Copy of presentation shown at Transmission Network Strategy Conference in Barcelona

1. Shared Back Haul Solutions
Network Strategies
Monday 16th November 2009
Allan Oakman
Business Development Manager

2. The case for shared Back Haul
Agenda
• Current environment
impacting strategies
• The response to reduce
costs
• The opportunity and
solutions
1

3. Arqiva
Wireless Access Terrestrial Broadcast Satellite & Media
TV transmission Scale and worldwide footprint
Wireless Access
• All UK TV channels (incl. BBC, ITV, C4, C5) The acquisition and integration of Inmedia &
Largest independent UK site provider •
1,154 UK national TV broadcast site network BT Satellite brings substantial growth in
• 24,000 marketable sites, urban and rural
• Key focus on analogue to Digital Switchover worldwide reach and capability
• 9,000 built sites, ~ 8,000 for cellular (DSO) by 2012 • 100+ earth stations at 10 teleports in UK,
• Provider of design, build and installation Radio transmission US & France
services plus backhaul • All BBC and circa 300 national, regional and Services to broadcast, media & enterprise
• Support services to emergency and other local commercial radio services on AM, FM, • Playout services, outside broadcast
public sector organisations and DAB
• Occasional use for sports and news
• Private Mobile Radio networks and services TV multiplexing
• Uplinking of over 400 channels worldwide
• Own and operate two of the six Freeview DTT
• Mobile data solutions • Carrier and enterprise connectivity
multiplexes
Your network
Full managed service
Mobile Data
Applications
Back Haul Services
of broadcast networks Play-out
on long term contracts
Managed Services
Developing
network • Exploits latest generation MW and fibre technology
Services, people &
managed
services
• Tackles infrastructure and investment required for existing and future Back Haul
Private Mobile Operations
Radio (PMR)
Services
• Proposes flexible managed Back Haul solutions to multiple MNO and Enterprise sectors in
the country – represents significant opportunity for legacy & future access (LTE) networks
skills
• Arqiva plays key role in
Infrastructure
– Site infrastructure
Site management Airwave Teleport
– Investment in appropriate technology
– Optimised use of spectrum
Broadcast Wireless site Public Safety Satellite – Promoting alternative Back Haul solutions to traditional approaches
customers customers customers customers
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4. Mobile Data Traffic Demand
Operators always find it difficult to prepare for demand tomorrow by rolling out capacity today; under
or overestimating demand has serious implications on operator’s bottom line
Cellular Traffic Demand Growth (TeraBytes/ Hour) Growth of UK Mobile internet users
10
8.1 8.1
190 TB 8 7.5
Unique Audiences (millions)
6
150 TB 6 5.7
110 TB 4
70 TB 2
30 TB 0
2009 2012 2015 2108 2021 2024 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009
Source : Ofcom Predicting Areas of Spectrum Shortage 2009 Source : Ofcom Communication Market Report 2009
MNO’s Network Challenges
• Prediction of demand for new services
• How much capacity should they build?
• Length of time it takes to upgrade and deploy a back haul network
• Availability of back haul spectrum may impact the strategies that can be deployed
3

5. Existing Strategies and Options
Operators have exploited obvious cost reduction strategies through shared network models based on
consolidation of infrastructure. Innovative solutions previously considered unacceptable are now
being considered
MNO1 MNO1
• Site Share – towers and sites with MNO2 MNO2
separate base station equipment
savings of ~ 40% against site Opex
costs
• Site Share with RAN share – Recent
announcement of merger between
Orange UK and T-Mobile savings of
more than €4 billion (£3.5 billion)
• Back Haul sharing using both self
provide and leased service providers
are being implemented
RNC/BSC Shared RAN and
• Cost saving initiatives are dependent on backhaul
consolidation partnering agreements
• Driving down cost base associated with Separate Core
suppliers will provide limited benefits
Core Core
MNO1 MNO2
• Consolidation is creating uncertainties
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6. Shareable Back Haul – leased services
The extent of leased services varies by MNO strategy but typically for 3G and future LTE ~ 55% of
network connectivity is forecast to be delivered by leased services. This is likely to increase.
• Typical product in UK assumes delivery by fibre based on incremental bandwidth supporting TDM, ATM
and Ethernet
– Synchronisation typically provided by discreet E1
– Zero contention to defined bandwidth threshold
– Typical Services assume 10Mb, 30Mb and 60Mb
• Current leased services utilising Microwave may require additional connection charges to cater for 3rd
party MW dish rental and cost of hardware changes to support Ethernet based network solutions
• Typical architecture assumes network would require ~ 45% of sites served by MW due to lack of available
fibre with aggregation at fibre POP for 2nd mile connection
TDM/Ethernet over Radio
Traditional
EPC
Leased Service Provider
TDM/Ethernet over Fibre
TDM/Ethernet using xDSL MNO fibre network
DSLAM
Self Provide MW Access NW Leased Services
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7. Synergies and Optimised Cost Reductions
Operators are examining cost saving initiatives based on individual Opex sectors. The value of
grouping multiple sectors & initiatives under a single service provider will increase due to synergies
• Shared services on common sites
provide opportunities in the following Site Infrastructure
areas: Provider
Site Infrastructure
– Site rental Provider
Site Infrastructure
– Antenna Sharing Provider
– RAN sharing Back Haul
Back Haul Services
– Back Haul sharing
lue
Services Back Haul
Services
• Providers capable of delivering
aggregated savings offer greatest V a
potential and benefit to MNO’s Base Station
• Back Haul sharing is only feasible where Vendor
Base Station
both service provider and customer Base Station
Vendor Vendor
requirements are satisfied Outsourced
Managed Svc
– Contention Provider
Outsourced
– Disparate QoS capabilities Managed Svc
– Scale & Growth potential Outsourced Provider
Managed Svc
– Commercially attractive Provider
• Architectures will involve use of MW and
associated Opex costs
New Service Propositions
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8. Shared Back Haul potential
A shared transmission network can potentially deliver > 30% cost savings per operator but can be
enhanced where 3rd party site providers provide the service.
MNO’s Network Challenges Constraints
• Back haul networks are a mixture of self Delivery by MW may be limited by licensed
provide MW and leased services spectrum but can be managed through use
of hybrid architectures
• Leased service providers often limit
service to a single MNO/Entity
Neutral host transmission network Independent transmission network
Cost per sharer
• Prediction of demand for new services split
across geographic locations is not clear
• Uncertainty of bandwidth demand is Cost savings of circa 30% if
impacting upgrade strategies associated two operators share
transmission
with upgrading legacy networks
• Implementation of network upgrades take
longer than expected and impact both
customer experience and costs
• Latest generation MW can compete with
fibre service offerings but spectrum
availability & costs are problematic*
1 2 3 4 5
* Estimated to ~ 400Mbp
Number of shares
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9. Use of Flexible Leased Services
Key Advantages of Flexible Network Outsourcing Solutions
• Predictable cost to MNO’s without need for large scale Capex programmes
• SLA’s/ QoS capable of managing real and non real time traffic tailored to MNO requirements
• MNO’s need not worry about Network/Technology where service provider guarantees performance
• Options to consider extend lifecycle legacy networks through gradual migration onto leased services
• New options to provide both permanent and temporary network connectivity solutions
• Providers who own spectrum can provide an alternative managed service proposition to traditional providers
Point to Point Logical Overlay Point to Multipoint
k
Lin
H
PD
M
TD
cy
ga
Le
X
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10. Integrating Point to Point/Multipoint Solutions
• Developed network Back Haul strategies
tend to use a mix of PTP and fibre based
solutions
• The deployment of PMP solutions is inhibited
by the availability of licensed spectrum or
risks associated with using unlicensed
spectrum
– WiMax options on Back Haul may
provide an additional alternative
– Lack of capacity is considered to be a
problem but capacities of 250Mb –
600Mb per sector are achievable
• PMP solutions are capable of integrating PtP
within the same platform, extending range
and service options
• Arqiva owns suitable spectrum and sites and
is well placed to offer hybrid solutions
• LTE PMP Backhaul solution for London:
• 145 Cell sites – 30Mbps (Mean)
• 8 Hub sites (4x28MHz)
Source: Cambridge Broadband
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11. Use of Optimised Bandwidth on Leased Services
• Customer self provide provision
bandwidth x Mbps and associated
opex costs. Utilisation < 100%
• Managed service provider
dimensions total bandwidth to
target customers’ PCR
• Actual aggregated traffic levels
typically below sum of customer
PCR
• Statically multiplex gain over
managed service provider network
• Source: Cambridge Broadband
• MNO Self Provide networks dimensioned to assumed growth for future use
• Bandwidth and Opex related spectrum fixed limits scope for optimisation of costs relative to service
• Managed service provider has a reduced cost base through aggregation and optimisation to ensure PCR and
SLA’s are achieved.
• New Managed services can provide mix of guaranteed + best effort within defined QoS class across multiple
customers
• Increased competition between service providers benefiting MNO’s
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12. Managing Disparate Service Requirements
Managed back haul services are changing with increased interest by MNOs’ in aggregating
benefits and disparate savings associated with Back Haul and site related costs.
Service Solution
• Move from traditional approaches to flexible wider ranging managed services will be critical in achieving
cost reduction across the sector. A growth of more cost effective solutions will deliver enhanced savings
• Migration to a flat I.P based network can be achieved including the provision of optimised back haul for
legacy networks
Technology Impacting Strategies Management & Control
• Adaptive Modulation and increased spectral • Each customer has unique SLA and QoS
efficiencies providing increased bandwidth on capable of being managed within a total
MW back haul bandwidth domain
• Ability to use both PtP and PtMP overlay • Compliance and reporting capabilities through
solutions using service provider spectrum NMS on a per link basis and/or network
• Transmission optimisation techniques • Use of VLAN and QoS parameters to
increasing overall customer experience discriminate and manage traffic flows
• Reduced costs to provider are passed on to • Capable of hand off to 2nd mile service provider
customers with low cost per Mb or MNO fibre/exchange aggregation point
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13. Challenging the Total Cost of Ownership
A managed transmission service can deliver >30% NPV savings on TCO over five years per
operator
£600
Millions
TCO - MNO TCO - Neutral host
£500
£400
£300
£200
£100
£0
Year 1 Year 2 Year 3 Year 4 Year 5
Year 1 Year 2 Year 3 Year 4 Year 5
TCO – MNO1 £204 m £286 m £368 m £450 m £532 m
TCO - Neutral host1 £94 m £187 m £281 m £374 m £468 m
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1 Based on total 13,000 links a mixture of fixed line and Microwave links

14. Summary
• Delays associated with network
consolidation will lead to poor customer
experience through back haul bottlenecks
• A new flexible managed service solution
will support network growth
• Grouped cost reduction strategies are most
effective
• Cost savings are most likely to be achieved
through innovative Back Haul strategies
• Legacy infrastructure can have an extended
life cycle
• Hybrid solutions and managed services will
resolve Back Haul bottlenecks
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15. allan.oakman@arqiva.com
http://uk.linkedin.com/in/allanoakman
Thank you
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16. Typical Gains using Transmission Optimisation
• Use of Back Haul
optimisation is not new
• Historically limited use in
last mile access network
• Clear advantages
• Multiple vendors
providing solutions
Source: Cambridge Broadband
– Cost of integration
and operational
managed issues
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