Broadband Issues Perspective

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Broadband Issues PerspectiveMike Furby

Systems Engineering ManagerRedback Networks

© Copyright Redback Networks Inc. 2007. All rights reserved. - 2 -

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Redback Networks, An Ericsson Company

• Founded 1996 • Headquarters: San Jose, CA• Wholly owned subsidiary

of Ericsson• Tier 1 Customer Base– 500+ service providers– 16 of Top 25 globally

• Fastest growing SP router company• Support over 50MM DSL Lines• $400MM+ Investment in Next-

Generation Multi-Service Routing Portfolio



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Multiple Applications

In Top 20

Residential Triple Play

Business Networks

Mobile Broadband

Internet& VOD IPTV VoIP VPN

(L2/3)MetroE

(Agg/VPLS)Wi-Fi/WiMax

3G Data/MPBN

SmartEdge Highlights



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Broadband Issues

• Waves of change across the industry• Market dynamics & changing traffic patterns – Per subscriber traffic growth – Market saturation, growth is slowing– Service evolution– Increasing competition– Subscriber loyalty & the need to differentiate– Pressure on service margins & the need to reduce OPEX/CAPEX– P2P, DPI & QoS

• 21CN Wholesale Broadband Connect– Single step WBC strategy



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Technology EvolutionBroadband Capacity

1990 2000 2010 Year

ADSL

ADSL2+

SDSL

VDSL

VDSL2

FTTH

GPON

Last mileBandwidth

500kbps

2Mbps

10Mbps

100Mbps

1Gbps

CapacityBRAS/BNG

1st gen BRAS

Eth BNG

Next-gen Eth MSER

10Gbps

240Gbps

480Gbps50x

2000x



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Network Traffic IncreasingBroadband and Video Driving Upgrades

Subscriber traffic in mobile networks

Traffic Patterns creating Pressure points for Fixed and Mobile

Subscriber traffic in fixed networks

50 000

100 000

150 000

200 000

250 000

300 000

350 000

2005 2006 2007 2008 2009 2010 2011 2012

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byte

Classic Voice Internet IPTV/VideoVoIP

Source: Ericsson and market estimate

0

1,000

2,000

3,000

4,000

5,000

2004 2005 2006 2007 2008 2009 2010 2011 2012

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Voice Internet TV/Video



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5%

10%

15%

Q2C Y 06 Q3C Y 06 Q4C Y 06 Q1C Y 07 Q2C Y 07

DSL Cable FTTX

WorldwideAmericas

EMEA APAC

Source: Point-Topic as of Q1 2007

0%

10%

20%

30%


DSL Cable FTTX

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5%

10%

15%


DSL Cable FTTX

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15%


DSL Cable FTTX

Broadband Growth by Technology



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Service EvolutionsP2P Technology & Internet Video

2002 – 2006P2P dominates Internet traffic

(Video accounts for 60%)

2007HTTP overtakes P2P again

(YouTube accounts for 20%)

iPlayer

Driving the world towards adopting P2P as a commercial video distribution technologyDriving the world towards adopting P2P as a commercial video distribution technology

Source: Cachelogic

Source: Ellacoya



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BT Transformation

BRASSubscriber CP

Cisco 10k or JNPR ERX

20CN MSiP

(ATM network)

20CN Colossus

(IP network)

20C IP-stream

BRASSubscriber CP

SE800

20CN Colossus

(IP network)

21CN

(Ethernet MPLS)

21C IP-stream

BRASSubscriber CP

SE800

21CN

(Ethernet MPLS)

21CN

(Ethernet MPLS)

21C WBC



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Summary

• The way Broadband is being delivered is changing• Internet traffic is both increasing and changing shape• Growth is slowing– Driving the need to differentiate– Driving the need to reduce costs

• Redback is a key supplier to the industry– 16 of the top 25 DSL suppliers are Redback customers

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23 of the top 25 largest telecommunication companies by capex are Redback or Ericsson customers

22.9

17.9 17.7

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Top 20 Telecommunication Companies by CAPEX (billions)

Redback or Ericsson customerNot customer

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16 of the top 25 DSL operators by subscribers are Redback customers

23

13.4 13.2

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Top 25 DSL Operators by Subscribers (millions)

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Documents

Broadband Issues Perspective