An introduction to NTT s NGN and new services in Japan
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1 An introduction to NTT s NGN and new services in Japan March 17, 2007 Tadanobu OKADA Associate Senior Vice President, Executive Director of Information Sharing Laboratory Group, NTT 1
2 Outline 1. The current status and future direction of Japan s telecommunications market 2. NTT s plans for the deployment of its NGN 3. Conclusion 2
3 Measures taken to prolong the lifetime of NTT s PSTN facilities NTT s PSTN consists of several thousand switches. Although a then-state-of-art switching system (NS8000) was developed around 10 years ago, the rapid progress in technology since then has resulted in the discontinuation of production of some components used in the system. Currently, we are trying to prolong the lifetime of the switches by re-establishing sources for such components. Other carriers Several hundreds Several thousands Several tens POI Transit switch NTT Communications Transit switch NTT West NW inside a prefecture Local switch Local switch Transit switch NW between prefectures NTT East Transit switch NW inside a prefecture Local switch POI Local switch Other carriers Integration degree Migration to more highly integrated LSI that operates with lower voltage power supply 1.8, 2.5V PS 0.25µm 5V PS 1.0µm 1.2µm 0.6µm 0.8µm 3.3V PS 0.35µm 0.5µm Discontinued Year NS8000 (developed around 10 years ago) 05 3
4 Maturing of IP telephony technology in Japan IP telephony is spreading from business users (IP-PBX). Low rates (or free between specific points) offered by ISPs have increased the number of IP phone users in Japan to more than 13 million. NTT already provides an IP phone service Hikari Phone using the ordinary telephone numbering plan. *1 1 Free OCN 2 Free 3 7 / 3min Affiliated ISP s IP network 7 / 3 min 9 / 3 min 14 / min Int l phone network Discount rate OCN.Phone Affiliated ISP s IP phone (178ISPs) *2 Non-affiliated ISP s IP phone (12ISPs) *2 *2 PSTN phone PSTN phone Mobile phone Int l phone Number of subscribers (millions) Increase of subscribers to IP phone service Remarkable growth *1: NTT Communications, Inc.: *2: not changed by distance 4
5 Change in net increase of subscribers to broadband service In the first quarter of 2005, the net increase in FTTH users exceeded that of ADSL users. In the second quarter of 2006, the number of ADSL users began to decrease. In contrast, as anticipated by the u-japan Plan, optical access is increasing rapidly. 1.6 Net increase in numbers (millions) ADSL Q2 Q3 Q4 Q FTTH Q2 Q3 Q4 Q Q2 Q3 Q4 Q1 Q3 Q4 Q1 Q Q Q Number of subscribers (millions) Source: Website of the Ministry of Internal Affairs and Communications 5
6 Decrease in revenues from both fixed-line and mobile phone services of NTT The revenue from the fixed-line phone service has decreased considerably. The revenue from the mobile phone service has also begun to decrease. Fix-line-based operators NTT East/West/Communications Profit Profit (billion US$) (billion US$) Mobile (NTT DoCoMo) Revenue Revenue Revenue Revenue Profit
7 Competition for share of FTTH is particularly fierce in urban areas NTT has over 50% share in optical access nationwide. However, in urban areas, where fibers can be installed efficiently, NTT faces tough competition and is falling behind in many prefectures. Share of FTTH market in individual prefectures (As of March 2005) NTT s share (%) NTT average Toyama Ishikawa Nagano Tokyo Kanagawa Ibaraki Tochigi Gunma Saitama Chiba Akita Hokkaido Mie Nara Aichi Gifu Ehime Tottori Fukuoka Saga Nagasaki Hiroshima Shimane Shiga Kyoto Fukui Oita Miyazaki Kumamoto Kagoshima Yamaguchi Kagawa Tokushima Kochi Osaka Wakayama Hyogo Okayama Shizuoka Yamanashi Nigata Iwate Miyagi Yamagata Fukushima Aomori Okinawa 7
8 What is expected in Numerous and diverse devices and appliances will be connected to the network, which should inevitably increase the variety of services, the means whereby services are provided, and number of service providers. Domestic e-business & life market 54T yen (2005) 86T yen (2009) Platform market 2.4T yen (2005) 4T yen (2009) Security market 1.2T yen (2005) 1.6T yen (2009) 1.3B (2005) 1.8B subs (2010) Source: ITU statistics 2.0B (2005) 7.0B subs (2010) Source: ITU statistics Fixed-line Mobile 1.0B (2005) 2.5B subs (2010) Source: ITU statistics Future network Internet access A variety of application services Application Application Application Application Application IP-TV 5M (2005) 53M households (2010) Source: RNCOS M063.htm The future network needs a capacity of... Peta bits (10 15 ) in 2015 Exa bits (10 18 ) in 2024 Source: R&D strategy for the 21 st century network core technology, Ministry of Internal Affairs and Communication New network appliances Domestic applications 9. 5M (2005) 15M units (2010) ml 8
9 Future direction of NTT as a telecom carrier It is urgent for NTT to increase profit by increasing revenue in addition to reducing capital and operational expenditure. Promote broadband & ubiquitous services like FMC and triple play >Revenue shift from telephony Revenue from telephony Cost Revenue from Broadband and ubiquitous services Establish service delivery platform for new seamless businesses >Expand telecom market Migrate telephone network to IP >Reduce capital and operational expenditure 9
10 Key technology for revenue shift (GE-PON) 10
11 Triple play on a single fiber - already commercially available - Broadcasting companies Broadcast VOD Internet I S P Telephone network Broadcast Programs Videos High-speed Internet IP phone IP network Optical fiber : Simultaneous transmission of broadcast programs and IP data IP phone : High-quality videophone Telephone TV : High-quality broadcast and video distribution TV PC Internet : Stable and high throughput environment 11
12 Features of NTT s GE-PON system - Fine-tuned bandwidth control for each user A peak speed of 100M bps bidirectional transmission for each customer is possible under low traffic loads, with IEEE 802.3ah interface conditions. In the event of heavy traffic, the operator can control the minimum bandwidth allocated to each ONU (this enhances the functionality of IEEE 802.3ah). For example, if if 32 users share the bandwidth equally, the operator can guarantee at least 30M bps for each customer. ONU-1 ONU-2 ONU-3 ONU-4 ONU Downstream Upstream Max: 100M bps/onu Optical splitter (Max: 32 branches) OLT 12
13 1. The current status and future direction of Japan s telecommunications market 2. NTT s plans for the deployment of its NGN 3. Conclusion 13
14 Approach to NGN Build NGN that is of high quality, flexible and secure Develop and spread broadband and ubiquitous services that allow fixedmobile convergence (FMC) Open network that allows collaboration with other carriers and xsps Smooth migration from existing fixed-line to IP telephony, and from copper to optical access Expand business opportunities by exploiting broadband and ubiquitous services xsp: Provide new business opportunities Strengthen competitive edge and financial base, and contribute to achievement of u-japan 14
15 Basic concept of NTT s NGN Lifestyle support, home appliance IP-based network enabling provision of seamless fixed and mobile services Community, e-commerce Broadcast, content providers IMS ASPs and various service players Open network interface NGN Network interface disclosure, to enable various service players to provide a wide array of applications on the NGN Home network Safe, secure, and convenient network equipped with features of both the existing fixed-line telephone and IP networks Office, hotspot, etc. IMS: IP Multimedia Subsystem 15
16 Roadmap to building NTT s NGN Fiscal year Steps in introducing the NGN STEP 1 Field trials STEP 2 Provide optical access to 30M users (End of fiscal 2010) STEP 3 Core network Construct transit network -deploy core nodes -deploy optical wavelength transmission equipment Construct access networks deploy edge nodes Seamless integration with mobile network Service control functions Deploy service control functions IMS deployment (conforming to ITU standards) Service development Trial services <For limited regions and users> Full-scale development of next-generation services Broadband Internet access IP telephony Multicast transmission for video distribution Bi-directional video (data) communication Ethernet services, etc. 16
17 Overview of Field Trials of NTT s NGN Trial period: One year from Dec Areas: Tokyo and its surroundings and Osaka Various services through tie-ups with IThome appliance manufacturers and ASPs IP multicast function SNI (Application Sever-Network Interface) NGN Security functions End-to-end quality control Base station IP telephony FMC Video distribution Internet access 17
18 28 participants in the field trial The following companies are participating in the NGN field trial. Cisco Systems Inc. Sony Corp. NEC Corp. Hitachi Ltd. Matsushita Electric Industrial Co., Ltd. Iwatsu Electric Co.,, Ltd. Oki Electric Industry Co., Ltd. Sumitomo Electric Networks, Inc. Fujitsu Ltd. Mitsubishi Electric Corp. Asahi Broadcasting Corp. Square Enix,, Inc. TOHO Cinemas Ltd. USEN Corp. NTT Communications Corp. NTT DoCoMo,, Inc. Internet Initiative Japan Inc. eaccess Ltd. K-OpticomK Corp. KDDI Corp. ASAHI Net, Inc. NEC BIGLOBE Ltd. So-net Entertainment Corp. NIFTY Plala Networks Inc. an EditNet Co. Global Solution K.K. FreeBit Co., Ltd. As of February
19 1. The current status and future direction of Japan s telecommunications market 2. NTT s plans for the deployment of its NGN 3. Conclusion 19
20 New activities for the NGN Upgrade the fixed-line telephone network to a broadband IP network by applying the latest optical, broadband and IP technologies Deploy new broadband and ubiquitous services Create new markets by collaborating with various service players on the network 20
21 Conclusion As one of the first carriers in the world to implement an NGN, NTT will be happy to share with Asian Pacific countries our experiences of NGN trials and deployment. 21
22 22
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