CompTel 2010CompTel 2010Wireless Backhaul Panel
March 16, 2010
Wireless Data Evolution is Driving Fast Growing Demand for Backhaul Services
Voice Texting and Email Mobile Internet
Two T‐1’s (3 Meg) 3 ‐ 8 T‐1’s (5 ‐ 10 Meg) 25 ‐ 50 Meg Ethernet300 Meg in 5 years
Typical Cell Tower Bandwidth Requirements Per Carrier
Demand for “Smartphones” and
g y
246 Million Data Capable Devices
Smartphones
mobile Internet applications driving bandwidth requirements
at cell towers
40 Million (16%)
Page 2Confidential
Source: CTIA 10/8/09
CompTel Wireless Backhaul Panel
• John ScaranoCOO and Co‐founderZayo Group
• Lynn ReferCEOCEOTelecom Transport Management
• Matt YoungDirector of SalesAlcatel‐Lucent
• Jeff Stuparits PEJeff Stuparits, P.E.Distinguished Member of Technical StaffVerizon Wireless Backhaul Planning
• Moderator: Ron Mudry CEO of Tower Cloud• Moderator: Ron Mudry – CEO of Tower Cloud
ZAYO BANDWIDTHdCompany Summary and
Wireless Backhaul Overview
March 16, 2010
Zayo Group
2
Wireless Trend
More data devices… Driving >250% data CAGR… Accelerated further by LTE
(VzW: top 30 mkts by 2011)% of ATT Subs withintegrated devices
Zayo is actively building fiber to the tower networks in order to meet the growing demand for wireless data services
3Source: AT&TW presentation at 2009 4G Conference
to meet the growing demand for wireless data services
Primer – Base Station Capacity
Maximum ‘useable’ bandwidth per tower increasing rapidly…
R t ti B St ti C it E l tiRepresentative Base Station Capacity Evolution
2006 2007 2008 2009 2010 2011 2012 2013
Base stations connect wireless voice/data traffic to fiber (and copper, microwave,
etc ) backhaul
HSDPA/HSUPA3.6 / 14.4Mbps 1.9 Mbps
HSPA+21(28) / 5.8
HSPA+42 Mbps
HSPA+(MIMO)84 Mbps
HSPA+(MBand)168 Mbps
LTE172 Mbps etc.) backhaul
networks172 Mbps
‘2G’ ‘3G’ ‘4G’
Base stations ultimately govern the maximum bandwidth a tower can support… upgrades trigger multi-year handset upgrade cycles
4
Source: Telstra plan presented at 4G Conference
How Does Zayo Support the Wireless Space?
Mobile Switching CenterTowerCentral Offices
Antenna Local Voice Connectivity
Central Offices
Other MSCs
Wi l
IPRouters
Voice Switches
Voice Tandem Exchanges
Backup; voice and data aggregation
Wireless – Wireless voice ti itWireless
Provider Base Station App Servers
(e.g., Voicemail)Other NetworkElements
Internet Peering Locations
connectivity
Internet Traffic
Zayo Fiber Network
Fiber to the Tower ‘Backhaul’
Other Bandwidth Infrastructure services
5
Backhaul Infrastructure services
Price per Meg?
Without price compression per meg, high speed smart phones are unlikely to be economically viable for wireless carriers
Illustrative Price per Meg – Fiber to the Towerp g
Price per Meg at Various Bandwidth Commitment Levels
75%100%
0%25%50%
6 Megs 20 Megs 50 Meg 100 Megs
Cost effective for voice
Cost effective for
3G Speeds
Cost effective for high speed
wireless internet
85%, while bandwidth increases 16x
Price per meg decreasing…
this elasticity of demand fuels healthy growth
6
Using this example, revenue increases by 2.4x
…this elasticity of demand fuels healthy growth
Compelling, Common Characteristics
D i ti t fib t k
Memphis Indianapolis Philadelphia Spokane
Example Markets
Dense pre-existing metro fiber network
Balance sheet affords very long term payback
Believe high likelihood of a second/third tenant
5-10 year contracts; 100% ETL
Provide service to majority of customer towers
100% Zayo controlled end to end network
7
Requires laser implementation focus…
Telecom Transport Management, Inc. Overview
Privately-held, venture-backed companyy , p y
Pure-play provider of high capacity wireless backhaul services
Utilize hybrid fiber/microwave backhaul solutions to over 1 000 Utilize hybrid fiber/microwave backhaul solutions to over 1,000 cell sites
Currently offer service in 5 markets/12 cities to four national carriers and one regional service provider
Contracts are typically 5-7 years in length with recurring revenue while expenses are fixed allowing for considerable revenue while expenses are fixed, allowing for considerable scalability through lease-up activity
TTM expects to become cash flow positive 3Q 2010
1
p p Q
End to End Backhaul: Fiber and Microwave
ProtectedMicrowave
FiberCapacity Microwave
Hub
Fiber Hub
Wireless Carrier Switch
Cell Site
Cell Site
Hub Ce S e
FiberFiber Cell Site
Cell SiteCell Site
TTM E d E d S i
2
TTM End to End Service
Mobile Transport EvolutionComptel 2010
Matt Young
Sales Director
March 2010
Market Trends… explosive growth in Mobile Broadband
N t i l b t d t Faster/cheaper mobile broadband devices are driving the need for higher capacity networksContinued growth in mobile subscribers with strong forecasted growth in 3G subscribers
New terminals boost data …
ubs
Mob
ileV
or V
ideo
New end user services are IP driven with network assets migrating to support Ethernet/IPIP transformation needed to provide scalability and to reduce/control network transport costsE d d d f b db d i
% S T V
Source: MMetricsAverageiPhone
End user demand for new broadband services can offset reductions in ARPU 2009
$1992007$599
Mobile BroadbandNew Handsets + Services + SubscribersAll IP + RAN Capacity
Mobile data-users growth rate 2008 to 2012
BackhaulAll IP + RAN CapacityCost + Scalability
bers
Information service 86%
Mobile data-users growth rate 2008 to 2012
Video 194%
E-mail 83%
Games 95%
MMS 99% Graphics/images 77%Music 136%
Ringtones 62%obile
Sub
scri
b(M
illio
ns)
All Rights Reserved, Copyright © Alcatel-Lucent 20092 | Alcatel-Lucent Mobile Transport Evolution
Ringtones 62%
Mo
Source: Pyramid
IP/MPLS Mobile Backhaul Transport Solution For 2G, 3G and LTE
Convergence over Ethernet networks where available
Ethernet EthernetCarrier Ethernet or IP Network
(MetroE, TPSDA, PacketMicrowave…)
7750 SR
RNC, BSC,SGW, MME, …
NodeB.eNB,BTS
Ethernet
NodeB
ATM/IMA
(nxT1/E1)
OC3ch
ATM OC3
7750 SREthernet
T1/E1 TDMIPoMLPPP (nxT1/E1)
BTS
7705 SAR-8
7705 SAR F
or
nxT1/E1 OC3chTDM SONET or Microwave Network
BTSIPoMLPPP (nxT1/E1) 7705 SAR-F
Connection ResiliencyLAGMulti Chassis APSConvergence over TDM
Cell Site AggregationDynamic end-to-end MPLS PWsAny access media
Service Router flexibilityRAN MLS (L2/L3)
Multi-Chassis APSRedundant Pseudowires Fast Re-RouteEnd-to-End OAM and SLAs
Convergence over TDM networks where required
All Rights Reserved, Copyright © Alcatel-Lucent 20093 | Alcatel-Lucent Mobile Transport Evolution
Any access mediaMPLS OAM tool kitAccurate synchronization delivery
RAN router aggregationBackbone VPN edgeIntra-MTSO consolidation
Convergence of 2G/3G/LTE Backhaul, Backbone and LTE Evolved Packet Core
Seamless convergence of IP backhaul/backbone and Evolved Packet CoreFlexible eNodeB Carrier Ethernet access alternativesMulti‐technology solutions => higher BW, Ethernet and all‐IP
CDMA / EVDOGSM / GPRS BTS
2G/3G2G/3G Circuit Switched Core (Voice)
Microwave
Fiber
IP Backhaul MPLS, Edge
RouterCell Site AccessGSM / GPRS
EDGEUMTS /HSPA+
IP channelBTS
Node B BSCRNC
META (IP backhaul and backbone)
Cell Site Aggregation
Backha lAccess MTSO
Packet Switched Core
Copper
Access
LTE+EPCLTE+EPC
IP channel All-IP
BackhaulAccess MTSOIP Backhaul MLS, Edge Router and
S/P GW
Microwave
FiberCell Site
eNode B
IP channel
META (IP backhaul and backbone)
All IPEvolved
Packet Core MMEPCRF
CopperCell Site
Aggregation
Access
All Rights Reserved, Copyright © Alcatel-Lucent 20094 | Alcatel-Lucent Mobile Transport Evolution
Common IP backhaul / transport and IP EPC management
Conclusion
Critical success factors for evolving transport of new mobile broadband services:
Architectural flexibility and scalability - to address diverse backhaul environments
Sophisticated QoS - essential for new services and new business modelsnew business models
Robust network and OAM tools - to meet SLAs and reduce OPEX
Clock synchronization – to enable reliable handoffs Clock synchronization to enable reliable handoffs and guarantee service performance
Trusted partner – with expertise in delivering true E2E transport solutions optimized per customer
All Rights Reserved, Copyright © Alcatel-Lucent 20095 | Alcatel-Lucent Mobile Transport Evolution
BACKHAUL REQUIREMENTS
[ Fiber Based Ethernet-to-the-Cell ]
C t lComptel March, 2010
Jeff Stuparits, P.E.Di ti i h d M b f T h i l St ff
1
Distinguished Member of Technical StaffVerizon Wireless Backhaul PlanningVerizon Network and TechnologyAtlanta, GA
Verizon Wireless OverviewVerizon Wireless Overview
Off V i (CDMA) d D t (EVDO) i• Offers Voice (CDMA) and Data (EVDO) services• 40,000+ cell sites
• Customers: 91M+• Net Customer Additions in 4Q09: 2M+• Net Customer Additions in 4Q09: 2M+• 4Q09 Revenue: $13B+
• Deploying 4G LTE starting in 2010• We need Fiber (Ethernet) to our Cell Sites
2
We need Fiber (Ethernet) to our Cell Sites
LTE PlansLTE Plans• Four-year plan to have all cell sites LTE capabley p p• Phase 1: Commercial launch of 25-30 markets by year-
end 2010
• All cell site traffic (voice, EVDO, and LTE) will run over Ethernet Backhaul All T1’s will be disconnectedEthernet Backhaul. All T1 s will be disconnected.
• Additional information available at Verizon Wireless web site or other internet sources (recent Tony Melone interview with Network World)
3
Fiber/Ethernet PenetrationFiber/Ethernet Penetration• Phase 1– 2010 (Metro) 90/10 (90% Fiber / 10% MW)( ) ( )• Phase 2 – 2011• Phase 3 – 2012• Phase 4 – 2013 (Rural) 10/90 (we want to avoid this)
C / ?• Can Phase 4 be pushed towards 50/50 ?
• A challenge for the Transport industry !• A challenge for the Transport industry !• Phase 3 and 4 planning needs to take place now.
4
What (most) Wireless Carriers Want:OOur Transport Wish List
1 Fiber (or MW) based1. Fiber (or MW) based Ethernet Transport System,
2. Delivering 5-10 times the bandwidth we use today,
3. At less MRC (OpEx) than t dwe pay today.
When all 3 of these items are enabled
5
When all 3 of these items are enabled, we tend to move forward with urgency.
VZW TargetsVZW Targets
• Fiber Based Ethernet BackhaulFiber Based Ethernet Backhaul• GigE Multimode fiber interface at cell site• High Availability Five 9’s+ in the coreHigh Availability, Five 9 s+ in the core
• 50Mbps to start• 50Mbps to start• 100Mbps once 4G ramps up, then +++• 100 500Mbps for Microwave Hub sites• 100-500Mbps for Microwave Hub sites
T t i 100Mb f $1500/• Target price: 100Mbps for $1500/mo.6
Backhaul RequirementsBackhaul Requirements
• End;
7
CompTel Wireless Backhaul Panel
• John ScaranoCOO and Co‐founderZayo Group
• Lynn ReferCEOCEOTelecom Transport Management
• Matt YoungDirector of SalesAlcatel‐Lucent
• Jeff Stuparits PEJeff Stuparits, P.E.Distinguished Member of Technical StaffVerizon Wireless Backhaul Planning
• Moderator: Ron Mudry CEO of Tower Cloud• Moderator: Ron Mudry – CEO of Tower Cloud