TELECOM ASIA SUPPLEMENT l JUNE 2012

Wi-Fi blurs

the broadband lines

IP traffic surge to flow mostly over fixed-line networks

Sponsored by Cisco

Mobile Internet Supplement

Editors Letter l 3

The Cisco TCO Challenge

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Overview
Cisco invites you to engage with us to explore how Cisco Solutions can positively reduce costs on your mobile backhaul network. According to the Cisco Visual Networking Index: Forecast and Methodology, 2010-2015, there will be two networked devices per capita in 2015, up from one networked device per capita in 2010, and the number of devices connected to IP networks will be twice as high as the global population in 2015. The more devices on your network, the more data that efficiently needs to be transported. Engage with Cisco to learn how our mobile backhaul solution can not only handle the growth in data traffic but also do it in the most cost effective manner, creating more profit for you.

Detailed Analysis
While we have provided the initial potential benefits, we ask to you to join our Premier Engagement team on a much more detailed analysis that will provide the operational insight to deploy a cost effective network. This analysis is basically a custom engagement over a 2-3 month period where Cisco will partner with you to develop a custom analysis. Our Premier Engagement team has vast service provider experience in network design, deployment, and strong financial backgrounds in both wireline and mobility markets. Since this is a major investment, we ask for an agreement to mutually work together developing the model for your company. During this process you will be working with our team to ensure the model can be developed to your companys needs. This is how Cisco partners with service providers to ensure timely deployments to increase customer satisfaction and to deploy efficient capacity planning.

Wi-Fi to carry the load

obile devices and video will play an increasingly significant role in the exponential growth of IP traffic, which is expected to continue for at least the next decade. The latest Visual Networking Index report from Cisco, however, illustrates clearly that while wireless is destined to dominate the internet, fixed-line broadband will still carry the majority of that traffic five years from now, thanks to Wi-Fi offload. This issues main story looks at the highlights of the VNI report. Cisco expects over half of the worlds internet traffic to come from Wi-Fi connections in 2016, and those Wi-Fi access points will be connected to fixed-line broadband networks, many via home gateways. While wireless devices connecting direct to mobile broadband networks will account for a tenth of global IP traffic in 2016, wireless devices connecting to fixed-broadband connections via Wi-Fi will account for 51%. The issue also features market reports covering mobile payments, mobile phone shipments and M2M mobile modules. Gartner expects the value of mobile payment transactions to grow 42% annually and hit $617 billion in 2016 with 448 million users. The market is forecast to increase 62% this year and have more than 200 million users. IDC sees the growth in mobile phone shipments slowing to 4% this year, with smartphone growth of 39% offsetting a 10% drop in feature phone sales. The firm expects Android to account for 61% of the smartphone OS market this year and iOS to have a stable 20% share. But by 2016 Windows Phones will be outselling iOS phones. IMS Research projects that partially due to increased government initiatives that by 2016 more than 45.4 million cellular modules will be shipped to the automotive sector, representing about 38% of that years total shipments. The company also forecasts M2M module shipments for the medical market to grow at more than a 95% annually until 2016. Finally, Andrew Mackay from Cisco talks about the Next-Gen Internet and what it will mean to telcos. We hope you enjoy this issue and let us know what you think and what you want to read about in future issues. l Joseph Waring Telecom Asia group editor

Contents
3 Editors letter 4 Newswire 6 Cover: Mobile data traffic 9 Research Note: Mobile phone market 10 Analyst Insight: Mobile payments 11 Analyst Insight: M2M mobile modules 12 Q&A: Cisco 14 Products

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First, it will show much more accurately the financial benefits. Second, and most important, it will serve as a capacity planning tool. This will enable you to deploy the equipment with an accurate projection of needs, making your capital investments the most efficient.

With just a few inputs, Cisco can easily illustrate potential benefits to your business.

Published by Questex Asia Ltd. For additional information Mobile Internet Supplement, please visit our website www.telecomasia.net or contact: Managing Director Johnathan Bigelow jbigelow@questexasia.com Group Publisher Gigi Chan gchan@questexasia.com Regional Sales Director, APAC Jessie Cheung jcheung@questexasia.com Group Editor Joseph Waring jwaring@questexasia.com Global Technology Editor John C. Tanner jtanner@questexasia.com Online Editor Fiona Chau fchau@questexasia.com Art Director Dick Wong dwong@questexasia.com Production & Web Manager Pauline Wong pwong@questexasia.com Editorial and publishing office Questex Asia Ltd 13/F, 88 Hing Fat Street, Causeway Bay, Hong Kong Tel: +852 2559 2772 Fax: +852 2559 7002 Website: www.telecomasia.net Subscription Hotline: +852 2589 1313 Subscription Fax: +852 2559 2015 E-mail: customer_service@telecomasia.net
Mobile Internet supplement is published by Questex Asia Ltd, 13/F, 88 Hing Fat Street, Causeway Bay, Hong Kong. Printed in Hong Kong. 2012 Questex Media Group LCC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage or retrieval system, without permission in writing from the publisher.

# of residential customers

# of mobile # of business customers customers

From there we can rapidly provide you some high level results showing the potential benefits the solution can enable and discuss with you the potential. We trust you will be pleased with the results and can delve deeper over two weeks to with your inputs to provide a more customized understanding the benefits based on your network configuration. In this two week deployment, our account team will work with you to further refine the business model. From here we request to meet with you on the results and show what steps can be taken do develop a full operational model that will aid your organization in monetizing the network but also aid in efficient capacity planning.

Contacts
Email one of the following addresses below to set up an appointment to learn how to engage with Cisco on the TCO Challenge. tco-emea@cisco.com tco-americas@cisco.com tco-apjc@cisco.com

4 l Newswire

Mobile Internet Supplement

Mobile Internet Supplement

Newswire l 5

Mobile TV users spend more time viewing

obile TV has become a convenient service which is even capable of replacing traditional TV for some people, MobiWorld Media found out in its new SPB TV survey. Of 47,000 respondents, 60% said they mostly watch mobile TV at home. Most surprisingly, 36% usually watch TV on their mobile devices over 30 minutes uninterruptedly while 39% watching do so several times a day and 27% several times

Smart devices drive Taiwan subscriptions

a week. The survey found that most of mobile TV subscribers appreciate features like freedom to shift between different types of internet connections Wi-Fi, 3G, Edge, LTE, etc. (57% of the respondents find this feature crucial). As for the content preferred, movies & series is the users favorite channel category for both live and on-demand TV, followed by travel & discovery programs and news.

More than a quarter of respondents (28%) are ready to pay $1 to $5 a month for mobile TV services. Of the 48% willing to pay, they chose one month as the most convenient subscription period while 22% would subscribe for even a longer time. When asked about other TVenabled devices they use, 43% of respondents marked out internetconnected TV sets and 30% use desktops, but smartphones still won with 56%. l

oice-only subscription plans in Taiwan still have a good take-up rate of 48%, followed closely by data and voice bundled subscription plans, which formed 46% of the total mobile tariff contracts pie. Recent findings from GfK Taiwan also show that data-only plans had the lowest share of 6%. Besides these termed postpaid contracts, which formed the lions share of the total revenue earnings in the mobile tariff sector, a stabilized share of 5% was represented by prepaid cards. The popularity and widespread adoption of the latest mobile internet devices such as smartphones

and tablets have been directly fueling the rising take-up of mobile tariff plans, propelling the sectors value in recent times to the highest it has ever been in the country, said general manager Lydia Huang. An emerging trend is the willingness of consumers to commit to a longer-term contract in order to enjoy greater savings for their mobile device, Huang said. For instance, while only 27% of subscribers in November 2011 chose to sign on a contract beyond the two-year term, the proportion rose steadily over the next consecutive months to reach 43% in March this year.l

Smarter charging boosts mobile internet uptake

marter management and charging of mobile internet can enhance the consumer experience as well as secure operator revenue, according to a new study from Ericsson ConsumerLab. The Smarter Mobile Broadband report focused on internet usage via mobile phones and was conducted in the US, UK, Indonesia and Brazil, covering more than 2,300 interviewees aged 16-59 years. Among respondents, 40% to 45% said they would use the internet on their mobile phones more if they had access to better speed while 30% to 45% said that a lower price of data is a key element to increase usage.

Also, 30% to 40% said that a better battery life for the mobile phone is important. The same percentages said that having a better network coverage also influences usage. Many consumers also express frustrations about paying for a plan that is not fully used and, in turn, favor more personalized price plans. Users from the UK and US who have experience with unlimited plans are more cautious about moving to differentiated plans. However, in the primarily prepaid markets of Brazil and Indonesia, consumers are used to paying for what they use and topping up when necessary. l

NFC-ready POS terminal shipments double

he market for near field communicationready POS terminals grew in 2011 with annual shipments doubling to an estimated 2.5 million units worldwide, according to a new report from Berg Insight. The rapid growth was driven by a transition in the NFCpayments ecosystem from performing trials to accelerating the rollout of NFC-ready payment infrastructure, in preparation for the arrival of NFC-based mobile payment services. Berg Insight forecasts that the global installed base of NFC-ready POS terminals will grow at a

LTE equipment to hit $17.5b in 2016

he global 2G, 3G and 4G equipment market decreased 14% to just under $10 billion in the first quarter of 2012, following an 8% increase the previous quarter, Infonetics Research reported. We saw weak 2G and 3G activity across the board, exacerbated by China Mobiles dramatic GSM pause on the heels of extraordinary shipment levels in the previous quarter, said principal analyst Stphane Tral.

LTE and Wimax equipment revenue also declined sequentially, Tral said. Nonetheless, LTE spending is up 128% from the year-ago first quarter, and the number of mobile operators committing to LTE continues to increase rapidly. Infonetics also found that from the year-ago first quarter, the overall 2G, 3G, and 4G infrastructure market including LTE and Wimax equipment shrank by 8%.

One bright spot of the quarter is 3G mobile packet core network equipment, which went up 4% sequentially and up 5% yearon-year, reflecting ongoing 3G expansion activity tied to 2G modernization. Infonetics expects a spike in TD-SCDMA equipment spending this year due to China Mobiles expanding TD-LTE trials aimed at helping it move quickly to 4G.l

CAGR of 49.4% from 3.9 million units in 2011 to 43.4 million units in 2017. This corresponds to an increase in the penetration rate from 8% to 53% over the same period. Penetration is projected to be highest in North America where an estimated 86% of the terminals will be NFCready by 2017. Europe and the rest of the world will have 78% and 38%, respectively. Berg Insight expects that the emergence of mobile wallet services will be the most significant development in the payments industry in the next few years. l

Phone customers use more data than any other smartphone users, and account for 80% of the top 10% of heaviest data users, according to a report from Analysys Mason. Of those smartphone consumers who are in the 70th percentile or above in terms of data usage, iPhone users appear more than three times as frequently as the next most data-hungry consumer segment those who have Android on HTC devices. This is based on data derived from Arbitron Mobiles on-device monitoring app that provided access to the smartphone behavior of more than 1,000 panelists for two months in the US, UK, France, Germany and Spain. Analysys Mason said the high usage at the top end of the user base means that average monthly smartphone data traffic levels which stood at 807MB per month for the panel are 3.5 times higher than median data traffic levels generated by individual users (221 MB per month). Nearly one million unique apps are available globally, but the report found that each panelist used an average of only 32.6 add-on apps during the two-month observation period. Of those apps, 47% were used only once.l

iPhone users most data-hungry

6 l Coverstory

Mobile Internet Supplement

Mobile Internet Supplement

Coverstory l 7

Wi-Fi blurs the broadband lines

Wireless devices and video will drive the majority of IP traffic in 2016 and thanks to Wi-Fi, most of it will be over fixed-line networks
ts not news that IP traffic is growing at exponential rates and will continue to do so for at least the next decade, just as its not news that mobile devices and video will play an increasingly significant role in that growth. However, the latest Visual Networking Index report from Cisco Systems illustrates in no uncertain terms that while wireless is destined to dominate the internet and video is going to be the fastest-growing mobile service driving it fixed-line broadband will still be carrying the majority of that traffic five years from now, thanks to Wi-Fi offload. First, the big picture.

According to Ciscos latest VNI forecast, released at the end of May, global IP traffic has increased eightfold over the past five years, and will increase nearly fourfold over the next five, with annual global IP traffic expected to reach 1.3 zettabytes by 2016 (a zettabyte equal to a trillion gigabytes, if that helps). On a per-month basis, that works out to 110 exabytes per month by 2016 globally, compared to 31 exabytes per month last year (a CAGR of 29%). In Asia Pacific, IP traffic will grow slightly faster at 31% CAGR to reach 40.5 exabytes per month by 2016. Cisco attributes those figures to a number of industry trends,

all of them directly or indirectly related to wireless, from the increasing number of device types (smartphones, tablets, e-readers, home gateways and M2M connections) and growing internet penetration (3.4 billion internet users in 2016, or 45% of the projected global population) to faster average broadband speeds, video and Wi-Fi usage.

Wireless drives fixed traffic

Looking more specifically at mobile data traffic growth, Cisco is projecting mobile data traffic to increase 18-fold at a CAGR of 78% to hit 10.8 exabytes per month worldwide by 2016. Thats three times faster growth than

fixed IP traffic in the same forecast period. Interestingly, despite that growth, mobile data traffic will still account for just a fraction of the worlds IP traffic just 10% in 2016 (albeit compared to just 2% last year). And yet Cisco also says that internet traffic from wireless devices will surpass the volume of traffic from wired devices by 2016. The latter projection doesnt contradict the former because Cisco is factoring Wi-Fi into the equation. Cisco expects over half of the worlds internet traffic to come from Wi-Fi connections in 2016, and those Wi-Fi access points will be connected to fixedline broadband networks, many via home gateways. As such, the VNI report says, The trend toward mobility carries over into the realm of fixed networks as well, in that an increasing portion of traffic will originate from portable or mobile devices. In other words, while wireless devices connecting direct to mobile broadband networks will account for a tenth of global IP traffic in 2016, wireless devices connecting to fixed-broadband connections via Wi-Fi will account for 51%. Result: wireless devices will be generating well over 60% of global IP traffic one way or another.

The trend toward mobility carries over into the realm of fixed networks as well, in that an increasing portion of traffic will originate from portable or mobile devices
and business services sectors. And on the consumer mobile side, unsurprisingly, its all about video. Cisco estimates mobile video will be the fastest-growing consumer mobile service (compared to gaming, music, social networking, location based services, m-commerce and messaging). The mobile video user base will grow from around 271 million in 2011 to 1.6 billion users in 2016 (at a CAGR of almost 43%). Mobile video growth will even outpace growth in the digital TV (12% CAGR) and online video (9% CAGR) segments, according to Cisco. Actually delivering that video does create provisioning challenges, although Cisco says such challenges can be met by intelligent networks. This video trend can also create opportunities for service providers to leverage popular content across multiple platforms, thus increasing revenue streams and enhancing network monetization. For those people wondering what all this means for SMS whose demise has been regularly predicted any day now ever since smartphones became popular Cisco reports that text messaging isnt going anywhere. While consumer SMS will see the slowest annual growth of all segments

Global IP traffic, wired and wireless

Mobile video vs SMS

A new element in this years VNI is the Service Adoption Forecast, which as the name implies looks at adoption of services in the consumer mobile

Source: Cisco VNI

8 l Coverstory

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Mobile Internet Supplement

Research Note l 9

Android peaks as phone market slows

in the Service Adoption Forecast (a mere 8.3%), thats still decent growth for what is decidedly a mature market. And it will be the service with the highest global penetration rate in 2016 90% of the worlds 4.1 billion mobile users will use SMS by then, compared to 74% of 2.8 billion mobile users last year. The second-fastest growing consumer mobile service behind video is mobile commerce, according to the Service Adoption Forecast. However, second fastest is a technicality m-commerce is projected to grow at 42.7% CAGR, just 0.2% lower than mobile video. More to the point, its expected to reach far more users 2.1 billion in 2016, compared to 1.6 billion for mobile video. Asia Pacific will lead the charge in mobile commerce throughout the forecast period, growing from almost 100 million in 2011 to 974 million in 2016. Middle East and Africa will have the second-highest number of users in 2016, reaching 424 million. Cisco says the growth figures point to a growing acceptance by consumers of the functionality of mobile commerce services, from mobile shopping and payments to banking, toll-road payments and event ticketing. However, the report notes that such services will have to overcome the usual concerns from consumers over mobile-based transactions, particularly when it comes to security, device vulnerability and protection of financial information. data plans to tiered packages (or at least trying to), one interesting aspect of this years VNI is the impact of tiered pricing models on mobile usage. According to Cisco: Average consumption per user in an unlimited pricing plan is nearly twice that of a user of a tiered pricing plan. However, traffic per user has increased 169% for tiered pricing plans compared to 83% on unlimited plans, indicating that tiered pricing users may be seeking to fully maximize their usage plans. Cisco adds that new findings indicate that the top 1% of users is different each month. Therefore, out of each 10,000 users, there are not only 100 heavy users (1%), but 500 to 1,000 users (5% to 10%) that are in the top 1% at some time during the course of a year. l

Feature phone slump will slow overall growth, while Androids market share is expected to peak in 2012
his year is set to be a banner year for Android, but not for the mobile phone market overall as a slump in the feature-phone market limits growth to single digits. According to the latest Worldwide Quarterly Mobile Phone Tracker report from research firm IDC, vendors will ship a total of nearly 1.8 billion mobile phones this year, compared to 1.7 billion units shipped in 2011. Thats a mere 4% growth year on year, and the lowest annual growth rate for the mobile handset sector in three years. IDC credits the expected slowdown to a projected 10% decline in feature phone shipments in 2012. While feature phones will still comprise 61.6% of the total mobile phone market this year, many feature phone owners are holding on to their phones in light of uncertain job and economic prospects, IDC says. On the bright side, the smartphone segment will offset the feature-phone slump with a 38.8% increase to 686 million units, driven by high carrier subsidies, falling average selling prices and component costs, increased awareness and device diversity, and lower-cost data plans among other things. The smartphone parade wont be as lively this year as it has been in past, said Kevin Restivo, senior research analyst with IDCs Worldwide Quarterly Mobile Phone Tracker. The mobile phone user transition from feature phones to smartphones will continue in a gradual but unabated fashion. Smartphone growth, however, will increasingly be driven by a trium-

OS winners & losers

Source: IDC

Tiered pricing impact

With the mobile industry moving away from unlimited

Mobile data and internet traffic

2011 2012 2013 2014 2015 2016 CAGR 2011-2016

By Geography (PB per month) Noth America Western Europe Asia Pacific Latin America 119 259 493 844 1,305 1,964 75% 180 366 684 1,161 1,705 2,438 68% 206 438 832 1,503 2,614 4,323 84% 40 77 146 267 455 738 79%

Central and Eastern Europe 34 68 134 253 439 706 83% Middle East and Africa Total (PB per month) Mobile data and internet
Source: Cisco VNI

18 45 91 187 378 635 104%

597

1,252

2,379

4,215

6,896

10,804

78%

virate of smartphone operating systems, namely Android, iOS and Windows Phone 7. Most of that will be Android, which will dominate the smartphone sector for the next four years. IDC expects Android to account for 61% of the smartphone OS market this year, driven largely by Samsung sales. On the downside, thats as good as its going to get Androids market share will slip to just under 53% by 2016. Interestingly, it wont be Apple taking the credit for nibbling away Androids market share, but Windows Phone. Indeed, Apple is expected to see its market share slip just a tad from 20.5% this year to 19% in 2016. By contrast, Windows Phone will be outselling iOS phones by that time, as its market share grows from an estimated 5.2% this year to 19.2% in four years, putting it in the No. 2 slot. (To keep that in perspective, iOS will still see healthy 10% CAGR

growth in that time frame.) Unsurprisingly, with Nokia now committed to Windows Phone, Symbian is fast slipping into obscurity. IDC expects Symbian-powered smartphone shipments to effectively grind to a halt in the next two years. More surprisingly, however, the same fate wont befall BlackBerry OS, the current woes of Research In Motion notwithstanding. IDC insists there will still be a market for BlackBerry OS-powered devices in emerging markets, for example, where users are looking for affordable messaging devices. However, while BlackBerry will more or less maintain its current market share level (projected to be 6% this year and 5.9% in 2016), IDCs Restivo says the gulf between the BlackBerry OS and its primary competition will widen as the mobile phone market becomes increasingly software/app-oriented and the bring your own device enterprise trend proliferates. l

10 l Analyst Insight

Mobile Internet Supplement

Mobile Internet Supplement

Analyst Insight l 11

Mobile payments to hit $171.5b in 2012

Gartner expects the market to experience fragmented services and solutions for the next two years
orldwide mobile payment transaction values will surpass $171.5 billion in 2012, a 61.9% increase from $105.9 billion in 2011. According to Gartner, the number of mobile payment users will reach 212.2 million this year, up from 160.5 million last year. We expect global mobile transaction volume and value to grow an average of 42% between 2011 and 2016, and we are forecasting a market worth $617 billion with 448 million users by 2016, said research director Sandy Shen. This will bring opportunities for service and solution providers that will need to cater to the local demand patterns to customize their offerings. Gartner also found that the market will experience fragmented services and solutions for the next two years. Technology providers will have to cater their solutions to the local market that will be using different access technologies, business models and partners, and under different regulatory conditions. There will be a few global players that have the scale and resources to serve large customers and the mass market whose requirements can be readily satisfied by standard solutions, Shen said. She added that, on the other hand, there will always be segments that cannot be sufficiently served by the global players. Shen said the demand of these segments can only be satisfied by specialized or local players that can better understand the segment and have specific solu-

Govt moves to shape M2M cellular modules market

IMS Research says regulations will drive growth in the automotive and healthcare sectors

rolled out nationwide in the US, following a successful pilot program, and Gartner expects a large number of merchants to introduce their own mobile payment services, trying to emulate Starbucks success. In developing markets money transfer and airtime top-ups will account for most transaction volume, and money transfers will account for the largest portion of the transaction value because of the demand for secure and efficient ways of storing and transferring money. Ticketing and parking also appeals across many markets because it can improve efficiency in transacting, as well as offering user convenience. In developing markets, such as in Africa and South Asia, users can buy Three years away bus and railway tickets using a moShen said NFC payment bile payment service so that they can involves a change in user behavior secure tickets earlier where tickets and requires collaboration among are often in short supply. stakeholders that includes banks, Gartner projects that eastern mobile carriers, card networks and Europe will see the highest user merchants. It takes time for both to happen, so we dont expect NFC growth between 2011 and 2016, albeit from a smaller user base. payments to come into the mass Asia Pacific tops all regions in market before 2015. In the meanthe number of users, followed by time, ticketing, rather than retail Africa. This also contributes to payment, will drive NFC transachigh transaction volume, where tions. the two regions combined will In addition, merchandise account for more than 60% of the purchases will drive transactions in North America and western Europe. global mobile payments volume in 2016. Africa tops all regions in These will include e-commerce transaction value throughout the purchases where users buy online, as well as in-store purchases. Major forecast period, benefiting from a higher proportion of money transfer e-tailers such as Amazon and eBay transactions that have higher value have developed strong mobile storefronts and have seen significant per transaction than other use cases. North America is the third-largest growth from the mobile channel. region by value in 2016 and is twice For in-store purchases, Starbucks the value of western Europe. l Card Mobile app is now being tions to meet the unique challenges. SMS remains the dominant access technology in developing markets because of the constraints of mobile devices and the ubiquity of SMS. Web/WAP is the preferred access technology in North America and western Europe where mobile internet is commonly available and activated on user devices. Gartner expects Web/WAP access to account for about 88% of total transactions in North America and about 80% in western Europe by 2016. Near field communication (NFC) transactions will remain relatively low through 2015, although growth will start to pick up from 2016.

overnment directives, along with other dynamics in the market such as dropping module prices, will propel annual module shipments for machine-to-machine (M2M) communications to more than 118 million units by 2016. IMS Research, in its latest edition of a report titled World Market for Cellular Modules in M2M Communications, forecasts that the greatest impact of these government regulations will be in the automotive sector. Separate mandates in Brazil, Russia and the Europe Union are expected to require that automobiles have cellular connectivity in upcoming years. In the Europe Unions eCall and Russias ERA GLONASS initiatives, the inclusion of cellular technology is intended to support mandatory emergency call systems that allow for immediate notifications to emergency services when an automobile is involved in an accident. In Brazils Contran 245, cellular technology will be required to assist in the tracking and recovery of stolen vehicles. These government initiatives are intended to address different issues and concerns, and demonstrate the wide variety of uses that cellular technology can have in the automotive market, said senior analyst Josh Builta. It is expected that these regulations, along with consumer demand for connected infotainment systems will result in strong growth in shipments of cellular modules to the automotive

there is no industry other than automotive that has greater potential for cellular M2M communications, Builta said. As medical expenditures continue to rise, governments worldwide will increasingly promote the use of technology, including cellular, to provide affordable healthcare solutions, he added. IMS Research projects that partially due to these increased government initiatives, module Great potential in shipments into the medical market healthcare will grow at more than a 95% The firm also believes that CAGR from 2010 to 2016. government initiatives aimed However, Builta cautions that at reducing cost and improving government regulations can also efficiency could eventually drive uptake of cellular modules in other serve to inhibit uptake of cellular modules in these same markets. markets such as healthcare. In Cellular-enabled medical devices, many countries, governments are already beginning to look at home- for example, are typically required to go through a complex and based remote monitoring devices that frequently incorporate cellular time-consuming approval process through multiple regulatory bodtechnology as a way to maintain ies, he said. Furthermore, govhigh standards of care in a costernment standards are often not effective manner. the same in each country, meaning Given the aging population this process is even more difficult and healthcare cost concerns, it is if manufacturers want to sell their not surprising the US government cellular-connected devices internahas been at the forefront of these tionally. efforts with legislation such as the Regulations could also negaFostering Independence through tively impact the market for celthe Technology Act of 2011, the Veterans Telehealth and Telemedi- lular modules in the automotive cine Improvement Act and Califor- industry. Government actions that nias Telehealth Advancement Act. aim to reduce distracted driving could force manufacturers to limit To date, the overall uptake the functionality of applications of cellular modules in the medical market has been fairly limited [but] such as connected infotainment systems. This could result in reducconsidering the size of the aging population and increasing number ing the popularity and consumer demand for such systems. l of people with chronic diseases, market in upcoming years. IMS Research expects that if these respective programs achieve their intended results, it could spur governments in other countries to enact similar legislation. The company forecasts that in 2016, more than 45.4 million cellular modules will be shipped to the automotive sector, representing about 38% of that years total shipments.

12 l Q&A

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Mobile Internet Supplement

Q&A l 13

Preparing for the Next-Gen Internet

Andrew Mackay, Ciscos manager for mobile architectures for Asia-Pacific, Japan and China, defines the Next-Gen Internet and explains what it will mean to telcos
Mobile Internet: What is the expected impact of the boom in smartphones and tablets on mobile networks and how can telcos prepare for the impending surge? Andrew Mackay: Smartphones and tablets offer a tremendous opportunity for operators to redefine their role in the mobile ecosystem, but they also threaten the foundation of their business. The mobile broadband era started with bundled 3G modem plans mainly for corporate users. With little scope for operator differentiation once coverage and speeds became comparable, inevitable price wars eroded revenue while encouraging consumption, hitting profitability with a double whammy. Most APAC markets are still stuck in this vicious circle. This new smartphone era offers a way to regain differentiation, built not just on dumb access but also by shaping the services and content the devices enable. However, embracing smartphones and tablets means operators face exponential throughput demands, while competing with a host of new players for a share of subscriber spend. These devices also encourage use of off-net Wi-Fi access whenever possible, which threatens the heart of an operators proposition, where controlling internet access itself is no longer a given. Preparing for the boom means being able to scale capacity without costs spirally, and having the right business framework and network enablers to shape the complete user experience. How does Cisco define the Next-Generation Internet? The Next Generation Internet is mobile, not The solution to operator profitability lies in the right balance of top-line revenue per bit yield management with bottom-line cost per bit scalability. Foundational business analytics need to be in place to understand the revenue and associated variable cost to serve every service stream. Only then can the services be orchestrated to extract maximum value from the network. Since networks cant be expected to just scale as they have in the past, they instead need to adapt to the new normal, by recognizing that services have distinct user requirements and operator value. For example, not all services need low latency and high mobility, so differentiated access can be exploited. Networks also have to be more dynamic with resource allocation to increase utilization, plus be able to optimize traffic, particularly video. As services and apps move off the device onto the network, how will telcos make money from the cloud besides merely boosting traffic on their networks? The strategic value of the cloud is not just in increasing traffic and traditional XaaS cloud services. Virtualization and the cloud give the operator the flexibility to create services and capacity on demand, to experiment and try new offers and business models. Cisco for some time has been leading in creating synergies between the network and the cloud. We have architectures that are more virtualized and converged to cope with elastic demand and rapid service creation. How much revenue potential is there for service providers in connecting the unconnected in developing markets? Where do you see the main opportunity? The main opportunity in connecting the unconnected is in mobile broadband. If we look at APAC as a whole, mobile penetration is around 75% of the nearly four billion population, yet mobile broadband penetration is only around 8%. Clearly the opportunity for growth is huge, if data services can be overcome the challenges of reachability and affordability. We look forward to the coming of the digital dividend to APAC in the coming years. What role will small cells and Wi-Fi play in enabling telcos to bring down the cost per bit? Given spectrum constraints, and the ever more challenging task of acquiring macro sites, densification with small cells (in either licensed or un-licensed bands) is inevitable. The proliferation of Wi-Fi enabled smartphones and tablets is already leading to large-scale off-load at home and in the office. In several developed markets we have also seen femtocells filling a requirement for more ubiquitous indoor coverage and capacity. Operators and vendors alike are now forming the strategies for the role of small cells outside the home and office. They are already proving more economical for serving the bandwidth requirements of hotspots, venues and even urban hot-zones with cost per bit of more than six times better then 3G macro capacity seen in some Cisco studies. There are environments where user density and demand reduces and the economics of scale and outdoor small cells no longer make sense. But current small-cell deployments are a long way away from this cross-over. l

Ciscos Andrew Mackay fixed in time or space. A user no longer wants silo services but rich multi-media My Way experiences that follow them through-out the day as they live, work and play. A device is no longer a handset or dongle, but any-screen media players and internet portals, plus no-screen connected things. For the operator the Next Generation Internet is one of unpredictable demand and business models. Rapid device and application developments spur rapid network demands and constantly changing user services. The old days of the operator controlling the eco-system, hence service demand, are over, now it is a much more dynamic and complex place to do business. We are calling this the new normal since the operator needs new approaches to remain profitable. Sustainability in this new normal requires new network attributes: heterogeneous, elastic, intelligent and orchestrated. On the consumption side, with the huge growth in data and video usage, how can service providers profitably manage their cost curve?

14 l Products

Mobile Internet Supplement

Mobile Internet Supplement

Products l 15

iBasis launches LTE signaling exchange

(SMART) Tunnel the worlds longest multi-purpose tunnel at almost 10km. Comba provided multiBasis, a KPN company, operator, multi-system 2G/3G announced the launch of uawei has unveiled its its LTE Signaling Exchange Backhaul Adaptive Solution, distributed antenna system (DAS) products and solutions. Under the (LSX), which will allow MNOs a mobile broadband contract, Combas wholly-owned to connect to hundreds of other solution that provides operators Malaysian subsidiary Comba operators through a single with an IP backhaul performance Technologies is also providing full interconnect and assure LTE monitor (IPPM) and IP backhaul maintenance services. roaming interoperability across quality management (IP SQM) The completion of this project multiple vendors. services for improved efficiency. has facilitated ubiquitous wireless Demand for the LSX is a result The solutions IPPM service voice and data experience with of the disruptive nature of LTE constantly monitors quality of seamless handover at high speeds and the evolution from traditional service between the eNodeB within the tunnel. SS7 (MAP) signaling to IP-based and the EPC serving gateway Combas DAS solution Diameter signaling. The iBasis according to speed, delay, operates at the GSM900, LSX runs on iBasis IPX network, jitter and packet loss. The GSM1800 and UMTS frequencies a multiservice, global IP network solution adjusts for bandwidth used by Malaysias operators that delivers high quality voice bottlenecking according to Digi, Celcom and Maxis in this and data services for mobile changes in network quality and project. operators. realizes adaptive adjustments for The SMART Tunnel is a storm A number of mobile network bandwidth transmission. drainage and road structure in operators, including UNE, a The IP SQM service focuses Kuala Lumpur, Malaysia, with leading telco based in Colombia, on the downlink from the EPC and Dutch operator KPN have serving gateway to the eNodeB to daily traffic of over 30,000 agreed to connect to iBasis realize smooth levels of data traffic vehicles. The tunnel comprises of a 9.7-km bypass tunnel for storm LSX Sandbox, which provides a and buffering. The IP SQM also water and a 4-km double-deck comprehensive trial environment supports both static and dynamic motorway. l in preparation for launching bandwidth adjustments based commercial LTE roaming on data provided by the IPPM services. and increases backhaul usage The LSX Sandbox enables and improves user experience Cisco unveils mobile testing of a full range of by decreasing packet loss and core platform technical operations, including retransmission. basic roaming, policy control Test results show that when isco has unveiled its ASR and charging, Diameter S1 link congestion occurs, TCP 5500 platform, touted as interoperability, signaling transmission efficiency is improved the foundation for a new accounting and MAP-Diameter by up to 50% when the solution is generation of mobile internet interworking. employed. l networks. The iBasis LSX reduces The Cisco ASR 5500 system complexity and cost while promises to deliver the agility ensuring high quality of service and scale that service providers Comba wraps up for roaming customers. The need to meet the evolving mobile SMART Tunnel LSX allows MNOs to connect requirements of their customers. to hundreds of downstream As the industrys first elastic project in Malaysia operators through a single solution for mobile networks, interconnect and normalizes it was designed to capitalize omba Telecom Systems messages to enable interoperability on breakthroughs in software has completed a contract on behalf of each roaming partner. architecture optimized on new, to supply and deliver a It also interworks with existing wireless communications system purpose-built hardware. SS7 networks. l These design characteristics for Malaysias Stormwater address three multi-dimensional Management and Road

Huawei unveils mobile backhaul solution

challenges known as the new normal, which includes the dramatic growth of mobile lifestyle devices, increased usage of next-generation applications, and rise of the internet of things or machine-to-machine (M2M). Cisco claims that the ASR 5500 system is the only elastic packet core solution capable of integrating signaling, data, in-line services, and policy and charging control within a single platform. The system is also said to be the only solution capable of autosizing existing network resources to address dramatic variations in network behavior. l

security without reengineering their existing network and without loading anything onto the mobile devices. This solution not only allows operators to provide comprehensive security, but also enables new revenue and customer acquisition opportunities while avoiding the high costs of provisioning and managing security software on mobile devices, said CEO Hongwen Zhang. l

access point, is well suited for emerging markets and single AP deployments not only where the demand for mobile internet services is also rising but where tighter economic constraints on network investments dictate a balance toward lower cost over sheer performance. l

Altair unveils TD-LTE chipset

Wedge Networks launches security solution

edge Networks has launched its Mobile Security Module for service provider and operator networks. The module features the most comprehensive mobile threat intelligence, rapid deployment and zero device footprint which all allow operators to protect their network, enterprise customers and subscribers from mobile malware and malicious threats. The Mobile Security Module promises to reduce operational costs as it helps control compromised devices, reduce support calls, encourage self-management and eliminate illegitimate traffic on the network. The module also offers rapid deployment into existing networks through the WedgeOS which combined with its inline, L2 transparent network stack allows service providers and operators to rapidly enable mobile

ltair Semiconductor has released a cost and featureoptimized chipset tailored Ruckus launches for the Indian TD-LTE market, indoor Smart Wi-Fi which is expected to become one of the fastest-growing LTE gear markets in the world. The chipset, dubbed Hornet, uckus Wireless has launched is the result of several years its highest-capacity threeof working very closely with stream (ZoneFlex 7982) and dual-stream (ZoneFlex 7321) leading carriers in India, and was developed based on the 802.11n Smart Wi-Fi access points for carriers and enterprises stringent cost and performance requirements of the Indian that need increased wireless performance, capacity and ease of wireless market. The combination of the use. explosive growth expected The ZoneFlex 7982 and in Indias broadband market, ZoneFlex 7321 integrate a together with the challenging collection of technologies cost requirements to enable this not found in any other Wi-Fi growth, is very unique compared system, the company said. These to other global markets, said capabilities increase signal gain, mitigate RF interference and allow Eran Eshed, co-founder and each ZoneFlex AP to adapt to the VP of marketing and business development at Altair. changing nature of Wi-Fi signals Altair-based TD-LTE products from each connected mobile are commercially deployed device. in Brazil and the company The Ruckus ZoneFlex 7982 has completed advanced prea high-capacity, three-stream commercial field trials with 802.11n access point that carriers around the world, combines dynamic polarization including Softbank in Japan, diversity with adaptive antenna arrays and transmit beam-forming China Mobile and leading carriers in India. Altairs TD-LTE solution technologies to give customers is the first to have demonstrated up to a 4x improvement in Wi-Fi Category 4 throughputs publically performance, signal gain and in China and Japan. l reception. The ZoneFlex 7321, an affordable dual-stream 802.11n

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