(C) 2003 NTT

Enhancing IP networks to support Enhancing IP networks to support

consecutive killer applicationsconsecutive killer applications

Enhancing IP networks to support Enhancing IP networks to support

consecutive killer applicationsconsecutive killer applications

Tadanobu OKADATadanobu OKADA

Vice President, DirectorVice President, DirectorNTT Network Service Systems LaboratoriesNTT Network Service Systems Laboratories

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Class 3 (utilization of Class 3 (utilization of management resources)management resources)

Class 1 (regulated)Class 1 (regulated)

Applied R&DApplied R&D System improvementSystem improvement CustomizationCustomization

Fundamental R&DFundamental R&D Common technologies to create Common technologies to create

new servicesnew services Basic and coreBasic and core technologies to generate new technologies to generate new principles and componentsprinciples and components

NTT NTT (Holding Company)(Holding Company) R&DR&D

Class 2 (competitive)Class 2 (competitive)

NTTNTTFacil-itFacil-itiesies

NTT-NTT-MEME

NTTNTTCom-Com-wareware

Bldg.Bldg.mgt.mgt.

MaintenanceMaintenance andand

operation ofoperation of networknetwork facilitiesfacilities

SoftwareSoftwaredevelopmentdevelopment

computercomputerserviceservice

NTTNTTEastEast

NTTNTTWestWest

Intra-pref.Intra-pref.comm.comm.

Intra-pref.Intra-pref.comm.comm.

R&DR&D R&DR&D

NTTNTTCommun-Commun-icationsications

NTTNTTDoCoMoDoCoMo

NTTNTTDataData

MobileMobilecomm.comm.

SISI

R&DR&D R&DR&D R&DR&D

Intl. &Intl. &inter-pref.inter-pref.

comm.comm.

NTTNTTElec-trElec-tronicsonics

NTT-NTT- ATAT

OpticalOpticaldevices,devices,

LSILSI

TechnologyTechnologytransfer,transfer,

software & software & hardwarehardware

developmentdevelopment

Class 4 (new business Class 4 (new business exploration)exploration)

Organization of NTT GroupOrganization of NTT Group

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Changes in the numbers of subscribers and usersChanges in the numbers of subscribers and users

Note 1: Numbers of telephone and ISDN subscribers after 2002 are an NTT projection.Note 2: Numbers of mobile phone subscribers are a projection of the Mobile Computing Promotion Consortium (MCPC).Note 3: Numbers of Internet users are a projection of InfoCom Research Inc.Note 4: Numbers of broadband user households are the target of the e-Japan strategy.

20 million

40 million

60 million

80 million

94 95 96 97 98 99 00 01 02 03 04 05 06

（ 3/2000 ）

Telephone

Mobile phone

Broadband(fiber optic + DSL, etc.)

Internet(fixed networks + mobile Internet)

ISDN

●

7/1999 – NTT Reorganization

IT Strategy Council

e-Japan strategy

●

Number of telephone subscribers: 50.61 million (as of end Sept. 2002)

●

Number of mobile phone subscribers: 77.72 million (as of end Sept. 2002)

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Internet-user household projections Internet-user household projections

OtherＡＤＳＬＦＴＴＨ

Bar graphBar graphNumber of Internet-user households

･ Broadband use

･ Narrowband use

Line graphLine graph

Broadband user household penetration rate

Mobile Internet user penetration rate

(Source: InfoCom Research, Inc.)

(x1 million)

0

10

20

30

40

45

0%

10%

20%

30%

40%

50%

60%

70%

75%

14.0911.49

8.994.86

2.410.220.03

6.30

10.68

14.42

15.39

14.9413.95

2.38

8.438.44

7.64

6.10

4.10

2.32

1.45

19.39

22.30

19.33

13.86

8.846.41

5.28

23.25

31.15

36.52

39.24 40.87 41.28 41.75

29.8%

45.8%

55.9%

63.7%

69.3%73.1%

75.7%

8.2%

18.7%

36.0%

52.8%

66.3%

71.8% 74.8%

Num

ber

of

user

ho

use

hol

ds

Pen

etra

tion

rate

（％）

2001 2002 2003 2004 2005 2006 2007

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Broadband access penetrationBroadband access penetration

Broadband environmentBroadband environmentBroadband environmentBroadband environment

(high-quality movies, interactive, constant connection) (high-quality movies, interactive, constant connection)

ADSL (2%)CATV Internet

(5%)

United States

(103 million households)

〔 3/2001〕

ADSL (32%)

CATV Internet (18%)

Republic of Korea

(14 million households)

〔 8/2001〕

Japan

(47 million households)

ADSL (9%)

CATV Internet (4%)

Fiber optic access

(59%)

〔 9/2000〕

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Monthly ADSL service fees in Japan, the US, and KoreaMonthly ADSL service fees in Japan, the US, and Korea

ADSL services for household users are not provided yet.(2002)

Japan ： 1.5Mbps ： @nifty, OCN, Plala; 8Mpps ： @nifty, OCN, Plala, and Yahoo!BB

U.S ：　 1.5Mbps ： Verizon, SBC, Covad

Korea ： 1.5Mbps ： KT, Hanaro; 8Mbps ： KT, Hanaro

（＄）

Note 1: Fees compared: ADSL subscriber fees, ISP fees and NTT line connection charge (applicable in Japan only).

Note 2: Dates of calculation: September 1,2003 for fees in Japan;April 1, 2002 for fees in the US; January 2002 for fees in Korea.

Note 3: Exchange rates: ￥ 120.2 to the U.S dollar; ￥ 0.1045 to the Korean won.

Source: “Predicting the Spread of the Internet, ” May 21, 2002, InfoCom Research, Inc.

$22.95（ \2,663 ）

$23.30（ \2,703 ）

$56.62

$33.91（ 3,900won ）

$26.08（ 2,900won ）

0

10

20

30

40

50

60

1.5Mbps 8Mbps

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(C) 2003 NTT

Changes in the electronic commerce (final consumption goods) marketChanges in the electronic commerce (final consumption goods) market

Electronic Commerce (EC) ： Commercial transactions involving the ordering of goods and services on the network using TCP/IP.

170

144

302

537

1,053

0

200

400

600

800

1,000

1,200

1996 1997 1998 1999 2000 2001Source ： MPHPT

（ billion $ ）

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(C) 2003 NTT

Changes in the use of contents before and after broadbandChanges in the use of contents before and after broadband

9.7

24.7

31

37.6

63.6

61.2

84.7

94.1

1.4

8

6.4

14.4

43.4

43.5

72.8

91.2

0 20 40 60 80 100

Video/ video on demand

Online games

Streaming audio and video

Downloading music and images

Downloading software

Shopping

Web surfing

e- mail

Before broadbandAfter broadband

（ % ）

Source: An Outlook for the Spread of the Internet, May 21, 2002, InfoCom Research, Inc.

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Source: Stefan Saroiu, Krishna P. Gummadi, Richard J. Dunn, Steven D. Gribble, and Henry M. Levy;

“An analysis of Internet content delivery systems”, Proc. of the 5 th Symposium on Operating

Systems Design and Implementation, December 2002.

Bandwidth usage by several contents delivery systems (actual data)Bandwidth usage by several contents delivery systems (actual data)

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(C) 2003 NTT

IP network as an infrastructureIP network as an infrastructure

IP network should grow into a sound infrastructure on which various business players provide users with “killer” applications and get money.

Simple, Safe, Smart

Marketingbusiness

Travel EC

Databasebusiness

Financial portalbusiness

Moviedistributionbusiness

Net gamebusiness Remote

nursing-carebusiness

e-learningbusiness

Communitybusiness

Image creatorsupport business

Preventive medicalcare business

Onlinepublishingbusiness

Collaborationbusiness

Solutionbusiness

IP network

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(C) 2003 NTT

Requirements for IP telecommunication networkRequirements for IP telecommunication network

・ Variety of QoS

・ Security

・ End-to-end connectivity

・ Scalability

・ Openness

・ Economy

IP network should become simple, safe, and smart.IP network should become simple, safe, and smart.

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(C) 2003 NTT

TV

Home network

・・・

WirelessＤＳＬ

Other networks

Session control

Edge node

Main information

Control information

Corporate network

Outline of network architectureOutline of network architecture

Transport

Network control

Applicationservers

Optical

Regional ＬＡＮ

Mobile IP

Security

PresenceAuthentication ChargingService

platform

Gateway

Core network

　 Network platform

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Secure Session Technology Secure Session Technology ～～ A Key to mass A Key to mass communicationcommunication～～

Large

between unspecified number of

people

Medium

between specific

enterprises

Small

within an enterprise

Client/Server 　　　　　　　　　　　 End-To-End 　　　

Authentication by pre-shared key (password, etc.)

e.g. IPsec, HTTP digest authentication

PKI, server-mediated authentication

e.g. TLS, Kerberos e.g. S/MIME

Mass communications with: 　 ・ Mutual user authentication 　 ・ Secure communications 　 ・ Privacy protection 　

Limits to Non-NM approach

Target

Non-NM approachBreakthrough by combining session-control and secure-communications

technologies

NM approach

- user authentication - address resolution - session control - secure signaling

Mass communications between many users will be made possible by secure session technology combining session-control and secure-communications technologies.

NM : network-mediated

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(C) 2003 NTT

IP transportIP transport

Location registration

Monitor connection

Communication

Search Check status

Connection establishment

Transport

Network control

Applicationservers

Service platform Authentication Billing/payment

Network control associated with communication lifetimeNetwork control associated with communication lifetime

Specific services with application-dependent controls

session

Authentication

Access control

Location management

Presence control

Security control

QoS control

Encryption control

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(C) 2003 NTT

Examples of business player model

Use

Customer and terminalservice provider

Delivery service provider

Session managementprovider

Network management service provider

Authentication service provider

User(terminal)

(1) User authentication

(2) Provide service menu

Network quality management

User

User(terminal)

(3) Connection request (4) Connection

agreement

Provide terminal management

(including application code download)

(5) Visual communication

Servicegateway

Billing proxy, Service provider

Service portal

(6) Billing and collecting charge

Main Player: Essential player in C2C Value added service player: Players who provide additional services to main players. They provide outsourcing functions to the main player.

Notes

Video contentControl & management signal

Main playerValue added service player

claimsProvide terminal management

(including application code download)

(Source: HSAC)

Bi-directional video communication service platform

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CentralizedCentralizedadministrative typeadministrative type

AutonomousAutonomousdistributed typedistributed type

　　 --Difficult to flexibly Difficult to flexibly meet ever-diversifying meet ever-diversifying user needsuser needs

　　 --High costHigh cost

Quality concernsQuality concerns

Progress from advantagesDisadvantages cause delay and decline.

Disadvantages cause delay and decline.

Internet ageInternet age

PresentPresent ●●

Server-client type Server-client type

Broadband Broadband progress ageprogress age

in the next 5-10 years in the next 5-10 years

End-to-end type End-to-end type

From From now now

Until Until now now

Resonant communications environment Resonant communications environment

Low-costLow-cost

　　Reliability and quality Reliability and quality assuredassured

Telephone ageTelephone age

Network evolution toward resonant communication environmentNetwork evolution toward resonant communication environment

^ ^

^ ^><

><

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(C) 2003 NTT

Features of the resonant communication environmentFeatures of the resonant communication environment

anywhereanywhere

highhigh

　　 QualityQuality (bandwidth, delay)(bandwidth, delay)

ChargesCharges(price/distance)(price/distance)

ContentsContents

Time shiftTime shift

UbiquityUbiquity

texttext

audioaudio

videovideo

- Text, audio, video

low-costlow-cost

goodgood

Mobile phonesMobile phones

Fixed linesFixed lines

Current InternetCurrent Internet　　 (Narrowband/broadband)(Narrowband/broadband) Resonant communication environmentResonant communication environment

NoteNotess

InteractivenessInteractiveness(real time)(real time)

SecuritySecurityhighhigh

static imagesstatic images

goodgood

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(C) 2003 NTT

Impact on the Japanese economyImpact on the Japanese economy

The impact on the Japanese economy is estimated in the range The impact on the Japanese economy is estimated in the range of \64 trillion annually by 2007.of \64 trillion annually by 2007.

(Source: McKinsey & Company, Inc.)

Impact of introduction of broadband

systems into industries

Automotive and electrical machinery

( global competition type )

Other manufacturingindustries

( domestic demand type )

Medical etc. ( profession

service type )

Retail etc. ( processing &

distribution type )

Distribution and financial etc. ( facility operation type )

64 trillion

3 trillion

17 trillion

11 trillion

17 trillion

15 trillion

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(C) 2003 NTT

・ Broadband communication era has started.

・ IP network should grow into an infrastructure, that has high reliability, multiple transfer quality classes, and secure end-to-end connectivity.

・ Session control is one of the key technologies to meet the requirements.

・ These technologies provide “simple”, “safe”, and “smart” connection between end-to-end users, which can create a variety of new businesses.

SummarySummary