© 2017 Nokia1

The Future X Network(and its critical role in new value creation)

Marcus Weldon

President of Bell Labs & CTO of Nokia

2 © Nokia 2017

The Simple Formula

1 1 1 11 11 111+ + = +

3 © Nokia 2017

The revolution

Tech. Revolution Enabling Technology Connectivity

Financial (1600 − 1740) Stocks & Bonds Banking & Stock Market Infrastructure

1st Industrial (1780 − 1840) Steam Engine & Iron Production Rail and Shipping Networks

2nd Industrial (1880 − 1920) Steel & ChemicalsExtended Transportation NetworksElectricity & Telecom Networks

Scientific-Technical (1940 − 1970) Analog & Digital Signal processing Digital Communications Networks

Information (1985 − 2015)The Web, Cloud computing & Mobile devices

Internet & Broadband Access

Automation of Everything (2015 −) Digital interfaces & Data analysis Future X Network

Technological Revolution (def):

Interconnection of new systems and technologies

We arehere

+ capacity to profoundly transform economies & society

4 © Nokia 2017

1.84

2.41

1.771.79

2.82

1.62

(1.0)

0.0

1.0

2.0

3.0

1870-1920 1920-1970 1970-2014

Output per person Output per hour

Source: Robert Gordon, The rise and fall of American growth (adapted by Mark Gordon, Chief Economist, E&Y)

The quest for digital value (1/2)

% C

ha

ng

e P

er

Ye

ar

5 © Nokia 2017

Source: McKinsey Global Institute, The Internet of Things: Mapping the Value Beyond the Hype, June 2015

The quest for digital value (2/2)

6 © Nokia 2017

The end and the beginning

Past/Present Future

Business

Solutions Technology-driven Human/Business-driven

Driver Consumer (GB) Industry (BW, Latency, SLA)

Innovation SpeedPer decade(new services)

Per day(new apps)

Technology

Architecture Heavily Centralized (100ms, 10M) Massively Distributed (1ms, 1G)

FlexibilityLimited (Provisioned)

Large(Software definable)

SharingStatic and Limited(HW VPNs )

Dynamic and Infinite(SW Slices)

IndustryDynamic

InvestmentSingular(Operator only)

Multiple & Cooperative(Many contributors/new players)

Standards Definitive Iterative

Partnership Limited w/APIs Co-design w/Open specs

We arehere

7 © Nokia 2017

Enterprises& Verticals

Consumers

The new digital era

Digitization, delivery & sharing of:

Digitization, distribution & optimization of:

8 © Nokia 2017

Latency matters …

0.1 1 10 100

10

100

1000

10000

(km)

RTT(ms)

Light propagation

Electric grid control

Autonomous vehicles

vRAN

Haptic VR & tele-operation

Cloud-assisted driving

BW-efficient 360° video

Hi-Res cloud gaming

4K video streaming

VoIP/video conferencing

Web page load

Vestibulo-ocular reflex

IM chat & bots

High-Frequency trading

Sprint start

0.25

1

2

4

8

7

5 20

10 100

10 40

20 90

120

50 1900

100

150

150

50

1000

4000

ICP

cl

ou

dC

ore

cl

ou

dEd

ge

clo

ud

Service latency requirements (in ms)

Max tolerable networking delay

Max application delay for processing

Human response times (for reference)

We arehere

9 © Nokia 2017

Bandwidth matters …

UHD & Unicast388

887

3,360

5,903

GB/User/Mo

20202016 2025

171

272

…

490

2016 2017 2018 2019 2020

GB/User/Mo

92 GB/user/Month

VR/AR

We arehere

~5x

~60x

10 © Nokia 2017

Latency & bandwidth matter …

Edge CloudCore Cloud

1ms10ms100ms1s10s 100us 10us

1kbps

10kbps

100kbps

1Mbps

10Mbps

100Mbps

1Gbps

10GbpsCloud RAN

360° video (hi-res)

Electric grid control

Cloud-assisted driving

Autonomous vehicles

Comms & Chatbots

4k Video streaming

Sensors

Home Sensors

Haptic VR

Remotetraining

360° video (free viewpoint)

Remote control vehiclesHD Video

streaming

360° video (lo-res)

Ban

dw

idth

Latency

Video VR/AR

People & Things

SystemControl

Virtual RAN

360° VR/AR

We arehere

11 © Nokia 2017

Summary: The 100yr, 100x shift

Enabled by: Local real estate, fiber, trust, optimized HW/SW network platforms , programmability, privacy preserving, & secure

Enabled by: Global reach and power; SW platforms for business model disruption, stability, non-privacy preserving & inadequately secure

We arehere

ComputeTech

IPNetworks

Broadband Access

ComputeTech

IPNetworks

Broadband Access

Core Cloud Edge Cloud

100s ms, 10’s Mbps1 day, $1000, 10B

1ms, 1Gbps10 years, $1, 1000B+

Devices Things

12 © Nokia 2017

Consolidation creates local market power

ISP Locations Internet Exchange Point (circles are sized by volume)

Source: Netflix, “How Netflix Works With ISPs Around the Globe to Deliver a Great Viewing Experience”, March 17, 2016

Netflix Open Connect (2011-2016)

2010: Global/centralized distribution only

2011: Open Connect launched

2016: 100% content locally served from ~1000 locations

The shift is underway (but still video centric)

13 © Nokia 2017

NFV

HIGHEST PERFORMANCE

LOWEST COST PER BIT

MOST PERSONALIZED

SDN

Edge Cloud/Access

NFV

Architectural Shift 1: Virtualizing the Network

~40 %CapEx & OpEx

Savings

14 © Nokia 2017

HIGHEST PERFORMANCE

LOWEST COST PER BIT

MOST PERSONALIZED

NFV Edge Cloud/Access

Type 1: Software-define a Service

40 %IP + Optical

CapEx Savings

Type 2: Software-define

a Network Path

Architectural Shift 2: Software-Defining the Network

Type 0: Connecting SW to HW

SDN

15 © Nokia 2017

HIGHEST PERFORMANCE

LOWEST COST PER BIT

MOST PERSONALIZED

Edge CloudNFV

Architectural Shift 3: Distributing the Cloud…in the Network

~40 %CapEx & OpEx

Savings

SDN

16 © Nokia 2017

HIGHEST PERFORMANCE

LOWEST COST PER BIT

MOST PERSONALIZED

SDN

Edge AccessNFV

90 %CapEx

savings by Small Cells

& vRAN

Architectural Shift 4: Distributing the Access Network

2x

2x >10x

10x

5x

17 © Nokia 2017

Perspective on 5G

Source: Bell Labs, adapted from F. Boccardi, T. Marzetta, IEEE Comms. Magazine, 201402

2G-4G:

“People & Video”

Ultra-broadband: “VR/AR”

Ultra-low latency: “System Control”

Forbidden region: “Shannon Limit”

Pre-5G

R1

R2

Ultra-narrowband: “Things”

R3

R4

R5

18 © Nokia 2017

The Future X Network: The Six Essential 5G Technologies

19 © Nokia 2017

80

90

100

110

120

130

140

150

160

170LoRA

LTE

5G

WiGig

Z-Wave

Zigbee

WiFi

SigFox

MulteFire

NB-IoT

LTE-M

10 bps 100 kbps 1 Mbps 10 Mbps 100 Mbps 1 Gbps 10 Gbps100 bps 1kbps 10 kbps

Throughput

Ma

x C

ou

plin

g L

oss

(d

B)Long range

Short range

Medium range

Low Medium High

The Future X Network: IoT technologies

20 © Nokia 2017

500 250 125 63 32

Node sizeMORE

SPATIAL REUSE

MORESPECTRUM

WIRELINE CAPACITY

MORE SPECTRAL

EFFICIENCY

The Future X Network: Distributing the Cable Access Network

21 © Nokia 2017

The Future X Network: Optimizing cost : performance of Cable

• Centralized DOCSIS 3.1 won’t achieve multi-Gbps scale at low cost

• DOCSIS 3.1 requires OSP upgrades - CAPEX better utilized in DAA

• DAA required for DOCSIS FDX / XG-CABLE

22 © Nokia 2017

The Future X Network: Access Convergence - Architecture

10-40 Gbps 10-40 Gbps

10 Gbps 1-10 Gbps

1 Gbps 100s Mbps

100s Mbps 10s Mbps

Peak BW/User

23 © Nokia 2017

The Future X Network: Access Convergence – BW & Technology

24 © Nokia 2017

Increases complexity/functionality in OSP but:

• Seamless coordination/session continuity between mac layers for multi-access technology use cases

• Future hybrid multi-access CPE with future remote can enable multi-access services

MAC

PHY

5G mmWave

MAC

PHY

DOCSIS FDX

MAC

PHY

PON

MAC

PHY

FTTdp

R-MAC/PHY - Collocated access functions

Reduces complexity/functionality in OSP but:

• Remote Phy ↔ Central Mac handshakes may impact seamless coordination/multi-access session continuity

• Potential for multi-access technology scheduling coordination challenges between Macs

MAC

PHY

5G mmWave

MAC

PHY

DOCSIS FDX

MAC

PHY

PON

MAC

PHY

FTTdpDOCSIS mac at headend/edge cloud

R-PHY - Collocated / distributed access functions

The Future X Network: Access Convergence – BW & Technology

25 © Nokia 2017

The New Architecture

ConvergedEdge Cloud

2 Software defined, end-end

Smart Network Fabric3

Universal Adaptive Core

4Access agnosticconverged core

modular, decomposednetwork functions

Common data layer

Programmable Network OS

5Dynamiccustomerservices

Dynamicnetwork optimization

Management &Orchestration

SDN NFV

Multi-operatorfederation

self-optimizedcoverage & capacity

MassiveScale Access

1

Long fibers

AccessRemote

Shortwaves & wires

Digital Value Platforms

7 ANP, CSP, ICP, Vertical apps

External data sources

Open APIs

Augmented Cognition Systems

6 Machine learningAnalytics

Humans& Machines

Dynamic Data Security

8

• New trust framework

• Ecosystem sharing

• Mass edge monitoring

We arehere

26 © Nokia 2017

The New Value (1): Time (& Trust)

Analog

with Trust

(in Privacy & Security)

Create Time

(by Prediction & Automation)

Digital

Free Wifi

27 © Nokia 2017

The New Value (2): Global-Local Equilibrium

Global ForcesLocal Forces

Optimized Discovery of Digital Content

Massive Brand Power

Generalization

Personal Data Monetization

Economies of Cloud Platform Scale

Optimized Delivery of Digital Content

Trusted Brand Relationship

Personalization

Personal Privacy Protection

Economies of Secure Network Platform

28 © Nokia 2017

Media & entertainment Data & knowledge discovery Comms, commerce, context & Content

Vertical & infra automation

VR/AR Expert assistance Supply-demand matching Critical control platforms

Needs- Massive scale content delivery- Dynamic bandwidth control

Needs- Massive access capacity- Low latency edge processing

Needs- Global network coverage- Immediate response

Needs- Global network coverage- Network-enhanced trust

Needs- Global network coverage- Uplink capacity for sharing

Needs- Global network coverage- Immediate response

Needs- Latency/reliability constraints- Control systems in edge cloud

Needs- Tera-scale access and core- Network slicing for verticals

Smartcity

Smarthome

Health care

Self-driving

Industry

Smart grids

The New Value (3): Digital Value Platforms

29 © Nokia 2017

The Simple Formula

1 1 1 11 11 111+ + = +

ms Gbps Tn $Tn GSPs LSPs

30 © Nokia 2017

And the winners will be…

Global Providers Local Providers

Become a high performance Infra company first and foremost

• Create highly optimized, high performance edge-cloud network

• Support massive scale, adaptive network slicing and hosting infrastructure

• Create alliance with global providers for E2E service offerings

• Offer real time (edge) analytics and security services

Become a DVP company first and foremost

• Create or acquire new digital value platforms

• Create E2E (industry-centric) service offerings

• Create alliance with local providers for edge network slicing & high performance services delivery

• Leverage local value for real time (edge) analytics and security services