Solving the Distance Wireless Backhaul Strategies ITEXPO 2010 Stuart Benington Director, Global Portfolio Strategy Tellabs 1

Key Considerations  “Solving the distance” equates to achieving a balance of three main things: 1. End user demographics – services, population density, etc. 2. Economics – capital and operational costs 3. Embedded infrastructure, both physical and virtual 2

3 Mobile Service Demographics Orange = 2G footprint; Yellow = 3G footprint (Sources: GSMA, Verizon) The distance issue and its solution varies widely across regions/countries

Backhaul Economics: Demand and Supply  Bandwidth demand in mobile backhaul driven by 3G/4G networks and fixed-mobile convergence; this is the “mobile broadband tsunami”  Bandwidth supply is a balance between technology and economics:  Fiber connectivity has the most bandwidth potential and less maintenance/power than copper, but can involve considerable capex to deploy  Microwave links can be less expensive to deploy, but:  Involve line of sight requirementsline of sight  Are subject to environmental conditions such as rain, pollen, solar radiation, etc. 4

Embedded Infrastructure Considerations  Cell site/BTS location driven by many factors, i.e. coverage requirements, zoning, etc.  This location is a major driver of access to backhaul bandwidth  Capacity sites may need in-building wiring access or underground right-of-way  Coverage sites may have more difficult distances to accommodate 5

4G Architecture Helps Solve the “Middle Mile” Problem (Sources: Deloitte; Leading technology research vendor) Processing cost is dropping faster than bandwidth cost… …driving distributed architectures like the IP RAN for LTE

Conclusions  Solving the distance problem is a balance between technical and economic factors  The technical implementation will continue to be a combination of improved bandwidth and optimization of network architecture  Ultimately the main decision criteria is determining how to best serve the end user 7