New Business Models for Network Operators

1. ITU-T Workshop on“New challenges for Telecommunication Security Standardizations"Geneva, 9-10 February 2009 New Business Models for Network Operators David Goodman Profile Product Line Manager Subscriber Data Management, Converged Core Nokia Siemens Networks

2. Content Vision 2015 Subscriber Data Consolidation Telco 2.0 Identity Management Summary

3. Vision 2015 – The World Connected Applications predominantly in internet Multitude of business models 5 billion people connected Broadband everywhere

4. Vision 2015 – The World Connected Applications predominantly in internet Multitude of business models Subscriber-centered, information-driven Broadband everywhere

5. Vision 2015 – The World Connected Personalized Service Mobility Converged Experience Identity OpenSubscriberData Managed Experience Policy Customer Insight Intelligence Applications predominantly in internet Multitude of business models Broadband everywhere

6. Subscriber-Centric Evolution Align theorganization Simplify and personalise services Reveal customer insights Exploit new business models 1 2 3 4 Recognize the value of subscriber information Unify subscriber data across network and services Profile subscriberbehaviour across network and services Expose subscriber information to third party eco-system 74% of operators have already evolved their organisation towards a subscriber-centric model 70% are planning to start creating a single view of subscriber data by end of 1H 2009 76% say customer profiling is their first area of interest for subscriber data 64% say identity management is second highest area of interest for subscriber data

7. Content Vision 2015 Subscriber Data Consolidation Telco 2.0 Identity Management Summary

8. Silo Networks, Silo Data • Service providers have become detached from their real-time subscriber data – which severely limits their capacity to appropriately interact with customers and partners. • Allows new competitors emerging from the content or retail sectors to exploit the new possibilities of aggregate services coming from Web 2.0 communities or the convergence of fixed and mobile services.

9. Silo Networks, Silo Data Network Network Network Network Services Services Services Services Call/Session Control Call/Session Control Call/Session Control Call/Session Control Presence Presence Presence Presence CustomerProfiles CustomerProfiles CustomerProfiles CustomerProfiles Portal Portal Portal Portal Resource Mgmt. Resource Mgmt. Resource Mgmt. Resource Mgmt. Messaging Messaging Messaging Messaging Policy Policy Policy Policy Video Video Video Video Devices Devices Devices Devices Access & Authentication Access & Authentication Access & Authentication Access & Authentication Accounting Accounting Accounting Accounting Voice/VoIP Voice/VoIP Voice/VoIP Voice/VoIP Cable Mobile DSL Wireless Broadband BRAS CMTS BRAS CSCF MSS DSLAM Cable HFC Aggregation Switch SGSN RAN xDSL Modem Cable Modem Access Switch TV WiMax

10. The Telco Inheritance • At present, for many service providers, customer data is spread across many different systems – often across different departments and in totally incompatible formats – with all the ultimately unnecessary cost, efficiency, error, duplication, synchronization, support and integration overheads that accompany such an approach. • Given the history of the telecommunications sector, such an inheritance has been unavoidable • What’s important now is to make sure that the inheritance of data fragmentation doesn’t continue to cause further complications and headaches in the future.

11. Anytime, Anyplace, Anywhere • As the metabolism of the whole industry gears up several notches at once, network architectures and their underlying IT systems must be able to respond in real-time to increasingly complex interactions as customers move between devices, access technologies, payment methods and even identities • The future of telecommunications being predicated on an ability to offer speech, content and applications ‘anytime, anyplace, anywhere’ – to the same rigorous standards of service quality

12. Holding The Vision • This vision will be severely limited by an inability to bring together relevant subscriber data: • As customers move from cellular to WiFi networks or home PC´s, their device preferences are lost and services become annoyingly inconsistent. • As domestic broadband customers surf between their IPTV, web, email, RSS feeds and MMS, their service preferences and supporting data fail to transfer • As tele-workers move between personal and business time during a normal day, they are faced with having to constantly re-key and re-log network identity information to gain access to the right environment. • Service providers have limited ability to combine contextual information with interests, communities and content to offer attractive and premium-priced aggregated services.

13. Identifying The Subscriber • If a network operator is to make the essential next step towards providing what are truly personalized services, then a consolidated, real-time, de-fragmented picture of the subscriber must be available to act as the catalyst for rapid service creation, deployment and delivery

14. Data Layer Services Layer Presence Portal Messaging Video/IPTV Devices SDF Control Layer Call/Session Control CustomerProfiles Policy AAA Intelligent Network Resource Mgmt. Data Layer Subscriber Profile Database High Performance Core Open Access Cable Mobile DSL Wireless Broadband BRAS CMTS BRAS CSCF MSS DSLAM Cable HFC Aggregation Switch SGSN RAN xDSL Modem Cable Modem Access Switch TV WiMax

15. Standards-based Architecture • An open, standards-based architecture that sits at the heart of the network creating a horizontal and unified subscriber data layer across all applications. • Separating application logic from the subscriber data liberates and unifies customer data that is currently locked away in silo, closed and often proprietary systems. • Through this unified approach, mobile, fixed and broadband service providers can take control of their subscriber information, unlocking and securely sharing data across an array of applications, networks and partners. • By consolidating this data, applications are able to share one complete, rich and consistent view of the subscriber data instead of limiting its usage.

16. Unified Subscriber Data Directory

17. Data Consolidation • Data consolidation achieves this through several ways: • By creating one operator common data model, subscriber data can be harmonized across the network into one logical data layer, removing data inconsistencies and duplications. • This ensures a distributed data architecture can be centrally managed throughout its life cycle, essential to the evolution and integrity of the data model. • Where data cannot be consolidated, it is federated from silo data sources to bring it into one complete view • All data appears to form one common information model, but may be stored in a third-party SQL RDBMS database • By having one database, only one point of integration is exposed for all applications

18. Simplification • This simplifies subscriber and service provisioning, eliminates application integration complexity – and means that only one database ever needs to be updated. • Wasted network capacity is eliminated by simplifying network architecture, reducing server and storage requirements, and sub-optimal usage of database software licenses • System resilience and scalability can be more optimally managed through data consolidation, delivering carrier-scale availability through a highly distributed real time architecture.

19. Common Data Model • Although ‘putting everything into the same box’ delivers demonstrable savings, it’s from the flexibility in how subscriber data is structured, distributed, exposed and managed that the real tactical and strategic benefits accrue – and through the promotion of a common data model tailored to an operator’s data requirements.

20. Content Vision 2015 Subscriber Data Consolidation Telco 2.0 Identity Management Summary

21. The Telco 2.0 opportunity Telco World (Subscription Driven) Converged Core and Services Internet World (Content driven) Web Services InformationExchange • Contextual identity • Profiles information • Policies information • Authentication, Authorization • Location, Presence information • Payment, Billing • Personalization information • Profiling, Recommendations • Subscriber-centred • Subscriber data-focused • Subscriber profiling • Business model innovation • User-centred • User data focused • User profiling • Business model innovation 3 2 1

22. A Single Profile StoreTypical Operator Profile Directory Dynamic data is constantly updated as the subscriber interacts with services, manages subscriptions and changes between environments Static data is updated infrequently but must be read in real-time by many applications TM  TIME STAMP Operational data enables the end-to-end quality of experience to be controlled and services to function correctly. Transactional data defines entities that are derived from transactions and service usage. 123456 00:01:43 Address Buddies  User identities CPE profiles Subscriptions Static Profile Dynamic Profile Pricing plan Presence Directory Operational Transactional Recommendations Policies Activity QoS Security Access & Authentication Balance Session state Real-time subscriber profile

23. Subscriber Data ManagementHolistic solution Personalized Service Mobility Converged Experience Identity Managed Experience Policy Customer Insight Intelligence OpenSubscriberData

24. Subscriber Data ManagementHolistic solution Personalized Service Mobility Converged Experience Identity OpenSubscriberData Managed Experience Policy Customer Insight Intelligence 76% of operators state that subscriber data management is the most important convergence issue for their organisations over the next 12-24 months* 83% of operators say that real-time subscriber data is critical to improve the subscriber experience* * Loudhouse Research on behalf of Nokia Siemens Networks

25. Subscriber Intelligence Framework Personalized Service Mobility Converged Experience Identity OpenSubscriberData Managed Experience Policy Customer Insight Intelligence 87% seek to improve customer insight in next 12 months* 72% see prediction of customer needs as important* Only 14% have real time data analysis available to them* 53% state existing customer data doesn’t allow for profiling* * Loudhouse Research on behalf of Nokia Siemens Networks

26. Identity Management Framework Personalized Service Mobility Converged Experience Identity OpenSubscriberData Managed Experience Policy Customer Insight Intelligence 64% of operatorssees identity management and managing multiple subscriber identities as a key issue* * Loudhouse Research on behalf of Nokia Siemens Networks

27. Policy Management Framework Personalized Service Mobility Converged Experience Identity OpenSubscriberData Managed Experience Policy Customer Insight Intelligence 68% of operators see access and authentication data as obstacles to providing seamless services between different access networks* * Loudhouse Research on behalf of Nokia Siemens Networks

28. Content Vision 2015 Subscriber Data Consolidation Telco 2.0 Identity Management Summary

29. “Will operators lose out on $1 trillion* in Web 2.0?” Web 2.0 Broadband bit pipes Legacyinterworking Terminals Fixed/cable Multiradio Mobile platform Mobilephone POTSphone ISDNphone SIPphone PCClient TV SIP SIP PDA Transform or become a bit pipe? *Light Reading, Vol. 7, No.6, June 2007

30. Monetizing Subscriber DataSeize the opportunity to transform business Operator poll: What are the most relevant areas ofsubscriber data intelligence in your opinion?* • The Internet-based ecosystem – Amazon, eBay, Google, etc. – already exploits customer data • 76% of operators believe customer profiling harbours the greatest business potential • Targeted mobile marketing yields response rates as high as 45%** • Operators see subscriber identity management as a top priority *Source: Apertio Loudhouse Research, Q3’07**Source: Blyk MVNO first quarter results

31. Total Global IDM Market CAGR = 21.6% (2006 to 2014) Market size (US$ millions) Forrester: Identity Management Market forecast: 2007 To 2014 The market harbors great potential for IDM applications

32. Business Transformation and the Role of Telcos Operators • Service provider • Countless attractive services • Need for user authentication • Identity provider • Trusted provider of high-quality services • Trusted billingrelationship • Unique authentication capabilities Newservice opportunities Strong relationship Identitymanagement(IDM) Focus on Users Internet players (ASPs, third-party software vendors, content providers, ad companies) • Controlled access to online applications • Portable identities acrossdomains • Protected user privacy

33. Identity Management Framework The role of identity information will evolve, strengthening the operator’s position in the value chain Identity management will enable new revenue opportunities, and enhance the user experience Network-agnostic identity management is the key component of tomorrow’s multi-access network Customerprofiles Identity federation Close & trusted relationship with subscribers and communities Single sign-on (SSO) Attribute query/push Mutual authentication Authorization & trust management

34. New Internet revenue streams await network operators Common repository for subscriber information The operator unifies subscriber profiles with SSO and a common profile TCO-optimized IDM for multi-access and convergence Identity Management Architecture Payment Operator services Identity manager WAP MSSC Stream Repository AAA/BSF HLR HSS IMS Policy Server WiMAXASN-GW WLANAC xDSLBRAS 3GPPGGSN(PS) SAE GW SGSN MME 3GPPMSC-S(CS)

35. Identity Management Use Cases Mobility Personalized Service Identity Converged Experience OpenSubscriberData Policy Managed Experience Intelligence Customer Insight Web single sign-on Anonymous federation and queries Legal age verification Child locator/parental screening Personalized web homepage Service blending with caller ID on IPTV User account provisioning on demand Targeted advertisement enabler Cooperative payment

36. Trusted Partners in Web 2.0 Web single sign-on Use case overview Operator challenges • Reduce churn to Web 2.0 service providers and other telcos • Enhance the user experience • Simplify use of in-house and externally branded applications • Establish a trusted image/brand • Operator works with third parties or in-house service providers  circle of trust and new revenue streams • User signs on once to access all applications in the circle, and enjoys • a convenient user experience • controlled, secure access to online services Operator benefits • Enriched portal attracts & retains users • Cuts costs & saves time by • using a central approach to identity • mashing up in-house and third-party applications with SSO • Establishes a reputation as a trusted partner in the Web 2.0 world circle of trust User (when abroad) Mail, calendar Identity Manager Operator Internet User MySpace commondatabase

37. Protect Key Assets Anonymous federation and queries Use case overview Operator challenges • Master the challenge of complex, distributed IT • Control costs and maintain security while increasing access to information • Protect subscribers’ identities • Only trusted partners and authenticated users view the selected subscriber’s identity data • Brokers across the network and web domain • Allows access to be restricted for each SP and protects subscribers’ privacy Operator benefits • Single storage place for all identities and attributes increases security, saves costs and simplifies user management • Automated processes for network access and web domains increase efficiency • User provisioning • Password management • Access control circle of trust Service(e.g IPTV User (when abroad) Identity Manager Operator Internet User commondatabase

38. Profile Access with Privacy Legal age and nationality verification Use-case overview Operator challenges • Become a major player in the Web 2.0 world and generate revenue from subscriber data assets as a trusted identity provider for service/content providers. • How to protect subscribers privacy? • Cost of compliance for legal age and nationality • A gambling, adult content, government, adult purchase can pay US $22 per registered user to verify compliance today • Operator provides and guarantees legal age and nationality for competitive fee Operator benefits • Generate revenue for legal age and nationality verification service to online sites requiring strict compliance. • Operator can provide timely verification whilst protecting privacy and using existing subscriber assets. • Quick return on investment circle of trust Legal AgeVertification Online Gambling Identity Manager Operator Internet User commondatabase

39. Content Vision 2015 Subscriber Data Consolidation Telco 2.0 Identity Management Summary

40. Summary • Next-generation business model for network operators demands subscriber-centric data consolidation to: • Improve CAPEX/OPEX • Improve time-to-market with new services • Leverage subscriber loyalties • Encompass Web 2.0/Telco 2.0 opportunities particularly through identity management-based services • Security challenges: • Protecting subscribers’ identities, identity data and privacy as well as engaging subscribers with their data • From a standards’ perspective it’s a brave (and exciting) new world

41. PostscriptAn ITU-T success story

42. X.500 – A PARADISE Found and Lost • One of the best things X.400 ever did was to spawn the X.500 series of recommendations for distributed directory services, published in six editions • As with X.400, X.500 was originally driven by telcos who wished to provide a global directory of OSI and other services • Realised to some extent in the R&D pilot, PARADISE • But failed, despite Herculean efforts, in the NADF and Eurescom initiatives • In the ’90’s X.500 went underground as LDAP-based systems flourished in the corporate space • A simpler protocol, API and overall concept • But it still lacked many things … in terms of robustness, distribution and access controls, there was no match

43. One-NDS • During the ’90s, a group of developers working for Orange UK in Bath were looking at network operators requirements for real-time applications, primarily HLRs (Home Location Registers) • Having already used RDBMS, they turned to X.500 as a preferable deployment model • That idea became One-NDS, a real-time, resilient and distributed and application hosting environment conceived and built for 2G and 3G telecommunications networks • Specifically designed to enable the use of a common centralised database by multiple applications through the support of open data access protocols

44. NSN CC SDM Customer BaseHighlights Over 740 million subscribers Deployed with 62 customers in 39 countries worldwide One common subscriber database – One-NDS Nine NSN and hundreds of local dataless applications

45. Summary • What goes around, comes around … • … let’s keep up the good work!

46. Thank you!david.goodman@nsn.com Thank you! david.goodman@nsn.com