Wireless Service Providers & ASPs: Partnering for Mobile Internet Apps Vish Nandlall

1. Wireless Service Providers & ASPs: Partnering for Mobile Internet Apps Vish Nandlall Chief Architect, Carrier Networks vnandlal@nortel.com

2. Agenda • Why ASPs should partner with wireless service providers • Implications of wireless service provider trends for ASPs • Conclusions

3. Agenda • Why ASPs should partner with wireless service providers • Issues with Mobile Internet’s market traction being resolved • Wireless service providers control key assets to enable apps • E.g., Best-Effort VoIP May Not Be Good Enough • Implications of wireless service provider trends for ASPs • Conclusions

4. Low Bandwidth Relative to Fixed Internet UMTS WiMAX 802.16e EV- DO Rev C LTE Mobile Internet Cellular Mobile Wireless BB HSPA EV-DO / DOrA Voice & Messaging WiFi 802.11 n Local Area • Mobile Internet’s historically low • bandwidth  • Content limitations • Consumer impatience • Mobile, wireless broadband (BB) • deployments will eliminate this issue! 802.11 a/b/g WiMAX 802.16d VDSL / FTTH Fixed Any App over Broadband Increasing bandwidth 2007 Rollout 2008 & beyond Existing

5. Unfriendly Handset Ergonomics • Unfriendly handset MMI  • User difficulty in obtaining • & viewing content • Handset vendors improving • iPhone set a new benchmark

6. No Mobile Content Development Guidelines • Lack of guidelines  • Deters content development • Hinders usability of content • W3C’s Mobile Web Initiative (MWI): • Best practices & mobile device descriptions • .mobi top level domain for MWI-based content dotMobi Investors W3C MWI Sponsors

7. Mobile Content Market Fragmentation • Fragmentation of market across: • Device types • Access network types • Operators • Limits market scope of developed • content  • Reduces incentive for content • development • Mitigating factors: • Access distinctions diminish with • wireless BB • 3 device types will dominate 2010 TechNewsWorld, 4/2006

8. Walled Gardens Walled gardens = Limited access to Internet  Reduces user’s bang for the buck “Sprint sees ‘open’ model for WiMax” (InfoWorld, 1/2007) The walls are falling!

9. “Vodafone, Yahoo Extend Partnership” for IM LightReading, 2/2007 “Alltel Extends Mobile Content Delivery Contract” cellular-news, 1/2007 Operator’s Revenue-Sharing Models “YouTube, Verizon deal is official” GigaOM, 11/2006 “X-Series from 3 Puts Internet on Your Mobile” Partnerships with Orb, Sling Media, Google, Microsoft, Google Mobile Marketing Magazine, 11/2006 • Historical models reduced incentive for content development • Growing # of operator partnerships indicate mutually agreeable terms

10. Fixed Internet Content Hasn’t Met Mobile Users’ Needs • Online behavior of mobile & • fixed Internet users differs. • Situational, mobile-relevant • content emerging: • Timely • Location-relevant • Actionable Navigational & mapping services Breaking news Podcasts, video webcasts Live sportscast

11. Mobile Internet Subscription Pricing Too High • Price has reduced end-user demand  • Reduces market for content developers • Prices likely to fall due to… • Market analysts recommending small • premium above DSL access tariffs • Competition from alternative wireless • access (e.g., WiFi, WiMAX) • Service providers re-examining pricing when • VoIP deployed over wireless BB Internet price Subscriber Usage

12. Agenda • Why ASPs should partner with wireless service providers • Issues with Mobile Internet’s market traction being resolved • Wireless service providers control key assets to enable apps • E.g., Best-Effort VoIP May Not Be Good Enough • Implications of wireless service provider trends for ASPs • Conclusions

13. Wireless Service Providers Control Key Assets to Enable Apps

14. E.g., Best-Effort (BE) VoIP May Not Be Good Enough • Voice KPIs: • Voice quality • Call setup delay (i.e., post-dial delay) • Wireless channel characteristics: • Shared  BE traffic latency increases beyond a threshold of sector loading  policy-controlled QoS • Relatively slow  over-the-air (OTA) propagation can consume major portion of delay budget  access network-controlled header compression + efficient voice encoding with VoIP packet alignment with L2 frame sizes • Lossy  frame loss impacts voice quality & call-setup delay  UDP transport for SIP + limited SIP PRACKs + loss-resilient codec • User mobility may result in handoff to different channel, & can result in movement to different point of attachment in operator’s intranet  policy-controlled real-time enhancements to minimize break time • Mobile devices optimized around use of wireless-specific, IPR-encumbered codecs, & use of other codecs may perceptibly impact other apps Only wireless service provider can consistently deliver “quality” voice

15. Agenda • Why ASPs should partner with wireless service providers • Implications of wireless service provider trends for ASPs • Conclusions

16. Visited IMS PBX Policy Server SS7 Peer IMS PSTN MSC 2G/3G WAN AS AS AS AS AS AS AS AS AS AS AS Mobility- Enabled Intranet Enterprise LAN SCP Internet Home IMS OFDM-MIMO WAN Fixed BB @home Implications of Wireless Service Provider Trends for ASPs • Mobile Enterprise Services • Mobile enterprise telephony • One phone vs. one number • IMS-hosted, Mobile IP Centrex • Enterprise-hosted, Mobile IP PBX • Mobile Enterprise Services • Mobile enterprise telephony • One phone vs. one number • IMS-hosted, Mobile IP Centrex • Enterprise-hosted, Mobile IP PBX • Telephony-enabled apps – e.g., CRM & web portal with click-to-call • IMS • Access-independent session control & app-layer service routing • Operator control & billing for services • Authentication & service authorization • Scalable, multi-vendor deployments • Standardized roaming & interconnects • Mobile Enterprise Services • Mobile enterprise telephony • One phone vs. one number • IMS-hosted, Mobile IP Centrex • IMS • Access-independent session control & app-layer service routing • Operator control & billing for services • Authentication & service authorization • Scalable, multi-vendor deployments • Standardized roaming & interconnects • Provides for network evolution • PSTN & AIN/CAMEL inter-working • VCC mobility between packet & MSC access with IMS services • Relevant types of app servers (ASs): • SIP AS – for interactive, real-time communication services (e.g., VoIP & video-telephony, PoC); messaging; notification services • OSA-SCS AS – ParlayX/WS* APIs providing ASPs with access to service provider’s network enablers • Mobile Enterprise Services • Mobile enterprise telephony • One phone vs. one number • IMS-hosted, Mobile IP Centrex • Enterprise-hosted, Mobile IP PBX • Telephony-enabled apps – e.g., CRM & web portal with click-to-call • Federated apps – e.g., presence • Coordination between carrier- & enterprise-hosted business apps • Carrier-hosted, add-on business apps: conferencing, presence & IM, contact center, etc. • Enterprise-hosted s/w: FFA/SFA, CRM, ERP, etc. • End Users’ Demands • Broadband (BB) Access • IP Ubiquity for E2E Connectivity • Fixed-Mobile Convergence (FMC) • Policy-Enabled QoS & Charging • IMS • Over-the-Top ASP Competition • Mobile Enterprise Services • Service Bundling • Service Delivery • IMS • Access-independent session control & app-layer service routing • Operator control & billing for services • Authentication & service authorization • Scalable, multi-vendor deployments • Standardized roaming & interconnects • Provides for network evolution • PSTN & AIN/CAMEL inter-working • VCC mobility between packet & MSC access with IMS services • End Users’ Demands • Broadband (BB) Access • IP Ubiquity for E2E Connectivity • Fixed-Mobile Convergence (FMC) • Policy-Enabled QoS & Charging • IMS • Over-the-Top ASP Competition • Mobile Enterprise Services • Service Bundling • Service Delivery • End Users' Demands • Personalization: • Shift from network- to subscriber-centric services • My content & apps on my time @ my location • My communication, my way • Gen Y • Web 2.0 social networking & collaboration • MMORPG • Both can be voice enabled • Seamless service access across all devices with… • Content/app adaptation per device/place/time/role • Fixed-Mobile Convergence (FMC) • Mobile access to both fixed BB via WiFi or femtocells & cellular WAN • Seamless app mobility via IP-based mobility or Voice Call Continuity (VCC) • Consumer: sticky service bundle with cheaper, better mobile coverage @ home • Enterprise: initially driven by cheaper mobile telephony costs • Wireless service provider: new market for provider-hosted, mobility-enabled, enterprise voice services  mobile voice enablement of enterprise apps • Broadband (BB) Access • Complementary technologies: • Fixed BB @ office & home • OFDM-MIMO for WAN mobility • Enables: • New, richer, multimedia apps • Architectural shift: stovepipe  loosely coupled network layers • Decoupling apps from access, both technically & commercially • Policy-Enabled QoS & Charging • Shared wireless pipe & mobility  QoS & admission controls + mobility enhancements needed to guarantee performance for some apps • Discounted QoS & packet counts for operator’s & partners’ IMS & non-IMS apps vs. “best effort” & basic mobility for non-partners • Service Delivery • Internet Time  over-the-top partnerships, web services development • Internet Cost – new, low cost, service economics • Over-the-Top ASP Competition • New business models – e.g., free, advertising-subsidized apps • Voice service competition based on cost  erosion of service provider’s voice revenues • Competitive, VoIP ASPs indeed have opportunity for “cheap,” wireless voice market; wireless service provider will retain advantage for “quality” market • Service Bundling • Voice-centric  triple/quad plays  content differentiation via... • Competing portfolios of multimedia & value-added services • Service providers need ASPs’ help to compete! • IP Ubiquity for E2E Connectivity • IP-based mobility between access nets • Device access to IP-based apps (& eventually phasing out others) • IP Ubiquity for E2E Connectivity • IP-based mobility between access nets • Device access to IP-based apps (& eventually phasing out others) • Enterprise telephony  IP • Implications: • Mobile users more accessible to ASPs • More mashups possible • IP Ubiquity for E2E Connectivity • IP-based mobility between access nets

17. Agenda • Why ASPs should partner with wireless service providers • Implications of wireless service provider trends for ASPs • Conclusions

18. Conclusions • Historical issues - technical, market, & commercial - impeding collaboration between ASPs & wireless service providers are being resolved • Wireless service providers need the help of ASPs to compete with innovative apps, designed for the mobile handset & delivered with expedited TTM • Wireless service providers control assets that can enable or enhance certain applications delivered over the Mobile Internet • Collaborating with the wireless service providers can open market segments for some ASPs, and improve market share for others