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Making Convergence Pay - Tellabs v1.2

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Jeremy Steventon-Barnes

Echo Boomers, also known as Generation Y or Millennials, are the generation born between the early 1980s and mid-1990s. They are the children of Baby Boomers and the oldest are now entering adulthood. They have grown up in a digital world and have never experienced life without technologies like mobile phones and the internet.

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WHO ARE THE ECHO BOOMERS? Echo Boomers are the generation born between the early 1980s and the mid 1990s. They are the children of the baby boomer generation of the 1950s and 1960s. There are over 250 million of them and the oldest are now moving into adulthood to become the first true digital citizens. They are also known as: ‘Generation Y’, ‘Bridgers’ or ‘Millennials’. Most have grown up in a world where they’ve never ridden in a car without a seat-belt, spent a day at the beach without sun cream or left home without a mobile phone.
Real World Quadruple Play: Converging Fixed and Mobile Broadband 25 September 2006 Jeremy Steventon-Barnes jeremy.barnes@tellabs.com
Key Message Consumers demand services that are instant, intelligent, and indispensable Converged services require deep fibre for high quality triple play, plus bandwidth scaling for mobile broadband
Agenda >Convergence trends >Triple play and deep fibre >Mobile broadband
About Tellabs > Over 30 years’ experience > Leader in North American fibre access > Over 1/3 of global wireless calls are made on Tellabs’ customers’ networks > Solutions in about 300 networks in about 100 countries > About 3,700 employees > 2005 annual revenue $1.9B
Operator Challenges Fixed Operator Business Challenges Source: Infonetics, “Service Provider Plans for IP, MPLS, and ATM” Reducing opex and creating new services are key to growing revenues and beating the competition
Operator Challenges Mobile Operator Business Challenges Again: creating new services and reducing opex Source: Infonetics, “Service Provider Plans for Next Gen Mobile and Wireless Broadband”
Convergence Vision Converged Network Mobile Business Access Residential Access New services, opex synergies, lower churn…
31st May 2006 Orange Pioneers Total Communications: Integration of Mobile, Fixed-Line and Broadband plus business communications services - Orange, Wanadoo, Equant and Etrali unite under the Orange brand - A single customer experience from sales to service - Launch of free Orange broadband for Orange mobile Pay Monthly customers - Free fixed-line calls to Orange mobiles with new "Anytime" broadband talk service - Future converged services announced, including One Phone, single email and one address book across mobile and broadband - Orange Business Services: a single banner for all business services 31st May 2006 Orange Pioneers Total Communications: Integration of Mobile, Fixed-Line and Broadband plus business communications services - Orange, Wanadoo, Equant and Etrali unite under the Orange brand - A single customer experience from sales to service - Launch of free Orange broadband for Orange mobile Pay Monthly customers - Free fixed-line calls to Orange mobiles with new "Anytime" broadband talk service - Future converged services announced, including One Phone, single email and one address book across mobile and broadband - Orange Business Services: a single banner for all business services Convergence by Orange
Convergence by Sky 18 July 2006 BRITISH SKY BROADCASTING PLC Free Broadband for Sky Customers Launch sets new standards in quality, ease and savings 18 July 2006 BRITISH SKY BROADCASTING PLC Free Broadband for Sky Customers Launch sets new standards in quality, ease and savings
Convergence by Vodafone 30 May 2006 Vodafone Group Strategy update from Vodafone “In the context of changing customer requirements and the growing convergence of mobile, broadband and the internet, Vodafone's third strategy objective will be to innovate and deliver on customers' total communications needs.” 30 May 2006 Vodafone Group Strategy update from Vodafone “In the context of changing customer requirements and the growing convergence of mobile, broadband and the internet, Vodafone's third strategy objective will be to innovate and deliver on customers' total communications needs.” > 1 September: “Vodafone Germany launched … flat rate … fixed, mobile and DSL services” > 11 September: “Vodafone to deliver fixed-line broadband services in the UK” > 15 September: “Vodafone Italy and Fastweb announce joint broadband initiative”
Marco Tronchetti Provera ex-Chairman, Telecom Italia [“The Economist”, 14 Sep 2006] Thanks to broadband, telecoms and the media are converging and that is where we are moving Convergence by Telecom Italia
Making Convergence Pay - Tellabs v1.2
3play and 4play defined Triple play (telecommunications) From Wikipedia, the free encyclopedia In telecommunications, the Triple Play service is a marketing term for the provisioning of the three services: high-speed Internet, television ( Video on Demand or regular broadcasts) and telephone service over a single broadband connection. Triple Play has led to the term "Quadruple play" (or 4play) where wireless communications is introduced as another medium to deliver video, Internet and voice content. The grouping together of services (as triple or quadruple play) is called multi-play. Triple play (telecommunications) From Wikipedia, the free encyclopedia In telecommunications, the Triple Play service is a marketing term for the provisioning of the three services: high-speed Internet, television ( Video on Demand or regular broadcasts) and telephone service over a single broadband connection. Triple Play has led to the term "Quadruple play" (or 4play) where wireless communications is introduced as another medium to deliver video, Internet and voice content. The grouping together of services (as triple or quadruple play) is called multi-play.
Multi-play bandwidth needs HDTV in multi-play  need for deep fibre SDTV Stream 1 = 4Mbps PVR Stream = 4Mbps Premium HDTV Stream = 12Mbps SDTV Stream 2 = 4Mbps High Speed Data and VOIP = 5Mbps AoD/VoD Stream = 4Mbps Gaming Stream = 4Mbps
FTTx Options Local Exchange 150m FTTC FTTP 1.2-2.4km FTTN BPON/GPON ADSL2+/ VDSL2 GE 100M 100M 10-20M VDSL2
Fibre costs in for greenfield deployments FTTP Per Home Capital Costs Parity with Cost of Deploying New Copper Source: In-Stat/MDR Fiber Copper
Triple play summary > 3play is as old as cable modems > 1st generation 3play with IPTV over ADSL2+ only delivers SDTV > Satellite, cable and competitive operators are offering a growing menu of HDTV plus instant Internet > To compete, incumbent operators need deep fibre, ie FTTP or FTTC
Making Convergence Pay - Tellabs v1.2
Mobile Broadband >4play is more than just adding mobile voice to 3play >Mobile broadband is being realised through 3G HSPA >Data traffic grows rapidly  large bandwidth upgrades >Revenue growth is slower >Operators must decouple bandwidth from cost…
Europe: Mobile Revenue Trends 2004 2005 2006 2007 2008 2009 0 50 100 150 200 250 300 US$Bn 18% 21% 24% 27% 30% 32% Voice Data Source: Pyramid Research Data revenue grows steadily… But data traffic grows dramatically…
Mobile Operator Revenues Backhaul Costs (traditional approach) Margin Squeeze Mobile Margin Trends? Cost-effective backhaul OR margin squeeze? Time Money
Mobile Network Evolution > Wireline broadband as a precedent > Minimise backhaul opex > Reduce leased line bandwidth for 3G data with statistical gain > Substitute Metro Ethernet & DSL for expensive TDM leased lines > Deploy Ethernet Microwave with adaptive modulation > Converge with wireline broadband infrastructure where possible > Anticipate new standards and services
Making Convergence Pay - Tellabs v1.2
Summary Consumers demand services that are instant, intelligent, and indispensable Converged services require deep fibre for high quality triple play, plus bandwidth scaling for mobile broadband
Making Convergence Pay - Tellabs v1.2

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Making Convergence Pay - Tellabs v1.2

  • 1. WHO ARE THE ECHO BOOMERS? Echo Boomers are the generation born between the early 1980s and the mid 1990s. They are the children of the baby boomer generation of the 1950s and 1960s. There are over 250 million of them and the oldest are now moving into adulthood to become the first true digital citizens. They are also known as: ‘Generation Y’, ‘Bridgers’ or ‘Millennials’. Most have grown up in a world where they’ve never ridden in a car without a seat-belt, spent a day at the beach without sun cream or left home without a mobile phone.
  • 2. Real World Quadruple Play: Converging Fixed and Mobile Broadband 25 September 2006 Jeremy Steventon-Barnes jeremy.barnes@tellabs.com
  • 3. Key Message Consumers demand services that are instant, intelligent, and indispensable Converged services require deep fibre for high quality triple play, plus bandwidth scaling for mobile broadband
  • 4. Agenda >Convergence trends >Triple play and deep fibre >Mobile broadband
  • 5. About Tellabs > Over 30 years’ experience > Leader in North American fibre access > Over 1/3 of global wireless calls are made on Tellabs’ customers’ networks > Solutions in about 300 networks in about 100 countries > About 3,700 employees > 2005 annual revenue $1.9B
  • 6. Operator Challenges Fixed Operator Business Challenges Source: Infonetics, “Service Provider Plans for IP, MPLS, and ATM” Reducing opex and creating new services are key to growing revenues and beating the competition
  • 7. Operator Challenges Mobile Operator Business Challenges Again: creating new services and reducing opex Source: Infonetics, “Service Provider Plans for Next Gen Mobile and Wireless Broadband”
  • 9. 31st May 2006 Orange Pioneers Total Communications: Integration of Mobile, Fixed-Line and Broadband plus business communications services - Orange, Wanadoo, Equant and Etrali unite under the Orange brand - A single customer experience from sales to service - Launch of free Orange broadband for Orange mobile Pay Monthly customers - Free fixed-line calls to Orange mobiles with new "Anytime" broadband talk service - Future converged services announced, including One Phone, single email and one address book across mobile and broadband - Orange Business Services: a single banner for all business services 31st May 2006 Orange Pioneers Total Communications: Integration of Mobile, Fixed-Line and Broadband plus business communications services - Orange, Wanadoo, Equant and Etrali unite under the Orange brand - A single customer experience from sales to service - Launch of free Orange broadband for Orange mobile Pay Monthly customers - Free fixed-line calls to Orange mobiles with new "Anytime" broadband talk service - Future converged services announced, including One Phone, single email and one address book across mobile and broadband - Orange Business Services: a single banner for all business services Convergence by Orange
  • 10. Convergence by Sky 18 July 2006 BRITISH SKY BROADCASTING PLC Free Broadband for Sky Customers Launch sets new standards in quality, ease and savings 18 July 2006 BRITISH SKY BROADCASTING PLC Free Broadband for Sky Customers Launch sets new standards in quality, ease and savings
  • 11. Convergence by Vodafone 30 May 2006 Vodafone Group Strategy update from Vodafone “In the context of changing customer requirements and the growing convergence of mobile, broadband and the internet, Vodafone's third strategy objective will be to innovate and deliver on customers' total communications needs.” 30 May 2006 Vodafone Group Strategy update from Vodafone “In the context of changing customer requirements and the growing convergence of mobile, broadband and the internet, Vodafone's third strategy objective will be to innovate and deliver on customers' total communications needs.” > 1 September: “Vodafone Germany launched … flat rate … fixed, mobile and DSL services” > 11 September: “Vodafone to deliver fixed-line broadband services in the UK” > 15 September: “Vodafone Italy and Fastweb announce joint broadband initiative”
  • 12. Marco Tronchetti Provera ex-Chairman, Telecom Italia [“The Economist”, 14 Sep 2006] Thanks to broadband, telecoms and the media are converging and that is where we are moving Convergence by Telecom Italia
  • 14. 3play and 4play defined Triple play (telecommunications) From Wikipedia, the free encyclopedia In telecommunications, the Triple Play service is a marketing term for the provisioning of the three services: high-speed Internet, television ( Video on Demand or regular broadcasts) and telephone service over a single broadband connection. Triple Play has led to the term "Quadruple play" (or 4play) where wireless communications is introduced as another medium to deliver video, Internet and voice content. The grouping together of services (as triple or quadruple play) is called multi-play. Triple play (telecommunications) From Wikipedia, the free encyclopedia In telecommunications, the Triple Play service is a marketing term for the provisioning of the three services: high-speed Internet, television ( Video on Demand or regular broadcasts) and telephone service over a single broadband connection. Triple Play has led to the term "Quadruple play" (or 4play) where wireless communications is introduced as another medium to deliver video, Internet and voice content. The grouping together of services (as triple or quadruple play) is called multi-play.
  • 15. Multi-play bandwidth needs HDTV in multi-play  need for deep fibre SDTV Stream 1 = 4Mbps PVR Stream = 4Mbps Premium HDTV Stream = 12Mbps SDTV Stream 2 = 4Mbps High Speed Data and VOIP = 5Mbps AoD/VoD Stream = 4Mbps Gaming Stream = 4Mbps
  • 17. Fibre costs in for greenfield deployments FTTP Per Home Capital Costs Parity with Cost of Deploying New Copper Source: In-Stat/MDR Fiber Copper
  • 18. Triple play summary > 3play is as old as cable modems > 1st generation 3play with IPTV over ADSL2+ only delivers SDTV > Satellite, cable and competitive operators are offering a growing menu of HDTV plus instant Internet > To compete, incumbent operators need deep fibre, ie FTTP or FTTC
  • 20. Mobile Broadband >4play is more than just adding mobile voice to 3play >Mobile broadband is being realised through 3G HSPA >Data traffic grows rapidly  large bandwidth upgrades >Revenue growth is slower >Operators must decouple bandwidth from cost…
  • 21. Europe: Mobile Revenue Trends 2004 2005 2006 2007 2008 2009 0 50 100 150 200 250 300 US$Bn 18% 21% 24% 27% 30% 32% Voice Data Source: Pyramid Research Data revenue grows steadily… But data traffic grows dramatically…
  • 22. Mobile Operator Revenues Backhaul Costs (traditional approach) Margin Squeeze Mobile Margin Trends? Cost-effective backhaul OR margin squeeze? Time Money
  • 23. Mobile Network Evolution > Wireline broadband as a precedent > Minimise backhaul opex > Reduce leased line bandwidth for 3G data with statistical gain > Substitute Metro Ethernet & DSL for expensive TDM leased lines > Deploy Ethernet Microwave with adaptive modulation > Converge with wireline broadband infrastructure where possible > Anticipate new standards and services
  • 25. Summary Consumers demand services that are instant, intelligent, and indispensable Converged services require deep fibre for high quality triple play, plus bandwidth scaling for mobile broadband

Editor's Notes

  1. Many executive are reporting 15%-25% annual increase in backhaul costs while revenues are flat or increasing in single figure percentage points (Heavy Reading’s Backhaul Strategies For Mobile Operators, March 2006)