big Bang” of virtual networks
Source: Telefonica

With focus on subscriber’s QoE
Source: Telefonica

Using a 3 phases network transformation…all
leading to 5G
Telefonica plans to follow a three-phase approach to implementing UNICA
 Virtualize non-critical systems, such as AAA and IP Media Subsystem
(IMS), deploying them as virtual network functions (VNFs)
 Transform to NFV core networks like virtual Evolved Packet Core
(vEPC) for LTE
 Virtualize critical systems like Home Subscriber Server (HSS) and Home
Location Register (HLR)
…boundary between Core and Access networks to blur
in 5G systems

 The Global wireless BB technology evolution
 Mobile data traffic projections
 data service subscribers in different areas)
 Ovum View on the path to business transformation
 Business transformation roadmap to 2025
 The road to 5G

5G – defining it is still difficult but expectations are
high across the wider community of stakeholders
“Which of the following you would regard as essential before a network should be considered to be a 5G
network. Choose all that apply.”
Source: GSA

Early 5G deployments – everyone wants to be
first! Korea, China, Japan, from 2018

Takeaways
 Mobile data explosion is a reality and deliver data (especially
video) in a cost effective way will prove challenging with existing
network infrastructure and business models.
 The road to network transformation has started and will lead to
huge opportunities for efficiency and agility but also will require
deep network, business and cultural changes in organizations
 5G will be a reality sooner than most think – being there now will
give a clear competitive advantage to operators and vendors
alike

Thank you!
Stay in touch!
Dario Talmesio
Principal Analyst and Practice Leader | Ovum
Telecoms, Media and IT
Direct line: +44 (0)20 7017 7202
Mobile: +44 (0)7949 070318
dario.talmesio@ovum.com
www.ovum.com

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