Emerging Wireless Opportunities in Asia Pacific

Featuring Bryan Tan, Manager, System Sales Engineer

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Additional References (on tellabs.com)
Tellabs IntegratedMobile Solution: 2G and 3G Mobile
Solutions for ETSI Markets
http://www.tellabs.com/solutions/integratedmobile/
tlab_integratedmobile_primer.pdf

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Emerging Challenge, Emerge Fall 2006 #
www.tellabs.com/news/reprints/emerging_fall06-reprint.pdf
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One Tellabs Center • 1415 West Diehl Road • Naperville, IL 60563 • 630 798 8800 • www.tellabs.com
Statements herein may contain projections or other forward-looking statements regarding future events, products, features, technology and resulting commercial or technological benefits and advantages. These statements are for discussion
purposes only, are subject to change and are not to be construed as instructions, product specifications, guarantees or warranties. Actual results may differ materially. The following trademarks and service marks are owned by Tellabs Operations,
Inc., or its affiliates in the United States and/or other countries: TELLABS®, TELLABS and T symbol®, and T symbol®. Any other company or product names may be trademarks of their respective companies. © 2007 Tellabs. All rights reserved.
Emerging Wireless Opportunities in Asia Pacific
(continued)

Alternative Backhaul Enablers

Cell Site

TDM
2G
PSTN
ATM TDM
Voice BSC
R99/R4

ATM ATM
Ethernet/DSL
HSDPA
8605
Data 8660
Ethernet RNC
LTE

Ethernet
WiMax

2G to 3G Mobile RAN Backhaul Migration

Hub Site RAN Core

8000 NMS

E1, FE
STM-1,
FE, GE

8620 PWE3 PWE3

Node B 8630 STM-16,
8660 FE, GE 8660
STM-1,
PWE3
SDH and ATM IMA
Ethernet
6340
E1 PWE3 BSC
BTS NxE1, STM-1, PWE3
E-1, STM-1
6325 FE, GE
6340 6350
E1, FE
MSC

Node B

One Tellabs Center • 1415 West Diehl Road • Naperville, IL 60563 • 630 798 8800 • www.tellabs.com
Statements herein may contain projections or other forward-looking statements regarding future events, products, features, technology and resulting commercial or technological benefits and advantages. These statements are for discussion
purposes only, are subject to change and are not to be construed as instructions, product specifications, guarantees or warranties. Actual results may differ materially. The following trademarks and service marks are owned by Tellabs Operations,
Inc., or its affiliates in the United States and/or other countries: TELLABS®, TELLABS and T symbol®, and T symbol®. Any other company or product names may be trademarks of their respective companies. © 2007 Tellabs. All rights reserved.
Podcast Transcript
Emerging Wireless Opportunities in Asia Pacific
Featuring Bryan Tan, Manager, System Sales Engineer
Monsho: What’s up? It’s Monsho, back
with another session of Get Schooled.
Are you ready for today’s pop quiz?
How does Ethernet work in a wireless
network where there are legacy tech-
nologies like TDM and ATM? Is it: (a)
deploys MSPPs that work with legacy
and new technologies, (b) 3.21 gigawatts
of electricity to the flex capacitor, or
(c) [singing] The Ethernet’s connected to
the copper, the copper’s connected to the
lambda. I could do this all day.
Don’t know the answer? Don’t worry. Sit
back and relax. It’s time to get schooled.
Ted Meister: Hello. I’m Ted Meister, with
Tellabs. I’m here with Bryan Tan from our
Singapore office, and we’re here today in
the luxurious Tellabs lounge to talk about
opportunities and challenges in global
wireless markets. Bryan, welcome.
Bryan, here in North America we’re look-
ing at 70% penetration in the wireless
market. The European Union is claiming
nearly 100% total saturation in their
wireless market. So these markets are
tapped. However, around the world
there’s incredible growth potential. Can
you talk a little bit about what you’re see-
ing in your region?
Bryan Tan: The APAC region is seeing
tremendous growth in the wireless space
that’s driven primarily by the developing
countries: India, China, as well as Indo-
nesia. India last year, in 2006, added 66
million mobile subs, to bring their total
number to 120 million. While that might
seem a big absolute number, when you
contrast it against their overall popula-
tion size of 1.2 billion people, you’re really
looking at 10% penetration. China, as of
today, probably has around 400 million
mobile subscribers out of 1.4 billion. So
that puts them in the high 20s, close to
30% penetration rate. Indonesia, another
country with 250 million population,
has about 17% to 18% mobile penetra-
tion rate. And so really there’s a lot of
headroom for growth for these countries
as far as wireless is concerned.
Now, in fact, wireless has become so
predominant that in some instances it’s
overtaken the wireline sector as the main
means of communications. Going back to
India, they have 36 million landlines and
120 million mobile lines. So you are really
looking at a ratio of one to four skewed in
favor of mobile, and it will increase as the
years go by.
The common denominator across all
these developing countries is that the key
criteria for success is really the competi-
tiveness of the mobile subscription, of
the mobile plan.
To give you an extreme example, In-
dia, for example, you can make a call
anywhere within India for one rupee a
minute. That’s equivalent to making a
call from New York to San Francisco for
2¢ a minute. And on top of that, you get
to receive incoming calls for free for a
lifetime if you sign up through that op-
erator. So it’s tremendous plans at very,
very, very cheap rates. And that in turn
puts pressure on the operators to offer
cheap service, but at the same time offer
to cost-optimize all the operations and
CapEx.
Ted Meister: So we’re talking on the
order of billions of potential subscribers,
which is great. However, there are some
challenges in these markets. To deploy
traditional T1/E1-based transport and
backhaul is rather expensive. The costs
are going down, but to deploy 3G ser-
vices is going to be pretty demanding.
Bryan Tan: Right. So we need to put in
the E1 and T1 backhaul in the context of
their overall spend. So backhaul typically
accounts for 20- to-25% of the mobile
operators’ operating costs. And as 3G
comes along, the backhaul cost hits an
inflection point, because in 2G, one or
two E1s would suffice. Now, for 3G and
HSDPA, you are looking at potentially
three, four or even five E1s per cell site to
give you 10 megabits download to that
cell site. And so the operators need to
break the linear cost curve of keeping
renting more and more E1s. So the T1/E1
model is not sustainable and is not scal-
able for 3G.
Ted Meister: There are no economies of
scale?
Bryan Tan: Correct.
Ted Meister: So as the industry moves to
deploy more 3G services, what are some
of the challenges that operators face?
Bryan Tan: Well, the biggest challenge
they face, or one of the biggest chal-
lenges they face, is to try to reduce the
backhaul costs, which typically consti-
tute about 20-to-25% of their operation-
al cost, which is a significant percentage
of the overall cost.
There are alternative technologies
available if they want to continue on
the leasing model; i.e., they continue to
lease capacity from the fixed-line carrier
to backhaul the traffic from the cell site
to the cell site controller. And really, the
alternative technologies are Ethernet
and DSL. And so these are very price-
attractive technologies when compared
to T1/E1.
To give you an example, the average price
of a 10-meg Ethernet across the board,
and this is a generalized number, is that a
10-meg Ethernet would cost 3.5 times as
much as five E1s would cost, which would
give you an equivalent bandwidth. But
what really the Ethernet does, or the DSL
does, is to give a more effective cost-
per-bit performance that would reduce
the operating cost. So that’s one model
where they continue to lease capacity.
The other model, if they have the facility
and the resources in place—i.e., fiber to
hub sites—then they can actually build
their own infrastructure rather than lease
it. And that’s where MSPP technology
comes in very helpful. And the MSPP
technology allows them to bill once and
use many times. It allows them to take
in the existing 2G transmission. It allows Tellabs, in response to the demands for reliability is a key component for the ser-
them to cater to the high-speed Ethernet MSPP in the mobile space, has developed vice providers’ end-user offering. And so
transmission that HSDPA brings along, or the 6325, the world’s smallest fully- being a redundant box, fully-redundant
when HSUPA comes along, it allows also featured compact MSPP. We developed box, at 1U, which is a fairly unique feature
HSUPA to go out to the same platform. it to be compact, because we understand today, is very important in the mobile
that in the cell site, space is an absolute space, especially for 3G.
Ted Meister: So is MSPP the technology
premium. So we’ve got a 1U-high 6325
of choice for migrating into an IP-based Monsho: That wasn’t so hard, was it?
that can scale from SDM-1, which is 155
network? The correct answer is (a) deploy MSPPs,
meg, to SDM-16, which is 2.5 gig, in the
blah-blah-blah. You know the answer.
Bryan Tan: Well, the MSPP is a big op- same form factor so that it can support
And in case you didn’t get it right, you
tion. The other option, like I mentioned, is the increasing traffic that 3G brings into
can always grab a cheat sheet at inspire-
the Ethernet and the DSL flavors, where the transmission network.
thenewlife.com.
they continue to lease from operators
In addition to the 6325 being compact,
these fixed capacities. But MSPP definite- I’ll see you next time. And remember
we don’t sacrifice redundancy. Now, it
ly is a big option for mobile operators. [hums: The Ethernet’s connected to the
goes back to the previous point, where
copper…].
we said redundancy and resilience and

One Tellabs Center • 1415 West Diehl Road • Naperville, IL 60563 • 630 798 8800 • www.tellabs.com
Statements herein may contain projections or other forward-looking statements regarding future events, products, features, technology and resulting commercial or technological benefits and advantages. These statements are for discussion
purposes only, are subject to change and are not to be construed as instructions, product specifications, guarantees or warranties. Actual results may differ materially. The following trademarks and service marks are owned by Tellabs Operations,
Inc., or its affiliates in the United States and/or other countries: TELLABS®, TELLABS and T symbol®, and T symbol®. Any other company or product names may be trademarks of their respective companies. © 2008 Tellabs. All rights reserved.