Alcatel-Lucent Network Evolution to Mass Broadband Solution

Accelerating mass-market broadband adoption in high-growth economies

Alcatel-Lucent Network Evolution to Mass Broadband Solution2

According to recent market research, personal broadband services

have tremendous growth potential in emerging economies. But to

meet this pent-up demand, service providers must overcome the key

challenges of access and affordability. Alcatel-Lucent provides a cost-

effective, end-to-end solution to help speed mass-market broadband

adoption. It allows service providers to transform their networks and

deliver attractive broadband services to the full range of potential

customers — from entry-level users to advanced Internet subscribers.

The solution leverages our experience in high-growth economies,

leadership in broadband technologies, our end-to-end approach to

network transformation and our contribution to developing a thriving

broadband ecosystem.

Alcatel-Lucent Network Evolution to Mass Broadband Solution 3

In high-growth economies, demand for broadband is strongTo estimate broadband market potential in high-growth economies, Alcatel-Lucent has conducted several quantitative surveys. The most recent study showed explosive growth potential for personal broadband, with 75 percent of respondents interested in subscribing to broadband at home if the service is available and affordable. These consumers all had some experience with the Internet through their work or Internet cafés — in Brazil, Russia, Egypt, Kenya, India, Indonesia, Malaysia, China, Vietnam and the Philippines.

Entry users• Increase mobile penetration

Internet users• Enable mass-market broadband

Advanced users• Deliver a user-centric experience

Figure 1. Alcatel-Lucent Broadband for All

Alcatel-Lucent Network Evolution to Mass Broadband Solution4

AustraliaTelstra

FranceOrange

AlgeriaAlgérie

Telecom

SouthAfrica

Telekom

IndiaTata

PakistanDancom

Developed markets

40 €

60 €

20 €

0 €

100 €

120 €

80 €

High-growth markets

But broadband is still at the early adopter stageIn his article, “Let Them Eat Megabits,” Columbia University Professor Eli Noam argues that broadband services in high-growth economies primarily benefit the urban professional classes. In fact, service providers have often targeted high-income users to promote profitability for their first broadband deployments in these areas. The results of this strategy have included weak broadband coverage, a lack of local content, low computer penetration and expensive devices.

Given the limitations of existing broadband resources, how can service providers overcome the core issues of affordability and accessibility — and expand their broadband footprint in Southeast Asia, India, Russia, the Middle East, Africa, the Caribbean, Latin America and other high-growth regions? To meet the pent-up demand for broadband within the unique requirements of high-growth economies, service providers need to transform their networks, enabling profitable delivery of afford-able broadband to the mass market on a nationwide scale. Alcatel-Lucent research also suggests new entry-level broadband package structures, new content and payment strategies and future service options to increase loyalty and ARPU among existing users.

Figure 2. Broadband Pricing Comparison End 2007

Alcatel-Lucent Network Evolution to Mass Broadband Solution 5

Reaching the full range of potential customersBroadband provides fast, always-on connections, which can help everyone gain the social and economic benefits of Information and Communication Technologies (ICT) applications, such as e-government, e-trade and e-education. Alcatel-Lucent has a longstanding commitment to delivering “broadband for all” — by helping service providers com-petitively transform their networks, so they can take full advantage of new broadband opportunities, with sustainable business models.

The Alcatel-Lucent Network Evolution to Mass Broadband solution can help you serve the full range of potential cus-tomers within high-growth economies. It enables “smart networks” that deliver affordable and attractive broadband services to entry-level consumers and Internet café users, as well as sophisticated subscribers who demand advanced multimedia offerings. The solution leverages our depth of experience in high-growth economies, market leadership in broadband technologies, our end-to-end approach to network transformation and our wide-ranging contribution to developing a healthy and economical broadband eco-system, with a broad range of mass-market devices and applications.

Alcatel-Lucent Network Evolution to Mass Broadband Solution6

An end-to-end approach for the lucrative mass marketUnlike many other solutions that are targeted only to high-end users, the Alcatel-Lucent Network Evolution to Mass Broadband solution can help you deliver broadband to the mass market. This best-in-class, end-to-end solution increases efficiency and reduces costs by combining flexible access, optimized backhaul and transport and applications suitable for a range of ARPU levels.

Alcatel-Lucent Network Evolution to Mass Broadband Solution 7

Figure 3. Alcatel-Lucent Network Evolution to Mass Broadband solution overview

HLR/AUCSCP SMSC MLC VHS

Broadbandcommunity centre

C-dotCARC

BSCMFS

RNC

A9130

8610 suite 9900 WNG centralnetwork guardian

Subs. data management

8650 SDM1430 unified home

subscriber server

9900 WNG detectors

OPTION: IMScore and apps.

Broadcastlive TV

5910 mobileinteractive TV

5910 videostreaming

Ad selectionserver

Video RBT

Multimedia IM5430 MIM

5100 messaging

suite c-VoIP5420 CTS

PCM

Mobility: 5420 VCCEnterprise VPN: 5430 ECN

Mobile e-Mailwith RIM Visual

voice mail

Presence andaddress book

5410 presence,XDMS

5920 multimediacontent mgr5930 interactive media manager

Hosted 6020 cross media:• MiTV• Ad selectium• Premium VOD

7500SGSN

7540/7549 WMG

5060 WCS

7500 SGSNWAC

A9370

7710 SR

7705 SAR/7450 ESS

1850 TSS

1850 TSS

OMSN + ISA-ES

OMSN + ISA-ES

7750 SR

7710 SR

9500MPR

Indoor: Femto

Fiber orcopper

9400 AWY/9500 MPR

5440 PC Client,5440 Windowsmobile clientPay ‘n Go RIM

ULCH

Entry user

GPRS/EDGE/1xRTT

Wirelessmultistandard

access

Metabackhauling

Metaaggregation

MTSO

MulticoreNGN

IP/MPLS andoptical

core

End-to-end network and services integration

SDE network

Alcatel-LucentMarket Advantage

Program (MAP)

SS7 services

WiMAX

3G HSPA/EvDOInternet user

Advanced user

Wirelineaccess

Microwave

Microwavepacket

ring

DSL or FTTX7302 ISAM

IP/MPLS

Hybrid optical/Ppacket T-MPLS

Call Server

MediaGateway

MediaGateway

PSTN

EnterpriseLAN/WAN

M

ultimedia

Intern

et

IP communications

MediaGateway

Affordablebroadband

Convergencecharging

Our approach to creating smart networks helps you get the bandwidth, speed, capacity and intelligence needed for profitable delivery of increased broadband traffic. IP transformation offers more economical backhauling and broadband service aggregation. Scarce resources can be used more efficiently with end-to-end control of band-width, and there’s no cannibalization of revenues with user and services differentiation. As a result, you can:

•Providerapid,reliableandoptimizedbroadband access connectivity, using the most effective technologies for your requirements

•Achievecost-effectivenetworksforbroadband data transport

•Monetizeyourbroadbandnetworkswithaffordableservices targeted at the full spectrum of end users

Alcatel-Lucent Network Evolution to Mass Broadband Solution8

Entry user

Internetuser

Content

Advanced user

Stimulateusage

Access

Networkand transport

Applicationsand service

delivery

Captureusage

Deliver mass broadband• With field-proven operational excellence end to end in high-growth markets

Build the smart networks• By protecting current network investment, while preparing to transform your network to all-IP

1

2

3

Monetize your broadband network• By launching affordable and attractive services, combined with end-to-end network control that enhances QoE

Figure 4. Alcatel-Lucent NEMB Value Proposition

The Alcatel-Lucent Network Evolution to Mass Broadband solution can meet the needs service providers that want to introduce broadband wireless services, including:

•Mobileserviceprovidersmovingtobroadbandwireless—includingGSMto UMTS evolution, CDMA EV-DO evolution, overlay GSM/WiMAX or GERAN evolution

•Fixedorconvergedserviceprovidersmovingtowirelessbroadband— combining DSL, PON and WiMAX

Alcatel-Lucent Network Evolution to Mass Broadband Solution 9

The solution includes:

•Multi-standardaccess(wirelessandwireline)

•Next-generationIPbackhaulandbackbonearchitecture

•Multicorearchitecture(distributednext-generationnetworkarchitecture, IP/MPLS and optic backbone)

•Convergentpaymentsuite

•Innovativebroadbandservicestargetedtodifferentend-usersegments,including:

¬ Affordable broadband packages for Internet users

¬ Multimedia/entertainment services for high-end residential users, such as triple play, mobile TV, video, music, gaming and local multimedia content

¬ IP communication services and premium voice for business users

Key features and benefits

FEAturEs BENEFits

End-to-end approach that includes manageable Quality of Service, • Affordable high quality, broadband for the mass market customer differentiation, control of broadband resources and IP network transformation

The Industry’s lowest TCO across the full end-to-end network • TCO reduction up to 44 percent, compared to a traditional leased-line backhaul with META architecture • CAPEX improvement of 4.9 to 1 with a TPSDA architecture compared to a centralized BRAS architecture • OPEX savings of up to 22 percent with a next-generation network, compared to legacy systems

Investment protection • Seamless network with continuity of service between access technologies • Shared resources, including common transport, site/node re-use and open interfaces • Synergies, such as a unified RRM and unified O&M

New ways to monetize your broadband networks • Differentiated offerings that provide affordable broadband services for the mass market, along with innovative new services for advanced users • Efficient use of scarce broadband resources by controlling non-value-add traffic and load on the network

10 Alcatel-Lucent Network Evolution to Mass Broadband Solution

The Alcatel-Lucent AdvantageWith the end-to-end Network Evolution to Mass Broad-band solution, you can benefit from:

•Rapid,reliabledeploymentofoptimizedbroadbandaccesstechnology, leveraging our field-proven operational excel-lence across an end-to-end solution

•Lowend-to-endtotalcostofownership,whichstartsbyprotecting your current network investment and continues throughout future transformation of your network to all-IP

•Deploymentofaffordableandattractivebroadbandservices,combined with end-to-end network control that helps deliver the best Quality of Experience for your customers

2008 2009 2010

Year

2011 2012

Revenues

50

$ m

illio

ns

-50

75

25

-25

0

125

150

100

Expenses Investments

Discounted payback2.5 years

+78% morerevenues

CDCF

Bell Labs business modeling demonstrates that targeting mass broadband with ARPU under 15 US dollars a month distributes revenues over a larger population pool.

11Alcatel-Lucent Network Evolution to Mass Broadband Solution

GLoBACoM NiGEriA – NAtioNAL turNKEy ENd-to-ENd NEtworK

with an Alcatel-Lucent solution, Glo achieved:• Leadership in network QoS• A 30 percent savings in OPEX• Smooth evolution to next-generation

IMS and triple-play services

the solution:• End-to-end 2G/3G solution:

access, ATM/IP/MPLS broadband data network, optical backbone, satel-lite, microwave and so forth

• Innovative services: VoD, mobile TV, video conferencing, mobile office (prepaid RIM)

www.alcatel-lucent.com Alcatel, Lucent, Alcatel-Lucent and the Alcatel-Lucent logo are trademarks of Alcatel-Lucent. All other trademarks are the property of their respective owners. The information presented is subject to change without notice. Alcatel-Lucent assumes no responsibility for inaccuracies contained herein. © 2008 Alcatel-Lucent. All rights reserved. CAR7526080509 (05)