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leading performance drives growth
In a world increasingly dominated by high-performance mobile devices, ubiquitous cloud-based
services and video-based content, connectivity has never been more important, and a whole new kind
of IP network is required to deliver the kind of quality experience that users expect.
4th Generation IP (4G IP) networks are service-aware and access-agnostic. They have the
smartness, simplicity, scalability and superior performance required to meet user expectations, build
loyalty, and deliver profitable lifetime revenue.
ericsson White paperUen 284 23-3209 | October 2013
4th Generation IP
4Th GeneraTIOn IP • MeeTInG new-GeneraTIOn needs 2
Meeting new-generation needssmart devices, broadband access and cloud-based services are a natural part of the lives of
many people and businesses. User expectations of modern devices and services have risen
dramatically, and the fact that near-ubiquitous coverage and seamless connectivity are available
is often taken for granted. People expect near-immediate access to applications and media,
including video, audio and file transfers, more or less everywhere: at home, at work, in public
spaces and while traveling.
Today’s internet-savvy users – who are
accustomed to using wi-Fi access, over-the-
top (OTT) services, social media and
internet-based tools “for free” – are
increasingly aware of the value they get from
their fixed and mobile broadband
subscriptions. Users expect services to be
reliable and adapted to their needs, tastes
and budget.
network operators are no longer in sole
charge of the services delivered to users.
Many services like video on demand (Vod)
are now provided directly by application
service providers (asPs) and content
providers – with no ties to connectivity or
subscription. however, changing demands
and increased network use by both people
and connected machines require much
closer interworking among devices,
applications and networks. This calls for
networks with evolved capabilities, and new
relationships between operators, asPs and
content providers.
To support the growth and rising expectations of consumers and enterprises, operators need
a new kind of network. Capacity expansion alone is no longer enough for IP networks, because
when everyone and everything is connected, requirements placed on the network become more
diverse. To secure the potential of mobile broadband, the shift to video- and cloud-based
applications, and machine-to-machine (M2M) and people-to-machine (P2M) communications,
the design and construction of IP networks need to be rethought. To secure profitable growth
and value for operators, 4G IP networks need to become user-experience centers – enabled by
network and business model innovation.
The guiding principles for networks are:
> smart – to support service differentiation and evolved business models
> scalable – to improve time to market and ensure economic use of resources
> simple – to manage growing technical complexity and enhance productivity.
networks need to be able to provide superior performance for every client – be it a person, a
machine or an application.
DevicesDevicesApplicationsApplications
NetworkNetwork
Figure 1: Interworking among devices, applications and networks.
4Th GeneraTIOn IP • GreaT exPeCTaTIOns 3
Great expectationsas the networked society takes shape, operators face three basic challenges:
> rising subscriber expectations – driven by the rapid adoption of broadband-enabled
smartphones, tablets and other devices
> a fast-evolving commercial landscape with new business models – enabled by connectivity
> exponential growth in data traffic – driven by rising numbers of subscribers and the increasing
popularity of video.
Overcoming these challenges impacts both technical operations and the commercial aspects
of service provision.
Users demand more
Consumer and enterprise users expect to be well connected everywhere they go. The need for
constant connectivity is becoming more critical as people use mobile broadband more, and use
more connected devices to carry out tasks like accessing work-related information and
communication, managing household appliances, implementing home security, and remotely
controlling electrical and air-conditioning systems.
a study carried out by ericsson ConsumerLab [1] shows that enhancing the user experience
is key to subscriber retention. The study showed that network performance has the greatest
influence on user satisfaction, and that
increasing the satisfaction level of a user from
medium to high reduces churn risk by more
than 50 percent.
however, as shown in Figure 2, the telecoms
industry lags behind other major industries in
terms of brand loyalty – when measured using
the net Promoter score (nPs) metric. This
loyalty gap could be attributed to increased
commoditization – or at least that subscribers
do not recognize any differentiation among
operators or their offerings.
Yet the ericsson ConsumerLab study found
that around one-third of smartphone users
encounter problems daily when browsing or
using apps, and two of the top four loyalty
drivers relate to value for money and the types
of tariff plans offered. These findings suggest that there is an opportunity for operators to increase
service differentiation and personalization based on performance and other value drivers.
Many businesses rely on access to the internet, and so performance issues have the potential
to be extremely costly in terms of lost business and reputational damage.
Fixed and mobile networks need to perform to provide just the right level of app coverage
(high probability of delivering targeted performance level anywhere in the network) to meet user
expectations and maintain loyalty. To achieve the right balance, network performance needs to
be addressed end-to-end: from content server to access network.
evolving landscape
The ICT landscape is changing – applications and services are being offered in new ways,
delivered to users directly over the network by content, IT or software providers and aggregators.
In this model, the ability for operators to create value beyond basic connectivity is limited.
Opportunities and challenges are natural consequences of change. The evolving landscape
impacts the role of the operators in terms of their position in value chains, what products and
services they offer, who will buy them, and what business models will be used.
RetailingRetailing
NPS benchmarks for US industry groups 2012. Source: Satmetrix 2012, Study of US consumers.NPS benchmarks for US industry groups 2012. Source: Satmetrix 2012, Study of US consumers.
Online servicesOnline services
TechnologyTechnology
Travel/hospitalityTravel/hospitality
Financial servicesFinancial services
InsuranceInsurance
TelecommunicationsTelecommunications
-40-40 -20-20 00 2020
26265050
7373
13134646
7676
663737
7171
-9-92828
6666
-15-152424
8383
-15-152323
7474
-21-211111
3838
4040 6060 8080 100Percent (%)
100Percent (%)
Figure 2: nPs benchmarks for Us industry groups.
4Th GeneraTIOn IP • GreaT exPeCTaTIOns 4
Future networks need to be able to generate revenue from traffic that is outside the direct
control of the operator. They need to be able to identify and capture new value chains and
additional sources of revenue, and they need to be agile – adapting quickly to new applications,
traffic patterns and charging models.
The foundation of operator-provided services will be based on more advanced connectivity
offerings, supporting differentiated services and multiple business models in a flexible way, which
will enable expansion into new areas and create new value chains.
exponential growth
In 2012, worldwide mobile subscriptions rose by 1.2 billion to 6.3 billion. Video is the dominant
segment of data traffic in mobile networks, with growth expectations of 60 percent annually up
until the end of 2018 [2]. In the same year, app downloads doubled so that more apps were
downloaded than in the previous five years combined [3].
The amount of data that users consume is also on the rise as video and music streaming
becomes more popular and the execution of applications becomes cloud-based. In 2012, total
monthly mobile data traffic doubled to 1.2GB, up from 600MB in 2011 [2].
The rising demand for access in mobile networks in turn places new demands on the
backhaul network in terms of capacity and utilization. It is not just pure bandwidth capacity
to meet users’ needs that is required; signaling capacity is also becoming a challenge. In
april 2013, ericsson tested a mobile network in asia, clocking the total number of daily
signaling transactions at 1.75 billion, with a total of 2.55 million sessions – which is equivalent
to an average of 690 transactions per user per day.
as more devices become connected, more services and applications will be constantly
connected to the network. and while not every device consumes large amounts of bandwidth,
the challenge of scale remains – to manage the huge number of additional subscriptions.
Innovative solutions like virtualization of home gateway functions expose every single device
connected in the home to the network for personalized and customized treatment. while this is
good for users and can be monetized by operators, the challenge of scaling IP networks to
manage the increase in clients will need to be overcome.
as fixed and mobile access speeds increase with the deployment of LTe and fiber-based
access systems, backhaul and metro networks may become capacity bottlenecks. For example,
10 percent of mobile broadband downloads were restricted to a maximum speed of 2Mbps in
a european operator network – a limit imposed by the legacy backhaul network, not by the radio
access network.
with the right infrastructure and business models in place, network operators have an
opportunity to boost user satisfaction, reduce churn, and to develop revenue growth by offering
performance guarantees to content providers and other partners.
4Th GeneraTIOn IP • redeFInInG IP neTwOrkInG 5
Redefining IP networking The architectures of the first two generations of IP networks were centered on host-to-host or
network-to-network connectivity. Third-generation networks were mainly built to support the
internet boom of the past decade and provide user-to-network access over a fixed connection.
Today’s users connect to networks through a multitude of devices everywhere they go.
Connectivity is now also about users connecting to users and the cloud, and machines connecting
to other machines, in more innovative and social ways. whether the connection is fixed or mobile,
the cornerstone of this transformation is a common, converged, end-to-end IP network.
To create new value and generate additional revenue streams, IP networks need to be able to
deliver more personalized services, and to be aware of different types of users, their devices,
content and locations. Value is no longer measured in terms of routers and routing, it is about
applying the appropriate packet transport technologies to reduce network costs, while adding
intelligence – such as policy control features at the edge – closer to the user.
naturally, networks need to continue to scale and grow, which involves not only increasing
raw capacity, but implementing a distributed approach for managing video traffic, as well as the
rising numbers of IP sessions, mobile apps, subscriptions and devices – a signaling challenge
that will require additional scale in the control plane.
so what is 4G IP networking? For users, it is the ability to personalize services; for operators,
it is increased revenue. 4G IP caters for the new reality of subscriber mobility – constant and
instant access to cloud-based applications – and effective monetization of capital investments.
It is essentially a new way of looking at network requirements, through the lens of the operators
and subscribers, in the face of three new realities:
> a smart world built on smart connectivity
> connectivity defined in terms of coverage, capacity and capabilities
> business model innovation to correlate value to bits.
smart ip networks
Industry direction
IP networks that incorporate smartness and awareness – in multiple dimensions – are critical to
meeting demand for improved user experience, resource optimization, security, monetization
and ecosystem enablement.
To offer personalized and differentiated treatment for subscribers and applications, networks
need to be service- and application-aware combined with policy control and charging.
evolving IP networks will be resource-aware and have the ability to optimize resource usage
based on current traffic conditions – from the content server to the access network. evolved
networks will be more device-aware, supporting personalization of the user experience and
resource optimization. networks will be aware of transport conditions for content being streamed
on a device, and will be able to transcode or optimize content accordingly. The network and
evolving business models will be able to build on and monetize location awareness.
with growing personalization and more personal content stored in the cloud, secure access
will be a major design requirement for the 4G IP network. network smartness will extend to
providing seamless access across multiple devices and technologies, whether fixed broadband,
3G, 4G or wi-Fi.
smarter architectures include cloud-based and customer-centric services placed in the
network. examples of this include network-based virtual home and enterprise gateways, content
delivery networks (Cdns) and caching functionality.
service provider software-defined networking (sP-sdn) will shorten time to market and enhance
the ability to differentiate, enabling complex services that are difficult for competitors to copy to
be deployed faster and at a relatively low initial cost. sP-sdn will also enable services to be
exposed to transform the IP network to a service enablement platform, as shown in Figure 3.
4Th GeneraTIOn IP • redeFInInG IP neTwOrkInG 6
smart networks enable operators to offer content providers and social network players
increased reach, as well as the ability to create tailored packages, with varying levels of
prioritization, advertising and data allowances.
Industry examples
some innovative operators are already finding new ways to monetize their broadband
networks, including partnerships with OTT service providers.
strategies vary and can include undifferentiated broadband access, tiered flat-rate plans,
shared plans (including parental control) and
premium (prioritized) plans; access to
popular add-on services such as on-demand
music or zero-rated unlimited access to
social networks; and pay-as-you-go
prioritized access to the internet or to a
particular media service, or unlimited access
at certain times of the day.
The ability to provide a range of services
improves network utilization and allows for
more opportunities for upselling, reduces the
risk of churn and improves user lifetime value
– while giving the subscriber more
personalized access to the services they
want matched with a willingness to pay.
For example, a southeast asian operator
has boosted mobile-broadband revenues by
providing differentiated consumer packages.
In the first phase, unlimited offers were
complemented with specific social
networking products, as well as more
granular, small denomination prepaid
offerings. In the second phase, many of the
subscribers that were introduced to internet services through entry prepaid packages signed
up for more advanced postpaid-offerings. The campaign resulted in a 45 percent increase
in subscribers and a 23 percent increase in revenue, with profitability maintained, over a
two-year period. The smart IP network was instrumental to the operator’s market success
and product packaging.
scalable ip networks
Industry direction
The ability to scale in multiple dimensions – to cater for say more traffic, increased signaling,
greater numbers of devices and subscriptions, and wider coverage – in the mobile packet
core and IP edge parts of networks is key.
In 4G IP backhaul networks, fiber will be used further into the access network, while
microwave links are ideal for small-cell deployments. This evolution of the backhaul requires
solutions that can combine microwave and fiber with the IP functionality needed for both
fixed and mobile backhaul.
The increases in the number of network elements and end points, a key network capability
will be self-reconfiguration – with efficient provisioning, self-organizing networks (sOn)
capabilities, and cost-effective maintenance.
Technologies like sP-sdn, which transform the network into a real-time programmable
entity, will enable scalability in service creation and will be the catalyst for large-scale
personalization in 4G IP networks. Virtualization of network functions will support network
scalability, primarily by distributing functionality throughout the network.
as video traffic grows exponentially, a crucial aspect of scaling will be the continued
evolution of Cdns and superior caching solutions that optimize video delivery and boost
efficiency in the transport and aggregation network. Optimizing content distribution in this
way can reduce network traffic by up to 20 percent.
3G/LTE3G/LTE Wi-FiWi-Fi TransportTransport
Open interfaceOpen interface
Software defined networking control layerSoftware defined networking control layer
Open programmable interfacesOpen programmable interfaces
Open tothird-party
networkelements
Open tothird-party
networkelements
Open to third-party
apps
Open to third-party
apps
Core appslibrary
Core appslibrary
OtherappsOtherapps
RouterRouter EdgeEdge DatacenterData
center
Service exposureService exposure
Figure 3: Transforming the network into a service enablement platform.
4Th GeneraTIOn IP • redeFInInG IP neTwOrkInG 7
Industry examples
a service provider in Oceania has
experienced an annual two-fold growth in
mobile traffic. To meet this demand, the
service provider deployed new packet core
technologies with higher capacity, triple
access and resource pooling, resulting in a
30 percent reduction in the number of nodes
needed in 2011, and a 36 percent reduction
in 2012.
In north america, several operators have
deployed large-scale IP-based LTe backhaul
using a combination of microwave and fiber
deployments. These evolved architectures
scale flexibly to cater for rapid traffic growth
as well as rising numbers of end points.
ericsson has demonstrated that features
like smart adaptive paging can help to
manage the increase in signaling
experienced by the mobile packet core as
a result of increased use of mobile apps. This feature reduces signaling load – by as much as 90
percent – compared with the traditional way of managing paging, as shown in Figure 4, and can
help reduce capital expenditure on mobile packet core components.
simple ip networks
Industry direction
In 4G IP networks, simplicity is about decoupling complexity from the expansion of capacity and
capabilities – in terms of technology, topology, operations and service creation. simplicity can
be enabled through:
> orchestrated management across multiple technologies and network domains
> seamless management of IP and optical network domains
> virtualization of functions across the network.
Using common orchestration for end-to-end
service management and operations,
administration and maintenance (OaM)
reduces opex for tasks such as provisioning,
monitoring and troubleshooting, while
improving time to market for new services
and boosting subscriber satisfaction.
end-to-end orchestration enables flexible
creation of services, cutting introduction
and modification cycles significantly and
removing innovation barriers. new
approaches to bandwidth planning, such as
intelligent capacity scheduling, user-driven
on-demand services and cost-effective
network expansion, support new business
models and help drive growth.
an end-to-end network management
system across IP and transport infrastructure
provides further efficiencies, develops greater responsiveness, and enables more reliable planning,
provisioning, turn-on, adaptation and control of new service connections.
emerging technologies like sdn and virtualization of network functions will be key to simplifying
the network. Provided with the ability to manage complexities in topology and service creation
programmatically, time to market for new services can be cut. Orchestrating networks with
advanced sdn applications such as service attachment automation will improve the user
experience, and also optimize resource utilization.
Number of eventsNumber of events
Feature activationFeature activation
Figure 4: a 90 percent reduction in paging events through the application of smart adaptive paging
NetworkNetwork
Distributed cloud execution environmentDistributed cloud execution environment
Service provider SDNService provider SDN
Orchestrationand
management
Orchestrationand
managementAppApp AppApp AppApp AppApp AppApp
DatacenterData
center
Figure 5: evolving the network and cloud for efficient service creation and delivery
4Th GeneraTIOn IP • redeFInInG IP neTwOrkInG 8
wide area networks (wan) and data center networks will be increasingly interdependent, with
overlapping architectural requirements, highlighting the need for end-to-end network and
integration expertise.
Industry examples
some vendors have already introduced evolved technology for IP service delivery, where multiple
network applications reside on a single platform. This trend is set to continue with the introduction
of virtualization technology and sP-sdn, which will create additional opportunities for innovation
in application development and execution.
an operator in Oceania has stated how applications like dynamic service chaining simplify the
entire service creation process and enable rapid time to market. This application eliminates
multiple static service chains for a number of high-touch functions – such as deep packet
inspection (dPI) – and for the intrusion detection system (Ids), which are inserted in the traffic
path after the packet gateway (PGw) or Broadband network Gateway (BnG).
replacing static service chains with flow-based switches that are controlled by a centralized
controller, and connecting the flow profiles to subscribers and applications, makes service
introduction a more agile process and introduces flexibility in the service control domain along
with increased efficiency in the data plane.
high performance ip networks
Industry direction
as connectivity in the world grows, the
network will become a significant
differentiator for bringing subscribers and
applications together, and delivering a
superior user experience.
The aim is to build superior-performing
end-to-end networks that are driven by
common orchestration and management
throughout the heterogeneous access
network (including small cells), the 4G IP
network and the cloud.
4G IP is critical to guarantee end-to-end
delivery. networks will evolve and improve
in terms of their ability to provide premium
and differentiated delivery for certain
content, applications or subscribers based
on smart capabilities. These capabilities will be scaled to be offered to the mass-market, on
account of the ability to remove the complexities of service personalization and creation.
Industry examples
some frontrunners are already capitalizing on the application of smart capabilities. By focusing
investment on superior network performance, these operators have been able to create substantial
gaps between their offerings and those of their competitors, along with improved financial returns.
The dramatic growth of video traffic has required optimization in the delivery of application-,
service- and screen-aware video. distributed Cdns are increasingly being deployed as are
acceleration features for applications such as video optimization, prioritization of paid content,
and zero-rated content for business applications.
In one carrier network in southeast asia, ericsson measured the time it took to load an
e-commerce website under three scenarios:
> directly from the origin server
> using traditional content acceleration methods
> combining traditional content acceleration techniques with end-to-end Qos enforcement in
operator networks – from the content servers to the user terminal.
as Figure 6 shows, the combined solution results in page load times that are almost 10secs
lower during peak hours.
Web page load time (s)Web page load time (s)
112233445566778899
101011111212131314141515
07:0007:00 11:0011:00 15:0015:00 19:0019:00 23:0023:00
QoS enhancedcontent accelerationQoS enhancedcontent acceleration
Directly fromorigin serverDirectly fromorigin server
Traditionalcontentacceleration
Traditionalcontentacceleration
Figure 6: Improving page load times through dynamic site acceleration and mobile content acceleration.
4Th GeneraTIOn IP • COnCLUsIOn 9
CONCLUSIONThe new era of 4G IP networking is founded on the creation of a network with the scale and
scope required to satisfy the demands of an increasingly connected world. superior-performing
networks that are smart, scalable and simple enable operators to adapt to new usage patterns
easily, and meet the performance requirements that result from changing subscriber behavior.
By delivering a highly personal, reliable and consistent user experience 4G IP networks will help
operators to create value and new revenue streams
By reassessing IP network design plans based on the expected demands and thinking beyond
capacity expansion, operators are in a prime position to benefit from the open opportunities of
the networked society, creating and monetizing new forms of differentiation.
4Th GeneraTIOn IP • GLOssarY 10
GLOSSARYasp application service provider
bng Broadband network Gateway
cdn content delivery network
dpi deep packet inspection
ids intrusion detection system
m2m machine-to-machine
nps net Promoter score
oam operations, administration and maintenance
ott over-the-top
p2m people-to-machine
pgw Packet data network Gateway
sdn software-defined networking
son self-organizing networks
sp service provider
vod video on demand
wan wide area network
4Th GeneraTIOn IP • reFerenCes 11
References1. ericsson, June 2013, keeping smartphone Users Loyal – assessing the impact of network performance on
consumer loyalty to operators. available at:
http://www.ericsson.com/res/docs/2013/consumerlab/keeping-smartphone-users-loyal.pdf
2. ericsson, June 2013. ericsson Mobility report. available at:
http://www.ericsson.com/ericsson-mobility-report
3. Portio research, 2013, Mobile applications Futures 2013-2017. available at:
http://www.portioresearch.com/en/major-reports/current-portfolio/mobile-applications-futures-2013-2017.aspx
4Th GeneraTIOn IP • addITIOnaL readInG 12
Additional readingericsson, 2013, Growth Codes – how operators turn data growth into profitable revenue growth.
available at: http://ericssonfilm.com/unplug/erICssOn_discussion_Paper_Brochure.pdf
ericsson, 2013. app Coverage – rethinking network performance for smartphones.
available at: http://www.ericsson.com/res/docs/whitepapers/wp-app-coverage.pdf
© 2013 ericsson aB – all rights reserved