The future of IPX in Bahrain and the GCC HOT TELECOM

Transcription

1 The future of IPX in Bahrain and the GCC 2014

2 This Report has been produced by Hot Telecom for the Telecommunications Regulatory Authority of Bahrain (TRA). The report is provided for the purposes of assisting the TRA and other stakeholders to understand issues related to IPX. This document contains information and statistics that have been obtained from sources believed to be reliable in regard to the subject matter covered. No guarantee or warranty is given for the accuracy and completeness of either the information in this report or of related oral information that may be supplied. This document does not however constitute commercial, legal or other advice however so described. The TRA and excludes any warranty and, or liability, expressed or implied, as to the quality, completeness, adequacy and accuracy of the information, statements and statistics contained within this document. This document is a study and it is a non-binding document. It has no legal effect. This document does not represent an official position of the TRA, but is intended to stimulate debate on the part of stakeholders and public. It does not prejudice the form or content of any future proposal by the TRA or. The TRA and reserves the right to change and update the information, statements and statistics provided in this document at its discretion and without prior notification and assumes no obligation to update the document on the basis of suggestions, comments and/or queries made by third parties. The TRA and assumes no responsibility for any consequences that may arise in the absence of such changes and/or updates. To the fullest extent permitted by law, neither the TRA or any of its officers or however so described or agents will assume responsibility and/or liability for any loss or damage, including losses or damages such as loss of goodwill, income, profit or opportunity, or any other claim of third parties, arising from or related to the use of the content of this document. The copyright for the Report and all rights of use are the property of the TRA or as defined in the contract between Hot Telecom and the TRA.

3 Workshop agenda 9h00 AM 9h15 AM 9h15 AM 10h00 AM 10h00 AM 11h00 AM 11h00 AM 11h30 PM 11h30 PM 12h15 PM 12h15 PM 13h00 PM Introduction Industry and IPX overview IPX evolution Break Possible impact of IPX in Bahrain and GCC Options and recommendations 3

4 Introduction

5 Project objectives Acquire a clear understanding of the future of IPX in Bahrain and the GCC - The evolution of IPX - Possible impacts of IPX on the telecom industry - Regulatory implications of IPX Define a number of possible options for Bahrain and the GCC relating to IPX 5

6 WAS ESTABLISHED IN 2003 EXPERTISE International, wholesale and IPX LOCATIONS CANADA, UK, US CUSTOMERS SERVED 200+ Tier-1, Tier-2 operators 6

7 Industry overview

8 Key Industry trends The new digital lifestyle Local is becoming global Everything everywhere at anytime Customer empowerment Everything IP everything wireless and everything for free 8

9 Retail Service Evolution Fixed to mobile substitution accelerating TDM to IP migration underway 2G, 3G to 4G migration starting VoLTE and VoWiFi in early deployment stages Video and Content supported over mobile RCS and IMS able to compete with OTTs M2M roaming will be required 9

10 Wholesale services Evolution Voice termination moving to IP LTE Roaming requirements are growing Value added services are added to the mix Return of quality as a differentiator Explosion of data roaming traffic expected 10

11 Business model Evolution Growing role of the mobile corporate groups Consolidation of the roaming providers Consolidation of the wholesale market handful of global wholesalers mobile groups a few niche players New pricing models Bundles Capacity pricing for voice Data per port or per bit? 11

12 Customer Evolution - Their needs High quality communications Support of high speed applications Seamless experience at home, on the road or abroad Seamless experience between devices Increasing desire for a secure communication experience 12

13 million Customer evolution - World Fixed and mobile subscribers 10,000 8,000 6,000 4,000 2, e 2014F 2015F 2016F 2017F 2018F Fixed Mobile Source: report The Future of International Wholesale 13

14 Billion minutes Customer evolution - World International voice traffic origination e 2014F 2015F 2016F 2017F 2018F Asia Europe Latin America MEA North America Source: report The Future of International Wholesale 14

15 PB/year Customer evolution - World Data roaming traffic e 2014F 2015F 2016F 2017F 2018F 2G-3G 4G Source: report The Future of International Wholesale 15

16 ( 000) Customer evolution - GCC Fixed and mobile subscribers 120, ,000 80,000 60,000 40,000 20, F 2015F 2016F 2017F 2018F Mobile subscribers ('000) Main telephone lines ('000) Source: report Middle East Statistics and Forecasts 16

17 ( 000) Customer evolution - GCC Mobile subscribers by country 100,000 80,000 60,000 40,000 20, F 2015F 2016F 2017F 2018F Source: report Middle East Statistics and Forecasts UAE Saudi Arabia Qatar Oman Kuwait Bahrain 17

18 Million minutes) Customer evolution - GCC Inbound-Outbound int l voice traffic 35,000 30,000 25,000 20,000 15,000 10,000 5, F 2015F 2016F 2017F 2018F International Outgoing International Incoming Source: report Middle East Statistics and Forecasts 18

19 Key regulatory questions Net neutrality Uncertainty as to what it means Competition around broadband internet access Apply to both mobile and fixed providers? Mobile termination rates Roaming rates and/or roaming choice OTT regulation 19

20 IPX overview

21 Current complex interconnect environment 21

22 What the GSMA wants - IPX Private and secure IP connection Direct IP routing (2 hops max) Multiple voice & data services on a single pipe Service specific classes of service End-to-end SLAs on key performance items Cascading commercial model bilateral plus hub Transparent routing and transparent rating Break-in and break-out when needed 22

23 The GSMA Pipe. 23

24 Simplified multi-service IPX environment Voice Video Signaling/Diameter Content VoLTE 3G/LTE Roaming Messaging IPX IPX IPX IPX IPX IPX platform IPX IPX OTT Cableco Mobile Fixed Internet Mobile Content 24

25 IPX benefits OPERATORS: Fewer commercial relationships Simpler network environment Guaranteed Quality and improved service to end users Support of LTE roaming, HD Voice/VoLTE and RCS New IP service opportunities PROVIDERS: An opportunity for long term stable relationships Less competition on price more on quality, service, reach Less competition in general (as consolidation takes place) Enables major wholesalers to enter new markets (voice, data, roaming) Possible savings down the line Provides environment to compete or partner with OTTs 25

26 Possible benefits of IPX for Bahrain operators Migrate voice termination to quality managed IP Extend VoLTE, HD voice and video globally Facilitate seamless LTE roaming Rapidly grow LTE roaming reach Improve quality and reliability of messaging Implement a rich communication experience Optimize CAPEX and OPEX 26

27 Possible benefits of IPX for the Kingdom of Bahrain Foster competition and stimulate new investment in the Kingdom Support technology evolution Ensure high quality international voice, data and content services Empower the consumer Support secure communication to IPX hosted services Help Bahrain become one of the region s IP leaders and a key IP node 27

28 Challenges IPX can help address Support of a seamless LTE roaming experience Upcoming tsunami of LTE roaming data End to end support of VoLTE and HD Voice/Video Simplification of networking with cost reductions Need for global reach and scalability Opportunity to monetize roaming customer data Increased need for quality and security Increasing pace of innovation to compete with OTTs and new entrants 28

29 IPX evolution

30 IPX services evolution Phase 1 Basic services 30

31 IPX services evolution Phase 2 LTE services 31

32 IPX services evolution Phase 3 Innovative services 32

33 IPX services and features Basic Services Value added services Capabilities Features VoIPX Voice signalling separate from voice termination Voice break-in, break-out WiFi Roaming and authentication HD Voice for 3G network implementations Cascade billing Number portability queries as a service VoLTE in-call transition to video CoS treatment to offer different QoS Fraud management Signaling interoperability (between GSM/CDMA) Multi-service across access circuits SMS Hubbing and termination Geo-location applications Number portability based routing E-2-E QoS guarantees MMS Hubbing and termination Pro-active data roaming quality monitoring Signaling interworking between 2/3G and LTE KPI reporting RCS Hubbing Silent roamer detection SLAs with penalties RCS Hosting VIP or premium customer service Transparency Routing IMS Hubbing SIGTRAN Signaling for 2G/3G services Diameter Signaling 2G/3G data roaming (GRX) LTE Data Roaming VoLTE termination (including support for video) VoLTE roaming Personalized customer offerings through RTI HD Videoconference Transparency Performance Transparency Commercial rating & settlement Note: Services and capabilities highlighted in green are on the roadmap of a growing number of IPX providers 33

34 IPX services evolution Innovation trigger? From Bleeding edge to Leading edge? One of many? Hubbing & VAS Peering Flash in the pan? LTE Support IPX Inception VoIPX era Data IPX era Network expansion This is where most of the IPX providers are at the moment 34

35 IPX providers Mobile data hubs Global wholesalers Regional wholesalers Comfone BICS Citic Telecom SAP Mobile Services BT Etisalat Syniverse BTS Hutchison TNS Deutsche Telekom ICSS NTT Communications ibasis Telekom Austria Group IDT Telstra Orange PCCW Global TI Sparkle Tata Communications Telefonica International Wholesale Telenor Global Services TeliaSonera International Carrier Vodafone Carrier Services Source: report IPX Competitive analysis 35

36 Complete IPX portfolio & features IPX provider evolution Extensive Mobile data hubs Innovative services and global reach The new breed Regional IPX providers Global voice & data wholesale IPX providers Federation IPX providers Global voice wholesale IPX providers Minimal Reach Extensive 36

37 Examples of IPX strategies Syniverse Promoting its IPX as the ideal mechanism for mobile operators to transition to IP and LTE Planning to support VoLTE interworking and enter the voice market only for direct interconnects Deployed real-time intelligence Targeting the media and advertising segment through IPX Enables interworking between 3G and LTE roaming TeliaSonera Interconnects all its retail operations over its IPX to enable seamless customer experience at home or when roaming Plans to set-up peering agreements with other mobile groups IPX platforms Also targets service providers outside of the TeliaSonera group 37

38 IPX customer evolution Cool tool to innovate Useful some of the time From Bleeding edge to Leading edge? Multi-service and features I don t need this VoLTE Now it is getting interesting What is IPX Why would I need this VoIPX better quality same price, why not LTE I am starting to see the light I don t need this This is where most of the IPX customers are at the moment 38

39 IPX supported services by target market Services Fixed Mobile Cableco OTT ASP VoIPX MMS transit SMS transit LTE Roaming LTE Signalling VoLTE roaming Voice Signalling GRX RCS/IMS Hubbing VoIP HD Voice VoLTE RCS High quality content Video Cloud M2M 39

40 IPX adoption Where are we at? IPX ADOPTION IS EXPECTED TO ACCELERATE IN Over 40% of customers we have interviewed stated that they are planning to adopt IPX for some of their services starting in OTTs formed the largest group in Never with no plans to migrate to IPX. But this is changing. 50% 40% 30% 20% Q. When are your planning to migrate some of your international interconnect services to an IPX? Mobile operators mentioned that their planned IPX adoption was directly related to the IP migration of interconnects between in-country networks and would follow it soon after. 10% 0% After 2018 Never 40 Source: report IPX Customer survey

41 IPX services What are customers needs? 85% said it was very important or important to provide support for LTE roaming 80% of the operators stated that it was very important or important to enable support for HD Voice Q. Do you have any need for these feature/services internationally? LTE Roaming support International Voice termination Support of HD Voice Guaranteed QoS to streaming video SMS/MMS Signalling and authentication services Call routing on a number by number basis Roaming internet routed back to home network Blackberry access Very interesting Interesting Not interesting 41 Source: report IPX Customer survey

42 IPX Features What are customers needs? Q. How important are these features when choosing an IPX provider? Guaranteed capacity Guaranteed quality Multiple services over a single connection Direct routing to their distant providers Guaranteed quality on an IP connection Carrying multiple services on single connection Guaranteed capacity on an IP connection GSMA IPX compliance Routing transparency Local IPX pop in your country Direct routing to distant service provider Reports on performance Fraud prevention/mitigation Transport/termination fee charge separation Very important Important Not important 42 Source: report IPX Customer survey

43 IPX provider What is important Q. What is more important to you when choosing an IPX provider? Reach will be one of the most important success factors for IPX providers IPX customers are only planning to interconnect with up to 4 IPX providers Down the line, offering a complete portfolio of services will be a crucial part of IPX service providers success Customers do not want to pay more for IPX even if it is of higher quality Provider with a global reach Access to a local PoP in country Provider offering the complete IPX portfolio Provider with regional strengths/diversity Provider offering both voice & data IPX services Have used the providers' services before Priority 1 Priority 2 Priority 3 Priority 4 Priority 5 Priority 6 43 Source: report IPX Customer survey

44 The Impact of IPX Enables the roaming evolution Enables the business model evolution Influences the telecom industry structure Facilitates the role of wholesalers in innovation Key to financial success Enables the IP evolution 44

45 Impact of IPX in Bahrain and the GCC

46 Use Cases for IPX Bahrain and the GCC Bahrain s National operators To address some the International service requirements they will have in the near future Bahrain s International operators To improve quality of termination and support new data services The TRA/Bahrain government To ensure the success of some of its 3-year plan s objectives and to strengthen Bahrain s role in the IP era The GCC region To improve intra-regional roaming quality and reach, regional communications in general and to ensure that the benefits of the move to IP based service are seen throughout the GCC region 46

47 Options for International Services Direct Interconnects Use of a Wholesaler Use of an IPX service Use of an internal mobile group IPX 47

48 Direct interconnect Operator 1 Country A Operator 4 Operator 2 Operator 3 Operator 1 Operator 2 Country B Operator 3 Operator 4 48

49 Wholesaler Country A Operator 4 Operator 1 Operator 5 Operator 2 Operator 3 Voice wholesalers Mobile data hubs Operator 3 Operator 1 Operator 2 Country B Operator 4 Operator 5 49

50 Use of (or creation of own) IPX Voice Video Signaling/Diameter Content VoLTE 3G/LTE Roaming Messaging IPX IPX IPX IPX IPX IPX platform IPX IPX OTT Cableco Mobile Fixed Internet Mobile Content 50

51 Mobile group IPX Zain Group s IPX network Country 4 Country 1 Country 5 Country 2 Country 3 International Wholesalers IPX providers Operator 3 Operator 1 Telenor Group s IPX network Operator 5 Operator 2 Operator 4 51

52 IPX s role in meeting operators requirements Bahrain mobile operators requirement Direct interconnect Wholesaler Mobile group platform IPX provider Improve Internet connectivity Migrate voice termination to IP and support VoLTE Improve quality and reliability of messaging Facilitate seamless roaming Rapidly grow LTE roaming reach Implement a rich communication experience Optimize CAPEX and OPEX Ratings: 0 Poor 1 Average 2 Good 3 Very good 52

53 Bahrain as an IPX Peering point Voice Signaling/Diameter Content Video VoLTE 3G/LTE Roaming Messaging Bahrain IPX peering point IPX 4 IPX 5 IPX 3 Bahrain IPX 6 IPX 2 IPX 1 Kuwait UAE KSA Oman Qatar 53

54 Bahrain s rating as an IPX peering point Requirements Bahrain s rating Modern International cable connection 2 Rationale Connectivity exists but access to cable stations is not clear and pricing is high Good regional cable and fiber connection 3 Connectivity is in place, but pricing and ease of provisioning not clear Deregulated market (national and International) 4 Clear and open licensing environment Well-structured and dynamic regulator 5 Clear licensing environment with focus on future developments Large number of mobile operators in in region 4 All GCC countries have competitive mobile environments Large and growing number of mobile subscribers in region Extensive deployment of LTE in country and in region Growing International mobile traffic (voice, data and roaming) Large enterprise and business community 4 Customers interested high quality global services 3 The GCC boasts a little over 83 million mobile subscribers, which accounts for only 1.2% of the world s total mobile subscriber base. 4 LTE is being deployed rapidly in all GCC and adjacent countries 4 4 International service demand is high and growing. Outgoing International voice traffic in Bahrain grew by 20.7% in 2013 and 27.7% in Many global multinational (Oil and Gas and Banking) are in the region with a supporting infrastructure of local companies GDP per capita is generally high in the region with all GCC countries rank in the world s top 40. Qatar boasts the world s 3 rd highest GDP per capita. 1 Poor 2 Average 3 Good 4 Very good 5 Excellent 54

55 Options and recommendations

56 Bahrain operators possible IPX options 1. Use one or more IPX providers to transport traffic in/out of Bahrain 2. Develop a group IPX 3. Become a regional IPX provider for the Middle East 4. Use a white label IPX provider to build a regional IPX offering 56

57 Bahrain operators IPX options Pros and cons Option: Use one or more IPX providers to transport traffic in/out of Bahrain Pros Minimizes investment and risk Ensures high quality and security for Bahrain s originating and terminating International traffic Enables LTE roaming and future IP service evolution Generates cost savings and economies of scale in the long term Uses one hub agreement for all destinations and/or services Cons Does not easily support group-wide features or offerings Each of the op-cos in a group may use a different IPX provider, which could result in complexity and does not maximize group savings 57

58 Bahrain operators IPX options Pros and cons Option: Develop and Build a group IPX Pros Facilitates seamless roaming between opcos Enables LTE roaming evolution Enables the group to come up with shared enhanced customer applications and data monetization possibilities Generates cost savings and economies of scale in the long term Gives the group negotiation power with global wholesalers Increases competitiveness of the group Cons Complex at first Requires investment in infrastructure and services equipment Some op-cos may not want to use it Need to peer with other IPX providers to reach the rest of the world 58

59 Bahrain operators IPX options Pros and cons Option: Become the IPX provider for the Middle East Pros Enables you to become the leader in originating and terminating voice and data traffic in that region Provide best quality and security to your own customers within the region Enables LTE roaming evolution Could create new sources of revenue Cons Need to peer with other IPX providers to reach the rest of the world Complex at first Requires investment in infrastructure and services equipment Requires sales and support staff 59

60 Bahrain operators IPX options Pros and cons Option: Use a white label IPX to build a Regional IPX offering Pros Minimizes investment and risk Reduces the time to market Good as a first step to give you time to develop your own IPX Enables LTE roaming evolution Cons Still requires underlying transmission network At the mercy of the white label IPX provider for services, quality and destinations Makes you less competitive when providing IPX services Group-wide features or offering capabilities may be limited 60

61 TRA s possible IPX options 1. Directly create a combined IP peering and IPX interconnection NAP within Bahrain 2. Encourage the creation of a national IP based transmission network 3. Encourage the creation of interconnected mobile group pan-regional IPXs with the Gulf Cooperation Council 4. Encourage the creation of a dedicated pan-regional network with the Gulf Cooperation Council 61

62 TRA s IPX options Benefits/Challenges Option: Create NAP in Bahrain Pros Position Bahrain as a key player in the new IP world Entice IPX providers to use Bahrain as the gateway into the Middle East Improve competition for International voice and data communication in Bahrain Generate new sources of revenue from new telecom players in the country Could attract large content and cloud providers to the country to benefit from the high quality connection point and transmission services Cons Some significant efforts (time and money) would have to be expanded to open the NAP and ensure it remains neutral Issues with access to Bahrain s International and national connectivity would have to be resolved Issues with undersea cable backhaul access and price would need to be addressed 62

63 TRA s IPX options Benefits/Challenges Option: Encourage the creation of a national transmission network Pros Provide fast and easy interconnect between all licensed service providers Potentially allow for a distributed NAP/carrier hotel structure and exchange point rather than creating a new location Encourages global providers to the NAP because of simple access to cable and national capacity and local carriers. Cons Could be an expensive project if underutilised Possible complexity of ownership structure. An existing service provider could agree to develop it over its own network, but strict neutrality conditions would have to be agreed 63

64 Pros TRA s IPX options Benefits/Challenges Option: Encourage the creation of mobile group pan-regional IPX networks Facilitates seamless roaming between countries and mobile operators Enables LTE roaming evolution Enables the region to come up with shared enhanced customers applications and data monetization possibilities Gives the mobile groups negotiation power Could encourage the network peering to take place in Bahrain (although other countries may also see this as an advantage Important part of the region s economic growth Cons Requires significant investments Some operators may not want to opt-in Only Etisalat currently has a regional IX network, so it would take some time before the necessary group infrastructures are in place and for the pan-regional network to be created 64

65 Pros TRA s IPX options Benefits/Challenges Option: Encourage the creation of competitive IP based panregional transmission networks Would ensure high quality, secure voice, data, Internet and content services throughout the region Would position the region as one of the most developed in terms of IP communication Provides underlying platform for service providers to extend their domestic services within the region Could support secure cloud and M2M applications for pan-regional enterprises and governments Cons Quite complex at first to define the necessary permissions and access requirements Requires significant investments by the participating companies Some countries may not want to enable such competition Dominant international carriers in the region would not be in favour and could make it difficult to succeed commercially 65

66 The Future IPX vision 66

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68 Thank You! January 12,