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UCPEstimation May 10th
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1
Technical aspects of (public)
Telecommunications
markets &main network structures
Node (switching& transmission)Transmission media
(p2p-connection)
ConcentrationnetworkNetwork access
Amsterdam, March 2004Henk Doorenspleet
Sr. Industry analyst telecomRabobank International
2
Agenda• Sector inside
– Global view– Dutch view
• The main network structures (1)– The telephony network
• Technical overview• Local Loop
• Networks decomposed…
• PSTN tour
• The main network structures (con’d)– Cellular Networks– CATV Networks– The Internet
• When networks meet– Interconnection
3
1. Sector inside
Global viewDutch view
4
Telecommunications: significant for society
Teledensity CableW- Eu 95% 10,2%
3,3%25,1%62%
?4.1%
E-Eu 30%US 103%Japan 98%Row 13%World 25%
Sour
ces:
Siem
ens&
ITU
Tele
den
sity
= fix
ed=m
ob
Sector inside
• Over 1 bn fixed lines• About 1.3 bn mobile
subscribers• About 300m homes
connected to CATVnetworks
• Teleom has special attention:– ITU (UN): enabler for
economic and social development
–
Sub/lines growth
0
400
800
1200
1600
1900
1920
1940
1952
1956
1960
1964
1968
1972
1976
1980
1984
1988
1992
1996
2000
2004
Fixed telCellularInternet
Significant sector in the world economy>>
5
Sector inside
Years to reach 50m users WW
0 20 40 60 80
Telephone
Radio
PC
TV
WWW
GSM
You noticed the growth pace?
But:• Majority of the world population have NOT (≅ 75%)• More than 50% of world population never made a phone call…• Saturation levels might differ per technology
6
Industry sectors compared on revenueSector inside
Euro top sectors based on2001 revenues of
top 10 players
Ū 0 Ū 200 Ū 400 Ū 600 Ū 800
Banking &Insurance
Oil, GasPetrolefum
TMI
Automotive
Telecom +equip (est)
Retail
Telecom
Media
Pharmaceutical
Airline &Aerospace
Ūbn
7
1
10
Traditional way to express Telecom development
• Relation telephony penetration <>GDP
• Traditionally leaders– USA– Switzerland– Luxemburg
• Ranking didn’t changemuch y-o-y
• Became less relevant:– Changing landscape
through liberalization– Mobile uptake– Internet uptake
• Used until recently• New metrics to express
telecom awareness are developed
–
–
GDP/capita (USD)
Tel
epho
ne li
nes
Per
100
inha
bita
nts)
100
100 1,000 10,000 100,000
AboveAverage
BelowAverage
Source: ITS, Siemens 2001Figures Dec 2000
Sector inside
Overall infrastructure ranking>>Digital Access Indicator>>
8
Sector inside
Global Telecom ranking, revisited…Global Telecom Ranking (ITU)
1 Hong Kong 65.88 12 Finland 61.22Singapore 60.58
58.5857.7255.4052.4551.4450.9548.8037.2331.95
LuxemburgBelgiumGermanyJapanFranceCzechSpainUAEChina
13141517202124263647
2 Denmark 65.613 Sweden 65.424 Switzerland 65.105 United States 65.046 Norway 64.677 Korea 63.428 UK 63.009 Netherlands 62.25
10 Iceland 62.0311 Canada 61.97
Ranking compiled by ITU based on:
• Mobile telecom numbers
• Internet numbers• Infrastructure
development• Competition• Legislation
Putting more in the ranking equation shakes up traditional “winners”:
• 2 telephone lines per home (US)• Rich countries (Lux)
9
Sector inside
Ranking beyond infrastructures: DAIDigital Access Indicator• Part of ITU’s World
Telecommunication Development Report (WTDR)
• Supports the World Summit on the Information Society (WSIS)
• DAI goes beyond traditional focus on telecommunication infrastructure.
• DAI covers:– availability of infrastructure– affordability of access– educational level– quality of ICT services– Internet usage
• DAI movers>>
DA
I Top
12
0,72 0,74 0,76 0,78 0,80 0,82 0,84 0,86
United Kingdom
United States
Canada
Norway
Netherlands
Hong Kong, China
Finland
Taiwan, China
Iceland
Korea (Rep,)
Denmark
Sweden
10
Sector inside
DAI Top 5 movers • Published by ITU in 2003• Covers changes 1998-2002
Rank '98
Rank '02
Economy Change
Top 5 gains in ranking, 1998-2002
24 4 Korea (Rep.) 20
22 9 Taiwan, China 13
20 14 Singapore 6
13 7 Hong Kong, China 6
7 2 Denmark 5
Top 5 drops in ranking, 1998-2002
12 21 New Zealand -9
11 19 Australia -8
30 36 South Africa -6
17 23 France -6
5 11 United States -6
11
Sector inside
Sector Inside: financials
•Since 2ndH19th century the telecom service sector has grown:
– CAGR (1995-2001)11.8%•Telecom service sector revenue
2003:– over US$1.18tn (souce: iDate)– Just under €900bn (source: EITO)
•Telecom equipment sector size:– over $290bn revenues in 2002
declined in 2003 to $253bn•The global ICT industry 2003:
– EITO €2.07Tn
WW 2003 ICT market(total value Ū2.07Tn)
IT services20%
End user comm equip
9%
Computer HW16%
Carrier Services
44%
Software11%
12
Sector inside
Sector Revenue split
World Telecom Service Market by Region(iDate Digiworld 2003)
2001 2002 2003 2006North America 358,8 363,1 374 420,7
260,7 291,9448,1232,51393
355,7192,11183
Western-Eu 232,9 249,1Asia-Pacific 288,7 323,3
Rest of World 180,7 185,1total 1061 1121
18%
19%30%32%
22%
17%7%
54%
20031994World Telecom Service Market by Service (ITU)
253158Equipment
268128Other services
41450Mobile455386TelephonyBy
service/product:
By region:
13
Sector inside
However the industry have seen turmoil
0
20
40
60
80
100
120
m$
1992 1994 1996 1998 2000 2002 2004
Equipment spending US operators
Bear Stearnstrendline
• Impact from the move from a monopolistic to liberalised market environment
– Started in the 1980s in the US, Japan & Europe, leading to• Flood of newcomers (with an expected shake out)• Reduction of government involvement
– Change in regulation needed and searching regulators to cope with a 100y old situation
– Government as the incumbent’s shareholder…• The crazy late 90s: the amalgamation of events:
– Internet hype: hugeinvestment, no revenuegrowth acceleration
– Competition becamesettled (after 10-15y)
– In search of the rightbusiness model:
• Facility based/nonfacility based
• Wholesale/retail models
14
Sector inside
The after math
•Most incumbents (become) financially on track•AltNets show improvements•Shake out has taken place (too small too little?)•Many new players in the value chain•Continued price pressure•Continued technology changes
• The big bucket of the $1.18Tn Telecom service revenue:• Used to be the incumbent’s (state) party• Is now being shared with many more players and technologies
15
Sector inside
The ‘proof’ of the movement
Minutes in KPN's PSTN
0
20
40
60
1998 1999 2000 2001 2002 2003 est
bn
min
/yr
TotalminutesDomestic
Intenet
Mobile term.
Internationa
• Fixed telephony, used to be the mainstay of the sector
– Share declines since early 1990s
– Revenue decline started in 2001
• Losing minutes:– Competition– Substitution by mobile
• Mobile continues to grow• Emerging countries mobile
will be the means of telephony
• Growth of mobile, but no hyper growth in established markets
– Dial in Internet access migrates to broadband
– The Advent of Voice over Internet (VoIP) and the all IP future
Fixed & mobile as % of WW service revenue
5%
25%
45%
65%
85%
1994 2003
Fixedmobile
16
Sector inside
Sustainable fundamentals?• Growth can sustain due:
– Uptake of services in emerging markets
– In today’s society information plays a dominant role and holds significant economic value
– Transporting packaging and presenting of information is and will continue to be key
• Financial developments– Growth in volume is
not equal to growthin revenue
– Growth in revenueis not equal toprofitability
Telecom services revenue trends
$0
$400
$800
$1.200
$1.600
$2.000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Commodity lineLate 90s expecta
tionsline
Destroying value line
The uniform past oftelecommunicationsIs on the verge of being replaced by a futureof plurality
17
Dutch view
18
Sector inside: Dutch view
NL ICT spending comparisonY-o-Y growth of NL ICT & 2 subsectors
-5,0%
0,0%
5,0%
10,0%
15,0%
20,0%
2000 2001 2002 2003 est.
Total ICT
Carrier Services
Total IT
• Dutch ICT sector was slowed down dramatically 2001-2003
– Telecom service did fairly well driven by mobile and broadband growth.
– Telecom services kept the ICT growth just above the zero line
ICT expenditure per capita 99-03sourc: EITO
0
500
1.000
1.500
2.000
2.500
3.000
BE/LU FR DE NL SE UK US
19992000200120022003 est.
• ICT expenditure per capita (EITO)
– Includes business and consumer spending
– Sweden is ahead in EU, followed by UK & NL
19
PC penetration per 100 pop
0
10
20
30
40
50
60
70
80
90
100
BE/LU FR DE NL SE UK US
19992000200120022003 est.
Internet Indicators
0
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
7.000.000
Belgium France Germany Netherlands Sweden UK0,0%
5,0%
10,0%
15,0%
20,0%
25,0%Host countnov 2003ccTLDregistrationsccTLDas % of pop
Internet awareness is well developed
• PC penetration is strong– EITO stats show overall
penetration (business + home PCs)
– Home PC penetration is traditionally high, due to favorable tax plans
• Over 79% ~ 5.3m HH• Consequently Internet access
has developed above Eu-averages
– 74% of HH ~ 5m HH– 79% of business have Internet
access• Additional indicators show high
numbers of:– ccTLD(.nl) registrations– Real host counts
Sector inside: Dutch view
20
Sector inside: Dutch view
Dutch Telecom landscape
penetration
1999 2000 2001 2002 2003 HH pop
~90%
74%
47%
14%
14%
93%
8%
PSTN analogue (KPN) 7330 6915 6569 6316 61662
PSTN ISDN1 (KPN) 2280 2964 3420 3668 37682
ADSL - 10-15 145 340 9503
Cable modem access 650 9353
Mobile subs 5767 9678 12234 11983 120354
CATV connections 6120 6200 6159 6194 n.a.
Sat receivers/subs 320 330 418 535 n.a.
#PCs5 5700 6300 6900 n.a. 7500
• Like most western countries:– Several mature segments:
• Saturated telephone connections• Mobile high penetration with some room to grow• CATV is stable market• Stable market for corporate networking
– Rapidly growing• Broadband connections for Internet Access
Source: 1999-2002 TNO-STB (N&C 2003)1 ISDN is report in channels (not in connections)2 source KPN 3Q03 report
3 Year end 2003 (Telecom Paper)4 source telecom paper, 2003 est.5 Home & business PCs
21
Sector inside: Dutch view
Development of market players• Market players
As in most countries a dynamic environment– Dynamics started in the late 1980s after first steps of
formal liberalization of sub sectors– Heated up in the mid 90s: rapid growth of players
• 1993 liberalization of datacom service• 1996 liberalization of infrastructure• 1997 liberalization of voice
– Unavoidable consolidation started with the downturn– Overview of registrations of telecom providers at the
NRA: decline started in 2002
Registration category 1999 2000 2001 2002 ∆ 01-02
Facility based suppliers public network
101 138 148 127 -14,2%
Facility based suppliers leased linesPublic service providersFacility based CATV providers
Providers of conditional access systems
66 83 84 73 -13,1%186 263 280 264 -5,7%96 92 81 73 -9,9%
15 14 11 7 -36,4%
22
Sector inside: Dutch view
Players by category• Fixed telephony
– KPN dominant player• Connections (>90%)• Traffic
– Local >80% (85-95)– National <70%– International ~55%
– C(P)S operatorsTele2, Scarlet/Onetel….
• MS: 26% (2002)of which 74% CPS
– AltNetsUPC, Essent, BC-providers
• CATV3 largest CATV operators have 85% of subs
– UPC (2.3m)– Essent (1.7m)– Casema (1.3m)
• 5 Mobile players– KPN Mobile– Vodafone– T-Mobile (DT)– Orange (FT)– Telfort
• Top Internet access players– Cable companies,
integrated ISP & access providers
– KPN-brands– Wanadoo– Tiscali– Zon
KPN dominant player in all categories exception of video/radio distribution
Market share by Subscribers
Telfort12%
Orange8%
T-Mobile14%
KPN Mobile40%
Vodafone26%
Sector inside: Dutch view
Market share by revenue(2203)
Telfort8%Orange
8%
T-Mobile16%
Vodafone27%
KPN Mobile41%
23
Dutch dial in Internet Acces market shares (2002)
KPN brands34%
Other33%
Zon11%
Wanadoo8%
Tiscali14%
Sector inside: Dutch view
24
Dutch BB Internet Accessmarket shares (2003)
@home14%
Other18%
Zon6%
Tiscali6%
Wanadoo15%
KPN brands23%
Chello18%
25
Dutch Revenue 01-05 by product
0
4000
8000
12000
16000
20000
2001 2002 2003 2004 2005
mn € DataCom & Network
equipmentFixed telephony
Fixed data
Mobile telephony
CATV services
Carrier services total
Total Telecom
Telecom revenue 2003EU countries (Eito 2004)
Germany21%
France13%Sweden
3%
Belgium/Lux 3%
Other36%
Netherlands5%
UK19%
Dutch telecom servicesrevenue distribution 2003
Mobile telephony
40%
CATV services
7%Fixed
telephony31%
Fixed data22%
Sector inside: Dutch view
Dutch financials• European Telecom market
(services + equipment): €305bn• NL = 5% ~ €15bn• Mobile & Data do the growth
26
2. The main network structure
•Telephony network•local loop
27
The Mother of all networks: PSTN
•Successor of telegraph network•Unambiguous service: voice•Huge improvements after the first automated
circuit (electro mechanical) switch in 1896 to today’s high capacity/high density circuit switches
– Mainly ‘internal’ improvements– Lowering price levels and improving speech quality– Still ubiquitous, but less in emerging markets
•Today: analogue, ISDN and corporate connections
Sam
uel F
. B. M
orse
Network structures: Technical overview telephony networks
Antonio MeucciPSTN=Public Switched Telephone Network
28
Network structures: Technical overview telephony networks
PSTN, a hierarchy of circuit switches
Regional/transitexchanges
Transit/toll(Class4 switches)
Local exchanges(Class 5 switches)
Access network
Subscriber
To from other countries
Analogue, ISDN, corporate connections
International exchanges0800/0900 exchanges
Main equipment:•Digital circuit switches:
•Lucent’s 5ESS•Ericsson AXE•Nortel’s DMS•Alcatel’s Alcatel1000•…
•Transmission equipment:•Lucent•Cienna•Nortel•Alcatel•…
Transmissionmedia
Local Loop(transmission media)
29
•A.k.a. the last- or first mile network•(19th-century) design principals:
– Connecting analogue telephone sets to the nearest telephone exchange (circuit switch)
– Max distance 5km: due to physical limitations– Centralised power supply: current loop
•Still visible in today's structures– incumbents have lots of real estate– Fixed networks are still very voice centric
•The local loop is probably the largest investment in Telecoms networks
•(Future) bypass options:– Fibre in the Loop/Fibre to the
Home (FITL/FttH)– Wireless local loop
Network structures: Technical overview telephony networks
Fixed access network/local loop
30
Local loop structure•Twisted pair cabling under the pedestrians•Interconnection in small street cabinets•The local loop carries:
– Analogue & ISDN telephone– Leased line services– ADSL services
Point of Presence
Cabledistributionpoint
100pair
cable
MDF =main
distributionframe
To next level/Other PoPs
2 paircable900
pairs
f.o.-ringBusiness area
Street cabinet
Network structures: local loop
31
Network structures: local loop
Local Loop access
•This local loop is the ubiquitous access to customers, not only for incumbents but also for new entrants
•Regulators force incumbents to give access to their competitors:
– Unbundled Local Loop (ULL) or MDF access•For ADSL service
– Co-Location facilities•Room to locate equipment
In the US this is called UNE (Unbundled Network Elements)•What does that look like>>
32
Network structures: local loopAccess: Unbundled local loop
MDF fleslas Cable
TelephoneExchange
DSLAMADSL
Equipment
Transmissionequipment
DSLAMDSLAM
F.O.-trunks
Building incumbent (PoP, CO)
Co-locationarea
Equipment roomIncumbent
CLEC 2/DSL-
operator 2
CLEC 1/ DSL-
operator-1
Accessnetwork
Basement
33
Network structures: local loop
Dutch DSL - ISP chain• Large ISPs own (indirectly) DSL infrastructure• Cable facilities are closed for third party ISPs
(with the exception of Wanadoo Cable through Casema)
KPN
Versatel(~200)
BBNed(~325)
Tiscali(BabyXL)
~100
Nova-Xess(~85)
KPN(~750)
Het NetPlanetXS4all
Tiscali12Move
ZonnetWanadoo
Data ServiceProvidersFor SMEs
SmallISPs
Best dealseekers
Other DSLService providers
LargeISP
DSLfacilities
Lastmile
34
3. Networks decomposed
Network structures: Networks decomposed
The ingredients to brew a network
•Decomposing the cloud/the network is about distinguishing several layers
•The basic function of a network:connecting communicating partners
•Decomposed in 3 layers –Transmission media
•physically connects two elements•Cables & frequencies
–Transmission•Pumping digital information
(= bits) into the media•Error free delivery•Aggregation of bit streams
–Routing & switching•Collecting, addressing and delivering
through circuit or packet switching
The conceptual/modelled view
Switching/routingTransmission
Transmission-media
More reality view>>
35
36
Why a network?
•Point to point (p2p) /can-to-can (c2c) communications.
– Needs media & transmission– Not efficient, when more parties appear & random
communications patterns•n(n-1)/2 connections•n-1 interfaces
•A network is needed when point-to-point /can-to-can communications isn’t sufficient:
– Add routing & switching– N parties with random patterns
•1 interface for the user•The price: complexity in
“the cloud”
Node (switchin& transmissionTransmission media
(p2p-connection)
Concentration
network
Network access
Network structures: Networks decomposed
g)
Most reality view>>
Network structures: Networks decomposed
From concepts to realityFrom the Conceptual to the Geographical dimension• Access networks: to connect customer facilities to the
(nearest) Point of Presence of the operator• PoP of CO (Central Office) houses equipment, the nodes
handling transmission and routing/switching• PoP/CO houses also:
– Systems for value added services– System management systems and staff
In every geographical layer you find at least layer 1 and 2
AccessNetwork
Trunk or backbone
network
PoP/CO
37
Network structures: Networks decomposed
A network is always more• Building & running a network is more than just the 3 layers• Building networks is also about (non commercial issues):
– Planning network architecture to meet demands– Equipment choice– Planning physical location (acquiring new or use existing)– Planning OSS/BSS
(Operation & Business Support Systems)• Configuration-, inventory-, accounting, performance, fault-
and security management• And accompanying staffing
– Roll out: putting in place the basic ingredients• locations, Nodes, transmission facilities
– Value Added Services development & deployment• Running a network is a 7*24 operation
• Value Added Services on top of the basic function (connection communicating partners)
38
39
4. The main network structures (2)
•Cellular•CATV•Internet
40
Network structures: cellar networks
Cellular access network: “mobile last mile”•The radio access network (RAN) is the
local loop for cellular networks– RAN connects mobile terminal with
mobile network– RAN is most visible part of a mobile
network– Number of antenna sites is determined
by:•Amount of traffic (driver in urban areas)•Coverage (driver in rural areas)
•Issues– Spatial planning issues in towns and
country– Perceived health risks
•The RAN is 80% of mobile network Capex
41
Network structures: cellar networks
F G
E A B
D C
F G
E A B
D C F
F G
E A B
D C
Frequencyreusedistance
7-cell reuse pattern
Fictiouscellpattern
Idealcellpattern
Realcellpattern
Frequency(Hz)
0 time
1Mhz
200k
Hz
chan
nel
TS-1 TS-2 TS-8AB�
F�
Cellular coverage representation
Usage of frequency and
time: TDMA (GSM)
42
Network structures: cellar networks
Cell characteristics
•Coverage:– Depends on technology(CDMA, TDMA)– Designparameter:
• In building, in car, outdoor coverage•Voice/data traffic to accommodate
– Voice traffic (Erlangs)– offered data speeds
(higher data speeds -> smaller cell sites -> more antennas needed
– Height of antenna– Transmission power (regulated)
•Cell radius indication 300m (indoor coverage) -30km (open area coverage)
43
Network structures: cellar networks
Schematic overview of a mobile network
MSC
UTRAN
RNC
RNC
PSTN
Internet
Subscriberenvironment
B-nodes
R
CoreNetwork
Core transmissionnetwork
(UMTS terminology)
• The Radio network is ‘only’ the access network:“the mobile last mile/local loop”
• For mobile network more components are needed– Transmission (from base stations to core)– Core network– Interconnection with other networks– And all those other things that makes a network >>> 3 layers
TransmissionNetwork
44
Network structures: cellar networks
BSC
BSC
MT
MT
MTTo otherMSCs
1 2 3
4 5 6
7 8 9
E 0 #
1 2 3
4 5 6
7 8 9
E 0 #
EIR AUC
VLR HLR
MSC
BTS
BTS
BTS
G-MSC
PSTNincumbent
Celco-2
Celco-3
Interconnectionto othernetworks
GSM networkRadio AccessNetwork(mobile local loop)
Core network
GSM terminology
MSC = mobile switching centreEIR = equipment identity registerAUC = authentication centreHLR = home location registerVLR = visitor location register
MT = mobile terminalBTS = base transceiver stationBSC = base station controllerBS = base station
45
Network structures: cellar networks
A call from a mobile to a fixed phone
Basestation
Core Networkcomponents
(4-5000sites)
(100-140sites)
4-8sites
Base station
controller
Infrastructure Mobile operatore.g. Vodafone-NL
Phone@Home
PublicSwitchedTelephone Networke.g KPN-NL
Voiceswitch
House-keeping
Network Interconnection
LocalLoop
Radio network components
Telephoneexchange
WAN transportSystems, connecting geographical spread components
46
Network structures: cellar networks
Roaming• Roaming is: using the RAN of another operator, when:
– Out of range from the home network– In reach of network with roaming agreement
• An Telefonica Moviles Spain customer visits the Netherlands and roams with KPN• KPN recognizes a vistor and it’s home network (Moviles, ES)• KPN inquires Telefonica Moviles database; Customer roaming granted• KPN registers user in its VLR, Moviles registers its customer in its VLR• Incoming calls switched from Moviles to KPN• Outgoing calls handled by BEN, account info (CDRs) send to Moviles• Tariffs determined by Moviles billing system according to customer’s contact• Clearig between KPN & Moviles according roaming agreement
F GE A B
D CF G
E A BD C
F GE A B
D C
F GE A B
D CF G
E A BD C
F GE A B
D C
F GE A B
D C
F GE A B
D C
EIR AUC
VLR HLR
MSC G-MSC
EIR AUC
VLR HLR
MSCG-MSCVoice Data(visitor mgnt)
The NetherlandsKPN
SpainTelefonica
Moviles
BilateralRoaming
agreement
Mobile networks: aplethora of standards
• Mobile telephony networks haveevolved since the 1980s in 3 generations
• First Gen (1G)– 1 G, analogue transmission, limited
to no security– Many different ‘standards’ per region
(almost no roaming)• US & Asia: AMPS• Europe: NMT & TACS• Limited quality and capacity:
• Second Gen (2G)– Improved almost any aspect of mobile telephony
• Improved quality, security, efficiency• Applying Intelligent Network techniques
– Leveraging digital technology– Introduced in the early 1990s– Focus on voice, limited data– Very successful, almost 1bn subscribers– Unfortunately many standards appeared…
1925: first mobile/car phone
Network structures: cellar networks
47
Second Generation evolution(the alphabet soup)
• The main 2G standards– GSM: Europe & Asia– D-AMPS: US– PDC & PHS: Japan– CDMA evolved into cdmaOne (IS-95B): US & Asia– iDEN (USA)
• All based on TDMA technology (exception cdmaOne)• How to cope with data demand/promise?
– A new generation needed: 3G– Stakes are high: (topline mobile service revenue~> $350bn/yr)– intermediate solutions: 2.5 & 2.75G
• GSM > GPRS > EDGE• D-AMPS > GPRS >EDGE• PDC > 3G-UMTS• cdmaOne > migrating to 3G
first step CDMA20001x (a.k.a. CDMA1xRTT)
Network structures: cellar networks
48
49
The main network structures: cellular networks
The upgrade implications• The step to 2.5/2.75 G leads to some technology
consolidation– D-AMPS will migrate to GSM/GPRS– PDC & cdmaOne jump directly to Third Generation (3G)
• Therefore 2.xG is largely GSM stuff– No new spectrum needed– Addition of kit in the core network (SSGN & GSGN)– Software upgrade BSC & BTS
• Upgrade to 2.75G has big implications– EDGE: Enhanced Data rate GSM Evolution– No new spectrum needed: enhances data rates in
existing TDMA structure– Upgrade of all BTS (new TRXs=30-50% of BS cost)– Only faster timeslots NOT more timeslots=just enhancing
data speeds, but smaller cell size….
50
The main network structures: cellular networks
GSM to 2.5G
BSC
BSC
EIR AUC
VLR HLR
MSC G-MSC
BTS
BTS
BTS SGSN GGSN IP NetworksInternet
Other voiceNetowrks
Radio AccessNetwork
Core network
• SGSN: Serving GPRS Support Node• GGSN: Gateway GPRS Support Node• Connection to existing Core Network for User Identification
and service allowance
51
The main network structures: cellular networks
Third Generation• Developed during the 90s• Part of the ITU IMT-2000 program• Aim to consolidate, to one homogeneous system
– Harmonized use of frequencies & technology = scale!– Global roaming– Multi Media traffic– Higher speeds 100s of kbps– Convergence with Internet transport protocol (IP)
• However, development diverged– 3G Partnership Program (3GPP)
• Responsible for development and maintenance • 3GPP: development of WCDMA, typical upgrade path for GSM
operators• 3GPP2: development of CDMA2000, evolution of IS95, hence the
upgrade path for cdmaOne– Chinese bodies, Siemens and others develop: TD-SCDMA
(rationale: industry policy?)– Local variants, e.g. ARIB Japan)
52
The main network structures: cellular networks
3G-WCDMA•A.K.A. UMTS•Most likely migration path from GSM/GPRS to
3GOpts for the new GSM in Europe and (parts of) Asia.
– Support of UMTS-GSM roaming and handover– Relies on the GSM/GPRS core network
• New spectrum needed and issued (as we al know…)
– Works in paired bands of 5Mhz allocated in several bands ( between (1.7GHz-2.6GHz)
– Most operators acquired 10-25MHz of spectrum•Evolving standard from 3GPP release99 (rel 3)
improvements to an all multi media and IP platform (rel 5 and 6 (tbd))
53
The main network structures: cellular networks
3G-CDMA2000• Evolving from cdmaOne and therefore the best migration
path to 3G– Relies on cdmaOne spectrum, therefore no new
spectrum needed (per se)– Backward compatibility (to some extend)
• 1x and DO available on the market– a.o. Korea, TNZ– DO, some carriers in the US
• Not all advantageous:– cdmaOne (IS-95) core network
had non standard interfaces– 3GPP2 improved
that issue, willvendors comply? CDMA2000
1XRTTor 1x
1xEV-DOData only
1xEV-DVData & voice
TowardsAll IPFuture
More voicecapacity
150-300kbps
Separate data carrier
2.4Mbps peakIntegrated DV3.1Mbps peak
cdm
aOne
(IS-9
5)
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The main network structures: cellular networks
TD-SCDMA, the new branch on the tree
•Promoted by the Chinese government:– Actually TD-SCDMA is industry policy: no royalty fees
to Europe 7 US•Spectrum issues
– Better suite for asymmetrical traffic (TDD)– 1.6MHz of spectrum needed
•Cheaper terminals•Siemens heavy weight promoter with China•Other vendors picked up: huge market
55
Network structures: cellar networks
Wireless is more than mobile telephony!
•Broadcast networks (terrestrial TV and radio)•Fixed Wireless•Microwave transmission•Free Space Optics (FSO)•Satellite>>•Small coverage technologies/networks
(WiFi, Bluetooth, DECT)
•Wireless replaces wires for transmissionof bits (‘transmission without wires’)
•Wireless fundamentals>>
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Network structures: CATV networks
Cable Networks• Started as Community Access TV
Networks 1950s (100s of connected homes)
– Mainly US and EU– City planning driven: getting rid of
rooftop aerials• A wired broadcast network
– Designed for distribution of Radio and TV signal: putting the ether in a cable
– From head end to connected homes (Homes passed/-connected)
– Head end functions:• Receiving terrestrial and satellite
channels• Signal processing and re-transmission
on the cable network• 20-100 TV channels + FM-radio band• Value Added Services
Millions ofRooftop aerials vs head ends
Equipment Floor NTL, UK
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The main network structures: CATV networks
Cable networks, broadcasting networks• CATV network are build for re-broadcasting of TV and radio
– From network to customer– This has determined the structure of the network
(like the 5km-limitation did in telephony networks)– This has lead to wide deployments of: Branch & Tree
topologies– Very One-Way
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Network structures: CATV networks
Cable network structure
HE = Head EndDC = Distribution CentreSC = Sub CentreGA = Group AmplifierFA = Final Amplifier
• Structure of traditional (telephony) local loop and the CATV-local loop are becoming more look a-likes
• Fibre pushed to the edges: very last mile stays different– Twisted pair– Coax
FA
mini-starGA
SC
SCSC
SC SC
DC
DC
DC
DC
DC
coaxHFC = Hybrid fibre copper network
“The other local loop”
(≅10-15 FAs)
(20-50users)
HE
(5-10GAs)
20-30SCs10s of
DCs
Network structures: CATV networks
Network outline
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HE rooftop
(Master)Headend
Fiber1-2 hops Coax
Group AmpDistributionCenter
Final Amp & Multitap
Fibre Node/Sub Center
HFC distribution networkSDH Backbone
(Fiber rings)
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Network structures: CATV networks
Beyond basic TV & radio broadcasting• Broadcasting on a higher quality level:
– Digital TV & Radio– Increases capacity– Commercial ability to package services
(the world of set top boxes and conditionalaccess)
– Is happening in countries with competitionfrom satellite: e.g. UK, US, FR
• Internet Access– Using the CATV network for broadband Internet access– Competitive edge in US, UK, NL: ~40m subs
• Competition CATV operators (a.k.a. MSO): – Video: Digital Satellite TV (DTH) and Digital Terrestrial
(DTT)– InternetADSL base Internet Access– Telephony competing against incumbent operators
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Network structures: Internet
The internet, a network that happened• The Internet was hardly designed
it just happened–
– Grown from ARPA to an Academic network
– It went ‘public in the 90s– A bottom up growth path:
towards a world wide set of connected islands
• Traffic transported is enormous• International issues:
– IP numbering/addressingassignment and maintenance
– Domain names and domain name resolution
US &Can
LatinAm
Africa
EuAsia
Pacific
1,17Gbps
162,5 Gbps41,8 Gbps
14.1 Gbps0.7 Gbps
0.45 Gbps
600Mbps
• Internet backbone: capacity in placebetween major cities, carried by the fibre optic networks
• Access to the internet for users is relying on other networks
After the invention of packet switching
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Network structures: Internet
IN-IX
YOUR ISP.xx•Internet access•Mail•DNS
• To exchange (Swap) traffic betweenlocal/national ISPs and backboneproviders
OtherIX
telephoneDSL Cable
Internet b.b. carriers• Worldcom• Sprint• C&W• AT&T• Qwest• Global Crossing• Level3• NTT
ISP 1 ISP 2 ISP 3
OtherIX
Internet’s structure
International Internet-backbones
Internet Exchange>>
Internet Access• xDSL access• Cable access• Telephony access analogue/ISDN• Satellite access
EU-Internet Backbone and inter-continental connections
Network structures: Internet
To/from US162,5 Gbps
To/from Asia/Pac1,17 Gbps
To/from Africa0.45 Gbps
To/from L-A600Mbps
=IX63
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The Internet issue of today: Access
•– PSTN/ISDN, Dial in access– ADSL, based on the local loop– Docsis, based on the CATV network
• Niche technologies for uncovered (by DSL and Cable) areas
– Wireless access– Satellite access– (Power Line Communications (PLC)
• Future access means– FttH, Fiber to the Home– Broadband Wireless Access (BWA)– Better DSL
The uniform past oftelecommunications
Is on the verge of beingreplaced by a future
of plurality
Network structures: Internet
Mainstream options today<<
Development of access speeds
0,1
1
10
100
1000
10000
100000
1960
1964
1964
1978
1984
1988
1991
1993
1995
1998
2000
2001
2002
2003
2007
2010
2020
spee
d in
kbp
s
Technology released
Trend Line
V.21
V.22
V.22bis
V.32
V.32bis
V.fastV.FCV.34
V.34bis
V.90
V.92
V.23
Bell103
Docsis1ADSL
Docsis2ADSL-2
VDSL
Using (milking)PSTN
Push existingnets to
the edges
Diggingthe
Streets
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5. When networks meet
Interconnection
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Network structures: Interconnection
Interconnection, how it works• Operators interconnect to service customers, mutual interest of
operators• Often regulatory obligation to Interconnect (telephony)• Example: two telephone operators
User A dials B(e.g. fixed-mobile)• Operator B offers terminating
access to operator A• Operator A invoices user A• Operator A pays terminating
access fees to B
Operator B services user A(e.g. carrier (pre-)select, flat rate internet access)• Operator A offers originating access to B• Operator B invoices user A for the
services• Fees for the access line by A or B (country
depended
a bNetwork of Operaator B
Network of Operator A
Network-interconnection
interfaceuser user
access point
(Mobile)Terminating fees
Originating fees
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Network structures: Interconnection
Interconnection issues• Legal battle ground: interconnect obligations
– Forcing incumbents to open their networks– Level playing field is now existing and it’s of interest of
most parties to interconnect• Current battle ground: controlling end users tariffs
– Cartel between operators to keep priced high– Mobile Terminating Access (MTA) in Eu– SMS > MMS tariffs– Measure, assign SMP
• Unregulated future?– Internet as the ubiquitous network– Everything is just on application on top of– Regulation on a higher level: spam, DMR etc.
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Network structures: Interconnection
Telephony interconnection examples• Originating services
– Carrier Select– Carrier Pre select (CPS)– FRIACO (Flat Rate Internet
Access Call Originating)– MIACO (Minute Internet Access
Call Originating)• Call terminating services (call
completion!)
Case:• Relation ship
– Customer A of CPS-operator– Customer B of CPS-operator– Customer C of Incumbent
• Scenario’s– A dials C– B dials A– C dial A
Subscribers, connected to Local exchanges of the
incumbentIncumbent’s PSTN
Area YSub network
Area XSub network
Transitnetwork
Local AccessPoint
Regional AccessPoint
CPS-operator
B AC
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Thanks for your attention
Any (more) questions?
71
Branch-out-sheets
Ingredients: Switching & routing
Circuit & Packet characteristicsTwo main ways to connect (over a network) the source and a destination:
Circuit switching• The telephony network:
PSTN• Telephony, a 3 phase
process– Connection set up– Connected (to chat, to
the internet, to fax)– Connection tier down
• A connection supports 1:1 communications
• Service degradation: Blocking
Packet switching• Information transport in
packets: Internet• Each packet is labelled
– Source & dest. Address error and flow control information
• Concurrent connections– No additional interfaces
or transmission lines• Packets/frames/cells• Service degradation: Delay
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Circuitswitch
•A circuit offers:– constant capacity = QoS– inefficiency
•Scalability needs more resources•Very well developed
(more than 100 years old, 1,8bn CS subscribers WW)
Switchingmatrix
Ingredients: Switching & routing
Circuit switching
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buffers
Packetswitch
Packet switchrouting table
AIvir.nlserver
Packet
C→A
Label
B→A
Data
Ingredients: Switching & routing
Packet switching
•A packet offers:– No guarantees: first come
first serve– Efficiency
•Scalability easy/easier
Layering of communications: nothing new
3. Semantics
1. Transmission
2. Language
Ingredients: layering
Layer Protocol service3 The message
(did you understand what I mean?)The application, the (big) brain creates a messageWords to service the expression of an idea/ (deep) thoughtsMouth and ear service the language
2 Words, language, Syntaxes(what did you say, can you repeat yourself?)
1 Use of the air, transmission of signals (I can’t hear you, it’s too noisy
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Ingredients
What’s a bit, BInary DigiT
01
11
11
11
01
01
01
01
01
00
10
10
00
01
00
01
11
1
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•Smallest of digital data•A bit represents a binary value•A binary value is “0” or “1”•8 binary values = 8 bits = 1 byte•Transport of bits is expressed in a bit rate:
bits per second (bps)•Most information is analogue by nature:
– Voice, text, pictures– Conversion to bits by codecs (source coding):
•Voice (PCM)> 64kbps bit stream•Music (MP3)> 128kbps bit stream•Video (MPEG x)>30Mbps bit stream•Text (ASCII or Unicode) > 1 character = 1 or 2 bytes
00
11
00
01
10
10
01
10
10
10
01
11
10
01
00
10
011111001001110101011001100011101001000000
Ingredients: transmission media
Wireless transmission• Looks simpler: no wires needed?• The medium is the ether
– No digging!– Almost infinite capacity
But can only partly used• Regulation needed: frequency allocation
– The ether is just ‘1 cable’… so frequencies need to be assigned to avoid ‘the tower of Babel’
– Usage of the frequency bands and applied technology often regulated as well
– Some (or most) frequencies are perceived/positioned as scarce resources (also depending on the region)
– Based on National Frequency planning fitting in Regional and World Wide agreements, e.g.
• Satellite frequencies, due to large coverage• Harmonized mobile phone frequencies, for user convenience• Radio and television signals, producing one technology for the
world (not the case)– License exempt
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Aeronautical and nautical applications, military communications, radio amateurs,
Fixed mobile services (Microwave, LMDS),radar, Space, inter-satelliteMicrowave connections, radarKa-/Ku-band satellitesc-band satellites
TV broadcasting, fixed & mobile services (GSM, UMTS, WLAN..),
TV broadcasting, FM-radio broadccasting, radio navigation
Radio braodcasting AM-radio and several mobile and fixed services
radio navigation, radio broadcasting
radio navigation
Cosmicradiation
gamma
röntgen
ultraviolet
visible light
infrared
infrared
0,00003 Å
100 km
VLFvery low freq.
10 km
LFlow freq.
MFmedium freq.
100 m
HFhigh freq.
VHFvery high freq.
UHFultra high freq.
100 mm
SHFsuper high freq.
10 mm
EHFextra high freq.
THFterribly high freq.
0,1 mm 3 THz
radiospectrum Applications, differs from country by country
Electro Magnetic (EM) spectrum
microwave
Radar
Radio
Researched radio spectrum
Ingredients: transmission media
1 mm 300 GHz0,003 Å
0,03 Å 30 GHz
300 Å 3 GHz
4000 Å1 m 300 MHz
8000 Å10 m 30 MHz
30 µm
3 MHz300 µm
1 km 300 kHz0,03 m
30 kHz30 m
100 km 3 kHz
1 Å = 10 – 10 mWave length Wavelength Frequency78
Ingredients: transmission media
Wireless brings radio-technology-issues• Using the airwave is applying radio
technology– Susceptible for distortion– Distance limitations determined by
• Used frequency• Allowed transmitting power• Quality of the receiver• Quality/type transmitter antenna
Omni directional/directional• Access control needed: the air is
a shared medium, avoid• GSM• Satellite uplink
• An assigned frequency band has limitedcapacity determined by the modulation method (medium adaptation)
– Ongoing technological improvements (OFDM, higher frequencies, better DSPs…)
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35.767km
12.000 km
LEOMEOGEO
6371 km
Van Allen-belts
500-2.000 km
Satellite orbits
GEO = GeostationaryMEO = Medium altitudeLEO = Low altitude
Ingredients: transmission media
earth orbit
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