FTTH Wholesale Evolution A review on what is coming next

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1 FTTH Wholesale Evolution A review on what is coming next Guillermo Alarcon. Alcatel-Lucent Polska Cyfrowa impulsem do e-rozwoju Warszawa, 26 maja 2015 r.

2 Monthly Fee USD/M FTTH: Inclusion and Competitiveness From Luxury to Affordable Necessity Country Operator Mbps USD % of Monthly GNIPPP Tunis Ooredoo % Tunis Ooredoo % Tunis Ooredoo % Oman Ooredoo % Oman Ooredoo % Oman Ooredoo % Oman Ooredoo % France SFR % France SFR % Poland Alfanet % Poland Alfanet % Poland Alfanet % Poland Alfanet % Mexico Axtel % Mexico Axtel % Mexico Axtel % Colombia ETB % Colombia ETB % Colombia ETB % Colombia ETB % 200,00 150,00 100,00 50,00 0, ,00 Bubble Size: Monthly Fee / GNIPPP Tunis Oman France Poland Mexico Colombia Speed Publicized prices in the Internet March 17th 2015 World Bank Data

3 Telecom Network Layered Model Investment needed Payback End-user Services, Content & Apps (residential, public & business) Active Network (network equipments, business & operation support) Passive Infrastructure (trenches, ducts, fibre) 20% 80% Few m-3 y 5-7 y y INFRASTRUCTURE SHARING, WHOLESALE SERVICES AND PPP

4 How to go further? FTTH CAPEX /Abonné) ZONES DENSES DENSITE MOYENNE ZONES RURALES Cost per household Subsidy Fiber drop Dark Fiber natural monopoly Comprehensive Fiber drop Dark Fiber Trenching ducts Engineeri ng Home HW Network HW Fiber drop Dark Fiber Trenching/ducts Engineeri ng Home HW Network HW ~4 ans ~8 ans > 20 ans You know the defy is exponential Well, there are also exponential solutions! Trenching/ducts OSP engineering Home HW Network HW Preventive Positive ROI for several alternative operators Positive ROI for one or two operator s 9M Positive ROI for one operator only No ROI without subsidies 24M House holds

5 GPON XG-PON1 TWDM-PON [1] TWDM-PON [4] Optics Flexibility & Scalability DS [Gbps]

6 Optics: Scalable & Flexible TWDM ALL services on one network TWDM G.989 NG-PON2 WDM TDM X Operational benefits Same initial cost as XG-PON1 XG-PON1 GPON G.984 XG-PON1 G.987 NG-PON1 XG-PON2 X Niche applications Still no volume deployments Next generation PON standardization roadmap NG-PON2 coming soon (2015)

7 Sharing Fiber through bitstream POI Layer 2 Wholesale Products Layer 3 Wholesale Products Access Provider Offers Wholesale Bitstream products at Points of Interconnections More POI, More Access Seeker Differentiation, at a Price. Both Layer 2 and Layer 3 IP/MPLS wholesale products can provide any transport service and meet any SLA Layer 2 is more straightforward while Layer 3 is more flexible in services but more complex in operations

8 Access Seeker Less Differentiation More Differentiation IP/MPLS Wholesale Bitstream Compromises Level 2 Wholesale Bitstream Products Level 3 Wholesale Bitstream Products Less Responsibility Access Provider More Responsibility

9 Services Infrastructure: Meet Cloud/IP Operators Consolidate & Converge (Fixed, Mobile, Media) Seeking Economies of Scale and Client Retention. Enterprises and OTT clearly going Cloud Operators going Cloud/IP: Network Function Virtualization (NFV) & Software Defined Networks (SDN). NFV: Dealing with service request in the Cloud Scalability, Programmability 30% CAPEX Savings on Core Functions SDN: Automates provisioning of network connections Operational Lifecycle more efficient 25% to 40% OPEX Savings on Network Connectivity The challenge continues: Return on Capital Employed (ROCE) continues to erode. NFV/SDN: The Next Technological Wave, as important and disruptive as IP twenty years ago

10 How does it look like? IP/Cloud Architecture

11 Cloud/IP What does it mean? Network Function Programmability, Connectivity Automation and Life Cycle Simplification means: New Relationships with Clients: Elastic reservation and release of network capacities, On-Line Selling, Service Provisioning and Self-Care, Faster, Simpler and Cheaper Trial and Fail New Market Players: Large Enterprises, Virtual SP, Brokers, Access-Centric Players and Cloud Carriers New Collaborations: SD-VPNs and NFaaS could yield to global offerings, as in Airline business Profound Changes in Operations: More IT savvy, compatible OSS/BSS required, Transformation / Greenfield decisions OPEX Savings: Estimated 25% for Europe NFV&SDN will expand value in telecom sector for those who embrace it by bringing elastic, programmable and dynamically manageable network capacities at internet timescales and transaction volumes

12 Is it real? Work on Standardization

13 Cloud Carriers, Enterprises and IT & OTT players Cloud/IP Simplifies, Scales up & Innovates Level 2 WP All Kinds and Sizes BIg Bandwidth on Demand Bandwidth Calendaring Enhanced user control of virtual network slices Real-time, context-dependent QoS Rapid turn-up and configuration of new enterprise sites Enablement of rapid, customized product trials Federated multi-operator dynamic virtual networks Real-time, end user customizable service options Security Services (Firewalls, NAPT, ACL, Intrusion Detection, DoSP, On demand Security Probes) Content Filtering, End Point Security IaaS: Compute, Storage & Desktop as a Service Granular Network Slices (Virtual IMS, Virtual epc) Enterprise Connectivity (SD-VPN, Virtual CPE Services) Less Wholesale Product Differentiation More Wholesale Product Differentiation Access Centric Carriers What is Complex today, will become simpler tomorrow What is Local today, will be Global tomorrow

14 Conclusion Broadband: Citizen Inclusion and Community Competitiveness FTTH: from Luxury to Necessity Infrastructure Sharing, Wholesale & PPP prospering Network Technology Evolving: Faster (TWDM-NGPON2) Services (IP/MPLS) which can be shared in wholesale mode (L2/L3 Bitstream). Telecom going Cloud (NFV & SDN): Cloud benefits into Networks Our industry is evolving. Lets evolve with it.

15 Dziękuję za uwagę Thank you for your attention