Get To Fast,

Faster - 2017

1 © Nokia 2016
2017
Fixed Networks:
The KEY to the Future Success
Sang XULEI
Vice President & Head of APAC Regional Business Center, Fixed Networks, Nokia

2 © Nokia 2016
2017
Fixed Network: the KEY to the future success
Defining the market strategy
Solve the 4 enigma’s of the broadband marketer – combine residential & business & mobile…

Carriers actions for today and plan for future

Business growth with the innovative services portfolio and the network transformation

Nokia Fixed Network partnership program

Innovation and partnership to master the future proof business case…

3 © Nokia 2016
 Show me Z traffic!
Residential Mobility Enterprise
3x

2x 4x 2x Cloud

70% 10% 20%

70% fixed, 15% Mobile,
150 Gbyte (*) 7 Gbyte (*)
15% WAN until 2020

Video IoT Cyber-Attacks

80% >40% 2x

And… -10%
declining revenues!
4 © Nokia 2017 (*): per sub/per month
Is all traffic going mobile?

Source: Ovum

Wifi data consumption user: from

30M (‘13) to 300M (‘16) video

• Mobile share is growing but not

surpassing 10%...
• WiFi will support >40% of data traffic
5 © Nokia 2017
 Fixed & mobile convergence will help to be better position

40% Being a converged provider is main strategy of most operators

35%

30% Converged
Free Cash Flow (% of revenue)

operators
25%

20%

15%

10%
Mobile-only
5% operators

0%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

6 © Nokia 2017
Market share (%)
Ultra-Broadband applications are changing our life and world

Virtual Reality will accelerate data usage

Larger screens are now

the largest drivers of Industry 4.0 &
traffic growth Cloud

Connectivity Speed Experience

Smart homing

IOT become IOE and brings new impact on traffic

7 © Nokia 2017
The 4 enigma’s of the Ultra-Broadband operators

Do you need Do you need

1 Gig? Multi Play?

All traffic is going How to raise

mobile? ARPU?

8 © Nokia 2017
Fixed Network: the KEY to the future success
Defining the market strategy
Solve the 4 enigma’s of the broadband marketer – combine residential & business & mobile…

Carriers actions for today and plan for future

Business growth with the innovative services portfolio and the network transformation

Nokia Fixed Network partnership program

Innovation and partnership to master the future proof business case…

9 © Nokia 2017
 Indonesia Overview
TOTAL ACTIVE INTERNET ACTIVE SOCIAL MOBILE
POPULATION USER MEDIA CONNECTIONS

260 132.7 79 380

MILLION MILLION MILLION MILLION
Java
Island

SIM penetration 146% LTE connections 52M LTE share of connections 13.6%

Smartphone adoption ~40% Monthly ARPU by connection 2.4 € PON / FTTH subscriber 2M
Source:
UN, US Census Bureau; APJII, Facebook, GSMA Intelligence
Nokia Business intelligence per Q1 2017
10 © Nokia 2017
PT. Telekomunikasi Indonesia, Tbk (TELKOM)
o To be the King of Digital with Indonesia Digital Network (IDN) 2020, realized with Network Reengineering Program 2020.
With NRP 2020 evolution focus:
•Enabling-Technology for Capacity
•Network Architecture
o To achieve 25 M Fixed Broadband Homepass by 2020
Indihome Telephone UseeTV Price
16.4 Million Homes-Passes *
10 Free 1000 Minutes Interactive TV Channels Rp.
4.3 Million Fixed Broadband Subs * Mbps Local call/ long distance call Essential 478.000/Month

1.9 Million Indihome 3-Play Subs ** 20 Free 1000 Minutes Interactive TV Channels Rp.
Mbps Local call/ long distance call Essential 748.000/Month
30 Free 1000 Minutes Interactive TV Channels Rp.
Telkom Coverage in Indonesia
Mbps Local call/ long distance call Essential Plus (HBO) 1.018.000/Month
40 Free 1000 Minutes Interactive TV Channels Rp.
Mbps Local call/ long distance call Essential Plus (HBO) 1.298.000/Month
Interactive TV Channels
50 Free 1000 Minutes Rp.
Mbps Local call/ long distance call
Essential Plus (All 1.498.000/Month
Channels**)

Interactive TV Channels
100 Free 1000 Minutes Rp.
Mbps Local call/ long distance call
Essential Plus (All 1.748.000/Month
Channels**)

*Source: Telkom Annual Report 2016 ** as of Q2 ‘17 Status

11 © Nokia 2017
 Business growth with the innovative services portfolio and
the network transformation
GIGABIT FTT OFFICE MOBILE ANY-HAUL
Bandwidth vs. speed More than connectivity alone Front/Mid/Backhaul

MULTI PLAY CLOUD WIFI OFFLOAD

One stop shop – Smart Home IT Integration Seamless handover

INTERNET OF THINGS INTERNET OF THINGS SMALL CELLS

Open Platforms New business models Coverage & Capacity

Optimal Convenient Cost-effective

Consumer Experience Workplace Everywhere Transport

Residential Business Wireless X-haul/Offload

12 © Nokia 2017
Innovative multi-play service is the key to drive business growth
High Speed Internet－ Innovative home service
fast deployment, UBB full coverage UHD Video, gaming, smart home, education, hospitality

Gigabit to home NGPON2

XGSPON

IOT, M2M

Symmetric Gigabit – Enterprise networking

AR/VR, cloud, enterprise
13 © Nokia 2017
 Bandwidth drive biz. growth

Human impatience is the killer app for gigabit

Cloud interactivity Peak bandwidth is key for

the user experience
Instant Gratification

Immersive VR

Virtual Reality (consumer)

8K video (4x)
Sustained bandwidth
Online backup / storage
is the basic enabler
4K Video (4x) (all users, all the time)
Home security

Web & Cloud apps

HD video (4x) Upstream (Mbps) Downstream (Mbps)

-1500 -1000 -500 0 500 1000 1500

14 © Nokia 2017
 Bandwidth drive biz. growth

Gigabit is a reality today

10G
2G

10G
10G 10G
10G 10G
10G
Gigabit network construction has been
expanded from site to the whole network
15 © Nokia 2017

More players jumped into the Ultra-Broadband war
Telecom operators
• Elevating bandwidth and do M&A
to compete cable and new players
• FTTH complemented with FTTx for
fast TTM/ROI and to counter cable
• Accelerate FTTH where faced with
disruptive players
• Look for strategic transformation
and breakthrough
Telcos
16 © Nokia 2017
Innovative Services drive biz. growth
Non-traditional players
NEW • Typically disruptive (1 gig fiber)
PLAYERS with low price, pressuring telcos &
MSOs
• Use existing ducts, right-of-way,
can cherry-pick areas
• Leverage existing content resource
but lack of network infrastructure
Competition
Cable operators
Differentiation
• Elevating bandwidth to compete
Telcos
• More BW headroom on cable;
MSOs less urgent need to go FTTH
• FTTH starting for business
services and greenfield, and to
counter disruptive players
 Innovative Services drive biz. growth

Higher Speed, Full Service, More Revenue

Digital upsell
“Mosaic” TV
Targeted ADV
Catch UP TV
Quint-play
(<4) Play
Movistar
FUSIÓN Multiscreen
Personal Fios Triple play Smart
Single Bill interactive Home
Video HDTV/4K cloud
DVR
UNICAST
Network
transform Peak Demand
FTTH/LTE Interactivity
DVR
ALL-IP Smart home
capillary FMC
“WOW” Experience

EntertainTV

DirectTV + AT&T unlimited plusSM Magenta EINS

17 © Nokia 2017 Triple play
 Innovative Services drive biz. growth
Telefonica Movistar Fusion Quad Play offerings

Mobile Internet Fixed TV Price

100 min. calls to fixed and Fiber/xDSL: upto 30Mbps Unlimited calls to landline TV online €47 /month (VAT incl.)
mobile Internet Series: 6 –channel TV
1.5GB 4G data

100 min. calls to fixed and Fiber: 300 Mbps Internet Unlimited calls to landline TV online €59 /month (VAT incl.)
mobile Series: 6 –channel TV
1.5GB 4G data

Unlimited calls to fixed and Fiber/xDSL: upto 30Mbps Unlimited calls to landline Multi-screen and recordings €65/ month (VAT incl.)
mobile Internet 550 mins. in calls to mobile Get the TV to needs: up to 130 (FusionTV) , 73 (energy TV),
2GB 4G data TV channel 80(football TV), 100 (all TV)

Unlimited calls to fixed and Fiber: 300 Mbps Internet Unlimited calls to landline Multi-screen and recordings €77/ month (VAT incl.)
mobile 550 mins. in calls to mobile Get the TV to needs: up to 130 (FusionTV), 85 (Power TV),
2GB 4G data TV channel 92(football TV), 112(All TV)

Key Innovative Movistar Features

• Personal online recording: unlimited simultaneous channel recording and up to 350 hours of Cloud DVR storage
• “Mosaic” TV: select between 6 different views of the live action for major sporting events with fast channel change
• “Catch-up” TV: for all 130 channels of Movistar TV programming for seven days after the original airdate.
• “Movistar Fusion” TV: Convergent offer branded, ‘traditional’ TV everywhere on all screens (smartphones, tablets, PC,
TV sets)
• Online TV: OTT-video service bundled with Fusion TV mobile subscriptions
18 © Nokia 2017
 Innovative Services drive biz. growth

The Residential Multi Play for your customer lock-in

The all-in for everyone

2 DUAL PLAY
3 TRIPLE PLAY
4 QUAD PLAY
Voice + Internet + 5 QUINT PLAY
Voice + Internet +
1 TELEPHONE
Voice services
Voice + Internet Voice + Internet +
Video Video + Mobile Video + Mobile +
Smart Home

Move to Fixed Mobile Convergence

Single Single Smart Apps Support

bill PoS Wifi f.i. VoWifi

Cloud OTT Seamless

Storage Multi Screen Handover

+ 6 months of 15€ discount

+ installation for free (value 59€)
19 © Nokia 2017
 Innovative Services drive biz. growth

The growth of Internet giants are changing the telecom competition landscape

• Google fiber: start Gigabit BB war with speed & price
• Meet problems on fiber network fast movement due
to cost too much on laying cables and lack of bundle
service provision
• Acquisition of wireless ISP WebPass(wireless strategy)
• Is no longer a social network but a future hub for user’s lives
• Proposed the Telco Infra Project(TIP) to build open source HW
& SW for access/backhaul/core in telecom network
• Partnered with ISPs in the developing world to offer free
Internet service on mobile phones

Become infrastructure provider？

Customer ownership battle？
Contents & Cloud

• An IoT Pioneer
• The world's biggest cloud hosting service(AWS) • OTT video-change video
• Sell Internet service directly to consumers consumption behavior
alongside its streaming media offering • Streaming subscribers near 100
million impact Pay-TV ecosystem
20 © Nokia 2017
 Innovative Services drive biz. growth

New strategic service development to meet the challenge: Smart Home

Smart home, a growing fifth-play opportunity for operators
• Huge existing customer bases, high levels of trust and unique billing relationships
• Bundled with current service packages and delivered over existing broadband infrastructure
• Most of TOP operators are jump in. Open home platform and industry chain are key factors

• Security applications
• Home automation
• Smart Profiling

Home security & automation starter kits

Update Speedport Smart router with hub
With smart home function
3 basic package:
• Smart Security New Magenta
• Smart Security and SmartHome
Automation solution
• Premium Security (release soon)
and Automation • Simply practical: comfort and safety • CT Smart home open platform
Home Automation • Simply magical: Everything goes by • Deeply cooperate with industry
Add-Ons itself chain in all aspects
• Easily expandable: comfort and safety • Digital home, smart home, home
informationization
21 © Nokia 2017
 Innovative Services drive biz. grwoth

New strategic service development to meet the challenge: IOT & M2M
• IoT is being used to drive
the ambitious ecosystem orchestrator a ‘connectivity plus’ approach
business change
• Launched M2X, a cloud based data storage • 1st global IOT mobile operator to exceed 50 million
• IOT will be voracious in service and data flow connection, launch NB-IOT in Q1,17
• Launches nationwide IoT network in Q1,17
consuming bandwidth • Strong presence
in automotive
• Operators may continue • Interesting in
manufacturing
to favor acquisition as a and Industry 4.0,
healthcare, retail
means of growth and insurance

• Need to building IoT

ready infrastructures
and services
• Value chain cooperation
• Completed the nationwide
deployment of LoRa network
in Korea in Jun. 2016
• The world's 1st provider of
hybrid IOT networks
22 © Nokia 2017 nationwide with LTE-M
“Cloud-Pipeline-Device”
connectivity via multiple technologies
Intelligent gateway
• Hub for home networking , WiFi
coverage & IOT connection
• Integrated IOT module
• Completed 1st city level NB-IOT
network in early 2017
• China Mobile IoT Company, 1st specialized IOT
operating company
• More than 62 million IOT terminals in China, Y15
 Innovative Services drive biz. grwoth

New strategic service development to meet the challenge: Industry 4.0

Industry 4.0
• Opportunities for Telecom in Manufacturing
• Industrial Internet of Things (IIoT)

• Secure cloud computing

• Broadband and mobile networks
• Complex IT security solutions
• ICT knowhow

The industrial IoT market is

The Next Generation Enterprise Network Alliance estimated to reach $123.89
Will Be The Global Network For Industry 4.0 Billion by 2021
23 © Nokia 2017
 Fixed Mobile Convergence: Network Transformation

The world is going wireless, but wireless is going fixed

100s of nodes 1 000s of nodes 10 000s of nodes

24 © Nokia 2017
 Fixed Mobile Convergence: Network Transformation

Convergence between Residential, Enterprise and Wholesale (Any haul)

Enterprises FTTBiz Mobile FTTCell Residential FTTH
1 2 3
(business services) (Backhaul Transport) (TriplePlay services)

Adopting “cluster” approach can lead to significant CAPEX decrease

25 © Nokia 2017
 Fixed Mobile Convergence: Network Transformation

Proof the business case: lowest TCO for MBH with fixed networks

Urban scenario: 50% take rate for FTTx BB, 2000 HH/sq km, 200m cell radius

Install BH at cell site BH at FCP Run wires (30m) BH Equipment

2,9
3

Connecting radio cells to existing fixed

2,2
networks reduces CAPEX by 50% or more
2
2

1,3
1
1 0,75

0
MDU FTTB GPON FTTCell P2P FTTCell P2P fiber MC-RAN P2MP Microwave P2P Microwave

26 © Nokia 2017
 Network Transformation

Future-proof network transformation: SDN/NFV

• SDN/NFV will have strong growth in 2017

• Fundamentally change telecom network architecture
• Deliver benefits in service agility, time to revenue, operational efficiency and capex savings
• Operators are starting carefully with explore, trial, test and make initial deployment
• Leading operators: AT&T (Domain 2.0), Telefonica (Unica), China Unicom (Cube-Net 2.0),
Deutsche Telekom (Pan Net), and SingTel (Network 2020)
AT&T services will
AT&T is one of the flagship pioneers of SDN/NFV increasingly become
• Virtualize core network services cloud-centric workloads

• Launch portfolio of new NFV-enabled digital services

• Deliver transformational cost efficiencies, reducing
provisioning times up to 90% Domain 2.0
A Network Built In Software
• Better and faster services for customers
Using Software to Put
• Raises SDN network transformation goal to 55% for 2017 Customers in Control
27 © Nokia 2017
 Network Transformation

Big data analysis and artificial intelligence: open new business model

Big data analysis and AI can help operator

• Save OPEX: using analytics to automate management & pinpoint the source of problems
• Save CAPEX: virtualizing network functions, running on commodity HW
• Using network capacity more efficiently
• Increase revenue by offering new services to customers or upselling them to other existing
services

NFV
SDN 5G
AT&T is experimenting with AI SD-WAN Cloud
Big Data and Artificial
Intelligence Platform and combining it with SDN
Vast amount of information in
and NFV to figure out a operator’s data lake
better way to run its network
28 © Nokia 2017
Fixed Network: the KEY to the future success
Defining the market strategy
Solve the 4 enigma’s of the broadband marketer – combine residential & business & mobile…

Carriers actions for today and plan for future

Business growth with the innovative services portfolio and the network transformation

Nokia Fixed Network partnership program

Innovation and partnership to master the future proof business case…

29 © Nokia 2017
The expertise to deliver
Mobile Fixed
Networks Networks
FTTx
Advanced copper based
solutions to deliver more
bandwidth to more people,
faster and in a cost-
efficient way. Fixed wireless
access innovation further
optimize the overall deploy
biz. case.
30 © Nokia 2017
IP / Optical Applications
Networks & Analytics
Fiber Cable MSO
High-capacity fiber based Fiber to the home solutions
solutions for unbeatable fit for cable operators to
bandwidth and converging help them maximize
all services on a single bandwidth, and use their
network. hybrid fiber network more
efficiently.
Nokia Bell Labs
Technologies
Digital Home Professional
Home devices to deliver Services
fully enriched customer
Product attached
experience and enable
deployments, multi-vendor
smart homes.
maintenance, professional
services and site
implementation and
outside plant.
Protect your investment & pay-as-you-grow

TWDM ONT
Co-existence XGS ONT TWDM ONT
ISAM FX Element GPON ONT TWDM ONT
Multiplexer
OLT

N
G
G
P
P CEx & MUX
O
O
N
N Step 1 Step 2
Introduce XGS-PON Introduce TWDM-PON
• Add Co-existence element • Add wavelength multiplexer
• Install universal NG-PON line card • Add TWDM optics in the existing line card
CO OSP • Add XGS optics & XGS ONT • Add TWDM ONT

31 © Nokia 2017
 Bringing fiber to the most economical point… scenarios & convergence

+50% TCO savings PON vs PtP

small cells backhaul (*)

32 © Nokia 2017 Client Confidential

Wireless complements fixed … and fixed complements wireless

Small cell Urban

backhaul 1 cell
Wifi hot
C-RAN/vBBU 4 3G/4G spot Next gen
macro 5G
2 Indoor
fronthaul
small cells

Hybrid
VDSL / G.Fast 3
CPE
Fixed
Wireless
Access
FTTdp FTTH FTTP FTTdp FTTH FTTH FTTP FTTB FTTH

Complement FTTx with : 1. MBH LTE Small Cells

ISAM OLT
2. MxH 5G cell densification
3. FWA (5GTTH, Fastmile)
4. CPE with hybrid access
33 © Nokia 2017
Quality of experience is crucial

2seconds 40% 5% <25ms <10-5

if not loaded viewers will users will abandon a fewer watched time if Network latency Packet loss
abandon the video video if it’s not loaded in 1% of the video duration
10 seconds stalling

Source: UMASS Amherst 2012

34 © 2017 Nokia
Nokia Digital Home
Vision for future

Wi-Fi performance
Best-in-class Wi-Fi
performance
Managed Wi-Fi
Self-optimization, remote
troubleshooting, insights &
analytics
Whole-Home Wi-Fi
Meshed Wi-Fi & IoT wireless
bridge
Open Data & Analytics
Predictive analytics, customer
recommendations, etc.

35 © 2017 Nokia
Smart Home
Turning challenges into opportunities
Home Home Smart Digital
security automation energy health

Smart home app

OLT or IP
Router

SP network

Smart Home gateway Smart Home cloud platform

Move to Quid Play and raise ARPU

36 © Nokia 2017
 Nokia Enterprise Fiber Based Solution
A POL solution can save up to 50% TCO in year one
Traditional LAN vs Passive Optical LAN

1 fiber OLT +
ONT access points
Equipment

Power
30 switches
Up to 50% 2.5KW 1.5KW
TCO savings
with POL

IT room floor space

Cabling

Bulky CATx small-diameter, cheaper

Cable bundles fiber bundle 25m2 0.60m2
37 © Nokia 2017 Based on a building with 5 floors & 124 end-points/floor
Software Defined Access Networks and Virtualization
What does it deliver

Flexible programmability
Reduced TCO drives high utilization,
by centralization lowering the TCO, Elastic scale
and consolidation of enabling dynamic and optimizing
(access) functions. (re)configuration, incl. capacity for control
Better agility and flexibility
Reducing transactional consistency. and management.
by virtualization of
cost Separate functions
access functions
and complexity. that scale
independently.
Increased velocity
to launch new Pervasive
devices and services, cognitive capabilities
rapid innovation for operating
and reduction (access) networks
of cycle times

38 © Nokia 2017
Access today

Cable

Copper

Fiber

FTT$
Bring gigabit speeds to
everyone, using fiber,
39 © Nokia 2017 copper, cable
Access tomorrow Fixed Mobile Convergence
Mobile transport, hybrid
access, fixed wireless access

Managed Wi-Fi

Open interfaces & data Wireless

Cable Whole home Wi-Fi

Scalable architecture

Copper

Programmable network Smart Home

Fiber

Automation Virtualization FTT$ The home

Analytics Scale & streamline your Bring gigabit speeds to Deliver a gigabit
& Apps network and operations everyone, using fiber, experience
40 © Nokia 2017 copper, cable into the home
 THANK YOU!

41 © Nokia 2017