Next Generation Networks Munir Cochinwala An SAIC Company

NGN Solutions v7 – 2 Basic Cable Premium Services (Tiers, Pay Services, IPPV, VOD, etc.) Internet Access Telephony Services 2001 Consumer Spending $26.68 billion $10.32 billion $11.6 billion $48.63 billion Source: Kagan Associates, Yankee Group Consumer Spending Total$97.23 billion

NGN Solutions v7 – 3 The Need Voice Service Price Erosion and Market Share Loss is Accelerating the Loss of Voice Revenues Source: The Boston Group Change in Long Distance service price one year after liberalization

NGN Solutions v7 – 4 Da ta Will Dominate the Network % Data % Voice % Data % Voice % of Network Bandwidth Year 45 % Annual Data Growth 100% Annual Data Growth With voice growing at 8%, in 5-10 years, voice will be a small minority of network bandwidth. The optimal strategy for the future may be to handle voice as much as possible like data. Data DATA Voice

NGN Solutions v7 – 5 Merging the Voice and Data Worlds Circuit Switching TDM transport High reliability & security Limited programmability Time sensitive billing Slow service set-up Dumb phones Telephony services Packet Switching Intelligence at edge Lower reliability & security Innovation in PC and enterprise applications Flat rate or bandwidth pricing Hard to achieve quality Smart PCs Single infrastructure Packet Switching Intelligence throughout (distributed / collaborative) High reliability, security & controlled QoS Innovative business to business applications High value service bundles Instant self-provisioning Smart appliances

NGN Solutions v7 – 6 What is a Next-Generation Network? Single Integrated Pipe Video High-Speed Data Voice/Fax Services A network where all kinds of information (voice, fax, video, data) are transported uniformly using packet-based transport and switching media. HFC (Cable) Network using DOCSIS transport ATM or IP Over xDSL Lines Fixed Wireless

NGN Solutions v7 – 7 Why a Next-Generation-Network? Using IP, operators can create an integrated multi-service communications platform –Lower cost structure than competing switched alternatives which enables aggressive price discounting without sacrificing margins Flexibility of IP networking allows delivery of value added features –Real-time provisioning of additional lines –Integrated voice mail, data services, etc. Enables bundling with existing service offerings NGNs and the PSTN will co-exist for years, making true interoperability essential

NGN Solutions v7 – 8 The Need Bundled NGN Services Can Provide Higher Marginal Profits 2nd POTS Traditional Network: ADSL Access From a Telco $180 Per Month First POTS Video Internet CaTV Internet NGN: VDSL Access From a Telco NGN: HFC Access From a CaTV Company Incremental Costs include incremental equipment and plant, installation costs, incremental operations costs and TV content (for Telco) costs. Bundled Services -- Over a Single Network -- Produces Better Economics! Incremental Revenue Incremental Costs Net Profit Existing Revenue 2nd POTS First POTS Internet 2nd POTS First POTS

NGN Solutions v7 – 9 NEXT GENERATION NETWORK PROVIDER VOICE AUDIO HIGH SPEED DATA LOW SPEED DATA VIDEO TELEVISION OTHER SINGLE INTEGRATED INFRASTRUCTURE Video on Demand E Commerce SOHO/Telecommuting Advertising Residential Applications ERP/IRP Solutions Unified Messaging Web Assisted Call Centers Small Business Infrastructure Business Applications The NGN Service and Application Model

NGN Solutions v7 – 10 Next Generation Network - Traditional and New Services Traditional Services Two to Four POTS Lines Fast Internet Access On-Net Long Distance Advertising Work At Home Virtual Circuits for Phone and PC Professionals Distributed Call Center Applications The Long-Term Vision: A Programmable Network with a Software Developers Tool Kit to build Lots of New Integrated Voice/Data Services Traditional Services Pay for the Network, New Services Fuel the Growth! Internet Voice Applications Click to Talk Internet Call Waiting Wireless Data PC Call Center with Voice / Internet Rent an App (e.g., PC Blackboard) Dial Tone II Java Ring Contains Your Identity Instant Access to and WWW Always On; No Wait!

NGN Solutions v7 – 11 Traditional Telephony Typical call - –user dials number – trigger in switch specifies if look-up (translation) is needed (600, LNP) – Query sent to centralized database Centralized servers (Intelligence) (~45 servers) –Providers share cost….share ownership –Each server configured for masimum of 1500 reads/sec – Updates mostly from centralized management system Dumb endpoints (Telephones) Intelligent Endpoints –Switches (difficult to program) New services introduced by trusted providers

NGN Solutions v7 – 12 NGN Multiple numbering systems – IP, Phone, Universal Numbers Distributed Intelligence –Databases in central servers, Provider database, Customer PC, Phones –Central global database does inter-provider translation On-net to off-net calls return IP address of destination gateway –Central Database is shared by providers –Transaction volume At central db, number of inter-provider calls At services databases (800, call-blocking lists, …) number of subscribed services At Provider and endpoints

NGN Solutions v7 – 13 NGN Network Repositories –User data (profiles, lists) in multiple devices and databases –Central Server provides reliability –Updates to devices synchronized on re-connect –Synchronization on demand or periodically: –Local databases are caches –User mobility Where should translation take place Should cache migrate Real-time constraints –Transaction volume across devices, endpoints...

NGN Solutions v7 – 14 NGN Directory Enabled Networks (Cisco) –LDAP interface to network resources –Schemas for network resources –Used for resource allocation for network services Warehouses –Traffic warehouses –Equipment Inventory warehouse –Warehouse used for capacity management, billing, SLAs,...

NGN Solutions v7 – 15 NGN Object based services –Calls abstracted as object –Call models implemented within objects –Object mobility used to implement services Call forwarding Third party call set-up Objects for service creation –Tool-kit for third party service creation –Base Objects/components upon which to build Device Independence –Migrate calls across device –Compose services across devices

NGN Solutions v7 – 16 Summary NGN (competition) has forced –Distributed intelligence –Low-cost solutions Telephone Providers want to jump on the dotcom bandwagon Only a few (2-3 of current Telephone providers will survive

NGN Solutions v7 – 17 NGN Target End Customers Small (2-99 employees) Business –Spend an average of $220/month on telecommunications services Medium ( employees) Sized Business Market –Spend an average of $2,800/month on telecommunications services Both segments are vulnerable to competition –Require a bundle of telecommunications services Multiple telephone/fax lines High-speed Internet access Etc. –Only 62% report loyalty to their incumbent LEC –Highly receptive to better, more complete offerings from competitive carriers Source: The Yankee Group

NGN Solutions v7 – 18 Large (500+ employees) Sized Business Market –Spend more than $3,000 per month on telecommunications services –Campus telephony and data networks often provided by on-site resources and staff –Require advanced wide-area network (WAN) data services and trunks from enterprise telephony networks –NGN services will focus on Cost containment with bandwidth aggregation and self-service provisioning Work-at-home services for telecommuters Advanced follow-me services for road warriors and office hoteling Mixed voice/video/data services for advanced communication, marketing, and customer service applications Source: The Yankee Group/Forrester Research NGN Target End Customers - Continued

NGN Solutions v7 – 19 SDK 3rd Party or Customer 3rd Party or Customer Provider Telcordia Telephony and Data Services Telcordia Telephony and Data Services 800 LNP ISUP SGCP Q931 UNI4.0 Feature Layer Protocols & State Machines Service Layer Protocols & State Machines COMMON CALL PROCESSING Service Layer Workhorse Layer Feature Layer Connection Layer Commodity Layer Connection Layer Protocols & State Machines Distributed Object Architecture Standard Interface The Gold UNI 4.0 UNI4.0 Proxy SGCP Other

NGN Solutions v7 – 20 MGCP TCAP/SS7 ISUP/SS7 SS7 Gateway ISCP Customer Care & Billing Network OSSs API Service Applets Service Execution GUI JAVA Service Definition NGN - Network Example MGCP Application Servers DOCSIS CMTS Video Data Packetized Voice Telephony Gateway PSTN 800 CNAM LNP Others Public Signaling Network Residential Gateway SGCP Call Agent MGCP Announcement Server Announcement Server Unified Messaging Video Servers

NGN Solutions v7 – 21 Next Generation Network - Layered Architecture Service Platform Backbone Access xDSL Cable Fixed Wireless IP ATM SONET DWDM DOCSIS Web Dashboard SS7 (TCAP & ISUP) Accounting Gateway Announcements OA&M Classic PSTN Customer - Provisioning - Activation - Programmability Service Definition Service Execution Differentiators