NEXT GEN MOBILE NETWORKS Dirk Wolter, Managing Director, Mobility, APAC 29 th January 2016

Transcription

1 NEXT GEN MOBILE NETWORKS Dirk Wolter, Managing Director, Mobility, APAC 29 th January 2016

2 Content 1. Global business and technology trends in Mobility 2. Implications for the Indian/SAARC market 3. Technology enablers for network evolution 4. Round table discussion

3 Global Trends in Mobility

4 Market Transitions for Mobile Network Operators New Business Models New Competitors New Technologies Flexible, usage-based pricing Faster time to revenue Direct, In-direct and Pass through Global market reach over the top (OTT) Reduced barriers to entry Accelerating pace of innovation Nimble software defined platforms in the Cloud System on a chip commoditization Emergence of M2M Adapt or Be Left Behind

5 EBITDA Margin (%) APAC Mobile SP Profitability 60% 50% 40% 30% 20% Telkomsel Grameenphone Globe AIS Smart Mobilink Banglalink Indosat XL Robi Mobitel CMCC Airtel AIS DTAC CT Dialog China U Voda India Maxis Emerging Markets Developed Markets DiGi Celcom Telstra StarHub SingTel M1 NTT DCM Optus SKT KDDI Spark NZ Softbank VHA VF NZ LG U+ ARPU (US$) $40 $35 $30 $25 $20 $15 $10 $5 $0 EBITDA Margin 50.0% 45.0% 40.0% Emerging Markets India/SAARC Developed KT 35.0% 10% True $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 ARPU (US$) Source: Cisco analysis, from 2014 annual reports. 30.0% 25.0% 20.0% Low ARPU doesn t mean low margin: Some emerging market SP s enjoy >50% EBITDA. Developed markets managing business transition to Data. Emerging are still challenged with declining ARPU and Profitability.

6 Innovation in OTT Strategies Compete APAC Focus China Mobile Jego App provides free calls, messages and cheap international calls. EU regulator: Mobile companies regularly block VoIP and prevent services such as Skype from functioning on their networks Indian cross-platform messaging App Hike is a joint venture between Bharti Enterprises and Softbank Protect Revenue European operators offer Rich Communication Services for messaging Partner Free Basics in 18 SPs in 14 countries Free Zone Search, Gmail, G+ Gain Subscribers Video stream bundles, add-ons, zero rating Music Stream bundles or add-ons Increase APRU Plan add-ons for unlimited collection of OTT apps Enable Direct operator billing for Skype credits Sponsored Data App APIs to manage NW QoS New Revenue Cloud based RCS app Jibe with network QoS MVNO OTT Google and WhatsApp offer direct services as MVNOs Wyless global M2M solutions Apple MVNO Rumours Implications of OTT Partnerships: Encryption (dark pipe), Net-neutrality

7 Protecting and Enhancing Voice Voice over WiFi to fix coverage & protect from OTTs Started with US Cable Operators, but now mass MNOs adoption driven by Apple T-Mobile, USA offers VoWiFi ios 8 brings Wi-Fi calling for iphones on T-Mobile 3, UK launches VoWiFi app EE, UK plans VoWiFi to boast indoor coverage The aim of VoWiFi is to improve in-building coverage. Calls will be automatically routed via WiFi, for instance in a user s home or office, where there is an absence of cellular coverage. Sprint prioritizes voice-over-wi-fi over VoLTE Four Sprint devices with the client pre-loaded. When the user connects to a WiFi hotspot, calls are automatically routed to the Wi-Fi network until the user leaves the area. Requires Secure Connectivity Device (Client App or OS) iwan (Interworking Wireless LAN, IPsec) Network epdg (Evolved Packet Data Gateway: Terminate IPsec to connect UE to EPC) Challenges: Limited Mobility, High Density QoS, Enterprise IT, Regulatory. VoIP Call Management IMS/SIP IMS/SIP

8 Bottom-line Challenge Operating Costs Reducing Margins and Stifle Innovation Source: GSMA Intelligence OPEX CAPEX Network complexities contributing to OPEX growth: Legacy technologies Purpose-built hardware hardwired Multiple OS Multiple points of failure Increasing provisioning and management costs Rigid Architecture: inefficient transport routing Slow to introduce: New capacity and services Need to reduce overall expenditure, especially OPEX Simplification and speed is innovation

9 Local Implications

10 APAC Region Mobile 5-Year Dynamics Diverse growth drivers based on market maturity 2019 Forecast REGION Mobile Users No. of Connections Mobile Users (inc M2M) No. of Avg Mobile Speed Devices / M2M Traffic/Device No. of Users per Month 2GB / Month Total Average Mobile Mobile Data Traffic Speed per Month APAC 2,800 M (5% YoY) 5,400 M (8% YoY) 8 Mbps 1.8 GB (48% YoY) 9,500 PB (58% YoY) China 1,050 M (4% YoY) 2,200 M (9% YoY) 9 Mbps 1.0 GB (51% YoY) 2,200 PB (67% YoY) India 900 M (9% YoY) 1,200 M (6% YoY) 3 Mbps 1.0 GB (58% YoY) 1,100 PB (67% YoY) Indonesia 195 M (5% YoY) 385 M (3% YoY) 2 Mbps 1.6 GB (54% YoY) 610 PB (59% YoY) 13x Growth Emerging Asia: More users and Smartphone adoption Philippines 57 M (3% YoY) 134 M (3% YoY) 5 Mbps 1.8 GB (51% YoY) 240 PB (57% YoY) Rest of APAC 450 M (4% YoY) 840 M (4% YoY) 6 Mbps 3.4 GB (66% YoY) 2,900 PB (70% YoY) Australia 22 M (2% YoY) 76 M (14% YoY) 25 Mbps 2.4 GB (26% YoY) 166 PB (41% YoY) Japan 115 M (0% YoY) 380 M (18% YoY) 17 Mbps 5.0 GB (26% YoY) 1,500 PB (40% YoY) Korea 46 M (1% YoY) 190 M (21% YoY) 19 Mbps 4.5 GB (24% YoY) 670 PB (43% YoY) ANZ: More BW and richer services Developed Asia: More connections with IoT Source: Cisco VNI Global Mobile Data Traffic Forecast, Note: The numbers above pertain to 2019, and the CAGR s are for period.

11 Dynamics of Mobile Business Growth in India Tailwinds Subscriber growth (highest in APAC 9% CAGR) Early in Smartphone adoption cycle (pent up demand) Market consolidation Mobile first innovation (inc OTTs) Spectrum Challenge Headwinds Spectrum low supply, high demand Infrastructure; backhaul/fibre, site acq, indoor coverage, power Financial constraints CapEx and borrowing Regulatory ambiguity on net-neutrality Source: Cisco, GSMA, 2016

12 QUESTIONS 1. What are the biggest challenges facing you in your networks today? 2. India is the most spectrum constrained country in the world, as a result we have seen a lot of innovation in spectrum efficiency here. What other areas are you considering to get more capacity out there? 3. How do you see the relationship with OTTs developing from here? 4. Do you think virtualisation and automation holds the key to lower TCO in the future? 5. How important do you see the IoT opportunity? What are your biggest concerns with addressing this segment? 6. What other areas should Cisco be helping to meet your business objectives?

13 Technology Enablers

14 The Evolution of Mobile Technology R&D 1G TACS. AMPS 5G Era Voice R&D 2G GSM/GPRS/EDGE. DAMPS/CDMA Digital R&D 3G WCDMA/HSPA. CDMA1x/DO Data R&D 4G WiMAX. LTE/LTE Advanced IP? R&D 5G IoE

15 Radio Access Evolution Converges to LTE and Wi-Fi Licensed Spectrum 60 MHz 90 MHz 120 MHz 200 MHz 300 MHz 3GPP TD-SCDMA GSM&EDGE UMTS HSPA+ LTE (FDD/TDD) LTE-A LTE-M 5G 3GPP2 CDMA 1x EVDO EVDO Rev. A/B UMB IEEE WiMax d WiMax e WiMax m Unlicensed Spectrum 80 MHz 400 MHz 6000 MHz WiFi b WiFi a/g WiFi n WiFi ac/ad/af LAA, LWA WiFi ax ah (IoT)

16 Polling question What role does Wi-Fi play in your mobile network strategy? 1. Wi-Fi is an important element in our access network strategy - this also includes VoWiFi 2. Wi-Fi is a complementary technology for some hotspots 3. We consider only minor Wi-Fi investments where useful in some niche cases 4. We do not see any use for Wi-Fi as a complement for mobile networks

17 Mobility 2020: Pillars Technology Enablers RAN Diversity (HetNet) 5 Bars Service Serve > 1000x Traffic in 10 years Cost effective access Serve new segments Optimise for M2M Mass connectivity Internet of Things Virtualisation Lower TCO Increase Agility Create a service platform

18 KEY THOUGHTS 1. Globally we see more innovation in OTT partnerships and new segments like IoT for revenue growth 2. Bottom-line TCO, especially OpEx, impacts profitability and constrains growth 3. Indian/SAARC market has great potential, but faces challenges; Spectrum, regulation uncertainty and high OpEx 4. Technology enablers are maturing to meet the growth and profitability challenge: RAN Diversity, NFV, IoT

19 Round Table Discussion

20 QUESTIONS 1. What are the biggest challenges facing you in your networks today? 2. India is the most spectrum constrained country in the world, as a result we have seen a lot of innovation in spectrum efficiency here. What other areas are you considering to get more capacity out there? 3. How do you see the relationship with OTTs developing from here? 4. Do you think virtualisation and automation holds the key to lower TCO in the future? 5. How important do you see the IoT opportunity? What are your biggest concerns with addressing this segment? 6. What other areas should Cisco be helping to meet your business objectives?

21 Back Up

22 HetNet IP/MPLS Backbone Unified Data Centre NFV Infrastructure Cisco Mobile Internet Architecture Voice & Messaging Enterprise IoT NFV Management & Orchestration (MANO) Services vims Hosted Collaboration Suite (HCS) IoT Cloud Connect Telco Cloud Network Mobile Service Enablers Policy Suite, Gi-Services, Analytics ASR5000 Series Packet Core 2G, 3G, LTE, WiFi, Femto GW, inline Services Virtual Packet Core (VPC) NEW Intelligent Access NEW ASR900 & 9000 Series Unified Mobile Backhaul TDM, ATM, IP, GE, 10 GE, L3VPN, SecGW, etc Universal RAN Orchestration Wi-Fi SON ANDSF 3G, LTE cson Universal Small Cells Macro Cells Any G / Any Vendor Wi-Fi, 3G/LTE Small Cell, dson NEW Heterogeneous

23 India: Mobile Device Growth by Type By 2019, Smartphones Will Attain Largest Share to Reach Nearly 54% 6% CAGR Millions of Devices * Figures (n) refer to 2014, 2019 device share Source: Cisco VNI Global Mobile Data Traffic Forecast,

24 India: IoT Connections by Network Type Multi-Technology Access Growth IoT Proportion of India total % CAGR Millions of IoT Connections Connections 1% 5% Data Traffic (Mobile) 0.2% 1.2% Revenue 0.7% 1.6% (Low Power Wide Area) * Figures (n) refer to 2015, 2020 share Source: Cisco VNI Global Mobile Data Traffic Forecast,

25 India: Mobile Data Traffic Growth / Apps Video to Account for 66% of Mobile Data Traffic by x (67% CAGR) Petabytes per Month * Figures (n) refer to 2014, 2019 mobile data traffic share Source: Cisco VNI Global Mobile Data Traffic Forecast,

26 India: Mobile Data Traffic Offload* 31% of Mobile Traffic to be Offloaded by 2019 Petabytes per Month *Offload includes traffic from dual-mode devices (i.e., supports cell & Wi-Fi, excl. laptops) over Wi-Fi/small cell networks Source: Cisco VNI Global Mobile Data Traffic Forecast,

27 India: IP Traffic by Local Access Technology Mobile Traffic Grows 3.8x Faster than Fixed Access 34% CAGR Petabytes per Month Source: Cisco VNI Global Mobile Data Traffic Forecast,

28 India: Mobile Data Traffic Growth In India, 3G will still support >50% of Mobile Traffic in 2019 Exabytes per Month Source: Cisco VNI Global Mobile Data Traffic Forecast,