Mobile Data Traffic Growth

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1 High Speed Connectivity and Content Delivery in a Mobile World [November 5th, 2013] 1

2 Mobile Data Traffic Growth 2

3 US Connected TVs booming The scenario in Brazil is moving fast towards it 3

4 What gets measured by Nielsen, matters First, a quick primer: The Nielsen ratings system for TV dates back to 1950 (earlier for radio) and has always been based on the principle of audience sampling. Once this was done by having folks keep paper diaries of their weekly TV viewing. Since 1986, Nielsen has used electronic people meters to track viewing and provide its audience sampling data. In 2002, Nielsen started working with TiVo to capture DVR viewing data, which has expanded over the years, and now counts views within three days of the live broadcast in the Nielsen ratings tablet diffusion (a major driver of all second-screen behavior) 4

5 Global Consumer Internet Traffic / Applications Internet Video Dominates Consumer Internet Traffic By 2013, in markets where Broadcasters OTT Content 29% CAGR are available, two Petabytes per Mont th 90,000 of the top three OTT videos services are likely to be provided by existing 80,000 broadcasters and VoIP distributors, while pure play OTT providers are 22% expected to only serve less than 10% of total TV households. 70,000 60,000 Online Gaming Source: Deloitte UK, ,000 40,000 30,000 20,000 10, File Sharing Web/Data Internet Video 23% 54% Online Gaming and VoIP forecast to be 0.73% of all consumer Internet traffic in 2016 Source: Cisco VNI Global Forecast,

6 Why are these news so important? The flow of money to the Internet is growing fast Source: emarketer and Cisco Analysis 6

7 Broadcast x Mobile Wireless Technologies () 7

8 Broadcast x Mobile Wireless Technologies () 8

9 Claro Network Facts andnumbers 3G : 2G Coverage 14,000 Sites 1800/900 MHz and 850/2100 MHz IP NodeB IPRAN 3G IP Sites : 9,000 Sites (>90%) Fiber To The Site: 7,000 Sites IP Microwave Radios: >1,500 Sites HSPA+ deployment: Fully implemented (100%) Deployment: 20% of covered pops / 18 Cities Traffic Management (Offload): Traffic Balance WiFi Hotspots: More than 5,500 deployed (Synergy with NET) Femto Solution: homologated d( (plan to rollout >100 in 2014) Small Cells / pcells: lab tests (under homologation) 9

10 Claro Network Status Coverage, Quality and Capacity Continuous growth to support new Data and Voice subscribers Cities Set'12 Set'13 Δ 2013 EoY GSM 3,633 3, ,645 UMTS 1,080 1, , Main Network Elements: Set'12 Set'13 Δ Core Elements Voice (MGW/MSS) Core Elements Data (GGSN/SGSN) GSM Radio network elements 13,384 13, UMTS Radio network elements ee e 8,417 9, ,158 Radio network elements 9 1,826 1,817 Fiber Optic IP Access for UMTS 5,703 7,021 1,318 GSM Coverage UMTS Coverage Coverage 10

11 Claro Big Events Maracanã Stadium 2G : 4 BTS 1800 MHz 3G+: MHz 3G+: MHz 4G : MHz 11

12 Claro Big Events Coverage Example using Wi Fi Access Point Installation Example Example of a coverage solution using several AP inside a stadium Equipment Dimension: Wi-Fi Antenna: 190x75x295 mm Estimation: antennae per stadium Wi-Fi Antenna (AP) 12

13 Claro in the News Quality and Customer Perception O Laboratório Digital deste mês é especial. Pela primeira vez um teste científico da qualidade do recém-lançado 4G brasileiro é aberto ao público; e não qualquer público, mas você, fã do Olhar Digital. A tecnologia móvel desenvolvida para atingir altas taxas de transmissão de dados já está em uso em algumas cidades; e, aqui em São Paulo, testamos a qualidade do 4G de três operadoras: Claro, Tim e Vivo que são as únicas que oferecem o 4G na cidade. A Oi ainda não tem rede 4G por aqui E a grande vencedora deste Laboratório Digital 4G foi a Claro; ainda que o nível de sinal não tenha sido tão alto, a qualidade do sinal da Claro foi muito bom. O aparelho com o chip da operadora ficou mais de 99% do tempo em 4G e as velocidades chegaram bem perto dos 10 Mbps uma velocidade compatível com a média mundial da tecnologia. 13

14 Claro Network Quality ANATEL SMP Continuous Improvement Month Month Month Month Fonte: 03/10/

15 Claro 4G Coverage Commitments Actual September 2013 EoY 2014 Anatel Target 2013: 50 Cities 2013 EoY: 79 Cidades Anatel Target 2014: 67 Cities (Q2 / 2014) + Marketing target: 97 Cities (Q2 / 2014) 15

16 AMX Brasil High Level Network Architecture 16

17 AMX Brasil Main Cities Backbone Capacity and Internet MNS LUBA BLS BLM PQIA EST SIS SLS CXUA TSA FLA NTL Capacity provided d by Embratel Network Claros Data and Voice Transport Ntw RBO PVO MRN FTM PMJ BONM CGE AJU JPA RCE MCO 120 Gbps Internet Capacity 4 POPs (12 Links + 4 Caching Peering) Vilhena Jaurú CBA SINOP ROI GNA BSA MCL VCA ILH PGU EUS SDR Internet Internet Internet CAMPINAS Internet Terremark JAGUARÉ UGN CTMS CPE Internet CVL PBO IUB ULA BRS RPO SRR SCL CAS BRU MIA MGA UM A PG SOC A STS JVE CTA LGS BNU FNS PAS CXS SMA ooso RRS PAE SIV PLT SPO SMT GVS VTA GRU BHE RIOS JFA RJO Internet MIRANTE MACKENZIE Internet Internet Internet Google Existing Points of presence 17

18 CDN and TPC: What is the difference? CDN deals with Managed Content and TPC with Unmanaged Content Cost Reduction N-Screen PayTV CDN Federation Whole Sale Opps Cost Reduction Better QoE Broadband Upsell Opps Internet Managed Video Unmanaged Video Cisco Content Delivery System (CDS) Internet Embratel IP Back Bone Cisco Transparent Cache (CTC) Customers 18

19 There s no such a Company playing this role in Brazil The CDN would enable Embratel to play this role for the group and for the market CONTENT PROVIDERS BROADCASTERS CDN OVER THE TOPs SPs and PAY TVs ISPs CAPEX & OPEX SAVINGS FEDERATION REVENUES Source: Cisco Analysis, 2012 NEW REVENUES OPPORTUNITY 19

20 Live com CDN Core EBT (Rio de Janeiro) Service Router 6 Router FW CDS Manager Content Provider Origin Server PoP 1 n Router NET CMTS 3 FW Streamers Com CDN: Live = 10Mbps 7 4 Content Acquirer 1- Client/Subscriber 1 issues request for football match program and re-directed by DNS to SR 2 - SR re-directs client to closest and less loaded IS 3 Client issues request for football match program to IS 4 IS issues request for football match program to content acquirer 5 Content acquirer issues request for football match program to Origin Server at CP (Core POP) 6, 7 Video is live ingested by the content acquirer and delivered to IS that issues the request. 8- football match program live streamed from IS to Subscriber Next requests made for same content by same or other subscribers get delivered from IS cache directly Concurrent video stream represent 10 Mbps (1Mbps per video in average on EBT Backbone) per CP. CP = Content Provider 20

21 KEY TAKE AWAYS Network Quality: Best In Class Mobile Broad Band: 4G Best Results, ANATEL Best Results EAQ Top of Mind: Claro TV HD Network Evolution: deployment taking the advantage of IP Ntw penetration, Video and Throughput for Rich Applications (Latency, Speed, Robustness) SmallCells Strategy (indoor solution, traffic offload, enterprise) AMX Backbone Unification: Claro, Embratel and NET (4Play, Product Diversity) Network Robustness: Key Platforms NNOC National Network Operation Centers Sinergy Redundancy: Fiber, Microwave, HFC, Datacenters, IaaS (Cloud) Geographical Redundancy: National Presence, Latam, Submarine Cable AMX Tools: Geo, CEM, QoE, SON, Lean Six Sigma, BI 21

22 Thank You! 22

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