MobileInternet_June2012

7/29/2019 MobileInternet_June2012

1/9

TELECOM ASIA SUPPLEMENT l JUNE 2012

Wi-Fi blursthe broadband linesIP trac surge to fow mostly over xed-line networks


2/9

Mobile Internet Supplement Editors Letter l 3

Mobile devices and video will play an

increasingly signicant role in the exponentialgrowth o IP trac, which is expected tocontinue or at least the next decade. The

latest Visual Networking Index report romCisco, however, illustrates clearly that while wireless is

destined to dominate the internet, xed-line broadband willstill carry the majority o that trac ve years rom now,

thanks to Wi-Fi ofoad.This issues main story looks at the highlights o the VNI

report. Cisco expects over hal o the worlds internet trac tocome rom Wi-Fi connections in 2016, and those Wi-Fi access

points will be connected to xed-line broadband networks,many via home gateways. While wireless devices connectingdirect to mobile broadband networks will account or a tenth

o global IP trac in 2016, wireless devices connecting toxed-broadband connections via Wi-Fi will account or 51%.

The issue also eatures market reports covering mobilepayments, mobile phone shipments and M2M mobile

modules. Gartner expects the value o mobile paymenttransactions to grow 42% annually and hit $617 billion

in 2016 with 448 million users. The market is orecast toincrease 62% this year and have more than 200 million users.

IDC sees the growth in mobile phone shipments slowing

to 4% this year, with smartphone growth o 39% osetting a10% drop in eature phone sales. The rm expects Android to

account or 61% o the smartphone OS market this year andiOS to have a stable 20% share. But by 2016 Windows Phones

will be outselling iOS phones.IMS Research projects that partially due to increased

government initiatives that by 2016 more than 45.4 millioncellular modules will be shipped to the automotive sector,

representing about 38% o that years total shipments.The company also orecasts M2M module shipments or

the medical market to grow at more than a 95% annually

until 2016.Finally, Andrew Mackay rom Cisco talks about the

Next-Gen Internet and what it will mean to telcos.We hope you enjoy this issue and let us know what you

think and what you want to read about in uture issues. l

Joseph Waring

Telecom Asia group editor

Wi-Fi to carrythe load

3 Editors letter

4 Newswire

6 Cover: Mobile data trafc

9 Research Note: Mobilephone market

10 Analyst Insight: Mobilepayments

11 Analyst Insight: M2Mmobile modules

12 Q&A: Cisco

14 Products

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Contents

verviewsco invites you to engage with us

explore how Cisco Solutions can

sitively reduce costs on your mobile

ckhaul network. According to the

sco Visual Networking Index: Forecast

d Methodology, 2010-2015, there will

two networked devices per capita in

15, up rom one networked device per

pita in 2010, and the number o devices

nnected to IP networks will be twice

high as the global population in 2015.

e more devices on your network, theore data that efciently needs to be

nsported. Engage with Cisco to learn

w our mobile backhaul solution can not

y handle the growth in data trafc but

o do it in the most cost eective manner,

eating more proft or you.

asy to Engaget us show you how easy it is to

gage with Cisco. To get a high level

derstanding o what type o fnancial

etrics may be possible, you have to send

the ollowing inputs:

seline Inputs

Detailed AnalysisWhile we have provided the initial

potential benefts, we ask to you to join

our Premier Engagement team on a

much more detailed analysis that will

provide the operational insight to deploy

a cost eective network. This analysis is

basically a custom engagement over a

2-3 month period where Cisco will partner

with you to develop a custom analysis.

Our Premier Engagement team has vast

service provider experience in network

design, deployment, and strong fnancialbackgrounds in both wireline and mobility

markets. Since this is a major investment,

we ask or an agreement to mutually

work together developing the model or

your company. During this process you

will be working with our team to ensure

the model can be developed to your

companys needs. This is how Cisco

partners with service providers to ensure

timely deployments to increase customer

satisaction and to deploy efcient capacity

planning.

BeneftsFirst, it will show much more accurately

the fnancial benefts. Second, and most

important, it will serve as a capacity

planning tool. This will enable you to deploy

the equipment with an accurate projection

o needs, making your capital investments

the most efcient.

ContactsEmail one o the ollowing addressesbelow to set up an appointment to learn

how to engage with Cisco on the TCO

Challenge.

[email protected]

[email protected]

[email protected]

om there we can rapidly provide you

me high level results showing thetential benefts the solution can enable

d discuss with you the potential. We trust

u will be pleased with the results and

n delve deeper over two weeks to with

ur inputs to provide a more customized

derstanding the benefts based on your

twork confguration. In this two week

ployment, our account team will work

h you to urther refne the business

odel. From here we request to meet with

u on the results and show what steps

n be taken do develop a ull operational

odel that will aid your organization in

onetizing the network but also aid in

fcient capacity planning.

o residential # o mobile # o businesscustomers customers customers

Sponsored by Cisco

With just a ew

inputs, Cisco can

easily illustrate

potential benefts

to your business.

The Cisco TCO Challengeegin the process of saving with three easy inputs.


3/9

Newswire Mobile Internet Supplement Mobile Internet Supplement Newswire l 5

Smarter management and charging o mobileinternet can enhance the consumer experienceas well as secure operator revenue, according

to a new study rom Ericsson ConsumerLab.The Smarter Mobile Broadband report ocused on

internet usage via mobile phones and was conductedin the US, UK, Indonesia and Brazil, covering more

than 2,300 interviewees aged 16-59 years.Among respondents, 40% to 45% said they

would use the internet on their mobile phones morei they had access to better speed while 30% to 45%

said that a lower price o data is a key element toincrease usage.

Also, 30% to 40% said that a better batterylie or the mobile phone is important. The samepercentages said that having a better network

coverage also infuences usage.Many consumers also express rustrations about

paying or a plan that is not ully used and, in turn,avor more personalized price plans.

Users rom the UK and US who have experiencewith unlimited plans are more cautious about

moving to dierentiated plans. However, in theprimarily prepaid markets o Brazil and Indonesia,consumers are used to paying or what they use and

topping up when necessary. l

The global 2G, 3G and 4Gequipment market decreased

14% to just under $10billion in the rst quarter o

2012, ollowing an 8% increasethe previous quarter, Inonetics

Research reported.We saw weak 2G and

3G activity across the board,

exacerbated by China Mobilesdramatic GSM pause on the heels

o extraordinary shipment levelsin the previous quarter, said

principal analyst Stphane Tral.

LTE and Wimax equipmentrevenue also declined

sequentially, Tral said.Nonetheless, LTE spending is

up 128% rom the year-ago rstquarter, and the number o mobileoperators committing to LTE

continues to increase rapidly.Inonetics also ound that

rom the year-ago rst q uarter,the overall 2G, 3G, and 4G

inrastructure market includingLTE and Wimax equipment

shrank by 8%.

One bright spot o the quarteris 3G mobile packet core network

equipment, which went up 4%sequentially and up 5% year-on-year, refecting ongoing 3G

expansion activity tied to 2Gmodernization.

Inonetics expects a spike inTD-SCDMA equipment spending

this year due to China Mobilesexpanding TD-LTE trials aimed at

helping it move quickly to 4G.l

Mobile TV users spend more time viewing

Smarter charging boosts mobile internet uptake

LTE equipment to hit $17.5b in 2016

Mobile TV has becomea convenient service

which is even capable oreplacing traditional TV or some

people, MobiWorld Media oundout in its new SPB TV survey. O

47,000 respondents, 60% saidthey mostly watch mobile TV athome.

Most surprisingly, 36% usuallywatch TV on their mobile devices

over 30 minutes uninterruptedlywhile 39% watching do so several

times a day and 27% several times

a week.The survey ound that most o

mobile TV subscribers appreciateeatures like reedom to shit

between dierent types o internetconnections Wi-Fi, 3G, EDGE,

LTE, etc. (57% o the respondentsnd this eature crucial).

As or the content preerred,

movies & series is the usersavorite channel category or both

live and on-demand TV, ollowedby travel & discovery programs

and news.

More than a quarter orespondents (28%) are ready to

pay $1 to $5 a month or mobileTV services. O the 48% willing

to pay, they chose one month asthe most convenient subscriptionperiod while 22% would subscribe

or even a longer time.When asked about other TV-

enabled devices they use, 43% orespondents marked out internet-

connected TV sets and 30% usedesktops, but smartphones still

won with 56%.l

Voice-only subscription plans in Taiwan stillhave a good take-up rate o 48%, ollowed

closely by data and voice bundled subscriptionplans, which ormed 46% o the total mobile tari

contracts pie.Recent ndings rom GK Taiwan also show that

data-only plans had the lowest share o 6%. Besidesthese termed postpaid contracts, which ormedthe lions share o the total revenue earnings in the

mobile tari sector, a stabilized share o 5% wasrepresented by prepaid cards.

The popularity and widespread adoption o thelatest mobile internet devices such as smartphones

and tablets have been directly ueling the risingtake-up o mobile tari plans, propelling the sectors

value in recent times to the highest it has ever beenin the country, said general manager Lydia Huang.

An emerging trend is the willingness oconsumers to commit to a longer-term contract

in order to enjoy greater savings or their mobiledevice, Huang said.

For instance, while only 27% o subscribers in

November 2011 chose to sign on a contract beyondthe two-year term, the proportion rose steadily over

the next consecutive months to reach 43% in Marchthis year.l

The market or neareld communication-

ready POS terminalsgrew in 2011 with annual

shipments doubling to anestimated 2.5 million units

worldwide, according toa new report rom Berg

Insight.The rapid growth

was driven by atransition in the NFC-payments ecosystem

rom perorming trialsto accelerating the

rollout o NFC-readypayment inrastructure, in

preparation or the arrivalo NFC-based mobile

payment services.Berg Insight orecasts

that the global installedbase o NFC-ready POSterminals will grow at a

CAGR o 49.4% rom3.9 million units in 2011

to 43.4 million units in2017. This corresponds

to an increase in thepenetration rate rom 8%

to 53% over the sameperiod. Penetration isprojected to be highest

in North America wherean estimated 86% o the

terminals will be NFC-ready by 2017. Europe

and the rest o the worldwill have 78% and 38%,

respectively.Berg Insight expects

that the emergence omobile wallet services willbe the most signicant

development in thepayments industry in the

next ew years. l

iPhone customers use more data than anyother smartphone users, and account or

80% o the top 10% o heaviest datausers, according to a report rom Analysys

Mason.O those smartphone consumers who are

in the 70th percentile or above in terms odata usage, iPhone users appear more than

three times as requently as the next mostdata-hungry consumer segment those who

have Android on HTC devices.This is based on data derived rom

Arbitron Mobiles on-device monitoring

app that provided access to the smartphonebehavior o more than 1,000 panelists or two

months in the US, UK, France, Germany andSpain.

Analysys Mason said the high usage at thetop end o the user base means that average

monthly smartphone data trac levels which stood at 807MB per month or the

panel are 3.5 times higher than median datatrac levels generated by individual users(221 MB per month).

Nearly one million unique apps areavailable globally, but the report ound

that each panelist used an average o only32.6 add-on apps during the two-month

observation period. O those apps, 47% wereused only once.l

Smart devices drive Taiwan subscriptions

NFC-ready POS terminalshipments double

iPhone users mostdata-hungry


4/9

Mobile Internet Supplement Coverstory l 7Coverstory Mobile Internet Supplement

Wi-Fi blursthe broadband linesWireless devices and video will drive the majority o IP trac in 2016 and thanks to Wi-Fi, most o it will be over xed-line networks

Its not news that IP trac isgrowing at exponential rates

and will continue to do soor at least the next decade,just as its not news that

mobile devices and video will playan increasingly signicant role in

that growth. However, the latestVisual Networking Index report

rom Cisco Systems illustratesin no uncertain terms that while

wireless is destined to dominatethe internet and video is goingto be the astest-growing mobile

service driving it xed-linebroadband will still be carrying

the majority o that trac veyears rom now, thanks to Wi-Fi

ofoad.First, the big picture.

According to Ciscos latestVNI orecast, released at theend o May, global IP trac has

increased eightold over the pastve years, and will increase nearly

ourold over the next ve, withannual global IP trac expected

to reach 1.3 zettabytes by 2016(a zettabyte equal to a trillion

gigabytes, i that helps). On aper-month basis, that works out to110 exabytes per month by 2016

globally, compared to 31 exabytesper month last year (a CAGR o

29%). In Asia Pacic, IP tracwill grow slightly aster at 31%

CAGR to reach 40.5 exabytes permonth by 2016.

Cisco attributes those guresto a number o industry trends,

all o them directly or indirectly

related to wireless, rom theincreasing number o device types

(smartphones, tablets, e-readers,home gateways and M2M

connections) and growing internetpenetration (3.4 billion internet

users in 2016, or 45% o theprojected global population) toaster average broadband speeds,

video and Wi-Fi usage.

Wireless drives xed tracLooking more specically at

mobile data trac growth, Ciscois projecting mobile data trac

to increase 18-old at a CAGRo 78% to hit 10.8 exabytes per

month worldwide by 2016. Thatsthree times aster growth than

xed IP trac in the same orecastperiod.

Interestingly, despite thatgrowth, mobile data trac willstill account or just a raction o

the worlds IP trac just 10% in2016 (albeit compared to just 2%

last year). And yet Cisco also saysthat internet trac rom wireless

devices will surpass the volumeo trac rom wired devices by

2016.The latter projection doesnt

contradict the ormer becauseCisco is actoring Wi-Fi into theequation. Cisco expects over hal

o the worlds internet trac tocome rom Wi-Fi connections

in 2016, and those Wi-Fi accesspoints will be connected to xed-

line broadband networks, manyvia home gateways.

As such, the VNI report says,The trend toward mobility

carries over into the realm oxed networks as well, in that anincreasing portion o trac will

originate rom portable or mobiledevices.

In other words, while wirelessdevices connecting direct to mobile

broadband networks will accountor a tenth o global IP trac in

2016, wireless devices connectingto xed-broadband connectionsvia Wi-Fi will account or 51%.

Result: wireless devices will begenerating well over 60% o global

IP trac one way or another.

Mobile video vs SMSA new element in this years

VNI is the Service AdoptionForecast, which as the name

implies looks at adoption oservices in the consumer mobile

and business services sectors. And

on the consumer mobile side,unsurprisingly, its all about video.

Cisco estimates mobile videowill be the astest-growing

consumer mobile service(compared to gaming, music,

social networking, locationbased services, m-commerce and

messaging). The mobile video userbase will grow rom around 271million in 2011 to 1.6 billion users

in 2016 (at a CAGR o almost43%). Mobile video growth will

even outpace growth in the digitalTV (12% CAGR) and online

video (9% CAGR) segments,according to Cisco.

Actually delivering that

video does create provisioning

challenges, although Cisco sayssuch challenges can be met by

intelligent networks. This videotrend can also create opportunities

or service providers to leveragepopular content across multipleplatorms, thus increasing revenue

streams and enhancing networkmonetization.

For those people wonderingwhat all this means or SMS

whose demise has been regularlypredicted any day now ever since

smartphones became popular Cisco reports that text messaging

isnt going anywhere. Whileconsumer SMS will see the slowestannual growth o all segments

The trend toward mobility carries over intothe realm o fxed networks as well, in thatan increasing portion o trafc will originaterom portable or mobile devices

Global IP trafc, wired and wireless

Source:Cisco VNI


5/9

Mobile Internet Supplement Research Note l 9Coverstory Mobile Internet Supplement

in the Service Adoption Forecast(a mere 8.3%), thats still decent

growth or what is decidedly amature market. And it will be the

service with the highest globalpenetration rate in 2016 90%o the worlds 4.1 billion mobile

users will use SMS by then,compared to 74% o 2.8 billion

mobile users last year.The second-astest growing

consumer mobile service behindvideo is mobile commerce,

according to the Service AdoptionForecast. However, secondastest is a technicality

m-commerce is projected to growat 42.7% CAGR, just 0.2% lower

than mobile video. More to thepoint, its expected to reach ar

more users 2.1 billion in 2016,compared to 1.6 billion or mobile

video.Asia Pacic will lead the charge

in mobile commerce throughout

the orecast period, growing romalmost 100 million in 2011 to 974million in 2016. Middle East and

Arica will have the second-highestnumber o users in 2016, reaching

424 million.Cisco says the growth gures

point to a growing acceptance byconsumers o the unctionality o

mobile commerce services, rommobile shopping and payments

to banking, toll-road paymentsand event ticketing. However, thereport notes that such services

will have to overcome the usualconcerns rom consumers over

mobile-based transactions,particularly when it comes to

security, device vulnerabilityand protection o nancial

inormation.

Tiered pricing impactWith the mobile industry

moving away rom unlimited

data plans to tiered packages (orat least trying to), one interesting

aspect o this years VNI is theimpact o tiered pricing models on

mobile usage.According to Cisco: Average

consumption per user in an

unlimited pricing plan is nearlytwice that o a user o a tiered

pricing plan. However, trac peruser has increased 169% or tiered

pricing plans compared to 83%on unlimited plans, indicating that

tiered pricing users may be seekingto ully maximize their usageplans.

Cisco adds that new ndingsindicate that the top 1% o

users is dierent each month.Thereore, out o each 10,000

users, there are not only 100heavy users (1%), but 500 to

1,000 users (5% to 10%) that arein the top 1% at some time during

the course o a year. l

Mobile data and internet trafc2011 2012 2013 2014 2015 2016 CAGR

2011-2016

By Geography (PB per month)

Noth America 119 259 493 844 1,305 1,964 75%

Western Europe 180 366 684 1,161 1,705 2,438 68%

Asia Pacifc 206 438 832 1,503 2,614 4,323 84%

Latin America 40 77 146 267 455 738 79%

Central and Eastern Europe 34 68 134 253 439 706 83%

Middle East and Arica 18 45 91 187 378 635 104%

Total (PB per month)

Mobile data and internet 597 1,252 2,379 4,215 6,896 10,804 78%

Source:Cisco VNI

Feature phone slump will slow overall growth, while Androidsmarket share is expected to peak in 2012

This year is set to be a banner

year or Android, but notor the mobile phone mar-ket overall as a slump in the

eature-phone market limitsgrowth to single digits.

According to the latest World-wide Quarterly Mobile Phone

Tracker report rom research rmIDC, vendors will ship a total o

nearly 1.8 billion mobile phones thisyear, compared to 1.7 billion units

shipped in 2011. Thats a mere 4%growth year on year, and the lowestannual growth rate or the mobile

handset sector in three years.IDC credits the expected slow-

down to a projected 10% decline ineature phone shipments in 2012.

While eature phones will stillcomprise 61.6% o the total mobile

phone market this year, many ea-ture phone owners are holding on totheir phones in light o uncertain job

and economic prospects, IDC says.On the bright side, the smart-

phone segment will oset theeature-phone slump with a 38.8%

increase to 686 million units, drivenby high carrier subsidies, alling

average selling prices and compo-nent costs, increased awareness and

device diversity, and lower-cost dataplans among other things.

The smartphone parade wont

be as lively this year as it has beenin past, said Kevin Restivo, senior

research analyst with IDCs World-wide Quarterly Mobile Phone

Tracker. The mobile phone usertransition rom eature phones

to smartphones will continue ina gradual but unabated ashion.

Smartphone growth, however, willincreasingly be driven by a trium-

Android peaks as phone market slows

virate o smartphone operating

systems, namely Android, iOS andWindows Phone 7.

Most o that will be Android,which will dominate the smartphone

sector or the next our years. IDCexpects Android to account or61% o the smartphone OS market

this year, driven largely by Samsungsales. On the downside, thats as

good as its going to get Androidsmarket share will slip to just under

53% by 2016.Interestingly, it wont be Ap-

ple taking the credit or nibblingaway Androids market share, but

Windows Phone. Indeed, Apple isexpected to see its market shareslip just a tad rom 20.5% this year

to 19% in 2016. By contrast, Win-dows Phone will be outselling iOS

phones by that time, as its marketshare grows rom an estimated

5.2% this year to 19.2% in ouryears, putting it in the No. 2 slot.

(To keep that in perspective, iOSwill still see healthy 10% CAGR

growth in that time rame.)

Unsurprisingly, with Nokia nowcommitted to Windows Phone,

Symbian is ast slipping into obscu-rity. IDC expects Symbian-poweredsmartphone shipments to eectively

grind to a halt in the next two years.More surprisingly, however, the

same ate wont beall BlackBerryOS, the current woes o Research

In Motion notwithstanding. IDCinsists there will still be a market

or BlackBerry OS-powered devicesin emerging markets, or example,where users are looking or aord-

able messaging devices.However, while BlackBerry will

more or less maintain its currentmarket share level (projected to be

6% this year and 5.9% in 2016),IDCs Restivo says the gul between

the BlackBerry OS and its primarycompetition will widen as the mo-

bile phone market becomes increas-ingly sotware/app-oriented and thebring your own device enterprise

trend prolierates. l

OS winners & losers

Source:IDC


6/9

Mobile Internet Supplement Analyst Insight l 11l Analyst Insight Mobile Internet Supplement

Gartner expects the market to experience ragmented services andsolutions or the next two years

IMS Research says regulations will drive growth in the automotiveand healthcare sectors

Worldwide mobile

payment transac-tion values willsurpass $171.5

billion in 2012, a61.9% increase rom $105.9 billion

in 2011. According to Gartner, thenumber o mobile payment users

will reach 212.2 million this year, uprom 160.5 million last year.

We expect global mobile trans-action volume and value to grow

an average o 42% between 2011and 2016, and we are orecastinga market worth $617 billion with

448 million users by 2016, saidresearch director Sandy Shen. This

will bring opportunities or serviceand solution providers that will need

to cater to the local demand patternsto customize their oerings.

Gartner also ound that themarket will experience ragmentedservices and solutions or the next

two years. Technology providerswill have to cater their solutions to

the local market that will be usingdierent access technologies, busi-

ness models and partners, and underdierent regulatory conditions.

There will be a ew global play-ers that have the scale and resources

to serve large customers and themass market whose requirementscan be readily satised by standard

solutions, Shen said.She added that, on the other

hand, there will always be segmentsthat cannot be suciently served

by the global players. Shen said thedemand o these segments can only

be satised by specialized or localplayers that can better understand

the segment and have specic solu-

Government direc-

tives, along with otherdynamics in the marketsuch as dropping mod-

ule prices, will propelannual module shipments or

machine-to-machine (M2M) com-munications to more than 118 mil-

lion units by 2016. IMS Research,in its latest edition o a report titled

World Market or Cellular Mod-ules in M2M Communications,

orecasts that the greatest impact othese government regulations willbe in the automotive sector.

Separate mandates in Brazil,Russia and the Europe Union are

expected to require that automo-biles have cellular connectivity in

upcoming years. In the Europe Un-ions eCall and Russias ERA GLO-

NASS initiatives, the inclusion ocellular technology is intended tosupport mandatory emergency call

systems that allow or immediatenotications to emergency services

when an automobile is involvedin an accident. In Brazils Contran

245, cellular technology will berequired to assist in the tracking

and recovery o stolen vehicles.These government initiatives

are intended to address dierentissues and concerns, and demon-strate the wide variety o uses that

cellular technology can have in theautomotive market, said senior

analyst Josh Builta. It is expectedthat these regulations, along with

consumer demand or connectedinotainment systems will result

in strong growth in shipments ocellular modules to the automotive

Mobile payments to hit $171.5b in 2012 Govt moves to shape M2M cellular modules market

tions to meet the unique challenges.

SMS remains the dominantaccess technology in developingmarkets because o the constraints

o mobile devices and the ubiquityo SMS. Web/WAP is the preerred

access technology in North Americaand western Europe where mobile

internet is commonly available andactivated on user devices. Gartner

expects Web/WAP access to accountor about 88% o total transactions

in North America and about 80% inwestern Europe by 2016. Near eldcommunication (NFC) transactions

will remain relatively low through2015, although growth will start to

pick up rom 2016.

Three years awayShen said NFC payment

involves a change in user behaviorand requires collaboration among

stakeholders that includes banks,mobile carriers, card networks and

merchants. It takes time or bothto happen, so we dont expect NFCpayments to come into the mass

market beore 2015. In the mean-time, ticketing, rather than retail

payment, will drive NFC transac-tions.

In addition, merchandisepurchases will drive transactions in

North America and western Europe.These will include e-commercepurchases where users buy online,

as well as in-store purchases. Majore-tailers such as Amazon and eBay

have developed strong mobilestoreronts and have seen signicant

growth rom the mobile channel.For in-store purchases, Starbucks

Card Mobile app is now being

market in upcoming years.IMS Research expects that i

these respective programs achievetheir intended results, it could spur

governments in other countries toenact similar legislation. The com-

pany orecasts that in 2016, morethan 45.4 million cellular modules

will be shipped to the automotivesector, representing about 38% othat years total shipments.

Great potential inhealthcare

The rm also believes that

government initiatives aimedat reducing cost and improving

eciency could eventually driveuptake o cellular modules in other

markets such as healthcare. Inmany countries, governments are

already beginning to look at home-based remote monitoring devices

that requently incorporate cellulartechnology as a way to maintainhigh standards o care in a cost-

eective manner.Given the aging population

and healthcare cost concerns, it isnot surprising the US government

has been at the oreront o theseeorts with legislation such as the

Fostering Independence throughthe Technology Act o 2011, the

Veterans Telehealth and Telemedi-cine Improvement Act and Calior-nias Telehealth Advancement Act.

To date, the overall uptakeo cellular modules in the medical

market has been airly limited [but]considering the size o the aging

population and increasing numbero people with chronic diseases,

rolled out nationwide in the US, ol-lowing a successul pilot program,

and Gartner expects a large numbero merchants to introduce their own

mobile payment services, trying toemulate Starbucks success.

In developing markets moneytranser and airtime top-ups will ac-

count or most transaction volume,and money transers will account orthe largest portion o the transac-

tion value because o the demandor secure and ecient ways o

storing and transerring money.Ticketing and parking also appeals

across many markets because it canimprove eciency in transacting, as

well as oering user convenience.In developing markets, such as inArica and South Asia, users can buy

bus and railway tickets using a mo-bile payment service so that they can

secure tickets earlier where ticketsare oten in short supply.

Gartner projects that easternEurope will see the highest user

growth between 2011 and 2016,albeit rom a smaller user base.

Asia Pacic tops all regions inthe number o users, ollowed byArica. This also contributes to

high transaction volume, wherethe two regions combined will

account or more than 60% o theglobal mobile payments volume

in 2016. Arica tops all regions intransaction value throughout the

orecast period, beneting rom ahigher proportion o money transer

transactions that have higher valueper transaction than other use cases.North America is the third-largest

region by value in 2016 and is twicethe value o western Europe. l

there is no industry other than au-tomotive that has greater potential

or cellular M2M communica-tions, Builta said.

As medical expenditures con-

tinue to rise, governments world-wide will increasingly promote

the use o technology, includingcellular, to provide aordable

healthcare solutions, he added.IMS Research projects that

partially due to these increasedgovernment initiatives, module

shipments into the medical marketwill grow at more than a 95%CAGR rom 2010 to 2016.

However, Builta cautions thatgovernment regulations can also

serve to inhibit uptake o cellularmodules in these same markets.

Cellular-enabled medical devices,or example, are typically required

to go through a complex andtime-consuming approval processthrough multiple regulatory bod-

ies, he said. Furthermore, gov-ernment standards are oten not

the same in each country, meaningthis process is even more dicult

i manuacturers want to sell theircellular-connected devices interna-

tionally.Regulations could also nega-

tively impact the market or cel-lular modules in the automotiveindustry. Government actions that

aim to reduce distracted drivingcould orce manuacturers to limit

the unctionality o applicationssuch as connected inotainment

systems. This could result in reduc-ing the popularity and consumer

demand or such systems. l


7/9

Andrew Mackay, Ciscos manager or mobile architectures orAsia-Pacic, Japan and China, denes the Next-Gen Internetand explains what it will mean to telcos

Ciscos

Andrew Mackay

Mobile Internet Supplement Q&A l 13l Q&A Mobile Internet Supplement

Mobile Internet: What is the expected impact o the

boom in smartphones and tablets on mobile net-works and how can telcos prepare or the impending

surge?Andrew Mackay: Smartphones and tablets oer

a tremendous opportunity or operators to redenetheir role in the mobile ecosystem, but they also

threaten the oundation o their business.The mobile broadband era started with bundled

3G modem plans mainly or corporate users. Withlittle scope or operator dierentiation once cover-

age and speeds became comparable, inevitable pricewars eroded revenue while encouraging consump-

tion, hitting protability with a double whammy.Most APAC markets are still stuck in this vicious

circle. This new smartphone era oers a way toregain dierentiation, built not just on dumb ac-cess but also by shaping the services and content the

devices enable.However, embracing smartphones and tablets

means operators ace exponential throughput de-mands, while competing with a host o new players

or a share o subscriber spend. These devices alsoencourage use o o-net Wi-Fi access whenever

possible, which threatens the heart o an operatorsproposition, where controlling internet access itselis no longer a given.

Preparing or the boom means being able to scalecapacity without costs spirally, and having the right

business ramework and network enablers to shapethe complete user experience.

How does Cisco defne the Next-Generation Inter-net?

The Next Generation Internet is mobile, not

The solution to operator proitability lies inthe right balance o top-line revenue per b it yieldmanagement with bottom-line cost per bit scal-

ability.Foundational business analytics need to be in

place to understand the revenue and associated vari-able cost to serve every service stream. Only then

can the services be orchestrated to extract maximumvalue rom the network.

Since networks cant be expected to just scale asthey have in the past, they instead need to adapt to

the new normal, by recognizing that services havedistinct user requirements and operator value. Forexample, not all services need low latency and high

mobility, so dierentiated access can be exploited.Networks also have to be more dynamic with re-

source allocation to increase utilization, plus be ableto optimize trac, particularly video.

As services and apps move o the device onto thenetwork, how will telcos make money rom the

cloud besides merely boosting trafc on their net-works?

The strategic value o the cloud is not just in in-creasing trac and traditional XaaS cloud services.

Virtualization and the cloud give the operator thefexibility to create services and capacity on demand,

to experiment and try new oers and business mod-els. Cisco or some time has been leading in creating

synergies between the network and the cloud. Wehave architectures that are more virtualized and

converged to cope with elastic demand and rapidservice creation.

xed in time or space. A user no longer wants siloservices but rich multi-media My Way experiences

that ollow them through-out the day as they live,work and play. A device is no longer a handset or

dongle, but any-screen media players and internetportals, plus no-screen connected things.

For the operator the Next Generation Internet isone o unpredictable demand and business models.Rapid device and application developments spur

rapid network demands and constantly changinguser services. The old days o the operator control-

ling the eco-system, hence service demand, are over,now it is a much more dynamic and complex place

to do business.We are calling this the new normal since the

operator needs new approaches to remain prot-able. Sustainability in this new normal requires new

network attributes: heterogeneous, elastic, intelligentand orchestrated.

On the consumption side, with the huge growth in

data and video usage, how can service providersproftably manage their cost curve?

How much revenue potential is there or service pro-viders in connecting the unconnected in developing

markets? Where do you see the main opportunity?The main opportunity in connecting the uncon-

nected is in mobile broadband. I we look at APAC

as a whole, mobile penetration is around 75%o the nearly our billion population, yet mobilebroadband penetration is only around 8%. Clearly

the opportunity or growth is huge, i data servicescan be overcome the challenges o reachability and

aordability. We look orward to the coming o thedigital dividend to APAC in the coming years.

What role will small cells and Wi-Fi play in enablingtelcos to bring down the cost per bit?

Given spectrum constraints, and the ever morechallenging task o acquiring macro sites, densica-

tion with small cells (in either licensed or un-licensedbands) is inevitable. The prolieration o Wi-Fi

enabled smartphones and tablets is already leadingto large-scale o-load at home and in the oce.

In several developed markets we have also seenemtocells lling a requirement or more ubiquitous

indoor coverage and capacity.Operators and vendors alike are now orming

the strategies or the role o small cells outside thehome and oce. They are already proving more eco-nomical or serving the bandwidth requirements o

hotspots, venues and even urban hot-zones with costper bit o more than six times better then 3G macro

capacity seen in some Cisco studies. There are envi-ronments where user density and demand reduces

and the economics o scale and outdoor small cellsno longer make sense. But current small-cell deploy-

ments are a long way away rom this cross-over. l

Preparing for the Next-Gen Internet


8/9

iBasis launches LTEsignaling exchange

iBasis, a KPN compan y,announced the launch o

its LTE Signaling Exchange(LSX), which will allow MNOs

to connect to hundreds o otheroperators through a single

interconnect and assure LTEroaming interoperability acrossmultiple vendors.

Demand or the LSX is a resulto the disruptive nature o LTE

and the evolution rom traditionalSS7 (MAP) signaling to IP-based

Diameter signaling. The iBasisLSX runs on iBasis IPX network,

a multiservice, global IP networkthat delivers high quality voice

and data services or mobileoperators.

A number o mobile network

operators, including UNE, aleading telco based in Colombia,

and Dutch operator KPN haveagreed to connect to iBasis

LSX Sandbox, which provides acomprehensive trial environment

in preparation or launchingcommercial LTE roaming

services.The LSX Sandbox enables

testing o a ull range o

technical operations, includingbasic roaming, policy control

and charging, Diameterinteroperability, signaling

accounting and MAP-Diameterinterworking.

The iBasis LSX reducescomplexity and cost whileensuring high quality o service

or roaming customers. TheLSX allows MNOs to connect

to hundreds o downstreamoperators through a single

interconnect and normalizesmessages to enable interoperability

on behal o each roaming partner.It also interworks with existing

SS7 networks. l

challenges known as the newnormal, which includes thedramatic growth o mobile

liestyle devices, increased usage onext-generation applications, and

rise o the internet o things ormachine-to-machine (M2M).

Cisco claims that the ASR5500 system is the only elastic

packet core solution capableo integrating signaling, data,in-line services, and policy and

charging control within a singleplatorm.

The system is also said to bethe only solution capable o auto-

sizing existing network resourcesto address dramatic variations in

network behavior. l

Wedge Networkslaunches securitysolution

Wedge Networks has

launched its MobileSecurity Module or

service provider and operatornetworks. The module eatures

the most comprehensivemobile threat intelligence,

rapid deployment and zerodevice ootprint which allallow operators to protect their

network, enterprise customers andsubscribers rom mobile malware

and malicious threats.The Mobile Security

Module promises to reduceoperational costs as it helps

control compromised devices,reduce support calls, encourage

sel-management and eliminateillegitimate trac on the network.

The module also oers

rapid deployment into existingnetworks through the WedgeOS

which combined with its inline,L2 transparent network stack

allows service providers andoperators to rapidly enable mobile

Mobile Internet Supplement Products l 15l Products Mobile Internet Supplement

Huawei unveilsmobile backhaulsolution

Huawei has unveiled its

Backhaul Adaptive Solution,a mobile broadband

solution that provides operatorswith an IP backhaul perormance

monitor (IPPM) and IP backhaulquality management (IP SQM)

services or improved ec iency.The solutions IPPM service

constantly monitors quality o

service between the eNodeBand the EPC serving gateway

according to speed, delay,jitter and packet loss. The

solution adjusts or bandwidthbottlenecking according to

changes in network quality andrealizes adaptive adjustments orbandwidth transmission.

The IP SQM service ocuseson the downlink rom the EPC

serving gateway to the eNodeB torealize smooth levels o data trac

and buering. The IP SQM alsosupports both static and dynamic

bandwidth adjustments basedon data provided by the IPPM

and increases backhaul usageand improves user experienceby decreasing packet loss and

retransmission.Test results show that when

S1 link congestion occurs, TCPtransmission eciency is improved

by up to 50% when the solution isemployed. l

Comba wraps upSMART Tunnelproject in Malaysia

Comba Telecom Systemshas completed a contract

to supply and deliver awireless communications system

or Malaysias StormwaterManagement and Road

security without reengineeringtheir existing network andwithout loading anything onto the

mobile devices.This solution not only

allows operators to providecomprehensive security, but

also enables new revenue andcustomer acquisition opportunities

while avoiding the high costso provisioning and managingsecurity sotware on mobile

devices, said CEO HongwenZhang. l

Ruckus launchesindoor Smart Wi-Figear

Ruckus Wireless has launched

its highest-capacity three-stream (ZoneFlex 7982)

and dual-stream (ZoneFlex 7321)

802.11n Smart Wi-Fi accesspoints or carriers and enterprises

that need increased wirelessperormance, capacity and ease o

use.The ZoneFlex 7982 and

ZoneFlex 7321 integrate acollection o technologies

not ound in any other Wi-Fisystem, the company said. Thesecapabilities increase signal gain,

mitigate RF intererence and alloweach ZoneFlex AP to adapt to the

changing nature o Wi-Fi signalsrom each connected mobile

device.The Ruckus ZoneFlex 7982

a high-capacity, three-stream802.11n access point that

combines dynamic polarizationdiversity with adaptive antennaarrays and transmit beam-orming

technologies to give customersup to a 4x improvement in Wi-Fi

perormance, signal gain andreception.

The ZoneFlex 7321, anaordable dual-stream 802.11n

(SMART) Tunnel the worldslongest multi-purpose tunnel atalmost 10km.

Comba provided multi-operator, multi-system 2G/3G

distributed antenna system (DAS)products and solutions. Under the

contract, Combas wholly-ownedMalaysian subsidiary Comba

Technologies is also providing ullmaintenance services.

The completion o this project

has acilitated ubiquitous wirelessvoice and data experience with

seamless handover at high speedswithin the tunnel.

Combas DAS solutionoperates at the GSM900,

GSM1800 and UMTS requenciesused by Malaysias operators

Digi, Celcom and Maxis in thisproject.

The SMART Tunnel is a storm

drainage and road structure inKuala Lumpur, Malaysia, with

daily trac o over 30,000vehicles. The tunnel comprises o

a 9.7-km bypass tunnel or stormwater and a 4-km double-deck

motorway.l

Cisco unveils mobilecore platform

Cisco has unveiled its ASR5500 platorm, touted asthe oundation or a new

generation o mobile internetnetworks.

The Cisco ASR 5500 systempromises to deliver the agility

and scale that service providersneed to meet the evolving mobile

requirements o their customers.As the industrys rst elasticsolution or mobile networks,

it was designed to capitalizeon breakthroughs in sotware

architecture optimized on new,purpose-built hardware.

These design characteristicsaddress three multi-dimensional

access point, is well suited oremerging markets and single APdeployments not only where

the demand or mobile internetservices is also rising but where

tighter economic constraints onnetwork investments dictate a

balance toward lower cost oversheer perormance. l

Altair unveils TD-LTEchipset

Altair Semiconductor hasreleased a cost and eature-

optimized chipset tailoredor the Indian TD-LTE market,

which is expected to becomeone o the astest-growing LTE

markets in the world.The chipset, dubbed Hornet,

is the result o several yearso working very closely withleading carriers in India, and

was developed based on thestringent cost and perormance

requirements o the Indianwireless market.

The combination o theexplosive growth expected

in Indias broadband market,together with the challenging

cost requirements to enable thisgrowth, is very unique comparedto other global markets, said

Eran Eshed, co-ounder andVP o marketing and business

development at Altair.Altair-based TD-LTE products

are commercially deployedin Brazil and the company

has completed advanced pre-commercial eld trials withcarriers around the world,

including Sotbank in Japan,China Mobile and leading carriers

in India. Altairs TD-LTE solutionis the rst to have demonstrated

Category 4 throughputs publicallyin China and Japan. l


9/9

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Documents

MobileInternet_June2012