Management Summary of Onderzoek Flexibel Gebruik van MNC's

M2M switching problems
Management Summary “Onderzoek flexibel gebruik MNC’s”
Rudolf van der Berg
Jan Lindoff
2010

Machine to Machine (M2M) communications will connect millions of devices. Many of them using GSM-family technology
Switching GSM-operators requires large scale M2M end users to switch the SIM-cards in all devices, which is expensive or impossible
Ministry of Economic Affairs wanted to know what it could do to lower switching barriers for M2M end users
Logica researched possibilities for and impact of regulatory and technical solutions that might lower switching costs.
Conclusion: Ministry should open access to Mobile Network Codes. This allows M2M users to use own SIM-cards. Other solutions fail.
No. 2
Summary

M2M and Switching problems
Cause: Market model, technology and regulation
Solution: Regulation, pool and technology
Appendix: Private GSM
No. 3
Contents

Machine-to-Machine communications will let millions of devices communicate with each other and with people
8.1 million vehicles in NL
8 million smart meters in NL
TomTom alone sold 10 million Personal Navigation Devices last year
A digital picture frame company became a KPN customer recently
eReaders are equipped with wireless connectivity
Many of these devices will use communications technology from the GSM-family, because it is ubiquitous, standardized and flexible
GSM-family is GSM/GPRS/UMTS/LTE also known as 2G/3G/4G
GSM-family works on all continents, in almost all nations
GSM-family offers coverage almost anywhere, indoor and outdoor
Other networking technologies like wifi, powerline, ethernet, cable and DSL broadband have less coverage and often require configuration by user
No. 4
M2M to create an Internet of Things

M2M user is here defined as the party who pays for the connectivity to the M2M devices.
Company that supplies eReaders, smart meters, pay as you drive device
If they want to switch mobile network operators, they will have to change the SIM-card in each of the devices, which is expensive
Switching 10,000 SIM-cards estimated at 1 million euro
Logistics is hard. Devices often mobile or in remote or hard to reach places
Consumer electronics companies don’t even know where end-user is
M2M has very long life, up to 30 years
Some users forced to switch operators because of results of European Procurement procedures.
Problem acknowledged by GSM/UMTS/LTE standardization organisation 3GPP and previous research by Stratix for Ministry
No. 5
M2M users faced with switching costs

What causes this problem?
M2M users can’t access the wholesale market
SIM-cards are locked to one operator. The IMSI number can’t be changed
Regulations don’t allow M2M users direct access to wholesale market
What are possible solutions?
Opening access to Mobile Network Codes, so that end-users can use their own IMSI number
Introducing a pool of IMSI’s for M2M end-users
Technical solutions that allow changing of IMSI’s over the air
Interviews with 18 stakeholders: networks, end-users, suppliers and standardization organisations
No. 6
Research into switching problems

Cause
Market model, technology and regulation

Large scale end-users often have access to the wholesale market. Example: Electricity. Greenhouses, chemical plants, aluminium smelters buy and sell wholesale
In the wireless market there is always an intermediary between the end-user and the wholesale network
There are only two end-users in the Netherlands that have access to the wholesale market:
Pro-Rail for GSM-R (GSM for Railroad safety)
Ministry of Defence: use DECT-Guardband for mobile network
Lack of access to wholesale market results in dependency on one market party.
First time right, because changing is often impossible
No. 8
End-users can’t access wholesale market

No. 9
Market structure

Spectrum license holder: has bought or received right to use radio spectrum for mobile wireless network
Wholesale network builds physical network (antennas, fiber etc.) and leases access to this network to service providers
Service providers sell access to the wholesale network(s) to various customer groups, some specialize in M2M end-users
If a company is spectrum license holder, wholesale network and service provider it is a Mobile Network Operator (MNO) or operator
If a company is a service provider without a wholesale network and spectrum license it is a Mobile Virtual Network Operator (MVNO)
No. 10
Market players (1/2)

Mobile Network Enablers do not have a contract with a wholesale network directly, but they facilitate access to wholesale networks
Have all necessary equipment, billing, CRM etc. to enable an MVNO
Resellers don’t have a contract with the wholesale network. They resell the offer of a service provider to a specific market
M2M application providers are a type of reseller aimed at enabling specific M2M applications.
An MVNO is not equal to the service provider of an MNO. For instance it can’t become a member of the GSMA
No access to Inter Operator Tariffs of the GSMA for roaming agreements
An MVNO uses its own SIM-cards, a reseller uses the SIM-cards of the MNO or MVNO whose network it uses
No. 11
Market Players (2/2)

No. 12
A sliding scale from reseller to operator
ESP: extended service provider
VAS: Value Added Service

SIM-card designed to facilitate easy change of network or handset for consumer but not of large scale M2M end user
No need to change handset to change network or to change number when changing handsets
Every SIM-card has a unique unchangeable IMSI-number and cryptographic key that ties the SIM to a network. IMSI is 15 digits:
Mobile Country Code (3 digits, issued by ITU)
Mobile Network code (2 or 3 digits, issued by national regulator or ITU for international)
Mobile Subscriber Identity Number (9 digits, issued by mobile network)
For security reasons the IMSI-number and cryptographic key can’t be changed. Home Location Register verifies the cryptographic key
Wholesale networks use MCC+MNC to give access to device
MVNO switches wholesale network by changing access permissions
(Inter)national roaming works the same way
No. 13
SIM-cards lock customers to networks

To enable access to and switching of wholesale networks all that is required is access to MCC+MNC for end-users
Regulations dictate that access to MNC is limited to public networks
Not all M2M end-users can make a public offer, but what is a public offer is a vague sliding scale.
Rijkswaterstaat using thousands of cameras to monitor roads is not
A security company using cameras to monitor businesses probably is
An exemption is now made for non-public use of MNC’s, like it was done for the Ministry of Defence
Parties who offer Private GSM can request an MNC for their services. (for explanation of Private GSM see appendix)
No. 14
Regulations ties end-user to M(V)NO

Solutions
Regulation, pool and technological

Opening access to MNC’s will solve switching problems of end-users, without leading to problems elsewhere, it will:
not lead to a depletion of the IMSI-numbering plan
not negatively impact other policy goals
not conflict with international agreements
be technically feasible
be possibly positive for international mobile roaming
possibly lead to economic advantages
There shouldn’t be any restrictions on what end-users can apply for MNC’s, except those already present in number policy:
the use is in line with regulations
it is realistic that the numbers will be used
the amount of numbers requested is necessary.
No. 16
Solution 1: Opening access to MNC’s is best

How option 1 would work
End-user would apply to OPTA for an MNC
End-user would contract one or more wholesale networks. Multiple networks could enable national and/or international roaming
An MNO, MVNO or MNE can provide the technology to ease access to wholesale networks and decrease time to market
The end-user contracts a SIM-card producer directly or via M(V)NO/MNE. Receives SIM-cards and crypto keys for each IMSI with own MNC
End-user contracts intermediairies to get full international roaming if so desired (still theoretical)
No. 17
Mangement Summary “Onderzoek flexibel gebruik MNC’s”

Supply is at least a few thousand for the Netherlands alone. 515 are available in the current range and more ranges can be requested via the ITU
The ITU can issue between 100,000 and 1 million MCC+MNC’s
Demand for M2M applications is likely between a few hundred and a few thousand in The Netherlands
Demand for Private GSM purposes probably less than a hundred
Economic conditions will limit use of MNC’s. M(V)NO’s may offer better terms and use of MNC’s requires maintenance
Numbers like 088-company and internet Autonomous System numbers show good but limited interest from private networks
No. 18
No depletion of IMSI-numbers foreseen

Interconnection and Access
Rules on interconnection might need changing as only public networks can demand interconnection
Access to mobile networks is a market without parties that are deemed to have Significant Market Power. The competitive market should provide enough possibilities for M2M end users to enter the market
Access to numbers
Currently limited to public networks. Party with an MNC should be able to request other numbers like E.164 and Transit Signalling Point Codes
Lawful intercept:
Intercept can happen at the wholesale network, the suppliers of the private network and at the private network.
Tariff transparency
Mobile termination access rate follows that of host network.
No. 19
No negative impact on other policy goals

ITU has defined the structure and use of IMSI numbers in recommendation E.212
E.212 speaks of public networks, but this is not a legal term. It is the Member States who need to define this
When asked ITU Study Group 2 wasn’t negative about the proposed use by private networks
In response to a Dutch contribution on this subject, ITU SG2 sent a letter to 3GPP, cc GSMA, that it should be expected that individual countries will issue 3-digit MNC’s soon
No. 20
No conflict with international agreements

In Europe MNC’s are only 2 digits, in the Caribbean and the Americas this can be 3 digits.
Network may not be able to distinguish between MNC 291 and 293 because it just sees 29. Doesn’t know which HLR to contact
Networks expect no or little difficulty with customers with 3 digit MNC’s. Maybe some support systems that assume 5 digit MCC+MNC
Roaming customers from the Americas also use 6 digit MCC+MNC combinations and are handled well by the network
Some networks use 6th digit to point to a specific HLR in the network
No. 21
No technical difficulties expected

Roaming is making use of someone else’s network. Can be national or international: Tele2 NL roams on T-Mobile NL, 3UK on Orange UK
Some M2M users require national roaming because it increases coverage. Often a spot is covered by at least one network
Some networks offer a foreign SIM to accomplish this. Foreign networks often have roaming agreements with all networks.
International roaming should be the same. Networks giving access based on MCC+MNC combination, but is much harder
Seems only MNO’s with GSMA membership have easy access to roaming
M2M users may need to load IMSI of MNO on their SIM too.
If M2M users had access to international roaming, they could negotiate better rates by going with just one network
Maybe possible on bilateral basis, but what happens when it fails in one country?
No. 22
Benefits to (inter)national mobile roaming

Number pools often used to give access to scarce numbers
There is a number pool for E.164 numbers for M2M use
Internet uses number pool 192.168 for internal networks
MNC’s are not fit for number pools. It is used to find HLR and give access. This model breaks, because every network uses that MNC
Wouldn’t make switching easier, what if end-users of different networks used the same IMSI’s and then want to switch networks
For Private GSM a pool of MNC’s would be beneficial. It would facilitate experimentation and smaller networks
Recommendation to open one or two MNC’s for Private GSM use
No. 23
Solution 2: A pool of MNC’s is too complex

How solution 2 would work
End-user would contract MNO/MVNO for M2M services.
MNO/MVNO provides SIM-card with IMSI from pool, enables it’s own cryptographic keys on the SIM-card and HLR
When end-user wants to change operator, MNO/MVNO provides IMSI’s and cryptographic keys to new operator
New operator verifies that IMSI’s aren’t in use yet on his network and enables cryptographic keys on his HLR
Problem: Collissions: what if IMSI’s are already in use in the network of the ‘new’ M(V)NO?
Problem: Authentication not on MCC+MNC, but on IMSI+correct cryptographic settings. This is different from current situation
No. 24

3GPP looked at M2M users switching networks in Study Groups 1 and 3, with results published in TR 22.868 en TR 33.812
3GPP identified 4 problem areas for M2M
How to prevent stealing of subscriber identity from SIM-card
How to initially provide the SIM-card with right information either in factory or upon activation in the field
How to change subscriptions
How to update the SIM-card to new security levels during a 30 year lifespan
3GPP looked at theoretical possibility of 3 solutions, of which two are feasible. GSMA has told 3GPP the two solutions are unacceptable
Suppliers do see technical solutions and have them available, but these haven’t been standardized industry wide
No. 25
Solution 3: No technical solution available

Alternative 1: Trusted Environment based solution with remote subscription provisioning and change is theoretically feasible
Trusted environments can be created through hardware and software
Alternative 2: SIM based solution with no remote subscription provisioning or changing.
This is the current situation with SIM-changing
Alternative 3: SIM based solution with remote subscription change is feasible in two different ways
None of these solutions have been worked out in technical detail, just on the functional level. Standardization may take years.
M2M end-users may want technical solutions as well, because who knows what changes in companies in 30 years (i.e. mergers, sales)
No. 26
2 theoretically feasible solutions

How solution 3 would work
End-user would contract MNO/MVNO for M2M connectivity services
M(V) NO provides end-user with special SIM-cards or definition of trusted environment in accordance with industry-wide standard
IMSI’s and crypto of M(V)NO are used, but can be remotely changed
When an end-user wants to change operators, it notifies the current M(V)NO of the change to new operator
In accordance with industry-wide standard, the new and old operator cooperate in changing and enabling new IMSI’s and keys
Problem: How to enable global cooperation between M(V)NOs? Customers may change from German to Dutch M(V)NO
No. 27

Appendix A of 3GPP TR 33.812 V9.2.0 lists the opinion of the GSMA
[…]Furthermore, one of the major concerns of MNOs is the potential weakening of the well-established and trusted SIM-based GSM/3G security architecture. Extended OTA (any kind and via any bearer of over the air data download to the USIM)capability to facilitate download of new subscriber keys and possibly authentication algorithms represents such a potential weakening of security.[...] not allowing MNOs to fulfil their obligations towards regulatory and other governmental authorities to guarantee secure authentication and billing.
[…]The only proposal in the TR that was acceptable to GSMA SG representatives was the Alternative 2 where operator change was performed by physical replacement of the UICC in the device.[…]
(UICC = SIM-card)
No. 28
GSMA opposes technical solutions

Conclusions

Only by giving M2M end-users access to MNC’s can their switching costs be decreased
Other solutions are either not workable (option 2), or theoretically feasible (option 3), but not practically available short term
Recommend to open up MNC’s and other necessary numbers for M2M end-users and create a pool of MNC’s for Private GSM
Recommend to contact Commission and BEREC to communicate these changes, harmonize rules in Europe and address roaming issues
Recommend to request Commission to contact 3GPP and ETSI to work on technical solutions
No. 30
Conclusions and recommendations

Private GSM uses the DECT Guardband to offer unlicensed, private, low power, GSM services in The Netherlands
The DECT Guardband was a buffer between the DECT-spectrum and GSM-spectrum, that isn’t necessary anymore.
Conveniently standard GSM’s can work in this band
Any organisation can use the DECT Guardband to for instance create better indoor coverage.
In order to be able to use this technology an organisation needs access to SIM-cards
If there was a free to use pool of MNC’s for this purpose, organisations and individuals could experiment easier
No. 31
Appendix: Private GSM explained

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Management Summary of Onderzoek Flexibel Gebruik van MNC's

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