1

3. Evolution of network technologies

3.1. Evolution of transport technologies (backbone transport - switching/routing and transmission systems)

3.2. Evolution of access networks’ technologies to broadband (xDSL, CATV, Broadband Wireless Access)

3.3. Evolution of mobile networks (to 3G and beyond)

2

3.1. Evolution of transport technologies

A. Public Network Principles

Transport (Core/ Backbone) Network

Transmission

Network Terminations

Access Gateway

WirelessTechnologies

Access Network

Twisted Pair

Cable/Coax

Powerline

Optical Fiber

Switching/ Routing

These 3 techniques will be discussed next

3

Years1840 1900 1950 1975 1980 1990 2000

TelegraphManual switching

Electro-mechanics Analog Digital

Hand

telegraph

OperatorCr-B

55

QE

70

DE-1

PABX-1

PABX-2PABX-NG (IP)

Ethernet

Gbit Ethernet

Private

Pu

blic

ISDN

DE-NG (IP)

ATM

10 Gbit Ethernet

1884

Self-dial1935

(B-ISDN)

IP/X25/SMDS

FR

Cellular radio

GSM

UMTS/IMT-2000

DE-2

NMT

B. Evolution of switching technologies

G-MPLSMPLS

4

Switching technologies (Cntd)

CS(PSTN)

FR(FS, 70-s,

DN)

IP (PS-DG,

60-s, Internet)

Х.25 (PS-VC, 60-s,

DN)

MS(Tlg)

АТМ(CS, 80-s, B-ISDN)

Connection-oriented technologies

Connectionless-oriented technologies

5

ATMIP

OB

BACKBONE OPTIONS

Transport technologies in network backbones

MPLS

6

ATMIP

OB

BACKBONE OPTIONS

C. Transport technologies in network backbones - ATM

MPLS

7

ATM and the IETF model

ATM

• Layer 1/2 • Quality of Service (QoS)• Multimedia Transport

Constant Bit Rate (CBR) - Voice Variable Bit Rate (VBR) - WWW

Available Bit Rate (ABR) – E-mail Unspecified Bit Rate (UBR)

Application

Transport

Network

Data Link

Physical

8

Putting ATM to work

Voice• Delay• Delay Variation• Loss

Data• Delay• Delay Variation• Loss

Video• Delay• Delay Variation• Loss

Multimedia• Delay• Delay Variation• Loss

1 2 3 4 5

9

ATM QoS

• Constant Bit Rate for switched TDM traffic (AAL1): – Access Aggregation (TDM for GSM/GPRS, ATM for

UMTS)– Digital Cross-Connect

– Backbone Voice Transport - Basic

• Real-time Variable Bit Rate for bursty, jitter-sensitive traffic:

– Backbone Voice Transport – Advanced (AAL2)– Optional for Packetized Access Transport & Aggregation

(3G UTRAN, 2G CDMA)

• Non real-time Variable Bit Rate for bursty high priority data traffic:

– 2.5G data services

• Unspecified Bit Rate+ with Minimum B/W Guarantee for internal data:

– Operations, Admin & Maintenance (element management, stats collection, network surveillance, …)

– Billing data– Internal LAN traffic (email, web, file sharing, …) between

operator’s business offices

LINE RATE(LR)

CBR

nrt-VBR

ABR

UBRUBR+

rt-VBR

10

ATM’s role in the network’s segments

Premise• LAN/Desktop• Campus Backbone

Access• Low Speed (56/64)

• Medium Speed (E1)

• High Speed (>E1 to SDH)

• Integrated Access

Backbone• Voice• Data• Video• Multimedia

1 2 3 4 5

11

ATM and the “Competition”

Premise• LAN/Desktop - Ethernet, HS Ethernet, Gigabit Ethernet• Campus Backbone - HS Ethernet, Gigabit Ethernet

Access• Low Speed (56/64) - ISDN, ADSL • Medium Speed (E1) – xDSL, E1• High Speed (>E1 to SDH) - SDH• Integrated Access - E1, xDSL, SDH

Backbone• Voice Traditional Telephony, IP Backbones • Data Optical Backbones, IP Backbones • Video Optical Backbones, IP Backbones• Multimedia Optical Backbones, IP Backbones

12

ATM Summary

Multimedia

Not used much on Premise

Present use in Backbone

Predictable Performance/Guaranteed QoS

13

ATMIP

OB

BACKBONE OPTIONS

D. Transport technologies in network backbones - IP

MPLS

14

• Network Layer (Layer 3)

•

•End-to-End Addressing/Delivery•“Best Effort” Service

IP and the IETF Model

Physical

Data Link

Network

Transport

Application

IP

15

Putting IP to work

Voice• Delay• Delay Variation• Loss

Data• Delay• Delay Variation• Loss

Video• Delay• Delay Variation• Loss

Multimedia• Delay• Delay Variation• Loss

1 2 3 4 5

16

IP’s Role in the network’s segment

Premise• LAN/Desktop• Campus Backbone

Access• Low Speed (56/64)

• Medium Speed (E1)

• High Speed (>E1 to SDH)

• Integrated Access

Backbone• Voice• Data• Video• Multimedia

1 2 3 4 5

17

IP and the “Competition”

Premise•LAN/Desktop No Real Competition •Campus Backbone No Real Competition

Access•Low Speed (56/64) ISDN•Medium Speed (E1) xDSL, non-channelized E1•Integrated Access E1, multiple E1, Frame Relay, SDH

Backbone• Voice Traditional Telephony• Data Optical Backbones• Video Optical Backbones• Multimedia Optical Backbones, ATM Backbones

18

Why use IP?-Wide acceptance Internet popularity Global reach - IP Standards Mature standards Interoperability

IP Protocol characteristicsSimple protocolGood general purpose protocol

“Best Effort” Protocol

19

IP summary

Globally popular Originally developed for data Mature standards Interoperability “Best Effort” Protocol Voice over IP gaining popularity

20

We need a better Internet

Reliable as the phone

Next Generation Networks

Powerful as a computer

Mobile as a cell phone and

Working right away as a TV set

21

Main directions of improvement

1. Scalability

2. Security

3. Quality of service

4. Mobility

IPv6

22

ATMIP

OB

BACKBONE OPTIONS

E. Transport technologies in network backbones - MPLS

MPLS

23

• Routers that handle MPLS and IP are called Label Switch Routers (LSRs)• LSRs at the edge of MPLS networks are called Label Edge Routers (LERs) • Ingress LERs classify unlabelled IP packets and appends the appropriate

label.• Egress LERs remove the label and forwarding the unlabelled IP packet

towards its destination.• All packets that follow the same path (LSP- Label Switched Part) through

the MPLS network and receive the same treatment at each node are known as a Forwarding Equivalence Class (FEC).

AB

LER

LSR

LSRLER

LSP

MPLS Model

FEC

MPLS adds a connection-oriented paradigm into IP networks

24

E. Switching Technologies - Summary

• Driving forces (mid of 80th) - Common platform for different types of traffic

• ISDN is not suitable (N-ISDN - low bit rates, circuit switching)

• ATM will not become as the most important switching technology since 2000s

• Main competitors (Performance/Price) # Ethernet (LANs) # xDSL (Access) # IP/MPLS (Backbones)

25

ATMIP

OB

BACKBONE OPTIONS

F. Transmission technologies in network backbones - OB

MPLS

26

Stated data rates for the most important end-user and backbone transmission technologies -1

Technology Speed Physical Medium Application GSM mobile telephone service 9.6 to 14.4 kbps Wireless Mobile telephone for business and

personal use High-Speed Circuit-Switched Data service (HSCSD)

Up to 56 kbps Wireless Mobile telephone for business and personal use

Plain Old Telephone System (POTS) Up to 56 kbps Twisted pair Home and small business access

Dedicated 56Kbps on frame relay 56 kbps Various Business e-mail with fairly large

file attachments

DS0 64 kbps All The base signal on a channel in the set of Digital Signal levels

General Packet Radio System (GPRS) 56 to 114 kbps Wireless Mobile telephone for business and

personal use

ISDN

BRI: 64 kbps to 128 kbps PRI: 23 (T-1) or 30 (E1) assignable 64 kbps channels plus control channel; up to 1.544 Mbps (T-1) or 2.048 (E1)

BRI: Twisted pair PRI: T-1 or E1 line

BRI: Faster home and small business access PRI: Medium and large enterprise access

IDSL 128 kbps Twisted pair Faster home and small business access

AppleTalk 230.4 kbps Twisted pair

Local area network for Apple devices; several networks can be bridged; non-Apple devices can also be connected

Enhanced Data GSM Environment (EDGE) 384 kbps Wireless Mobile telephone for business and

personal use

27

Stated data rates for the most important end-user and backbone transmission technologies -2

Technology Speed Physical Medium Application

Satellite 400 kbps (DirectPC and others)

Wireless Faster home and small enterprise access

Frame relay 56 kbps to 1.544 Mbps

Twisted pair or coaxial cable

Large company backbone for LANs to ISP ISP to Internet infrastructure

DS1/T-1 1.544 Mbps Twisted pair, coaxial cable, or optical fiber

Large company to ISP ISP to Internet infrastructure

Universal Mobile Telecommunications Service (UMTS)

Up to 2 Mbps Wireless Mobile telephone for business and personal use (available in 2002 or later)

E-carrier (E-1) 2.048 Mbps Twisted pair, coaxial cable, or optical fiber

32-channel European equivalent of T-1

T-1C (DS1C) 3.152 Mbps Twisted pair, coaxial cable, or optical fiber

Large company to ISP ISP to Internet infrastructure

IBM Token Ring/802.5 4 Mbps (also 16 Mbps)

Twisted pair, coaxial cable, or optical fiber

Second most commonly-used local area network after Ethernet

DS2/T-2 6.312 Mbps Twisted pair, coaxial cable, or optical fiber

Large company to ISP ISP to Internet infrastructure

Digital Subscriber Line (DSL)

512 Kbps to 8 Mbps

Twisted pair (used as a digital, broadband medium)

Home, small business, and enterprise access using existing copper lines

28

Stated data rates for the most important end-user and backbone transmission technologies -3

Technology Speed Physical Medium Application

E-2 8.448 Mbps Twisted pair, coaxial cable, or optical fiber

Carries four multiplexed E-1 signals

Cable modem 512 kbps to 52 Mbps

Coaxial cable (usually uses Ethernet); in some systems, telephone used for upstream requests

Home, business, school access

Ethernet 10 Mbps 10BASE-T (twisted pair); 10BASE-2 or -5 (coaxial cable); 10BASE-F (optical fiber)

Most popular business local area network (LAN)

IBM Token Ring/802.5

16 Mbps (also 4 Mbps)

Twisted pair, coaxial cable, or optical fiber

Second most commonly-used local area network after Ethernet

E-3 34.368 Mbps

Twisted pair or optical fiber Carries 16 E-l signals

DS3/T-3 44.736 Mbps

Coaxial cable ISP to Internet infrastructure Smaller links within Internet infrastructure

OC-1 51.84 Mbps Optical fiber ISP to Internet infrastructure Smaller links within Internet infrastructure

High-Speed Serial Interface (HSSI)

Up to 53 Mbps

HSSI cable

Between router hardware and WAN lines Short-range (50 feet) interconnection between slower LAN devices and faster WAN lines

Fast Ethernet 100 Mbps 100BASE-T (twisted pair); 100BASE-F (optical fiber)

Workstations with 10 Mbps Ethernet cards can plug into a Fast Ethernet LAN

29

Stated data rates for the most important end-user and backbone transmission technologies -4

Technology Speed Physical Medium Application Fiber Distributed-Data Interface (FDDI)

100 Mbps Optical fiber Large, wide-range LAN usually in a large company or a larger ISP

T-3D (DS3D) 135 Mbps Optical fiber ISP to Internet infrastructure Smaller links within Internet infrastructure

E-4 139.264 Mbps

Optical fiber Carries 4 E3 channels Up to 1,920 simultaneous voice conversations

OC-3/SDH 155.52 Mbps

Optical fiber Large company backbone Internet backbone

E-5 565.148 Mbps

Optical fiber Carries 4 E4 channels Up to 7,680 simultaneous voice conversations

OC-12/STM-4 622.08 Mbps

Optical fiber Internet backbone

Gigabit Ethernet 1 Gbps Optical fiber (and "copper" up to 100 meters)

Workstations/networks with 10/100 Mbps Ethernet plug into Gigabit Ethernet switches

OC-24 1.244 Gbps

Optical fiber Internet backbone

OC-48/STM-16 2.488 Gbps

Optical fiber Internet backbone

OC-192/STM-64 10 Gbps Optical fiber Backbone

OC-256 13.271 Gbps

Optical fiber Backbone

30

Evolution of transmission technologies

Years1900 1970 1980 1990 2000

Frequency modulation, FDM

PDH

1935

Time multiplexing, TDM

Wavelength multiplexing

Tra

nsm

issi

on m

edia

Mod

ulat

ion

met

hods

Frequency modulation systemsSDH WDM

Copper cable

Copper cable

RadioCoax

CoaxFiber Optics

Satellite radio

Radio

all optical

31

Technological limitations of different transmission media

Optical fibers are the only alternative at high bandwidth and distancesOptical fibers are the only alternative at high bandwidth and distances

Mbit/s Limits of Transmission Media

0,1

1

10

100

1000

10000

0,1 1 10 100

Distance [km]

Tra

nsm

issio

n C

ap

acit

y [

Mb

it/s

]

Mbit/s Limits of Transmission Media

0,1

1

10

100

1000

10000

0,1 1 10 100

Distance [km]

Tra

nsm

issio

n C

ap

acit

y [

Mb

it/s

]Fiber

Coax

Cellular Wireless*

*Capacity in Mbit/s/sq_km, Bandwidth 500 MHz

250

Copper Twisted Pair

32

Optical systems move from backbone to access

Entry process of optical systems into access occurs very slowly... Prognosis 10-15 years, reason: exchange of copper cables and maturity of technologiesEntry process of optical systems into access occurs very slowly... Prognosis 10-15 years, reason: exchange of copper cables and maturity of technologies

yesterday

today

tomorrow

5 Years

10-15 Years

Access Metro Backbone

Copper Optical

ISDN POTSFiber optics and laser

Copper Optical

ADSL

Optical

additional: color filter and optical amplifier

additional: optical switch, color converter

33

Today optical transmission system consists mainly of electronics and passive optical

components

SDH networks:

WDM networks:

Signal Multiplexer Cross connector

Optical fiber

Amplifier

TDMMUX

TDM MUX,Cross-connect,control

Electricalsignal

Opto-electronics

Active optics

Passive optics

Electronics

• SDH and WDM process signals most of the time only electronically• Amplifiers are the only active optical elements in the network

Optical fiber

TDMMUX

WDM MUX,Cross-connect

Electrical signal

Active optics

Passive optics

Electronics

WDMMUX

Passive optics:- lenses- prisms- grating

Control

Passive optics:- lenses- grating- mirrors

Opticalsignal

34

Day after tomorrow:All-optical switching and multiplexing

• All-optical systems process signals only optically • Electronics disappear• Nortel (03/2002): large scale stand-alone optical switches

are likely for longer term market requirements

Optical fiberSwitchMatrix

Aktive Optik

Passive optics

WDMMUX

Passive optics:- lenses- prisms- grating

Control

Active optics:- Switch- color converter- amplifier

Opticalsignal

Signal Multiplexer SwitchAmplifier

35

Future photonic switches

• Optics are good for transport

• Electronics are good for switching

• Electronics as far as possible

Evolution instead of Revolution at least, 5 years for first all-optical systems in backbone and metro area

36

G. Concluding remarks - growth of network

capacity and “Death of distance” phenomenon • Growth of network capacity reduction of information

transmission costs• New generation of transmission systems – new ratio Cost of transmission/Bandwidth• PCM SDH/SONET DWDM • Bandwidth becoming a less dominating factor in cost of connection• Cost of one-bit-transmission has an obvious tendency to become very

close to zero in long distance communications systems• “Flattened” networks• “Death of distance” phenomenon (F. Cairncross, 1997)• Challenges for operators

37

Bandwidth using

• 32 terrestrial carriers connecting to the New York metropolitan area have a combined potential capacity of 818.2 Terabits per second. Of that, only 22.6 Terabits per second -- 2.8 percent -- of network bandwidth is actually in use

• Int'l IP       Using  City     Bandwidth,   Bandwidth,     

Gbit/s Gbit/s

London     550.3 9,5   Paris             399.4        9,3      

Frankfurt     320.2        10,3   Amsterdam  267.1 8,2  

38

Development of costs for IC sector

Source: Economist

0,01

0,1

1

10

100

1974 1979 1975 1985 1982 1994

years

$ p

er in

stru

ctio

n p

er s

eco

nd

Cray I

Digital VAX

Sun Microsystems 2

IBM PC

Pentium-chip PC

IBM Mainframe

0

50

100

150

200

250

300

350

1930 1940 1950 1960 1970 1980 1990 1996

years

US$

Cost of information processing $ per instruction per second Cost of a three-minute telephone call from New York to London, $

to be continued

to be continued

39

3.2. Evolution of access networks’ technologies to broadband

A. Reference structure of access network

Core NetworkAccess Network

TP/Coax/Radio/FO/PL

AN NT

CPE

CPE

NT - Network Termination

CPE - Customer Premises Equipment

AN – Access Node

TP – Twisted pair

FOC – Fiber optic

PL – Power line

•High cost of access networks - 50-70% of the total cost of local telephone networks•Modems/ISDN, LL (E1) based on four-wire connection

40

Local networks based on outdated principles are became a “bottleneck”, limiting subscriber’s access to modern services.

Key forces:• New subscriber’s requirements to providing new services• New regulations• Development of new services in voice, data and video information in

interactive and broadcasting mode # WWW pages with powerful video information # Multimedia applications Digital Video Broadcasting (DVB), Video-on-Demand (VoD), interactive TV

• Emergence of alternative operators in local networks, who compete with incumbent operators in provisioning a wide set of additional services

• Construction of high-speed core networks with a capacity of dozens and hundreds of Gbit/s

• Wireless Technologies

B. Access networks go to broadband

41

Technology Trends• Data communications exceed telephony

• Wireless/mobile subscribers exceed landline subscribers

• Broadband on Wireless

• Emergence of the Next Generation Networks

42

TIME

Business Access

High-speed Internet access

MV

Residential Multimedia

Today

Business growing the broadband access

Grow the market in three waves:– High-speed Internet access (HSIA)– Business access (start with underserved SOHO segment)– Residential multimedia (gaming/video/entertainment)

Address new audiences (PC, TV, console)

Build on existing infrastructure

Move aggressively

into HSIA

43

C. Different media to the customer

Backbone Networks

Satellites / Sky Stations

Access Network

Twisted Pair

Cable/Coax

Optical Fiber

GSM/GPRS/UMTS

WLAN

44

Technological limitations of different transmission media

Optical fibers are the only alternative at high bandwidth and distancesOptical fibers are the only alternative at high bandwidth and distances

Mbit/s Limits of Transmission Media

0,1

1

10

100

1000

10000

0,1 1 10 100

Distance [km]

Tra

nsm

issio

n C

ap

acit

y [

Mb

it/s

]

Mbit/s Limits of Transmission Media

0,1

1

10

100

1000

10000

0,1 1 10 100

Distance [km]

Tra

nsm

issio

n C

ap

acit

y [

Mb

it/s

]

Fiber

Coax

Cellular Wireless*

*Capacity in Mbit/s/qkm, Bandwidth 500 MHz

250

Copper Twisted Pair

45

D. Access networks’ technologies

time

1900

1975

2010

1980

1990

1995

2000

2005

Copper

Fiber opticsWirelessCoaxCopper

WLLSatellite Cellular radio

DECT

AMPS

GSMPDC

CDMA

GPRSHSCSD

EDGE

PON AON

OPAL

BPON

TV analog

Voice

VoD

TV digital

ISDN

4B3T

2B1Q

xDSL

HDSL ADSL

UDSL SDSLVDSL

VSATTV

SHDSL

STM 1

UMTS

PMP

CDMA

WLAN

BluetoothPOTSPower line

46

10 Mb/s

5.5 Mb/s

3.5 Mb/s

1 Mb/s

7.5 Mb/s

ADSL+

ADSL

Bit rates

E. Broadband access with xDSL technologiesExtending high bit rates coverage

CentralOffice

DSLAM

Increasing loop length

CPE

47

# 63.8 m DSL lines worldwide at end of 2003

Source: DSL Forum, 2004

48

# 'Top Ten' DSL countries by number of lines

Source: DSL Forum, 2004

49

# 'Top Ten' countries per 100 population

Source: DSL Forum, 2004

50

F. Broadband access in CATV network

CoaxHub

TV

CPh TS

PC

STB

CM

Headend

POTS

Internet

TV Studio

TS - Telephone setCPh - Cable phoneSTB - Set-top boxCM - Cable modemPOTS - Plain old telephone system

HubTV

Coax or Fiber

51

Cable modems

• Access to the Internet provided by operators in CATV networks –

Due to new regulations for CATV operators -

Key factor of cable modem applications

• New application of cable modems – HBR access to Internet

# 3 Mbit/s in symmetrical configurations

# 30 Mbit/s in forward and 10Mbit/s in backwards directions in asymmetrical configurations

• Other most important services in CATV networks

# Distribution of digital TV programs

# Interactive digital television

# Voice over IP and Voice over ATM

• New possibilities of broadband access via cable modems –

due to an evolution of AN Coax infrastructure to HFC infrastructure

52

G. Broadband Wireless Access

General term – Wireless Local Loop (WLL)

G1. Fixed BWA (LMDS/MMDS/PtM…)

LMDS - Local Multipoint Distribution System

•Interactive television TV with related services

•Voice service (usually as supplement to other services)

•High-speed data transmission for business users

•Access to the Internet and streaming multimedia from Web sites

53

WLAN Standards:IEEE 802.11, 802.11a, 802.11b and 802.11g802.11b - Wi-Fi ("wireless fidelity") technology Wi-Fi - alternative to a wired LAN (offices/homes)

•Ethernet protocol & CSMA/CA (carrier sense multiple access with collision avoidance) for common channel sharing•Frequency range - 2.4 GHz •Data speeds - up to 11 Mbps

•802.11a BRs from 1 to 12 Mb/s D 100 50 m

•802.11b 1 11 Mb/s 100 50 m

•802.11g 1 54 Mb/s 100 20 m

G2. Mobile BWA (WLAN, UMTS, IMT-2000…)

54

G.3. WiMax – Worldwide Interoperability for Microwave Access

Source: dBrn Associates, Inc., 2004

•Most fundamental difference between Wi-Fi and WiMax – they are designed for totally different apps

•Wi-Fi is LAN technology designed to add mobility to wired LANs.

•WiMax was designed to provide MAN BWA services

•Wi-Fi supports a transmission up to few hundred meters, WiMax could support services in area up to 50 km

55

WiMax Cell

56

I. Access networks – concluding remarks

# Access networks are the most expensive part for operators

# Copper cables have an average life span of approx. 50 years.

# Copper transmission systems reach their theoretical limits in access networks at approx. 50 Mbit/s.

# In Europe and North America massive investments inaccess networks will be realized in 10-20 years.Most of these investments will be applied to fiber opticsand to wireless networks.

57

Broadband access in Europe and USEUROPE• According to a new IDC study, broadband penetration in Western Europe will continue to surge in coming years. By

2009, 46% of Western European households will have broadband access, compared to 20% at the end of 2004. By 2009, there will be more than 92 million broadband connections, up from 40 million at the end of 2004. 83% of these will be provided to the residential market.

• Although Internet access will remain the most important application for the short to medium term, services like voice over broadband and IPTV will be cornerstones of successful business strategy.

USIn 2004, the number of high-speed subscribers in the U.S. grew by 35.4% to 32.5 million subscribers, consisting of the

following access technologies: • cable modem - 17.0 million • DSL - 12.6 million • fixed wireless - 2.2 million • fiber-to-the-home - 0.2 million • satellite - 0.4 million• mobile wireless (3G) - 0.1 million • broadband over power line - less than 50,000

58

3.3. Evolution of mobile communications

59

60Source: ITU

Beginning ofBeginning of 2G

61Source: ITU

62Source: ITU

63Source: ITU

64

Beyond 3G vision

65

2000

2000

2002

GSM Today Basic Telephony Circuit Data 28.8 kbps

(HSCSD) Standardised bearer &

suppl. services

GSM Basic telephony Circuit data 28,8 kbps,

(HSCSD) Standardised bearer &

supplem. services

UMTS Basic Telephony Mobile Multimedia and

Asymmetric Services Circuit / Packet Data

Rural <= 384 kbps(Sub-)Urban <= 512 kbpsLow Range <= 2 Mbps

Standardised Capabilities Virtual Home

Environmentin addition

New Capacity (Spectrum)

UMTSBasic telephonyMob. multimedia & asymmetric servicesCircuit/packet data

Rural <=384 kbps

Low range <= 2 Mbps Standardized capabilities

Virtual Home Environment

GSM Enhancements Packet Data

(GPRS <= 180 kbps, +EDGE <= 500 kbps)

Circuit Data(+EDGE < 300 kbps*)

CAMEL home servicessupport

SIM Toolkit, MobileExecutionEnvironment

GSM enhancements

Packet data (GPRS <= 180 kbps)

Circuit data (+ EDGE <=500 kbps)

CAMEL home services support

HSCSD: High Speed Circuit Switched Data

GPRS: General Packet Radio System

EDGE: Enhanced Data Rates for GSM Evolution

CAMEL: Customised Applications for Mobile Enhanced LogicSIM - Subscriber Identity Module

R R

UMTS +

3-4 years – transition period

2004+

(Sub-)Urban <= 512 kbps

GSM GSM

Service evolution from GSM to UMTS

66

Ovum

67

Technology Challenge for Mobility

Source: Siemens 100Mbit/s

Vehicular

2G

GSM

0.1 1 10

FWA (Fixed Wireless Access)

Mobility

Fixed

Pedestrian

Portable CordlessDECT

UMTS FDD

Deployment2000-2006

Large Area coverageup to 384

kbit/s

GPRSEDGE

2.5G

Bluetooth

FutureDeployment

IEEE 802.16/a/e WiMax

BRANs

BWAUMTS TDD

Indoorup to 2 Mbit/s

Beyond 3G

MMAC

Wireless LANIEEE 802.11 (Wi-Fi),

68

Evolution of mobile networks from 2G to B3G

69

Technology penetration forecasts for GSM, GPRS, EDGE and WCDMA for Western Europe

70

Mobile access will dominate

0

200

400

600

800

1000

1200

1400

1600

1800

1995 2000 2005 2010

Subscriptions worldwide (millions)

Mobile internetsubscriptions

Mobilesubscriptions

Mobile

Fixed

Mobile Internet

Fixed Internet

Source: Siemens

71

Mobile messaging market Increasing importance of multimedia applications

0

500

1000

1500

2000

SMSC 253 460 679 984 1246 1196 943 698 457

MMSC 10 69 184 460 805 1100

1998 1999 2000 2001 2002 2003 2004 2005 2006

• SMSC/MMSC supplier revenues [€m], worldwide

Source: UBS Warburg, 2002

SMSC:Short MessagingService CenterMMSC:Multimedia MessagingService Center

72

Mobile Average Revenue Per User (ARPU) potential

0

5

10

15

20

25

30

35

40

YE01 YE02 YE03 YE04 YE05

Year

AR

PU

(E

uro

/mo

nth

)

Western European ARPU(Euro/ Month)

Western European ARPU(Euro/ Month)

MMC

SMS Data (excl. SMS)Voice Enterprise Applications

23%Enterprise

Applications

15% other services

14% Internet Browsing

6% Mobile Banking

14% Map-based Local Info

12% Map-based Traffic Info

77%Individual

Applications11% Booking & Reservation

9% Multimedia Messaging

9% Video Telephony/Conf.

5% Mini Newspaper5% Personal Organizer

Source: Siemens

Mobile Data23%

73

European Average Revenue Per User for mobile voice and mobile data

European Average Revenue Per User for mobile voice and mobile data

Advertising ARPU M-Commerce ARPU Mobile data ARPU Voice ARPU

Advertising ARPU M-Commerce ARPU Mobile data ARPU Voice ARPU

Mobile Data

Mobile Voice

€ / month

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

0

10

20

30

40

50

60

70

Source: Credit Suisse First Boston, Siemens

74

Appendix - Comparison -How long does it taketo download:

E-mail

CableWLAN

30

UMTSADSL

Fiber

GSM

PSTN

GPRSISDN

bit/sByte

1

0,01

30 3

2,5

0,4

0,2

1 30

sec

min

min

20

9,6 k

56 k

115 k128 k

2 M8 M

30 M80 M

800 G

1 h video

MPEG 4 in TV-Quality

Song or photo

MP 3 High resolutionWirelesswired

sec

sec

sec

sec

ms

ns

7

3,5

12

sec

µsec

min

sec

ms

Liv

e V

ideo

Co

dec

s st

arti

ng

wit

h 3

2 kb

it/s

days

hours

3

12

hours6

min42

3 k 3 M 300 M