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    • NETEVENTS 2009 EUROPEAN PRESS SPOTLIGHT DRAFT Tech Focus II Mobile Backhaul: The Optimum Solution for Mobile Internet Market Perspective by Richard Webb Directing Analyst, WiMAX, WiFi and Mobile Devices, Infonetics Research Panellists: Nan Chen President, MEF Phil Tilley VP Marketing Strategy & Skills, Alcatel-Lucent Francois Tournesac EMEA Sales Director for Carrier Ethernet Transport, Nokia Siemens Networks Natasha Tamaskar VP Product Marketing, GenBand Inc Okay. Thanks very much. Thanks [inaudible]. We are going to have a look at mobile backhaul now. My name's Richard Webb, I'm Directing Analyst with Infonetics Research. I'm going to be moderator for a panel. But I'm just going to run very quickly actually through a few introductory slides. So just a very quick generalistic overview of some of the challenges of mobile backhaul. Just before we get into that a bit of a step back from it a little. I'm sure you're pretty familiar, I expect that most of you are pretty familiar with the transition that mobile networks have gone through. They were built for voice, they were circuit- switched. Obviously there's been a great roadmap of upgrading going on through into 3G and that will continue beyond into 4G. And as that happens mobile operators are pushing out more data or broadband-based services. But we're going to have a look at what that means for the network in terms of the backhaul, what it means in terms of the traffic load and some of the challenges and some of the technologies that are coming to the fore to address that. Barcelona, 12-13 February 2009
    • 2009 European Press Spotlight NetEvents Some of the challenges are first of all mobile subscribers growing and I don't think there's any debate about that. And secondly the amount of bandwidth per user is also growing exponentially. But at the same time ARPU is not growing in proportion to that traffic growth. So we're going to see that traffic growth accelerate even more, particularly with video coming to mobile, and we're going to make the statement here that that forces mobile operators towards a packet approach in their backhaul networks. And we'll come onto that in more detail. Another challenge is that you've got different technologies, different radio access network technologies co-existing, you've got 2G and 3G at the same cell site. That has implications for backhaul as well. You've got multiple operators at the same cell site. So how do we create a single backhaul environment for those multiple operators. And we've got more mobile broadband technologies coming. We've got WiMAX, we've got LTU and we need to prepare for that as well. So this continual transition is ongoing. So as I said, no great debate that mobile subscribers are growing. You'll have your own feel for whether a prediction of 5.2 billion by 2011 is there or thereabouts. That's subscriptions, not necessarily individuals, that accounts for multiple subscriptions. But yes, that growth is continuing, the traffic growth is continuing. So there's some real problems for operators on the backhaul side. So you see the continuation of that same point. The mobile backhaul connections are growing, the number of new connections a year growing. What we're seeing is hundreds of thousands of connections per year but what we're -- operators are in that situation where they're needing an order of magnitude upgrade on that bandwidth but they can't afford an order of magnitude OpEx charge for that additional bandwidth. So these are some example slides provided through T-Mobile which just gives a -- I'm not going to go into too great detail -- but it just shows an overview of what's happened to their traffic growth. Just an example. When you see per subscriber busy hour throughput, this is just a metric for what it means for traffic load, you see on the left-hand chart -- hopefully you can see, it might not be too clear -- but you see that the red part along the bottom is traffic throughput for GPRS services. And then as you go from January '06 through to towards the end of that chart you see where they launch UMTS services indicated in green. A huge, very rapid ramp-up in throughput per subscriber. So when that's multiplied over a large number of users that are adopting that technology, as we're now seeing, this creates a vastly different traffic load for them to deal with. And this is really quite frightening because they've been obviously managing networks very well based on voice data -- sorry, on voice traffic for a long time. Then all this data comes along and it needs to be handled. So bandwidth per connection affects the charges. So we're making the assumption here that we need new technologies in order to handle this backhaul load. We've come from an environment where mobile operators have been incrementally adding T1 lines or E1 lines to the cell site when they've needed to scale up a little bit to handle voice Barcelona, 12-13 February 2009 2
    • 2009 European Press Spotlight NetEvents traffic growth. But that really isn't cost effective or manageable for the mobile broadband environment. So we're making the suggestion here that Ethernet is the solution for this in the long run and that can obviously travel over a variety of different access technologies. But an operator who does not make that transition to Ethernet is going to be in big trouble. Apologies for skipping through this pretty quickly, I think it's fairly well assumed. So let's just have a look at the different cost metrics for Ethernet versus TDM. You see that the slide shows yearly savings for IP or Ethernet over TDM in the green part. In year one where it's deployed there's no saving. In the yellow part of the chart you can see IP Ethernet yearly CapEx plus OpEx, higher in the first year and then decreasing a little and then going up a little bit. But compare that to the blue part of the chart, you see TDM yearly CapEx. If you're continuing to add T1 lines for cell site backhaul that cost is just going to continue to ramp up. And that really undermines the whole business model to moving towards 3G and mobile broadband services for the operator. So this is our overview picture of some of the different technologies that we're going to see for mobile backhaul, how that technology share is going to play out. Apologies if it's a little hard to make out. But you'll see a transition in a few of the technology areas from PDH, particularly PDH and SDH microwave indicated in the light blue, that's a decreasing part of the overall picture as we move forward in time. And that transition to Ethernet microwave indicated at the bottom of the chart in darker blue. So you see as the PDH and SDH technologies begin to decrease in overall adoption you'll see that replaced by Ethernet and you'll see that again in Ethernet over copper and fibre in the yellow part of the chart, that also grows. So we're going to start by making the assumption that Ethernet is one of those technologies that is going to provide the panacea for the challenges that mobile operators face in terms of mobile backhaul. But after I've introduced the panel or asked them to introduce themselves we're going to kick that around a bit and see whether Ethernet is the only solution, whether we can assume that it is going to take us forward and help operators tackle this challenge. And if so, what's the timeframe. How are operators going to fulfil that migration from TDM to Ethernet and what are the road bumps along the way. Okay. I said I was going to run through it quickly. So I'm going to ask the panel to introduce themselves very quickly. Let's start with Nan. If you could just say a little bit about who you are and your background. Nan Chen My name is Nan Chen. I'm with MEF. I think most of you know me so I don't have to introduce -- if you don't know me you probably don't belong here. Just kidding. Phil Tilley I'm Phil Tilley with Alcatel-Lucent and also, as well as Alcatel-Lucent on the IP side also marketing co-chair for Europe for the MEF as well. Barcelona, 12-13 February 2009 3
    • 2009 European Press Spotlight NetEvents Natasha Tamaskar I'm Natasha Tamaskar. I'm from GenBand. My background has been IP and primarily an FMC type of [inaudible]. And we've been -- as you've heard from Sanjay -- we've been involved quite a bit on the FMC side both in femtocells and [inaudible]. Francois Tournesac My name is Francois Tournesac. I'm with Nokia Siemens Network. I have been through an acquisition coming from Atrica for eight years and previously had the privilege to work for 3Com for 10 years. The inventor of Ethernet. Richard Webb Okay, a very distinguished line-up, I'm sure you'll agree. So the first thing that I alluded to that I want to put to the panel, I very rapidly ran through it and I think there's probably consensus, but Ethernet surely is the solution to the backhaul challenge for mobile operators. First of all, I'm going to ask Francois this, perhaps you can take us back a little bit about the evolution of Ethernet, as you mentioned, you worked for 3Com, the fathers of Ethernet perhaps, as a good place to start. Perhaps you can tell us how -- Francois Tournesac We can summarise it with a couple of numbers. Initially D10, the 100, the 1,000, the hub, the switch. Also the cable, the wire, the RD45, the yellow cable initially, the coax etc. So things have evolved very much in Ethernet I think. This has created the huge market for everybody and this is why we're enjoying this. When I started with Atrica in 2000 the idea was to bring Ethernet into the carrier space and Nan was part of Atrica at that time also and we shared the same idea that we could open Ethernet to really build it in order to find the attributes to give it a carrier class spin. And in fact at that time in Barcelona was the first customer we closed, [LP] in 2002. And it was very interesting to see that carrier in fact started to adopt Ethernet especially because of the cost of the access, because carriers don't invest in core and etc. just to make themselves happy about it but they were interested and the adoption of Ethernet came because it was a single technology, well known, well standardised, promoted by various standard bodies and MEF certainly played a tremendous role in making it known. And therefore the adoption came from the access. And this adoption then required carrier class and there were different ways of adopting it. The first adoption, in the carrier class at least, was in the enterprise because this is where we saw from the extension of the data centres that was done in Japan, some vendors like Extreme in fact started this and Riverstone. And I think then the enterprise took the benefit of it and were looking for multi-servers and this evolved to the [inaudible] to the data centres and etc. This is where we are now. But then a parallel task has been moving -- it was the adoption of IP Ethernet and this IP Ethernet was very much adopted in the residential for the benefit of getting best Barcelona, 12-13 February 2009 4
    • 2009 European Press Spotlight NetEvents effort services, massive. And the first push was really the IP DSLAMs because taking a decision at the IP level early in the network for the telco was something very new. And I believe one of the early adopters of this technology was 3 and because they couldn't find an IP DSLAM they just built their own IP DSLAM which was an amazing thing and really drove the residential which today is widely adopted in Europe mainly because of the non-cable operator which exists in the US which is very predominant. And therefore this business is extremely strong. Alcatel-Lucent is certainly very much established in this business and Cisco are the two very strong players into this residential which is a very, very large business, mainly build on IP/MPLS. And then I believe -- and this is where we are -- we're looking at this mobile backhaul. And the mobile backhaul already benefits from the IP/MPLS so the application is already circulating and this is done. What we're looking here is really the base station to the controller, this link that today is still in an [NE1] link. And due to the numbers we've been seeing is searching for more bandwidth. And also due to the access, again coming back on to what I mentioned initially, the access is being simplified, it's an equipment that needs to be plugged, it needs to be small, a small consumption, it's expensive, it's outside. So it's an outdoor equipment. And it's come out with Ethernet. And it got to include the transport within itself so that will reduce the cost of the number of boxes because the [faders] are expensive, it's outside. So this is where I believe we're here to discuss about and when this will be coming. We've been working on the MEF with Phil because I also belong to the MEF. Recently, because I just joined. And I think it's quite a very interesting thing because this coming, it's happening, it's real and the whole next week you will be seeing most of the vendors announcing they're not going to do it now but I believe a lot of vendors are going to be announcing very good things about this new market. Sorry to be very long. Richard Webb No, thank you, it leads on to my next question. So let's talk about that roadmap. What is the timeframe, what kind of proof points are we starting to see, what's the template for implementation if you like? Perhaps Phil or Nan you'd like to pick up on that one? Phil Tilley So I guess, at Alcatel-Lucent we've been looking at this mobile backhaul market for quite a while now, probably two or three years or whatever. But I think as you said, first of all and thanks to the likes of Infonetics and Co who've done a great job in convincing mobile operators that actually carrier Ethernet in the backhaul economically is the best way forward and the only way forward. So I think carriers for the last two years have agreed that yes they must move to carrier Ethernet for the backhaul. Then really 18 months ago we launched the first product that actually did the integration of 2G, 3G traffic in the cell site onto either carrier Ethernet or E1/T1. So we had a total uniform or platform that can actually Barcelona, 12-13 February 2009 5
    • 2009 European Press Spotlight NetEvents enable you to do T1/E1 on the ingress, on the 2G some ATM 3G traffic. [Aggregate] that into carrier Ethernet but also in parallel still keep your E1. And that really started deployment and trials probably a year ago. And then in the last six months what we've seen now is that move from a pilot trial phase to real mass deployment and uptake. And we're suddenly starting to see and we've made a number of announcements the last couple of months, Panon in Hungary is one, Telecom New Zealand another, where they're deploying this platform to actually enable them to really use Ethernet in the backhaul. So I think in where are we on this time line adoption phase, we're right at the bottom of the hockey stick I believe right now. We've engaged in trials with the platform with a number of customers and we've got a number of live roll-outs. Richard Webb Well that's good news in a recession, to be at the bottom of the hockey stick. So perhaps I can ask Nan to be -- give us a little bit more detail about the implementation, how this works phase by phase? Nan Chen As you guys can see that what has really happened here is the recession has really kind of helped for people to crystallize the mobile backhaul using Ethernet as the technology for mobile operators is really a good way to go. And especially because the cost per bit is so much lower, as indicated on this chart earlier. And what MEF has done is we've put together -- and actually it's becoming one of the significant -- a specification we worked for a while, called it the Mobile Backhaul Implementation Agreement which was just proved last month in [inaudible] MEF-22. What it really does it really gave -- it used cases of transition from legacy networks to pure Ethernet networks and there's pure carrier Ethernet networks, there's multiple levels of transition from just packet offload to [inaudible] carrier Ethernet services or just clearly IP Ethernet based network. And that's one. A second part of that document is also talking about also the service recommendations, what the services recommend and what class of services are being recommended there when you deploy carrier Ethernet for mobile backhaul. And then the last piece is about the actual synchronisation. We did a few recommendations for synchronisation, How do you address the issues. So for those of you who'd be interested it's actually on our website, you can take a look at MEF-22. So also that -- obviously the implementation agreement alone is not going to solve world hunger and I think we are going to do that phase two. But that does give an indication of how the industry comes together and really sees the need and desire to get something done. Richard Webb Yes. So just sticking with some of those challenges, we're going to see these legacy technologies around for quite a long time. So firstly what kind of duration do you see Barcelona, 12-13 February 2009 6
    • 2009 European Press Spotlight NetEvents to the tail-off of those legacy technologies and what are some of the challenges? you mentioned synchronisation, perhaps also QOS is another challenge when you're into working with these different technologies in a backhaul scenario. Nan Chen Right. Well there's a -- let me just quickly hand over to Phil and the panel, one of the key things we're addressing here we didn't really anticipate everybody was just going to drop and switch to Ethernet. That's why the whole implementation agreement phase one is really talking about the migration. So there's a multiple ways to migrate from current technologies which is legacy based, TDM based technology, and gradually offload the packet traffic, initially probably data and then eventually voice, over to it and to address the synchronisation issues as well is really critical. Phil Tilley So yes, one of the real challenges I think we're facing right now is actually every mobile operator for geographic reasons, for population density reasons, has a slightly different network -- architecture network infrastructure. And then there'll be multiple hops and multiple points of aggregation to go out to remote cell sites. So there's quite a lot of daisy chaining going on from a central network controller through possibly a fibre-based aggregation out to microwave aggregation to some other type. And one of the challenges that faces every different infrastructure build-out is actually how do you engineer, how do you get that clock synchronisation which is the fundamental to make the whole mobile network operate and make the seamless handover of the call from one cell site to the other. You have to get synchronisation out to that far end cell site. And with those multiple layers of aggregation you need to make sure -- which is where the QOS comes in -- how do you ensure that you've got a quality of service all the way to that synchronisation bit in the highest priority to get to the end point. So you've got the complexity of that which is being overcome I think with the different operators. But it also does introduce as well -- there are two types of network amongst this architecture. There's some people who just lease the backhaul capacity and others who want to build their own. When you're leasing the capacity that's going to become, today it's a leased line, it's going to become an Ethernet service. So you're going to get Ethernet providers, fixed line Ethernet providers who are going to sell wholesale services into mobile backhaul. If that's the case the mobile operator doesn't know what equipment is in that network. So therefore they're going to go for a synchronisation method which is based on the packet. And actually the packet data -- actually the frame data is actually carried within the packet to get the synchronisation clock to the end point. So that means you need to use something like 1588 as a synchronisation method or adapt a clock recovery which is packet [inaudible]. If you own the network is becomes slightly easier and you can use what they call synchronous Ethernet to provide a synchronisation frame which is delivered through Barcelona, 12-13 February 2009 7
    • 2009 European Press Spotlight NetEvents hardware on every component, every box in the aggregation layer. So you've got really you've got two synchronisation methods that are now being developed and adopted in this network. So it enables again -- so I think the important point here is that it's an opportunity, this carrier Ethernet in the mobile backhaul offers the opportunity for fixed line operators to offer wholesale Ethernet services at the same time mobile operators to potentially build their own Ethernet network, particularly if they own the microwave assets. And they'll do their Ethernet over microwave. Francois Tournesac Coming back on what Kim mentioned before on the experience of enterprise mobile and residential I think the benefit, and this is what we're looking for here, is to increase the quality. And I think the -- my experience being with Nokia Siemens which is working with over 200 mobile operators on a day to day basis, building these networks, is that the mobile and the fixed worlds are very different. They are very different because the mobile requires a lot of tuning and a lot of standard. It's got to be fully standard. You can't choose one vendor or another vendor, it's got to be completely interpretable. So the standard of synchronisation that we're talking about will be fully compatible and all the vendors will be applying this standard of synchronisation, there's no doubt. It’s very stringent. And there needs to be a lot of tuning of the network because basically you're putting a lot of capacity over different speeds that you can rent or have. So that's the one side. On the fixed side until now the industry has been quite flexible. People have been using different technology. For doing the last MEF meeting in San Francisco we had this telco presenting an enterprise services MEF over GPON. And I was -- it was in Alaska and I was surprised. So to the extent that we can do a lot of services on a lot of different technology in the fixed world, this is not exactly the same thing in the mobile environment where things are much more precise. Coming back to the experience, I think what we're going to be experimenting moving forward with Ethernet is more and more quality and more and more knowledge because we're going to be replacing leased lines with Ethernet and we're going to be replacing the mobile backhaul with Ethernet, we're going to be replacing all the FTTH [inaudible] Ethernet everywhere push. And all this Ethernet will have the attributes that are adequate for the services and therefore we're going to be experiencing better services and more facility to access what we want. So I think the overall idea of the MEF to do implementation agreements on the mobile backhaul has been a tremendous evolution to basically explain to people how to do it and people of not only the telcos but also us as vendors and you as journalists to understand how it works. And this experience will be certainly replicated with other groups in the enterprise and certainly in the residential. Barcelona, 12-13 February 2009 8
    • 2009 European Press Spotlight NetEvents Natasha Tamaskar So if I was to just add a couple of points here, you're talking about tuning that's going to be required in the networks. I'll actually go back to your example as to -- you talked about frequency tunings and things like that, synchronisation. But there is some fundamental change that comes when you're actually going to these new backhaul technologies such as Ethernet. It's just not coming by itself, it's actually coming with a different paradigm. The network itself is changing, the access is changing. For example in Nokia Siemens you're starting to collapse your RNCs with your BSEs, you’re trying to create a flat network architecture. So these solutions are not going to be just coming by itself and it's going to create some other types of challenges. For example with all the speeds and feeds that you talked about Richard that are coming in, how is the core network going to respond. For example today you have the SGSNs etc. in the network. They are used to seeing very few elements within the network. As you go to different models it's not just about backhaul by itself but backhaul in conjunction with the network transformation. Now they're going to be seeing a lot more of these devices. So when all of these devices actually connect back into the core how does it actually affect the network. And the second point I want to make is this transition is really gradual. Coming from the United States we do not see Ethernet everywhere. I'm working for a company, we're pushing all IP very, very strongly. But in reality we actually see a lot of ATM out there. And it's going to stay there for a very long time while we are transitioning. So I think while from an access perspective and while from an end user's perspective you're looking for new services, that new iPhone that all these services and operators are going to want to provide these services, at the end of the day you're also looking for other types of technologies that can offload the burdens on this backhaul. And femtocells is one of the prime examples where you can actually use such a technology while ATM still persists. Right. Phil Tilley I don't disagree the ATM's going to persist. However I think where you've got ATM you've generally got a fibre connection, you're going to upgrade that to put Ethernet over that fibre. And therefore I think -- and also the important thing is you'll have an ATM interface on the radio equipment but you'll actually plug that ATM interface into this -- into working box which will then convert that into Ethernet [inaudible]. Natasha Tamaskar True. I guess what that means is that the edge of your operator's network is going to transform tremendously. This inter-working between the new technology and the old, whether it's IP and ether -- IP and circuit-switched, old circuit-switched technology -- is going to stay for a long time and it needs to be managed very, very carefully. Barcelona, 12-13 February 2009 9
    • 2009 European Press Spotlight NetEvents Audience Q&A Richard Webb Okay well thank you very much. I'm going to throw it open to any questions from the audience. From the floor [Inaudible] from [Windows News]. As you speak about the synchronisation and [inaudible] with Ethernet. So I would like to know what has been kept from the original Ethernet frames. What has been kept because you could put Ethernet on everything, electricity, gas, water? Francois Tournesac So I would say that the Ethernet has really been kept. The beauty of the Ethernet is the definition of Ethernet is evolving and I think we've been seeing that through the age. When -- before there was no V-line and the definition got inserted into the frame and I think the frame is quite well known. And the advantage there's a lot of vendors building chipsets, equipment solutions around Ethernet and this is building much more the market and we completely understand that if I'm a young engineer coming out of my school I'm not going to go on a project on ATM. I don't think that I'm going to see value in the work that I will be doing and building my curriculum moving forward. So Ethernet has not that much changed. I think it has been pushed along in different directions in order to solve problems and services. And therefore it has evolved. The sync Ethernet is just the fact that it's recognized that Ethernet if you try to do E1 over Ethernet you will see that there's a little bit of wander because in fact the packets are sent in an asynchronous mode. And therefore if you're trying to find synchronisation you look at a screen with the testers and if it passed it's good, if it doesn't pass it's out of it and you need to [inaudible]. And we've tried, at least on the Atrica side I've known, I've done a lot of tests since 2000 on the E1 encapsulation. We could reach 10 minus nine with encapsulation so we needed to find something better. And this is where sync Ethernet was created and we worked a lot with the labs of different telcos in order to understand how to do it. And we decided to synchronise the Ethernet sent from point A and to point B and we all agree standard is on its way. Same thing with 1588. In order to go over different types of networks like IP etc. it was important to find a standard and we did some tests and it's working. So basically Ethernet is not changing. I think the engineers are looking at fitting -- at making everything fit on Ethernet. Barcelona, 12-13 February 2009 10
    • 2009 European Press Spotlight NetEvents Phil Tilley Absolutely. Ethernet remains the same. What it is actually is it's the encapsulation of the traffic within the Ethernet. So the Ethernet at the interface point is exactly the same. Nan Chen So why Ethernet has always been staying the same, I would say the same thing and it has been -- always been is the cheapest good enough technology. Richard Webb Time for one more perhaps. Brad Booth – Ethernet Alliance Brad Booth, Ethernet Alliance. A quick question for the panel. Knowing some of the stuff that's currently going on inside IEE802.3 do you guys foresee that some of this five time stamp stuff that's going on there, the impact that it's going to have on some of the legacy environments. What are your thoughts on that? Nan Chen What legacy are you talking about Brad? Brad Booth E1/T1. Nan Chen Ah E1/T1. Well I think I have heard a story, the slow transitions before when we [inaudible] even talk about the migrating to Ethernet from enterprise services perspective. And that has come and gone. I think the transition even though it's slow but it's really fast at picking up at great speed. And I think the mobile backhaul is also in that particular category. I believe it's a great carrier Ethernet application. And I think a lot of those T1s, E1 will definitely be replaced very quickly. I think we saw that momentum is already ongoing. And I don't know what really good or bad but really what this environment made a lot of operators switch into Ethernet very quickly. Not only just at the mobile operator level but also in the backbone level and converted to a packet base. And really changing the overall -- the key question now service providers are actually asking is how quickly I can convert to packet, as quickly as possible in terms of as close to the customer as possible. That way can take advantage of the packet based network and optimisation. So I think a lot of the legacy network will be disappearing very quickly. Phil Tilley Yes I think that's the real benefit of the mobile backhaul. The T1 synchronisation work going into the support in mobile backhaul is actually going to make sure the Barcelona, 12-13 February 2009 11
    • 2009 European Press Spotlight NetEvents equipment and etc. components are in place to actually then enable that T1/E1 replacement market. Richard Webb Okay. Thanks very much. I think that's probably time for coffee. So I'd like to thank all our panellists in the traditional fashion. Thank you very much. [End] Barcelona, 12-13 February 2009 12