Development and Deployment of NGN and its Future Direction

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Development and Deployment of NGN and its Future Direction Research & Development Center NTT WEST CORPORATION Makoto Takano 1

Agenda 1.Trends of Broadband service in Japan 2.Current NTT West s NGN 3. Future direction 2

Agenda 1.Trends of Broadband service in Japan 2.Current NTT West s NGN 3. Future direction 3

Number of users (total) Broadband service users in Japan Broadband service users over 31.7M in Dec 2009. Stagnation of net increase of FTTH users (million million) 20 18 16 14 12 10 8 6 4 2 0 Dec.2000 Jun.2001 Net Increse(DSL) Net Increse(FTTH) ADSL FTTH CATV xdsl Dec.2001 Jun.2002 Dec.2002 CATV Jun.2003 FTTH (incl. FTTB) Dec.2003 Jun.2004 Source: Ministry of Internal Affairs and Communications http://www.soumu.go.jp/menu_news/s-news/02kiban04_000019.html Dec.2004 Jun.2005 Dec.2005 Jun.2006 Dec.2006 Jun.2007 Dec.2007 June.2008 Dec.2008 17.20M 10.13M Dec.2009 June.2009 4.30M Dec.2009 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0-10 -20-30 -40-50 Number of users (Net increase/quarter) (10 thousands) Total 31.71M CATV 4.30M(13% 13%) xdsl 10.1.13M (34%) FTTH 17.20M(53%) Apartment House Type (7.05M,22.2%) share of BB users (as of Dec.2009) 4

IP Phone Service Users in Japan IP phone users reached 23.15 million at the end of 2010.3, marked 14.5% increase year-on-year. 0AB-J number users have been kept increasing rapidly reached 14.53 million at the end of 2010.3, marked 30.2% increase year-on-year. 24 22 20 18 16 14 12 10 8 6 4 2 0 5.28 0AB-J -IP phone 050 - IP phone 0.19 8.12 1.42 2.04 2.70 3.36 4.21 Increase rapidly in 0AB-J number 5.13 5.92 6.80 7.76 8.65 0AB-J number 14.53million (2010.3) 9.51 10.33 11.16 12.03 12.82 13.66 10.03 10.05 10.30 10.40 10.27 10.27 10.20 9.96 9.78 9.62 9.53 9.25 9.06 8.89 8.76 8.65 8.62 Mar. 2004 Mar. 2005 Mar. 2006 Jun. 2006 Sep. 2006 Dec. 2006 Mar.2007 Jun.2007 Sep.2007 Dec.2007 Mar.2008 Jun.2008 Sep.2008 Dec.2008 Mar.2009 Jun.2009 Sep.2009 Dec.2009 Mar.2010 14.53 2004.3 2005.3 2006.3 2006.6 2006.9 2006.12 2007.3 2007.6 2007.9 2007.12 2008.3 2008.6 2008.9 2008.12 2009.3 2009.6 2009.9 2009.12 2010.3 Number of IP Phone users in total 5.28 8.31 11.46 12.10 13.00 13.76 14.48 15.40 16.12 16.77 17.54 18.28 19.05 19.59 20.22 20.92 21.58 22.31 23.15 0AB-J IP Phone - 0.187 1.42 2.04 2.67 3.36 4.21 5.13 5.92 6.80 7.76 8.65 9.51 10.33 11.16 12.03 12.82 13.66 14.53 050 IP Phone - 8.12 10.03 10.05 10.30 10.40 10.27 10.27 10.20 9.96 9.78 9.63 9.53 9.25 9.06 8.89 8.76 8.65 8.62 Source: Ministry of Internal Affairs and Communications http://www.soumu.go.jp/menu_news/s-news/02kiban04_000019.html 5

Number of users on NTT-West broadband services (Thousand) (Thousand) 120 100 Number of Flet's ADSL users Flet s s Hikari users are over 1 million! Aug. 31st, 2005 1Year Flet s s Hikari Flet s s Hikari Flet s s Hikari users are users are users are over 2 over 3 over 4 million! 11months million! 10months million! Aug. 23rd, Jul. 18th, May. 21th, 2006 2007 2008 1Year Flet s s Hikari users are over 5 14months million! May. 25th, 2 2009 Flet s s Hikari users are over 6 million! July.. 20th, 2 2010 6,0 0 0 5,0 0 0 80 Number of Flet's Hikari users Net increase of Flet's ADSL users Net increase of Flet's Hikari users Flet s Hikari + Flet s ADSL users are over 5 million! Jan. 10th, 2007 4,0 0 0 Number of net increase 60 40 20 0 Net increase of Flet s Hikari overstrided its of Flet s ADSL Number of subscribers of Flet s Hikari overstrided its of Flet s ADSL 3,0 0 0 2,0 0 0 Number of lines -20 1,0 0 0-40 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 0 (Month) FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 6

Agenda 1.Trends of Broadband service in Japan 2.Current NTT West s NGN 3. Future direction 7

History of the FTTH service deployment at NTT West Evolution of FTTH/IP network from f Best-effort effort to Carrier-grade Evolution of our NGN service with reference to the standardization ion High Reliability / Stability Fixed telephone Migration (future plan) network 2001.8~ B Flet s network (IPv4 IPv4) Best-effort effort Stepping up from best-effort effort to carrier-grade network Functionality / Cost efficiency 2008.3~ NGN Carrier-grade 2005.3~ Flet s Hikari Premium network (IPv6 IPv6) High 8

NGN Open Architecture NGN is open architecture : Easy connection of NGN helps and leads to create more Innovative applications SNI* UNI* IPTV Server IPv6 Multicast VoD Server RGW * SNI AP Server NGN Interactive communication Provide 5 types of services SNI Applications for optional service Adopt open architecture based on IMS SIP-based admission control ISP access Ethernet access NNI* Other Carrier Network ISP Network L2-VPN Network UNI for L2-VPN Service IPTV VoD IP phone voice&video Internet access L2-VPN including retransmission of digital broadcasting * UNI: User Network Interface * SNI: Application Service Network Interface * NNI: Network Network Interface * RGW: Residential Gateway 9

Call Congestion Control In case of Congestion, Congestion Controller restricts call sessions NGN 2Congestion Controller indicates restriction of call sessions to SIP servers 1Congestion Notification Congestion Congestion Controller SIP SIP SIP PSTN 10

NGN Service deployment End of FY 2009 : 80%* End of FY 2010 :100%* * of existing FTTH areas area ratio of NGN users in fiber-available area 43% 77% +311 buildings +527 buildings 100% 1,150 buildings 1,150+α buildings 312 buildings FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Launch in Some areas in Osaka Expansion to All existing FTTH areas area Expansion to major cities (by end of FY 2010) Expansion to 1 or more cities in every prefecture (step by step) Image Image Image Expansion to major cities Expansion to every prefecture Expansion to all existing FTTH areas area 11

NTT West NGN services -For residential users Family Type and Apartment house Type (fiber, ether,, VDSL) 100Mbps/ 100Mbps/200Mbps/1Gbps - Best effort ER ISP NTE THE INTERNET NGN ISP NTE optical fiber optical fiber ER ER splitter Apartment (optical fiber wired) splitter ONU VDSL/SW ONU ONU ONU ONU ONU ONU ONU ONU ONU 100Mbps 200Mbps 1Gbps 100Mbps 200Mbps 1Gbps Family type Family High-speed type Family Express type Apartment type Apartment High-speed type Apartment Express type 12

Value added service (software distribution service) Enable Software providers to distribute software to Flet s users without having their own systems (NTT-West provides software distribution system to Service Providers) Flet s bulk payment service (Fee collection agent system) http://flets-w.com/saas/tokuchou/index.html Software Providers Software Distribution Service access Software information site NTT-West s Flet s Network Software Software Distribution System NTT-West NTT-West provides provides Software Software Distribution Distribution System System -Software -Software distribution distribution service service for for Flet s Flet s users users -Stable, -Stable, Comfortable, Comfortable, Secure Secure (Distribution (Distribution via via NTT-West s NTT-West s network) network) Software Software Information Information Site Site Soft Soft on on Flet s Flet s NTT-West NTT-West provides provides software software information information site site to to users users for for distribution distribution software software introduction introduction Fee Fee collection collection agent agent system system NTT-West NTT-West charges charges and and collects collects Software Software usage usage fee fee with with NTT NTT West s West s service service fee fee (need (need Flet s Flet s bulk bulk payment payment service service subscription) subscription) 13

IPTV Services by NTT Group Optical Video Distribution Services enable users to enjoy Multi-channel TV, Rental Video and Karaoke. 10,000 Titles 15,000 Songs Video Services Karaoke Services Provider TV Services Special Services 70 Channels Live sports broadcasting etc. NTT-West NTT-plala etc. Retransmission of Digital Terrestrial Television (DTT) over IP (H.264/MPEG-4 AVC about 14M/channel) 14

1.Trends of Broadband service in Japan 2.Current NTT West s s IP Network 3. Future direction Service aspect System aspect 15

New Business Development Using NGN * UNI: User Network Interface Office NTT WEST Tele-working Secure Remote Office / High Quality Teleconference Home Clinic, Hospital Health care Supports for Well-being / Tele-counseling Security Services Home security House Monitoring (alarm system, patrol system, ) Media Contents Provider Amusement Service Home entertainment Rich Media Contents Delivery / Communications Household (outside) Remote control Home Appliance Control / Home Storage Access 16

Realization of varied services using HGW Appropriate bundles bundles are download to HGW using Service Aggregation Platform Service Provider Appliance Control Home Security Service Aggregation Platform BB NGN Appliance Control Home Security Remote Maintenance Home Network Control Remote Maintenance NTT extension OSGi Framework bundle Center System HGW Diverse Services Portal to home NW 17

Strategy for Power Saving We target drastic reduction of the total amount of CO2 emissions toward Year 2020. A concrete value is revised because of the change of government. (LDP DPJ) Since electric power consumption is the major factor of enormous CO2 emissions, saving power is indispensable. 1 1.2b kwh 1.3b kwh ~ 1.4b kwh 1990 2005 2007 2 (estimated ) NGN expansion 2 +0.6b kwh Streamlining legacy equipment Development of energy-efficient IP equipment 2.0b kwh Replacement of air-conditioning systems High-performance air-conditioner operation Environmentallyfriendly offices new technologies Reduction needed 1.1b kwh [Target] 25 25% against 1990 levels 2020 DPJ 1 Power consumption attributable to NTT West s networks and offices (expected) 2 The value is estimated because NTT was not separated by region in 1990. 3 Extrapolated based on figures in current services (not including increases due to future services) 4 The DPJ (Democratic Party of Japan) is the governing party of Japan after the general election in Aug. 2009 0.9b kwh 4 # Each numerical target in our grand design is subject to revision due to medium and long-term targets of NTT group, planned to be set by the end of this fiscal year, and surrounding future conditions of NTT West. 18

Power Consumption Reduction of Home Network Equipment By adopting various techniques, We can reduce power consumption of home network equipment. *Maximum Electric Power Consumption 25W - Adoption of the power saving chip - Reduction in number of parts 10W 15W Less than 100M-RGW 100M-RGW (2005.3 ) 1G-RGW (2006.8 ) NGN-HGW (2008.3 ) [Residential Gateway] Next target HGW (201X ) Integrate FPGA devices 12.4W Replace FPGA to ASIC Shrink ASIC process 9W 7.2W 4.9W Less than previous version (2005.3 ) (2005.6 ) (2006.2 ) (2007.11 ) [Optical Network Unit] Next target ONU (201X ) 19

Thank You 20

NTT West NGN services -For residential users based on 100Mbps named Family Type and Apartment house Type (fiber, VDSL method) -For enterprise users based on 1Gbps named Business Type. Content Provider ISP NGN SaaS NTT Office NTT Office NTT Office Apartment house Apartment house Splitter House ONU HGW Family Type Max:100Mbps Optical Fiber Rooms /Clients Splitter ONU HGW VDSL(CO) Apartment house Type (fiber, VDSL/LAN) Max:100Mbps Common Space metallic Cable Rooms /Clients ONU VDSL(CPE) HGW CO :Central Office CPE:Customer Premises Equipment Business Office ONU HGW Business Type Max:1Gbps 21

NTT West NGN services (monthly charge) ISP s service NTT-West s service from 500 Family type ONU ONU ONU 100Mbps splitter 4970(us$55) ER optical fiber Family High-speed type ISP NTE Family Express type THE INTERNET NGN Apartment (optical fiber wired) Apartment type ISP NTE splitter ER optical fiber ONU ONU ONU ONU ONU ONU 200Mbps 1Gbps 100Mbps 200Mbps 1Gbps 6680(us$74) min 6user min 8user min 16user Apartment High-speed type 4410(us$49) 3690(us$41) 3240(us$36) Apartment Express type 6120(us$68) 5400(us$60) 4950(us$55) Additional service fee : Hikari phone (0AB-J IP phone) 525(basic charge), 22

Wiring technologies for FTTH by NTT AS Lab. NTT s s wiring technologies underpin FTTH service Free bending optical cord Thinner & lower-friction indoor cable Conventional New product Φ22mm Bent at a right angle 低摩擦ケーブル ONU Bundled PC Metallic cable ( 30 pairs) Additional 5-6 cables Additional 30+ cables indoor optical cable Easy manipulation of optical cord. Installation work by users. Easy manipulation of indoor cable. More installation than before. 23

RACS functions for bandwidth assurance RACS talk with SIP-UA (HGW) and control bandwidth of edge routers bandwidth is requested with SIP media type (audio/video/data) direction (sendrecv/sendonly/recvonly) High-Priority Middle Priority Low Priority HGW RACS Manages available bandwidth and judges whether network has enough bandwidth or not MEGACO MEGACO SIP Edge Router RACS available using using using available using RACS operate edge routers. open the access filter and allocate proper bandwidth (policer). NGN 24

Broadband Deployment Strategy Hikari Road On March 2010, Goal of Hikari Road" Minister for Internal Affairs and Communications of JAPAN Mr,Haraguchi declared official target; * By 2015, all households use a broadband (Use rate 100%) *The number of the Japanese total households is about 49 millions. Japan aims at the realization in two directions 1Improvement of the infrastructure availability [90% 100%] 2Improvement of the Utilization [30% 100%] - Facilitate infrastructure deployment through incentives and competition - Promote public funds for unprofitable areas - Lower the service price by promoting fair competition - Create and open up new fields of broadband services by enhancing deregulation in public administration such as health care and education 25