Strengthening the Bottom Line: Asymmetrical Ethernet, Cable, OTN and White Spaces. Wednesday, September 25, a.m.-11:45 a.m.
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1 Strengthening the Bottom Line: Asymmetrical Ethernet, Cable, OTN and White Spaces Wednesday, September 25, a.m.-11:45 a.m.
2 PLEASE SILENCE YOUR CELL PHONES THANK YOU!
3 Moderator: Darrin Mylet, Business Operations and Regulatory Affairs, Adaptrum Speakers: Eric Fligel, Vice President of Network Engineering, WOW! Internet Cable and Phone Pasha Mohammed, Vice President, Product Management-Network Services, MegaPath Stephen Smith, Principal Solutions Architect, Packet Optical Networking, Fujitsu Network Communications
4 Global Market Size 2013 Global telecoms service providers revenues reaching $2.0 trillion and growing. (30x gap in Supply and growing rapidly with online video?) Over the next five years, U.S. enterprises are expected to spend more than $49 billion on Ethernet services provided by carriers. That's one finding in a new report from Insight Research, which says industry revenue will grow from nearly $5.5 billion in 2013 to more than $13 billion by Broadband supply and demand is similar in all market segments, Macro vs. Micro markets may require different technology and strategies. We will hear some thoughts on this today.
5 Capex/ROI At Macro level, are major incumbent US operators investing appropriate Capital to satisfy demand? Record Dividends/Stock Buybacks/CEO Pay? In 2012 AT&T s shareholder returns-to-capex ratio exceeded 100%-returned 17% more cash to shareholders than it invested in its networks VZ $120+ Billion buyout to Vodafone Maintenance of legacy infrastructure vs. transition to all IP a big technical and regulatory challenge How do you add net profit to the bottom line in this environment?
6 Where do we consume data? PLEASE SILENCE YOUR CELL PHONES THANK YOU!
7 Legacy Infrastructure is the mainstay, how do we add capacity specifically to where it is demanded and make profit? Fiber, DOCSIS 3.0, Advanced DSL & Wireless are among many of the solutions which we will discuss today.
8 Google Fiber, is this the bar?
9 WOW! Wholesale Services Overview Using Cable Infrastructure for Last Mile Ethernet
10 Cable and the Wholesale Market WOW! Is a privately held Cable MSO with 19 markets located in the Midwest and Southeast US. Want to be seen as a different type of cable company with a commitment to provide excellent service and create stress-free experiences for our customers Award winning customer service (JD Power, Consumer Reports) Acquired Knology properties a little over a year ago Made strategic decision to create Business Services division 10
11 Cable and the Wholesale Market 11
12 WOW s Approach Enabling Last Mile Carrier Ethernet is Good Business Build with Wholesale in Mind From the Beginning Take Advantage of Sizeable Fiber Assets (40,000 miles) Build a Flexible & Scalable Network Architecture Choose Sensible E-NNI Locations (national and local) Dedicated Wholesale Account Teams Systems, Processes and People Focused on Service Providers 12
13 WOW! Network Service Map Network Facts 12 States 19 Markets 40,000+ miles of local plant 150,000 locations within 500 of build out distance of our network ~3,000 wireless towers in markets served Major Interconnection Points Atlanta / 56 Marietta Chicago / 350 Cermak Ashburn VA / Filligree St IP Gateway Locations are available in each of our markets. Aggressive Build Intervals to suit specific business needs. 13
14 The Formula Reliable, Consistent Platform Focus on Layer 2 transport services for wholesale Consistent product and equipment in all markets Follow MEF specifications for standardized services Flexible Architecture 10Mbps to 10Gbps available Customized Ring and Point to Point topologies available Fiber Construction is what we do Systems and Processes for Carriers Customized solutions designed for our partners needs End to end service monitoring Customer web portal 14
15 Darrin Mylet, Business Operations and Regulatory Affairs, Adaptrum A Silicon Valley company developing wireless/ technology solutions to meet the growing wireless/ broadband demand. Adaptrum was an active participant in the FCC TV Whitespace Device Testing in In 2012, Adaptrum introduced the first, fully functional FCC Certified, TV Whitespace radio system. Next month, Adaptrum will launch a low cost commercial FCC Certified TVWS solution.
16 Open / Shared Spectrum Is Your Friend Licence-Exempt connectivity is near ubiquitous in smartphones, tablets and PCs 2013 fewer than 2.5 billion devices will be sold that are enabled with licensed connectivity. However, over 5 billion devices will be produced that use licence-exempt communication technologies. This disparity is set to increase. The majority of Internet data traffic delivered to end-users Wi-Fi carries 69% of the total traffic generated by smartphones and tablets and 57% of total traffic generated by PCs and laptops. China mobile indicate roughly 75% traffic over Wi-Fi. *Richard Thanki New White Space technology is coming to market now.
17 3G/4G Network Disconnect
18 How Do You Get Capacity From A to B?
19 Indoor Enterprise Demand Bandwidth Starved Areas Each Building Represents Potential Revenue Primary/Secondary Access T-1 / T-3 Price/Availability Specific alignment of Capex/Opex with BB demand Wireless is one way to reach these sites.
20 Outdoor Consumer Demand Mobile Carrier Networks not optimized for data Carriers push customers to find Wi-Fi Statistics validate this trend This network can be X faster than all others. Can you supply this and make money?
21 White Space Creates Small Cells Demand Driven Capacity/Coverage Core, Backhaul & Wi-Fi Expertise
22 Asymmetrical Ethernet Pasha Mohammed Vice President, Product Management MegaPath
23 MegaPath Overview MegaPath is the leading provider of managed IP communications services in North America. MegaPath operates one of the largest end-to-end communications networks in the U.S. Dedicated Wholesale division with broad nationwide access portfolio
24 Demand for Higher speed Global bandwidth consumption growth continues Connected devices driving most of it Cloud services adding fuel to the fire Forecast for the next 20 years shows exponential demand US is among the leaders services
25 Asymmetrical Bandwidth New business and consumer applications are driving more asymmetrical consumption As an example. At peak usage levels downstream to upstream usage is close to 4:1 ratio Cloud business applications will drive more downstream bandwidth demand Source: Alcatel-Lucent Oct 2012
26 Three key offerings: VDSL FIOS Cable Current Landscape Aggressive price per meg Built for Residential but repositioned for businesses as well No business class SLAs Limited business footprint Cable based services based on shared bandwidth at neighborhood level
27 Market Opportunities Value-based services that deliver business class performance for customers looking to support mission critical applications Wholesale designed services from a back-end perspective Bulk prequal capabilities Automated quoting Scalable and repeatable provisioning process Service that can be easily integrated into current portfolio from a go-to-market perspective
28 MegaPath s Asymmetrical Ethernet Built on the state of the art Ethernet platform Delivered using up to 8 pairs of DS0 copper loops with efficient bonding over VDSL2/ADSL2+/EFM Aggressive speeds from 8x1 Mbps to 50x10 Mbps Business class SLAs and bandwidth guarantees Support for Ethernet CoS (Class of Service) Best price per meg business service Aimed at top 700 Wire centers in terms of business demand Already launched partially continuing with expansion into 2014
29 OTN/WDM/SDN for Flexibility and Growth Stephen Smith
30 Growth of Internet Traffic Demands in North America NA Internet Traffic (PB/Month) Internet Video Traffic All Internet Traffic Source: Cisco VNI Increase in Internet Traffic for North America 285% increase in all traffic over five years 350% increase in video traffic over five years How to accommodate this growth without huge capital outlays? Fujitsu Proprietary and Confidential All Rights Reserved, 2013 Fujitsu Network Communications 30
31 Mobility Cloud Carrier Challenges Business Growth Challenges Competitive Business Models Network Service Provider Revenue vs Demand Growth Challenges 18% 16% CAPEX / Revenue Ratio Network Service Providers 14% SP#1 SP#2 Revenue Growth: 1% - 4% 12% 10% 8% 6% Apps Network Apps & Devices Cloud Network 4% 2% OTT Service Providers NA traffic demand Averaged growth: 54% 0% Amazon + Apple + Facebook + Google + Netflix "AT&T + Comcast + Verizon + Centurylink" Network Service Providers OTT Service Providers 3% Revenue Growth 14% CAPEX/Revenue 15% Revenue Growth 5% CAPEX/Revenue *Source: Cisco, Yahoo Finance Customer Relationship Fujitsu Proprietary and Confidential All Rights Reserved, 2013 Fujitsu Network Communications 31
32 Support for Private Line Revenue Revenue for US Market Packet Revenue Examples: L2/L3 VPN, Wholesale, Retail Ethernet Services Packet Service Revenue32% Private Line Services Revenue 68% Private Line Revenue Examples: ATM/FR/DS1s/DS3s/OC-N/Video/Transparent Ethernet Packet Revenue includes VPN services, Wholesale and Retail Ethernet Services $16.2B in 2013 Source: Infonetics Private Line Revenue: Losses of ATM/Frame Relay/DSx, Gains of Video and Transparent Ethernet $35B in 2013 Source: Insight Research Corporation Although revenues for Packet services is continuing to increase, the larger revenue share for the Service Providers is Private Line Carriers need a method for supporting this revenue with a Next Generation Transport Network Fujitsu Proprietary and Confidential All Rights Reserved, 2013 Fujitsu Network Communications 32
33 Capacity and Private Line To meet the challenge of the coming demand the Network Providers need to provide network capacity for Packet Services and support of Private Line Service Services The Challenge is how to do this quickly and with minimal Capital Build New Requires lots of capital Installation of fiber and Network Elements and Management Upgrade Existing Requires less capital Upgrade to higher link speeds Utilize OTN switching to achieve better efficiency of the wavelengths and support Private Line Services Reclaim fiber by transporting legacy services over OTN Optimize what Exists Requires minimal capital Utilize a Network Manager such as SDN to make better use of the Network Fujitsu Proprietary and Confidential All Rights Reserved, 2013 Fujitsu Network Communications 33
34 Metro Aggregation Networks OTN with SDN-based Packet Forwarding Access Aggregation of flows with Programmable Packet Forwarding Multi-layer forwarding reduces electronic hops/cost/complexity OTN provides for optimized connectivity OTN containers act like virtual wavelengths providing transparency and low latency SDN provides the network visibility and multiple layer control to optimize the network Packet services Multi-layer SDN Control Packet Layer Aggregation Packet Service Function 1G, 10G, Nx10G Private Line PPF PPF = Programmable Packet Forwarding Nx 1G, 10G, Nx10G 100G PPF 100G 400G Metro CO s Nx 1G, 10G, Nx10G 200G, 400G Fujitsu Proprietary and Confidential All Rights Reserved, 2013 Fujitsu Network Communications PPF Data Center CO OTN Layer Optimized Connectivity Protection Wave utilization Transparent and Private Line Services Churn Management Wavelength Layer Virtual fiber Bulk capacity Lowest cost transport 34
35 Change in Paradigm from Switch where you can, Route where you must New Paradigm Aggregate on the Edge, Ride the Wave when you can, Switch with OTN for flexibility, Steer with SDN Aggregate on the Edge Small flows into larger aggregate flows with programmable packet forwarding, LO ODU Multiplexing Ride the Wave with Wavelength Bypass of Routers/Switches Physical Wavelength Minimize 3R regens to save cost and minimize latencies Fastest and cheapest way to get information from point A to point B Switch with OTN for layer1 switching Virtual Wavelength Flexibility/low latency, Protection, Network Optimization, Churn Management, HO ODU Multiplexing Steer with SDN to direct Services on the Edge to appropriate Transport Pipes Service to Wavelength Service to OTN Switched Container to Wavelength Service to Aggregated Flow to Wavelength Service to Aggregated Flow to OTN Switched Container to Wavelength Path Determination Fujitsu Proprietary and Confidential All Rights Reserved, 2013 Fujitsu Network Communications 35
36 Summary Support of all Services including Packet and Private Line Services A single universal transport Anything/OTN/WDM SDN Control of the network Selects appropriate transport type VLAN/LSP, OTN Container, Wave Selects appropriate multiplexing New Revenue Opportunities and support of Private Line Services Steered with SDN Multi-Layer Control Better utilization of the network with OTN/WDM and SDN requires minimum CapEx and OpEx while equipping the Service Providers with the capacity that they need for future demands more revenue opportunities PL Access Network Server Network PL OTN Mux PL Access Network Server Network OTN Mux PL PL=Private Line Access Network OTN/WDM Core Network Server Network Fujitsu Proprietary and Confidential All Rights Reserved, 2010 Fujitsu Network Communications 36
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38 Speaker Contact Information: Darrin Mylet, Eric Fligel, Pasha Mohammed, Stephen Smith,
39 THANK YOU FOR ATTENDING!
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