5G Impacts and Opportunities on Network Architecture and TCO. Gianfranco Ciccarella Seminario ISCTI 16 Aprile 2018

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1 5G Impacts and Opportunities on Network Architecture and TCO Gianfranco Ciccarella Seminario ISCTI 16 Aprile 2018

2 Why Telcos IP Ecosystem and 5G require a disruptive transformation SUSTAINABILITY TELCOs OTT s role on services and devices Strong Telco competition Regulatory policy push Disruptive Telco transformation culture and vision services and network architecture business models TECHNOLOGY

Impact of IP traffic rate growth on performance, revenues and TCO Peak traffic

performance and service quality depend on Peak traffic rate the ratio: Average

traffic rate Average traffic rate Traffic Volumes [Pbyte/month] (1) Network Total

define network segments unitary costs [KE/(Gbps*year)] Peak traffic rate that

3 Impact of IP traffic rate growth on performance, revenues and TCO Peak traffic rate Average traffic rate , ,14 Netw. performance and service quality depend on Peak traffic rate the ratio: Average traffic rate Network cost depends on (1): Peak traffic rate [Gbps] Ratio: Peak traffic rate Average traffic rate Traffic Volumes [Pbyte/month] (1) Network Total Cost of Ownership depends on: topology, technologies and architecture, that define network segments unitary costs [KE/(Gbps*year)] Peak traffic rate that depends on traffic volumes [Pbyte/month] and on end user applications that define the ratio Peak traffic rate / Average traffic rate

Key points on traffic rate: peak and access versus IP network difference The cost to deliver 1 Pbyte/month depends on the ratio: Peak traffic rate Average traffic rate Issues related to traffic rate

4 Key points on traffic rate: peak and access versus IP network difference The cost to deliver 1 Pbyte/month depends on the ratio: Peak traffic rate Average traffic rate Issues related to traffic rate difference in UBB access versus IP network (aggregation, metro and core). To day the bit rate [Mbps/active user] reference values are: from [Mbps/active user] up to [Mbps/active user] for fixed and mobile UBB access networks from 2 [Mbps/active user] up to 8-10 [Mbps/active user] for aggregation, metro and core networks(1) This huge traffic rate difference is critical for network TCO, application performance and UBB monetization. (1) 2 [Mbps/active user] is related to nets with 1 [Mbps/user] and peak hour Contemporaneity Coefficient=0,5 (note that 0,5 is low for to day utilization): 1 [Mbps/user]/0,5 [active user/user] = 2 [Mbps/active user] 10 [Mbps/active user] is related to nets with 1 [Mbps/user] and non peak hours Contemporaneity Coefficient=0,1

and by Internet of Thinks (IoT) (*) European Parliament: 5G Network Technology Briefing, January 2016 Source: GSMA

5 From 4G to 5G: 5G Use Cases and Application requirements (*) Latency 5G Innovative Applications have challenging requirements in terms of: Latency Throughput (1) to ensure the Quality of Experience (QoE) levels expected by End Users and by Internet of Thinks (IoT) (*) European Parliament: 5G Network Technology Briefing, January 2016 Source: GSMA Intelligence, 2015 (1) Note that: TH << Bit Rate Apps TH = speed of the application Bit Rate = speed of the communication channel

speeds of less than 4 Mbps Average Radio Bit Rate utilization in large (i.e. > 1 Mbyte) TCP flows is: 34.

6 Mobile Networks Throughput Average (1, *) : TH Radio Bit Rate = 34.6% (1) Apps TH = speed of the application Bit Rate = speed of the communication channel TH/Bit Rate increase requires: Lower Roud Trip Time Lower Packet Loss Roughly half of mobile users report speeds of less than 4 Mbps Average Radio Bit Rate utilization in large (i.e. > 1 Mbyte) TCP flows is: 34.6%(*) Source: Akamai, Delivering the best mobile experience, April 2016 (*) An In-depth Study of LTE: Effect of Network Protocol and Application Behavior on Performance, SIGCOM 2013 Data on radio link bit rate utilization are reported in: Binh Nguyen, Arijit Banerjee, Vijay Gopalakrishnan, Sneha Kasera, Seungjoon Lee, Aman Shaikh, and Jacobus Van der Merwe Towards Understanding TCP Performance on LTE/EPC Mobile Networks AllThingsCellular 14, August , Chicago, IL, USA,

7 Contents and Apps closer to End Users impact on network architecture (1/2) 4G Mobile Network Architecture As Is

8 Contents and Apps closer to End Users impact on network architecture (2/2) Mobile Architecture To-Be : Cloud RAN, Virtual EPC and CD Platforms V-EPC V-EPC Cloud RAN

Network and POP target architecture Traffic

2021 58% 41% 20% 23% Cloud/QoE Platform Core

Delivery Platforms (Cloud e QoE) that by

traffic up from 52% in 2016 (Cisco VNI 2017)

traffic closer to the end user Technologies:

Platforms Edge POP Router v IP Edge Apps/ v

9 Network and POP target architecture Traffic managed by Content Delivery Platforms % 41% 20% 23% Cloud/QoE Platform Core POP Metro/Regi onal POP Cloud/QoE Platform IP Edge and Content Delivery Platforms distribution Increasing role of Content Delivery Platforms (Cloud e QoE) that by 2021 will carry 71% of the total internet traffic up from 52% in 2016 (Cisco VNI 2017) Content delivery platforms will carry traffic closer to the end user Technologies: NFV, SDN 22% 35% Cloud/QoE Platform QoE Platforms Edge POP Router v IP Edge Apps/ v QoE Fixed / Mobile Access Net OLT OLT Cloud Platform Cloud/QoE Platforms

10 Edge Computing: Apps performance improvement

11 Edge Computing: Apps performance improvement Case Studies Latency Term-CRAN Accelerator Latency CRAN-Core Latency Core-OTT Server Accelerator Same Packet Loss with and without QoE Platf. Cache Efficiency: 60% Accelerator Efficiency: 95% Mobile Terminal Base Station Cache CRAN Node Mob Core Node Telco GTW OTT Remote Server Case Study Latency distribution Cache & Accelerators deployment Speed UP A 2,1 Term-CRAN CRAN-Core Core-OTT Server B 2,4 35% 25% 40% C 2,4 D Term-CRAN CRAN-Core Core-OTT Server 1,8 30% 55% 15% E 2,4 Term-CRAN CRAN-Core Core-OTT Server 15% 20% 65% F 4,5

12 Saving by Edge Computing Saving evaluation Traditional IP Network architecture (centralized IP Edge and no QoE platforms) vs Edge Computing Architecture (distributed IP Edge and distributed QoE platforms) Same Network segments costs (Access, Aggregation, Metro and Core), i.e. same Network topology and technology TH = TH q, i.e. same total average throughput for the traditional IP Network (TH) and the Edge Computing (TH q) Edge computing Architecture cost includes the costs for distributed Platforms Cloud (Hw and Sw), v IP Edge (v BRAS and v EPC), v QoE or physical QoE Network Cost (no QoE; TH=TH q) Network Cost (QoE; TH q) Saving = (TH = TH q) Network Cost (no QoE; TH=TH q) Edge Computing in Mobile Networks: Cloud RAN Distribution, based on Telco Cloud and NFV, of Mobile IP Edge (EPC) and Platforms to improve the application performance and to reduce TCO

13 UBB Network Costs UBB Network cost simple models (a) C fixed access = f(tkr: user take rate) (1) C mobile access = f(tr: peak hour traffic rate/act.user; CC) (2) C aggr.+metro+core = f(tr: peak hour traffic rate/a.user; CC) CC: Contemporaneity Coefficient [Active user/user] Netw. Cost [E/(user*year)]=Netw. Cost[KE/(Gbps*year)]*CC[active user/user]*tr[mbps/active user] C fixed access[e/(user*year)] = c1 + c2/tkr C mobile access[e/(user*year)] = Cma[KE/(Gbps*year)]*CC*TR[Mbps/active user] (b),(c) C aggr.+metro+core[e/(user*year)]= Ca+m+c[KE/(Gbps*year)]*CC*TR[Mbps/active user] (c) Ca+m+c: Cost of aggregation + metro + core network [KE/(Gbps*year)] Normalized Cost [Mbps/user]= C[E/(user*year)]/Norm. Coeff.[KE/(Gbps*year)] (d) From [KE/Gbps] to [KE/(Gbps*year)] rough evaluation: xy[ke/(gbps*year)]=zw[ke/gbps]*1,85/5[1/years] The coefficient 0,85 = 0,15[installation 15%]+5*0,1[year*(O&M 10%/year)]+0,04*5[(WACC 4%/year)*year] WACC: Weighted Average Cost of Capital (1) The cost does not depend on the user traffic rate, because fixed UBB access bit rate depends on technology and bit rate is much higher than the user bit rate in the aggr.+metro+core network. (2) The cost depends on the user traffic rate. (a) Fixed access: LL+GPON OLT; Mobile access: radio link + enodeb or C RAN (b) Mobile access saving=f(thorbr: Throughput/radio link bit rate) (c) CC: contemporaneity coefficient [active user/user] TR act. user [Mbps/(active user)]*cc= TR user[mbps/user] (d) Norm. Coeff. = Reference cost

14 UBB Network Costs (2) C fixed network[e/(user*year)]= f(tkr, TR, CC)= C fixed access[e/(user*year)]+c aggr.+metro+core[e/(user*year)] C mobile network[e/(user*year)]= f(tr, CC)= C mobile access[e/(user*year)]+c aggr.+metro+core[e/(user*year)] Fixed or Mobile netw. normalized cost [Mbps/user]= C fixed or mobile network[e/(user*year)] Ref. Cost[KE/(Gbps*year)] Saving : QoE platf. such as Transparent caching (for fixed/mobile aggr.+metro+core) Increase of Throughput/radio link traffic rate (for mobile access)

15 Edge Computing: Network Cost Saving More details are presented in the following slide.

16 Mobile Network saving for Transparent Cache and 2 Accelerators function of SU 100 % Saving% 10 ECC TC%(SU) 100 TH RAN ECC [Mbps] cost % cost % (a) Transp. Cache in C-RAN ECC TC% = F(SU, HR) ECC AC% = F(SU) 1 < SU TC =<5 HR = 0,5 50 % 50% ECCTC% (SU) Accelerators % SU SU = 1 Sav% TC = = - 100*ECC TC%/MNC% Saving % with TC in SU = 1 TH RAN ECC% Sav% % % % % - 50 % (a) With SU = 1

17 Infrastructure sharing impact on 5G capex

5G can drive the transformation of Telco services/network architecture and business Key telco issue Telcos

Time to market (TTM) Total cost of ownership (TCO) Application serv.

bit rate - based on IP transport (L1 to L3) Ability to monetize is linked to application performance

ent, i.e. to throughput/bit rate ratio Low Performance limited by Telco networks - Focused on throughput

18 5G can drive the transformation of Telco services/network architecture and business Key telco issue Telcos performance OTTs performance How to address the issues? Time to market (TTM) Total cost of ownership (TCO) Application serv. performance UBB monetization 1,5-2 years 1 month Very high/high To be improved (1) Performance - focused on bit rate - based on IP transport (L1 to L3) Ability to monetize is linked to application performance improvement, i.e. to throughput/bit rate ratio Low Performance limited by Telco networks - Focused on throughput and download time - based on Content Deliv. Platforms (L4) Not relevant no network to monetize Application and network services separation (1) Apps TH = speed of the application 1 Bit Rate = speed of the communication channel 2 2 Edge Computing Distribution of: IP Edge Content Delivery and Services Platforms

19 Conclusions: take away and open issues Key take away Fiber to any RAN site RAN technologies and cell densification Edge Computing Architecture (Enhanced Content Delivery = performance improvement + cost saving) From shared infrastructure to shared active network components Key open issues Which network functionalities should be distributed? Is NFV technology affordable? Is the deep Edge Computing distribution affordable? Will 5G drive the integration of fixed and wireless networks? Are key target Telco business models defined? Are 5G standards/committees driving the disruptive tranformation?

20 Thanks! Mobile:

Meeting the requirements of the All-IP World. Cianfranco Ciccarella Telecom Italia Vice President Global Advisory Services

Meeting the requirements of the All-IP World Cianfranco Ciccarella Telecom Italia Vice President Global Advisory Services Meeting the requirements of the All-IP World Best UBB Network for what? Best UBB