Hype Cycle for Communications Service Provider Infrastructure, 2010.pdf

Research Publication Date: 30 July 2010

ID Number: G00205256

Hype Cycle for Communications Service Provider Infrastructure, 2010 Peter Kjeldsen

This report covers key technologies for communications service provider networks in the light of the austere economic conditions under which continued innovation toward higher bandwidth, more mobility and increased use of video must be realized.

© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

TABLE OF CONTENTS Analysis ....................................................................................................................................... 4 What You Need to Know .................................................................................................. 4 The Hype Cycle ............................................................................................................... 5 Major Changes to the 2010 Hype Cycle ............................................................... 6 Notable Positioning Changes .................................................................. 6 New to the Hype Cycle............................................................................ 7 Deleted from the Hype Cycle .................................................................. 8 Renamed Entries .................................................................................... 8 The Priority Matrix .......................................................................................................... 10 Off The Hype Cycle........................................................................................................ 11 On the Rise ................................................................................................................... 12 WiMAX 802.16m ............................................................................................... 12 3D TV Services ................................................................................................. 13 LTE-A ............................................................................................................... 15 CMTS Bypass ................................................................................................... 16 Smart Antennas ................................................................................................ 17 100 Gbps Transport .......................................................................................... 18 802.22............................................................................................................... 19 WDM PON ........................................................................................................ 19 White Spaces: Unlicensed Spectrum TV............................................................ 20 At the Peak .................................................................................................................... 21 RF Over Glass .................................................................................................. 21 Rich Communication Suite ................................................................................ 23 Self-Organizing Networks .................................................................................. 26 VoIP Wireless WAN .......................................................................................... 27 4G Standard...................................................................................................... 28 Convergent Communications Advertising Platforms ........................................... 29 Addressable TV Advertising .............................................................................. 32 Public Cloud Computing/the Cloud .................................................................... 34 Network Sharing................................................................................................ 35 Sliding Into the Trough ................................................................................................... 37 10G PON .......................................................................................................... 37 TD-LTE ............................................................................................................. 38 Next-Generation Service Delivery Platforms ...................................................... 39 Long Term Evolution ......................................................................................... 42 Femtocells......................................................................................................... 44 IMS ................................................................................................................... 46 MPLS-TP .......................................................................................................... 47 40 Gbps Transport ............................................................................................ 48 Broadband Over Power Lines ............................................................................ 49 802.11r-2008..................................................................................................... 50 WiMAX 802.16e-2005 ....................................................................................... 50 IPTV.................................................................................................................. 52 802.11n ............................................................................................................. 53 HSPA+.............................................................................................................. 55 Mobile Application Stores .................................................................................. 56 VDSL2 .............................................................................................................. 58 Climbing the Slope......................................................................................................... 60 DOCSIS 3.0 Cable ............................................................................................ 60 Network DVR .................................................................................................... 61

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Switched Digital Video ....................................................................................... 63 FTTH ................................................................................................................ 64 MPEG-4 Advanced Video Coding ...................................................................... 66 TD-SCDMA ....................................................................................................... 68 High-Speed Uplink Packet Access..................................................................... 69 Mobile TV Broadcasting .................................................................................... 69 GMPLS/ASON .................................................................................................. 71 Interactive TV .................................................................................................... 72 Mobile TV Streaming ......................................................................................... 74 Next-Generation Voice ...................................................................................... 75 ROADMs........................................................................................................... 76 Entering the Plateau ...................................................................................................... 77 Residential VoIP................................................................................................ 77 Appendixes .................................................................................................................... 80 Hype Cycle Phases, Benefit Ratings and Maturity Levels .................................. 82 Recommended Reading ............................................................................................................. 83

LIST OF TABLES Table 1. Hype Cycle Phases....................................................................................................... 82 Table 2. Benefit Ratings ............................................................................................................. 82 Table 3. Maturity Levels ............................................................................................................. 83

LIST OF FIGURES Figure 1. Hype Cycle for Communications Service Provider Infrastructure, 2010........................... 9 Figure 2. Priority Matrix for Communications Service Provider Infrastructure, 2010 ..................... 11 Figure 3. Hype Cycle for Communications Service Provider Infrastructure, 2009......................... 80

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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ANALYSIS

What You Need to Know The world of communications service providers (CSPs) has been changing fast, with these companies and their suppliers trying to reposition themselves in the light of shifts in the competitive landscape and trends in end-user behavior associated with the rise of mobile and fixed broadband services. An apparent disconnect exists between the CSP investment climate and the traffic growth that networks are facing. CSPs do realize the imperative of transforming their networks, business models and organizations. However, in the current economic climate CSPs, like most other organizations, focus more on near-term risk than on longer-term risks and opportunities. In the current climate the imbalance between short- and long-term investments is even stronger than usual. Most CSPs are focusing on short-term impact, which offers limited room for true differentiation. Those CSPs that in the current climate can make the right long-term investments that align services, network and underlying business models to a durable long-term vision with sustained differentiation — taking into account the threats and opportunities related to the emerging public cloud — stand a real chance of breaking away from their competitors. With CSPs hesitating to invest, especially in developed markets, uncertainties relating to advanced technology adoption are increasing, putting some technologies in a limbo that presents serious challenges for technology providers. New business models centered on network sharing can reduce CSPs' spending in certain segments, adding to the pressure that technology providers are facing. These providers' long-term success, perhaps even survival, will depend on having the right next-generation solutions ready at the right time. However, in the short term they must rely largely on CSPs' incremental investment in established technologies, as these customers still haven't fought off the effects of the financial crisis. Most technologies have been subject to less hype over the past couple of years than what would have been the case in healthier economic conditions. But one group of technologies has actually benefited from the financial crisis, at least in relative terms when compared with other technologies. These are the technologies either climbing the Slope of Enlightenment or taking their first steps on the Plateau of Productivity, and which offer CSPs a quick return on their investment. They include High-Speed Uplink Packet Access (HSUPA), network digital video recorder (DVR) and mobile application stores. One result of the financial crisis is that many technologies are piling up at the Trough of Disillusionment. Investors, technology providers and CSPs should position themselves to capitalize on these technologies. CSPs' adoption of any new technology is determined by how well it offers solutions to one or more of the tough challenges that CSPs face: Austere economic climate. Across regions CSPs are favoring investments in nearterm opportunities with acceptable financial exposure rather than more risky longer-term strategic investments (for example, very-high-bit-rate DSL [VDSL] versus fiber to the home [FTTH]). This pragmatic shorter-term focus ripples through the value chain, with vendors generally responding by focusing on low-risk, in-demand technologies. Changing competitive landscapes. CSPs and technology providers face changing competitive landscapes, driven by consolidation, globalization, innovation, evolving consumer behavior and a changed financial environment. Competition is arriving in many forms and from all directions — both traditional and nontraditional competitors Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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(such as Google and Skype) are seeking a share of the fast-changing market for communications, entertainment and information services. Network and business model transformation. Most CSPs are transforming both their business models and their networks to become more cost-effective, prevent customer churn and increase revenue by offering new types of service. CSPs that fail to innovate may not survive — but CSPs that decide on the wrong type of transformation, or that get the timing wrong, may find themselves in equally dire straits, even before more passive competitors do. Bit-wise economies of scale. To succeed, CSPs will have to implement network architectures that enable them to achieve competitive levels of "bit-wise economies of scale." That is to say, networks must be built and operated in ways which ensure that, year after year, as more traffic is handled, the cost per transmitted bit decreases, keeping a cap on the total network cost. CSPs that fail to do this will gradually become less competitive as a result of higher network costs and inferior network performance. Bit-wise economies of scale represent a key factor in making cloud computing economically feasible. Network ecology of scale. CSPs will also have to consider how environmentally friendly their network architectures are, defined in terms of energy efficiency and carbon footprint — not only in terms of where they are today, but also in terms of where they are heading as the bandwidth requirement for networks continues to grow. They must assess which technologies, architectures and solutions will deliver the right "ecology of scale" as network capacity increases. Emerging market opportunity. Emerging markets are responsible for an increasing percentage of worldwide spending on CSP infrastructure (spending outside North America, Western Europe and Japan accounts for an estimated 55% of the global carrier network infrastructure market in 2010, compared to 47% in 2005). This situation creates opportunities for technology providers, but also presents them with challenges that they need to address. When addressing the issues listed above, technology providers will increase their emphasis on developing the software and service aspects of their product portfolios.

The Hype Cycle Gartner's 2010 Hype Cycle for CSP infrastructure features both fixed and mobile carrier infrastructure technologies, as the technological underpinnings of both are increasingly intertwined. It is perhaps easiest to understand the technologies on the Hype Cycle and their potential impact on CSP infrastructure by categorizing them according to whether CSPs introduce them for reasons of cost, revenue, or both: Technologies introduced based on cost-center considerations (including performance vs. cost). 100 Gbps transport, 40 Gbps transport, network sharing, Multiprotocol Label Switching Transport Profile (MPLS-TP), 802.11n, Generalized Multiprotocol Label Switching (GMPLS)/Automatically Switched Optical Network (ASON), and self-organizing networks. Technologies introduced to drive up revenue. Rich communication suite, voice over Internet Protocol (VoIP) wireless WAN, convergent communications advertising platforms, mobile application stores, addressable TV advertising technologies, next-

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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generation service delivery platforms, network DVR, IPTV, mobile TV broadcasting, mobile TV streaming, interactive TV and 3D TV services. Technologies introduced for reasons of both cost and revenue. Cable modem termination system (CMTS) bypass, Long Term Evolution Advanced (LTE-A), smart antennas, radio frequency (RF) over glass, 10G passive optical network (PON), wavelength division multiplexing (WDM) PON, fourth-generation (4G) standard, femtocells, HSUPA, reconfigurable optical add/drop multiplexers (ROADMs), Long Term Evolution, very-high-bit-rate DSL 2 (VDSL2), WiMAX 802.16e-2005, IP Multimedia Subsystem (IMS), 802.11r-2008, MPEG-4 Advanced Video Coding, switched digital video, Time Division-Synchronous Code Division Multiple Access (TD-SCDMA), DataOver-Cable Service Interface Specification (DOCSIS) 3.0 Cable customer premises equipment (CPE), FTTH, next-generation voice, residential VoIP, broadband over power lines, WiMAX 802.16m, TD-LTE, High-Speed Packet Access Evolution (HSPA+), white The technologies that have progressed most on the Hype Cycle, despite the tough economic climate, come from all three of the above categories: new revenue streams (network DVR and mobile application stores), improved performance vs. cost (MPLS-TP and 40 Gbps transport), and a combination of both (femtocells, WiMAX 802.16e-2005 and HSUPA).

Major Changes to the 2010 Hype Cycle Gartner's "Hype Cycle for Communications Service Provider Infrastructure, 2010" replaces the 2009 report of the same name. As is always the case, some technologies have been deleted and some added — both sets are listed below. We also list those technologies that have seen noticeable change since last year's report.

Notable Positioning Changes Most of the technologies have changed position since the 2009 iteration of the Hype Cycle, though most of them only slightly. Some, however, have changed position more substantially: WiMAX 802.16e-2005. Now at the Trough of Disillusionment (last year it was halfway between the Peak of Inflated Expectations and the Trough of Disillusionment). This technology has potential as a "last mile" access technology in emerging countries, especially where third-generation (3G) and next-generation communications or media services have yet to be launched — this is the reason behind its change in position. Network DVR. Now entering the Slope of Enlightenment (last year it was halfway between the Peak of Inflated Expectations and the Trough of Disillusionment). IPTV and cable operators are interested in this technology as a way to provide value-added services to their customer base. Femtocells. Halfway between the Peak of Inflated Expectations and the Trough of Disillusionment (last year it was close to the Peak of Inflated Expectations). Femtocells could make mobile communications more pervasive and encourage more users to switch over to mobile as their main means of communication. With cost-conscious consumers in mind, CSPs around the world have been toying with the idea of femtocells, trialing or actually deploying them. Mobile application stores. On their way out of the Trough of Disillusionment (last year they were at the Peak of Inflated Expectations). Application stores offer downloadable applications to mobile users, mostly consumers, via a storefront that is either embedded in the mobile handset or found on the fixed or mobile Web. Due to expectations that the

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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adoption of smartphones and high-end feature phones will increase, along with the popularity of applications, we expect application stores to accelerate rapidly to the Plateau of Productivity in less than two years. MPLS-TP. Approaching the Trough of Disillusionment (last year it was at the Peak of Inflated Expectations). CSPs are expected to welcome MPLS-TP as a standardized technology for cost-effective transport solutions for carrier Ethernet services. MPLS-TP is being standardized as a joint effort between the International Telecommunication Union (ITU) and the Internet Engineering Task Force (IETF). 40 Gbps transport. Approaching the Trough of Disillusionment (last year it was not yet at the Peak of Inflated Expectations). CSPs are rapidly adopting 40 Gbps transport as one of the key components in their efforts to cater cost-effectively to the continued increase in network traffic. HSUPA. Now on the Slope of Enlightenment (last year it was halfway between the Peak of Inflated Expectations and the Trough of Disillusionment). HSUPA complements HighSpeed Downlink Packet Access (HSDPA) by increasing upstream data bit rates and improving latency on 3G cellular networks. The increased use of mobile data is the key driver behind the position change of HSUPA. In addition, it should be noted that two technologies have not moved since last year's report: Convergent communications advertising platforms. A convergent communications advertising platform is a scalable, multichannel set of interrelated applications and technologies used by CSPs to deliver targeted advertising services. Adoption of this technology in 2009 was poor, because of the retraction of the advertising market as well as reduced investment by CSPs. RF over glass. This standard is proposed as the cable network equivalent of FTTH. After build-outs of FTTH slowed in 2009 and 2010, the pressure for multiple service operators to move beyond hybrid fiber-coaxial (HFC)-based technologies lessened in North America. Further details of the reasons for the revised positions, and the reasons behind shifts since the last report, are given in the individual entries in this Hype Cycle.

New to the Hype Cycle The following technologies are new to the Hype Cycle: WiMAX 802.16m. A proposed technology for next-generation high-speed services which is being prepared and submitted to the ITU as a candidate for standardization for 4G wireless communications. TD-LTE. A cellular technology which is a time-division duplexing (TDD) version of LTE, and a successor to TD-SCDMA. HSPA+. A cellular technology also known as HSPA Evolution and Evolved HSPA; the abbreviation "HSPA" standing for High-Speed Packet Access, defined in The Third Generation Partnership Project's (3GPP's) Release 7 specification. 802.22. An Institute of Electrical and Electronics Engineers (IEEE) standard for wireless regional area networks using "white spectrum" in the unused guard bands in the TV frequency spectrum.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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3D TV services. Included because of the significant bandwidth implications that these services will eventually have on CSP networks. Broadband over power lines. Included instead of wireline home networking (coaxial and power line) from last year's Hype Cycle. Deemed relevant as it is part of the solution spectrum in the fixed broadband access landscape. Mobile TV streaming. The popularity of YouTube and services such as MobiTV makes mobile TV streaming an important capability in CSP networks. Self-organizing networks. A key feature of LTE networks — in the extreme, this would be the network running and managing itself, while in practice it is likely to be used gradually as an adjunct to human operators, starting with planning tasks.

Deleted from the Hype Cycle The following technologies no longer appear on the Hype Cycle: Cdma2000 1x EV-DO Rev. B. Obsolete before plateau on 2009 Hype Cycle, and not deemed relevant for this year's report. PBB-TE and T-MPLS. Obsolete before plateau on 2009 Hype Cycle, and not deemed relevant for this year's report (see the section on MPLS-TP for additional background information). Wireline home networking (coaxial and power line). Deleted due to a change of scope — broadband over power lines is included instead. Carrier Ethernet. Off the Hype Cycle as a result of technology maturity. HSDPA. Off the Hype Cycle as a result of technology maturity. MPLS infrastructure. Off the Hype Cycle as a result of technology maturity. Next-generation SDH/SONET. Off the Hype Cycle as a result of technology maturity. WDM. Off the Hype Cycle as a result of technology maturity.

Renamed Entries No entries have been renamed on this year's Hype Cycle.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Figure 1. Hype Cycle for Communications Service Provider Infrastructure, 2010

Source: Gartner (July 2010)

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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The Priority Matrix A characteristic feature of the Priority Matrix is that there are no transformational technologies with less than two years to mainstream adoption. This reflects the strong momentum of the CSP infrastructure market and the inherent difficulty in transforming networks quickly. As the Priority Matrix shows, seven of the included technologies are transformational in nature. Their transformational aspects relate to network performance (FTTH, LTE and TD-LTE), the ability to create new services (next-generation service delivery platforms) and changed business models (network sharing and VoIP wireless WAN). These are technologies that will make the networks of 2015 to 2020 very different from those we know today. The Priority Matrix also shows a number of technologies that are expected to have a high impact that will reach the Plateau of Productivity in less than two years. These technologies relate to basic network cost and performance (HSUPA), or enable new services and revenue streams (mobile application stores, MPEG-4 advanced video coding, next-generation voice and residential VoIP). These technologies will have a noticeable impact on CSP networks by 2012. Further details of the reasons for the technology positions in the Priority Matrix are given in the individual entries in this document.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Figure 2. Priority Matrix for Communications Service Provider Infrastructure, 2010

Source: Gartner (July 2010)

Off The Hype Cycle Mature technologies and standards that are off the Hype Cycle include cdma2000 1 x EV-DO Rev. B, PBB-TE and T-MPLS, wireline home networking (coaxial and power line), carrier Ethernet, HSDPA, MPLS infrastructure, next-generation SDH/SONET and WDM.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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On the Rise WiMAX 802.16m Analysis By: Phillip Redman; Joy Yang Definition: WiMAX 802.16m is a proposed technology for next-generation high-speed services. It is being prepared and submitted to the International Telecommunication Union as a candidate for standardization for International Mobile Telecommunications-Advanced (IMT-Advanced), or fourth-generation (4G), wireless communications. The specification continues to evolve, but currently includes a 100 Mbps downlink in mobile situations and a 1 Gbps downlink in nomadic situations. The group behind the proposal — the Institute of Electrical and Electronics Engineers (IEEE) 802.16 broadband Wireless Access Working Group — has defined the main principles for ".m." These include backward-compatibility with the WiMAX 802.16.e-2005 standard, support for spectrum up to 100MHz, multiple input/multiple output (MIMO), and time division duplexing/frequency division duplexing (TDD/FDD) mode. A final vote planned for 4Q09 was delayed until 2H10. However, proposals leading toward backward compatibility and a new designation of 802.16m to be called "WiMAX 2" were announced in April 2010, with targeted products to become available by 2011. As well as meeting the requirements for 4G mobile networks and ensuring backward compatibility with existing WiMAX technology, the WiMAX 802.16m working group aims to achieve: High spectral efficiency and voice over Internet Protocol (VoIP) capacity, leading to data throughput rates of up to 1 Gbps. Improved cell coverage, with "optimized" performance within 5 km, "graceful" performance at 5 km to 30 km, and "functional" performance at 30 km to 100 km. Better handover capabilities than 802.16e when users are on the move — the technology should be able to maintain connections even when people are traveling in vehicles at speeds of 120 km/h to 350 km/h. The key technologies used in WiMAX 802.16m are orthogonal frequency division multiple access (OFDMA), MIMO, smart antennas, carrier aggregation, relay and intercell interference coordination. WiMAX 802.16m is being developed to support TDD, FDD and half-duplex FDD (HFDD) schemes, and to operate in licensed spectrum allocated for mobile and fixed broadband services and future IMT-Advanced services. Position and Adoption Speed Justification: WiMAX 802.16m continues to be delayed, even as its precursor, 802.16e-2005, experiences limited rollout and support. As many WiMAX operators are already indicating a migration to Long Term Evolution (LTE), there is a decreasing chance that WiMAX 802.16m may ever be implemented, even if it is considered a true 4G alternative. During the past year, the industry has moved very little in finalizing the plans for the next generation of WiMAX, as interest in third generation (3G) and 3G upgrades (sometimes known as "fourth generation" ["4G"]) take center stage, pushing off demand for true 4G technology to beyond 2015. User Advice: WiMAX technology will become more broadly available in some countries before LTE is rolled out. In the midterm, WiMAX technology likely will be subsumed by global LTE availability. WiMAX 802.16e has appeal as a last-mile access technology for fixed broadband networks in emerging markets; however, the business case for WiMAX 802.16m as a mobile solution is not clear, unless it is chosen as the sole 4G technology, which is unlikely today as support wanes and moves closer toward LTE Advanced.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Business Impact: The IEEE plans to add features to WiMAX 802.16m to meet operators' requirements for quality-of-service management, location-based services, self-organization, security and interoperability with Wi-Fi networks and femtocells, among other things. This will improve WiMAX's ability to advance from current IT-grade services to telco-grade services, which will help WiMAX's market position. Assuming that the standard also supports full backward-compatibility, including network and device support, for 3G cellular systems, WiMAX 802.16m could become a competitive alternative to LTE Advanced systems and could be used as a wireline replacement in many cases. Benefit Rating: Moderate Market Penetration: Less than 1% of target audience Maturity: Embryonic Sample Vendors: Alvarion; Huawei; Intel; Motorola; Samsung; ZTE

3D TV Services Analysis By: Fernando Elizalde Definition: Three-dimensional television (3D TV) services deliver 3D images to television sets using stereoscopic imaging, where two slightly different images are superposed and transmitted to each eye. There are several technologies currently used to deliver 3D images on television sets. They fall into two broad groups: the ones that require glasses and the ones that don't. Position and Adoption Speed Justification: The resurgence of 3D screening and the enormous commercial success of some recent 3D films have generated expectations around the delivery of 3D content to the home television. Hollywood studios are interested in extending the reach of the cinema experience to the home, as this will create an additional pay-TV revenue stream for their growing portfolio of 3D content. For example, Walt Disney's Pixar subsidiary announced that it will produce all future content for 3D release. Similarly, Sony Pictures has announced several releases in 3D format, and other studios are talking about converting titles to 3D and re-releasing them. At the same time, TV service providers are looking for the next premium television experience after high-definition television (HDTV). Several broadcasters and pay-TV operators have been trialling 3D TV services since mid-2009, with plans to go live sometime in 2010 (most noticeable among these are U.S. sports broadcaster ESPN and British satellite TV operator Sky). The BBC, the U.K.'s public broadcaster, has also announced that it will film the 2012 London Olympics in 3D. The agreement between FIFA (soccer's world governing body) and Sony, which provides the media rights to film and broadcast up to 25 matches of the 2010 FIFA World Cup in South Africa, will have a more immediate impact. Current 3D TV technologies present pay-TV providers with a relatively easy setup to deliver the next significant consumer experience, compatible in some cases with 3D-ready HDTV set-top boxes already deployed in some consumers' homes. However, the ready to deploy technologies require either the use of special glasses to view the content in 3D, or special glasses and a filter for the television screen (or even a new set), for an experience that ultimately may not be optimal. In any case, the lack of industry standards means that there will be only limited deployment on fragmented, proprietary platforms. Understandably, consumer electronics vendors are heavily advocating 3D TV services so that they can introduce equipment to capture 3D content and products for the consumer household.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Several manufacturers have started to commercialize 3D-ready TVs in selected markets in time for the 2010 FIFA World Cup and the planned launch of 3D TV services. Most 3D services will consist of a single 3D channel for linear television, showing mixed content rather than genre-dedicated channels. Broadcasters and pay-TV providers in geographies other than the U.S. and selected markets in Europe and Asia/Pacific will continue to concentrate on introducing HDTV for the next three to five years at least. Perhaps the biggest issue holding back anything like mass-market adoption is the need to wear special glasses to see the 3D effect, and the limited viewing angles at which one can appreciate it. 3D TV sets that don't require glasses won't be available at mass-market prices for many years to come. User Advice: Early trials in the U.S., the U.K., France and a few other countries will provide a good early insight into how well consumers receive 3D TV services. Vendors and service providers interested in this market must set up a process to keep track of how these trials progress, and remember that successful early trials do not always translate into commercial mass-market opportunities. Industry players must set up industry standards quickly and avoid creating a market with fragmented technologies for 3D TV services. Currently, the 3D content available for TV viewing is restricted to films, and is limited. There is a strong drive from film studios to release 3D content in the near future. The genres most suitable for 3D viewing are horror, sports, action and children's animation, plus certain types of performance such as music and dance. These types of content are very suitable for video on demand (VOD). The appeal of 3D for soap operas, situation comedies, reality shows and news remains questionable. Business Impact: Until the adoption of industry standards, satellite TV operators will be best placed for 3D TV services, and will achieve the largest audiences. Since they are more likely to control the satellite network to set-top boxes, they can decide on the type of 3D technology that works best with their installed base of HD set-top boxes, extending their life cycle in those households with a 3D-ready HDTV set. Consumer electronics manufacturers will rapidly introduce 3D-ready equipment and increase production of this product type in the coming years. However, demand will be concentrated in markets where multi-TV-set households are starting to replace their second TVs and where sports bars are popular. Despite the hype, it is not clear that the consumer market is ready for 3D TV yet. However, for more specialized, less family-orientated content, for which people are willing to pay for better quality experiences (such as sports TV), 3D offers a chance for service providers to differentiate their services from their competitors and drive additional revenue. Benefit Rating: Moderate Market Penetration: Less than 1% of target audience Maturity: Emerging Sample Vendors: ESPN; France Telecom; LG; Samsung; Sky; Sony Recommended Reading: "Market Insight: 3D TV, Larger-Than-Life Expectations?" "Dataquest Insight: 3-D TV; A Mass-Market Product or a Niche Technology?"

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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LTE-A Analysis By: Sylvain Fabre Definition: Long Term Evolution Advanced (LTE-A), the Third Generation Partnership Project (3GPP) Release 10, is supposed to be the first version that is fully compliant with the International Telecommunication Union's Telecommunication Standardization Sector (ITU-T) specification for fourth-generation (4G) systems. The targeted peak rate for downlink is 1 Gbps and for uplink greater than 500 Mbps for stationary devices. This should be achieved with scalable usage of up to 100 MHz of spectrum. LTE-A should support various cell types, including picocells and femtocells, to improve uplink speeds, as well as relay technologies to improve coverage. LTE-A should be backward-compatible with LTE Release 8. Some functionality proposals include relay nodes, flexible spectrum usage and cognitive radio. Relays use over-the-air (OTA) links to macro base stations as backhaul connection, so OTA backhaul will need to be taken into consideration when choosing between relay access and direct access. Backhaul could pose challenges, as devices may get hundreds of Mbps — up to a theoretical limit of 1 Gbps — although no application today needs hundreds of Mbps per user, and most backhaul networks are not able to handle 1 Gbps. It is also worth noting that direct access to macro base stations by user equipment in relay coverage may cause significant interference with relay base stations. The scoping phase of LTE-A will be part of the ITU-T specification of 4G. Position and Adoption Speed Justification: LTE-A standardization is likely to be complete by 2011 at the earliest. Therefore, certified infrastructure network equipment for LTE-A can be expected 18 to 24 months after the standardization is complete, which means 2013. After 2013, trials, early commercial rollouts and upgrades to LTE systems will start, and mass-market deployment will happen during the following five years, until around 2018. However, the timeline for LTE-A could slip and depends on the success of LTE, which may still take time, as adoption of a new wireless generation can easily take up to a decade, as was the case for Global System for Mobile Communications (GSM) and wideband code division multiple access (WCDMA). User Advice: It is too early to plan for LTE-A for enterprises. Operators procuring LTE equipment today should ensure that the equipment can be upgraded to LTE-A. Business Impact: LTE-A aims mainly for high-speed wireless data for low-mobility users. Network sharing as a concept to save money for carriers will be part of LTE-A, and could lead to new operational models of mobile networks. LTE-A also has some implications in relay functions to create mesh networks and base station routing, which will minimize backhaul transport for nearby peer-to-peer traffic. Benefit Rating: High Market Penetration: Less than 1% of target audience Maturity: Embryonic Sample Vendors: Alcatel-Lucent; Ericsson; Huawei; Motorola; NEC; Nokia Siemens Networks; ZTE Recommended Reading: "Magic Quadrant for LTE Network Infrastructure" "Dataquest Insight: LTE and Mobile Broadband Market, 1Q10 Update" "Emerging Technology Analysis: Self-Organizing Networks, Hype Cycle for Wireless Networking Infrastructure" "Dataquest Insight: IPR Issues Could Delay Growth in the Long Term Evolution Market"

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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CMTS Bypass Analysis By: Ian Keene; Juan Fernandez Definition: Cable modem termination system (CMTS) bypass is an architecture that enables the deployment of Internet Protocol television (IPTV) technology on a cable network. This architecture redirects video traffic away from the CMTS unit that handles the Internet Protocol (IP) data traffic, and instead routes it through edge quadrature amplitude modulation (EQAM) units that are significantly less expensive. As multiple service operator (MSO) architectures evolve toward a converged model, the debate over the role of different elements is heating up. CMTSs are capable of providing IP-based video services like IPTV; however, converging the video and data services implies significant upgrades to the capacity and functionality of CMTS units. In an attempt to address this challenge, an alternative approach has emerged that redirects video traffic in IP form through EQAM elements that are significantly less expensive. This approach maintains separate streams for video and data even if the video is delivered as IP-based video. CMTS bypass delivers the video stream in IP form to Data-Over-Cable Service Interface Specification (DOCSIS) 3.0 modems on a separate stream. Position and Adoption Speed Justification: There are a small number of deployments of CMTS bypass-based IPTV in existence as of mid-2010. None of these are by large cable providers. The concept of delivering IPTV via cable networks is one of the approaches being considered for the evolution of MSO architecture into a converged IP-oriented model. MSOs are facing a dual challenge to their business models; on the one hand demand for high-definition content is increasing and taxing the capacity of MSOs' broadcast video delivery architectures, and on the other hand competition from fiber to the x (FTTx)-based competitors is raising the bar in regard to consumers' expectations for data bandwidth delivery. CMTS bypass offers a potentially cost-effective alternative to addressing these issues. Large-scale implementations will likely take a while to begin, and references from the leading-edge smaller service provider deployments will determine the ultimate success of this technology. In 2010, MSOs find themselves still in the analysis stage for what eventual IPTV strategy evolution to pursue. So, it is likely that CMTS bypass will be limited to trials, a situation that may evolve very gradually during the next two to four years. User Advice: Larger service providers should examine reference points from early adopters as they consider CMTS bypass as one of a number of existing solutions for solving the challenges of bandwidth optimization and video delivery. While there may be some benefits to deploying CMTS bypass, the implementation and management process demand caution. Smaller players can be more aggressive in deployment of the technology, since it offers some potential benefits at a reasonable price point, and, with smaller footprints, integration and implementation risks are more easily mitigated. Business Impact: Smaller players will benefit from a strategy of service expansion that is costeffective, as well as gaining mind share for deploying cutting-edge technology. In the medium term, this architecture may prove very beneficial in reducing costs by optimizing network capacity by offloading video traffic in IP format from the CMTS platforms. However, this offload does not apply to over-the-top (OTT) video which is the fastest growing type of video traffic in broadband networks. Additionally, MSOs (as well as telcos) are looking at OTT video as a complementary delivery tool for video programming as well, mostly as part of a convergence strategy. This limitation looms large as MSOs analyze their alternatives for moving to an IPTV architecture, something that seems inevitable at some point as convergence becomes a more important factor in the evolution of video delivery business models. Benefit Rating: Moderate

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Market Penetration: 1% to 5% of target audience Maturity: Emerging Sample Vendors: BigBand Networks; GoBackTV; Harmonic; Motorola

Smart Antennas Analysis By: Deborah Kish Definition: Smart antennas provide the signal-processing function behind antenna arrays. The technology has two basic functions: beamforming and identification of the direction of arrival of signals. Beamforming in cellular networks has advanced through the various generations of mobile technology to reach higher-density cells with higher throughput. It has played an integral part in the migration toward third generation networks. Based on the calculation of the direction of arrival of the signal, smart antennas are able to optimize the transmitter antenna beam, maximize the energy directed to the subscriber radio and minimize the energy radiated to other subscriber radios. Therefore, smart antennas can increase the signal to interference and noise ratio, and the channel capacity. Determining the direction of the signal is important, because portions of the signal are scattered and late arrival of scattered signals causes problems such as fading, cut-out and intermittent reception. The use of smart antennas can reduce, or eliminate, the trouble caused by multipath wave transmission. Smart antennas can be considered as a space division multiple access technology which will significantly increase the capacity in the same spectrum. Currently, it is becoming a key technology in Time Division-Synchronous Code Division Multiple Access, WiMAX and Long Term Evolution (LTE). Smart antennas have become the basis of multiple input/multiple output (MIMO), especially in WiMAX and LTE. MIMO technology places multiple antennas at both the source and the destination; eliminating the negative effects of multipath transmission. MIMO can also be advantageous in femtocell deployment; enabling a femtocell to switch between providing high data rates and strong transmission. Smart antennas are positioned as a low-cost alternative to deploying additional cell sites. Position and Adoption Speed Justification: Wireless communications are increasing; due to growth in subscription, provisioning of advanced new services and an increase in data and multimedia traffic. The adoption of Apple's iPhone, and Android-based phones, has created services issues — due to the increased traffic from mobile Internet usage, mobile streaming video and application store activity; as well as normal everyday Short Message Service data traffic usage. The pressure on communications service providers (CSPs) to provide more reliable services to subscribers from a coverage perspective, as well as increased mobile usage, is leaving them increasingly compromised. CSPs need solutions that will assist with backhaul and traffic offload. Smart antennas have been deployed in most large wireless carrier networks to improve capacity and tackle overall quality of service (QoS) issues caused by increasing voice and data traffic. User Advice: Adding more antenna arrays, with smaller beam-width antennas, would help to improve the capacity of the channel. However, it would also significantly increase the complexity of signal processing. In other aspects of telecommunications the notion of equipment sharing has been a point of discussion, and it could be the same for smart antennas. Over time, smart antennas have extended additional applications to sharing; they can also be found as virtual antennas embedded in various residential wireless gateways. Wireless carriers can benefit from smart antennas to maximize spectral efficiency and provide improved coverage and QoS; reducing customer churn and increasing subscriber levels. Business Impact: Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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From a network perspective, smart antennas have been very useful in increasing channel capacity. If handset vendors could introduce the same technology into their devices, it would improve radio performance and help to reduce the power consumption of the handset. Increased broadband penetration may also provide adoption opportunities for smart antenna technology in relation to femtocells. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Emerging Sample Vendors: Andrew; Antenova; ArrayComm; Westell; ZTE

100 Gbps Transport Analysis By: Peter Kjeldsen Definition: Updates to optical transport systems enabling the delivery of 100 gigabits per second (Gbps) data rates per wavelength represent a tenfold increase over commonly deployed systems in communications service provider (CSP) networks. Some of the same developments utilized for achieving 40 Gbps throughput are being used in 100 Gbps as well, but to maintain transmission distances, more advanced modulation schemes are being considered for 100 Gbps, with coherent dual polarization quadrature phase shift keying (DP-QPSK) modulation being emphasized by the Optical Internetworking Forum (see http://www.oiforum.com/public/documents/OIF-FD-100G-DWDM-01.0.pdf). With further advances in transceiver technologies and the push for even higher per-channel line rates in dense wavelength-division multiplexing (DWDM) systems, it is possible that other advanced modulation schemes can play a role in +100 Gbps transport. 100 Gbps (as well as 40 Gbps) line rates are already standardized for Synchronous Digital Hierarchy/Synchronous Optical Network (SDH/SONET) and optical transport network (OTN) by the International Telecommunication Union (ITU). The Institute of Electrical and Electronics Engineers (IEEE) ratified the 802.3ba standard in June 2010 (see http://standards.ieee.org/announcements/2010/ratification8023ba.html), which will allow CSPs to carry 40 Gbps and 100 Gbps Ethernet directly over transport networks supporting these line rates. This allows CSPs to consider the move to higher line rate systems in the wider context of what their future optical transport architecture should look like. Position and Adoption Speed Justification: 100 Gbps commercial trials are reported, with 100 Gbps solutions clearly leveraging advances related to the realization of 40 Gbps commercial solutions. However, to realize 100 Gbps solutions raises the bar in terms of more advanced transceiver designs, and cost-effectiveness (cost per bit) of 100 Gbps solutions compared to 40 Gbps is likely still a couple of years away. Production and development scale is still limited, but we now expect that 100 Gbps will reach the Plateau of Productivity within the next five years. User Advice: Evaluate the cost-effectiveness and maturity of the 100 Gbps technology vs. the need for addressing traffic growth challenges. CSPs should look at 100 Gbps wavelengths as part of architecture evolution rather than a simple capacity upgrade, especially in the context of migration to OTN and increasingly Ethernet-centric network architectures.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Business Impact: This technology will eventually offer cost-effective addressing of traffic growth issues, acting as enabling technology for the expansion of network capacity. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Emerging Sample Vendors: Alcatel-Lucent; Ciena; Huawei; Nokia Siemens Networks

802.22 Analysis By: Akshay Sharma Definition: Institute of Electrical and Electronics Engineers (IEEE) 802.22 is a standard for wireless regional area networks using white space (the unused guard bands in the TV frequency spectrum) — leveraging newer cognitive radio, to reuse unused spectrum for wireless broadband access, and operating in the very high frequency/ultrahigh frequency TV broadcast bands between 54MHz and 862MHz. This standard could lead to devices for broadband access via white space spectrum, and to newer communications service providers (for example, over-the-top providers such as Microsoft and Google) entering this arena. Position and Adoption Speed Justification: Initial drafts of the 802.22 standard specify that the network should operate on a point-to-multipoint basis, whereby the system has a similar topology to a base station and customer premises equipment (CPE) — much like a cellular network. One key feature of the wireless regional area network is that the CPE will be sensing the spectrum to determine if newer channels should be used. Manufacturers and users of semiconductors, PCs, enterprise networking devices, consumer electronic devices, home networking equipment and mobile devices should follow the progress of this standard. User Advice: It is too early to plan for 802.22 devices. Business Impact: The main aim of utilizing white space is to provide access to high-speed wireless data for low-mobility users. Benefit Rating: Moderate Market Penetration: Less than 1% of target audience Maturity: Embryonic Sample Vendors: Dell; Google; HP; Microsoft; Samsung

WDM PON Analysis By: Peter Kjeldsen Definition: Wavelength division multiplexing passive optical network (WDM PON) solutions are characterized by: (a) the use of a passive fiber tree, as found in other PON technologies, and (b) the use of dedicated wavelengths for each user. The use of multiple wavelengths increases the capacity of WDM PON systems beyond those where multiple users share the same wavelength, and the use of WDM splitters in the fiber tree means that any user only receives the intended wavelength, which WDM PON suppliers emphasize as a security benefit over traditional PON architectures with shared wavelengths. However, the use of dedicated wavelengths requires more advanced optical components and, therefore, WDM PON suppliers face a cost challenge

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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that must be overcome before WDM PONs will find widespread use. While WDM PON has beaten 10G PON in terms of getting non-standardized products to the market, the standardization of WDM PON is not as far along as is the case for 10G PON and it is uncertain when final standards can be expected. WDM PON is being standardized by the International Telecommunication Union (ITU), supported by the Next-Generation Access (NGA) initiative from the Full Service Access Network (FSAN) group. WDM PON is being included as a candidate technology in the NGPON2 work within FSAN. Position and Adoption Speed Justification: The challenge facing current-generation GPON/EPON technologies is more related to deployment cost than to limited capacity. With a premium cost related to the more advanced optical components, the most likely success scenario for widespread deployments of the more advanced WDM PON solutions is an upgrade scenario unfolding when current-generation PON deployments start to run out of bandwidth or when the additional cost of WDM PON becomes negligible from a total-cost-of-ownership perspective. WDM PONs will, in these scenarios, compete against 10G PON upgrade solutions — with the combination of 10G PONs and WDM PONs being a potential long-term scenario. For a more detailed discussion of the 10G PON and WDM PON, see "Emerging Technology Analysis: 10G and WDM PON." Some deployments of residential WDM PONs have already taken place in South Korea, and WDM PONs also have potential applications in the backhaul and business market segments. Despite this, the time it is expected to take for WDM PONs to reach the Plateau of Productivity exceeds the corresponding estimate for 10G PONs — mainly because of the expected price premium related to the more advanced optical components mentioned above. Indeed, before WDM can pass the Trough of Disillusionment, approved standards need to be in place and the technology needs to further mature to reduce the component cost. User Advice: Make sure to include WDM PONs when evaluating future network scenarios, and expect relatively steep price erosion as the optical technology matures and crystallizes into standard solutions. Business Impact: WDM PONs offer an upgrade path for communications service providers that have deployed current-generation PON solutions. Benefit Rating: Moderate Market Penetration: Less than 1% of target audience Maturity: Emerging Sample Vendors: Adva Optical Networking; Huawei; Nokia Siemens Networks; Tellabs Recommended Reading: "Emerging Technology Analysis: 10G and WDM PON"

White Spaces: Unlicensed Spectrum TV Analysis By: Akshay Sharma Definition: On 12 June 2009, the U.S. moved to digital TV and the "white spaces," in the unused TV frequencies between TV channels, can now be used to provide wireless broadband that delivers high-speed Internet access (at 10 Mbps and above) to fixed and low-mobility consumers. By October 2009, the first white space network was launched in Claudville, Virginia. This development is considered important because it demonstrated the applicability of the spectrum for broadband usage, and involved an "experimental license" from the Federal

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Communications Commission (FCC) and network infrastructure from Spectrum Bridge. The potential exists for further devices from members of the White Space Coalition, which includes Microsoft, Google, Dell, HP, Intel, Philips, EarthLink and Samsung. In February 2010, the city of Wilmington in North Carolina (and the surrounding county of New Hanover) partnered with companies TV Band Service and Spectrum Bridge to launch a new experimental network that uses white space spectrum to provide wireless connectivity to surveillance cameras, and environmental sensors, in a "smart city" deployment. Position and Adoption Speed Justification: In November 2008, the FCC in the U.S. unanimously granted free, unlicensed wireless access to chunks of unused airwaves on the broadcast spectrum that had previously been used to buffer TV channels. This access is dependent on mobile technology companies incorporating geolocation capabilities into their devices, that bar interference with TV signals and have the ability to access (via the Internet) a database that confirms which white spaces are available — according to the device's location. As a result of the October 2009 network deployment, the viability of this spectrum for broadband usage has been demonstrated, although non-interference within a major metropolitan environment still needs to be proven. It will be interesting to see if the Wilmington trial becomes the basis for smart city initiatives. User Advice: It is too early to plan for white-space devices. Business Impact: The main aim of white space is to provide high-speed wireless data to lowmobility users. Benefit Rating: Moderate Market Penetration: Less than 1% of target audience Maturity: Embryonic Sample Vendors: Dell; EarthLink; Google; HP; Intel; Microsoft; Philips; Samsung

At the Peak RF Over Glass Analysis By: Ian Keene; Juan Fernandez Definition: Radio frequency over glass (RFoG) is a standard proposed by the main cable standards body — the Society of Cable Telecommunications Engineers (SCTE) — that will effectively be the equivalent of fiber to the home (FTTH) for cable networks. The SCTE Engineering Committee — which is accredited by the American National Standards Institute — will define the RFoG standard, also frequently referred to as "cable passive optical network (PON)" during the next few years (note that this is not Data-Over-Cable Service Interface Specification [DOCSIS] PON, or D-PON, which is being proposed by Cisco). The committee approved the RFoG program in late 2007 and relevant subcommittees have started to meet to craft the standard, which is expected to significantly improve overall cable network capacity. And, while there is no defined timetable so far, it is expected that work on this standard will be completed before 2013.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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The move comes at a time when cable operators are under pressure to increase the capacity in their networks to support not only ultra-high-speed broadband (to compete with FTTH services being deployed by telcos and other carrier competitors), but also a future where everything on demand and massive amounts of high-definition programming, over-the-top and peer-to-peer video, as well as other bandwidth-laden applications and services, are expected to become the norm. Reduced operating expenditure (opex) is also a key aspect of the technology. The SCTE is developing a suite of technical standards to support wider use of optical fiber in the cable plant, while also supporting the coexistence of current legacy technologies over cable's hybrid fiber-coaxial (HFC) system architecture, in which voice, video and data share the same spectrum. Any new standard must deal with DOCSIS, which is the standard for Internet Protocol (IP) data services. The work on the RFoG standard will help to ensure interoperability with existing headend equipment, digital set-top boxes and DOCSIS modems/voice over IP (VoIP) embedded multimedia terminal adapters (e-MTAs), as well as integrated gateways' seamless operation on any FTTH-type architecture that emerges. An SCTE "interface" subcommittee will examine the key issues of RFoG, including: performance issues with existing outside plant equipment such as splitters and couplers; specifications for fiber-optic passive filters and gateway RF levels; environmental requirements for gateways; and issues and practices dealing with "midsplit" cable equipment and system operations. This last issue is interesting, as it deals with rearranging the spectral capacity of the cable's limited upstream path. Position and Adoption Speed Justification: A number of cable operators and independent operating companies (IOCs) that use RF infrastructure are already implementing deep fiber architectures in "greenfield" build-outs, and some are also moving to FTTH in their primary networks. In some higher-end markets, home builders are asking for FTTH connections as a way to increase the value of their properties and upscale buyers. As a general rule, home builders enter into nonexclusive agreements with TV and broadband service providers, but often offer incentives, such as subsidization, for running fiber connections to their developments. As the standard is more clearly defined and formalized during the next few years by the SCTE, and as pressure on cable operator bandwidth continues, look for RFoG to become more widespread, initially in the largest cable market, North America, but also in Europe, Latin America and Southeast Asia. Depending on what emerges and when, there is the risk that RFoG-based technology could face the challenge of achieving cost-effective volumes, especially given that other fiber technologies will be ramping up significantly worldwide. However, after build-outs for FTTH slowed in 2009 and 2010, the pressure for multiple service operators (MSOs) to move beyond HFC-based technologies lessened in North America. Some broadband expansion initiatives, particularly in the U.S., may also help to drive RFoG. The technology is well suited to extending cable footprints into surrounding rural areas, and could give MSOs a cost-effective way to compete for subsidized rural broadband dollars. User Advice: Cable HFC network operators need to consider opex factors as part of their competitive advantage, as well as what RFoG technologies can mean to that equation. And, in terms of providing business services to enterprise and small or midsize business customers, they need to consider what the use of a single network, instead of separate networks, will do to improve their operational success. Operators need to examine the benefits of the longevity of fiber, irrespective of the electronics that are/will be attached to the end of this fiber. Implementation of this technology will require operators to analyze their network needs and requirements in terms of the density of homes passed versus the distance from central headends/hubs, and strike the right balance for bandwidth expansion and opex savings. The costs of deploying RFoG solutions relative to HFC, in a "greenfield" environment with medium to low urban density, are lower by at least 18% to 25%. On the other hand, in denser urban Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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environments this situation is reversed: RFoG solution costs can be 15% more than HFC, so the value proposition of RFoG is diminished. Business Impact: Opex savings will deliver the biggest impact. Key areas are improved network reliability and uptime. RFoG is also expected to deliver major improvements in the powering of outside plant, removing all requirements for outside plant power, such as backup power, emergency generators and so on, as well as providing more environmentally "green" solutions for operators. Maintenance costs are also a major factor: customers with all-fiber plant have about 10% to 20% of the maintenance costs of an HFC or copper plant. Altogether, vendors of this solution estimate opex savings for their customers of up to 70% in ideal conditions. Taken together with its bandwidth expansion properties, this means that RFoG could have a significant overall business impact for users of service providers. RFoG solutions can be overlaid/installed on an "as needed" basis within an existing HFC network; they will be made compatible with all digital services for voice, video and data; and they will preserve existing protocols in both the downstream and upstream paths. There will also be a major benefit in boosting upstream bandwidth — an area of growing need for cable operators as peer-to-peer traffic and increasing video traffic in the upstream become more common over their platforms. RFoG lets operators use the lower 10MHz portion of the upstream in their HFC spectrum, with the addition of 64 quadrature amplitude modulation (QAM). Estimates are that the use of this technology could boost upstream capacity by as much as 50MHz to 80MHz on a practical level, assuming that there is support for 64 QAM upstream in both the cable modem termination system and the cable modem customer premises equipment. As previously mentioned, RFoG can also enable MSOs to extend their footprint into rural areas, allowing them to tap into subsidies. MSOs are able to extend the footprint of their networks by using fiber extensions into rural areas adjacent to their existing HFC networks, and by being able to reuse their existing equipment architecture (DOCSIS); but using fiber to reach the destinations they would not be able to reach without having to deploy a new access layer. Benefit Rating: Moderate Market Penetration: 5% to 20% of target audience Maturity: Early mainstream Sample Vendors: Alloptic; Aurora Networks; CommScope; Tellabs

Rich Communication Suite Analysis By: Deborah Kish; Charlotte Patrick Definition: Rich communication suite (RCS) is a service-enabling platform for vendors, a blended service package for users and a business model for communications service providers (CSPs). RCS services bring together a number of different functionalities into a single place on the consumer's device. As a competitor to RCS, the Apple iPhone address book is an early example of part of an intelligent address book functionality, allowing the user to start an e-mail, see an address in Google Maps and click on any telephone number to call or text. With Vodafone's recent launch of its RCS-like 360 service, it offers handsets by Samsung (the H1) and Nokia (Symbian) which will come preloaded with the service. RCS has been progressing, albeit slowly, since its inception and has seen three releases: Release 1 defining the following goals:

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Enhanced Address Book — provides presence functionality. Enables users to initiate communications including voice calls, video calls, file transfers or messaging. Also, it allows users to integrate multimedia elements, such as photos of contacts. Rich Call — enables users to exchange different types of content, such as video or photos, during a call. Rich Messaging — expands on traditional instant messaging to simplify and unify multiple messaging mediums and provide a richer user experience Release 2 was defined in June 2009 and finalized in February 2010. Its main purpose is to provide the user with access to RCS service features from a wider range of devices, making it possible to use RCS from a PC. Functionality such as having consumer's address book stored on the network will be required for this type of multi-device approach. Release 2 will also improve provisioning and configuration of the RCS client. RCS Release 3, which was defined in December 2009 will allow: One RCS user to share their location with another. More complex network value-added services such as "content sharing enriched by media processing" with digitized content, including voice playback and recording, advanced conferencing, high-speed fax and speech integration. This is where an originating user can share content enriched by media processing in the network with a terminating user when a voice call is established. "Chat enriched by media processing" is where an originating user can send and receive messages that enriched by media processing in the network. Enhanced functionality around "rich calls" — for example, video sharing between an RCS and a non-RCS user. Position and Adoption Speed Justification: RCS is still in trials and due to the tough economic environment in 2009, there are question marks around the business case for this type of functionality and the need for all CSPs in a particular country to work together to implement an interoperable solution. Countries most forward in their implementations include South Korea, where the three main CSPs have created their own RCS-like solution (although, the project is outside of the GSMA RCS initiative). The pilot focused on testing the IP Multimedia Subsystem for interoperability between CSPs, devices and to identify traffic patterns between instant messaging and Short Message Service (times of day, demographics and so on). The CSPs will then build rich communications on top of that. Common feature sets available to customers in March 2009 included text conversation, group chatting, presence and phonebook-driven buddy lists. Another example of RCS-like solutions is Vodafone's 360 where it introduced a new set of Internet services for the mobile and PC that gathers all of a customer's friends, communities, entertainment and personal favorites (such as, music, games, photos and video) in one place. Other countries where significant progress is being made include France — where Orange, Bouygues Telecom and SFR are currently testing interoperability. Also, Telefonica in Spain will be testing Release 2 functionality in 2010. User Advice: Rich communication has the potential to be an extremely competitive field with CSPs, Web 2.0 players, over the top players, device manufacturers and more involved. But only if one of the types of functionality proves especially useful to consumers or profitable for the RCS provider; will we see this becoming a mainstream product.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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2010 should be the year when CSPs monitor the progress of RCS and related services carefully. Does Vodafone continue with its strong push around its 360 product? Are the CSPs in South Korea moving toward a fuller roll-out? Is there continued movement in France and Spain or have CSPs gone a bit quiet with their activities? Equipment vendors and service developers should make interoperability and blended service enablement first principles in product development. CSPs will be looking at these closely during their procurement processes. CSPs can make RCS the preferred approach, implementing a "quality of experience" policy enforcement that prioritizes bandwidth, leaving Google and other over-the-top solutions as best effort, or they can embrace Google/over-the-top solutions and create hybrid offerings. This will need further joint development, interoperability testing and joint revenue sharing as well. Business Impact: It is hard to forecast the likely success of RCS with a number of unknown factors around user experience such as whether consumers find the intelligent address book features very attractive on devices will smaller screens or whether the mass market of customers be interested in some of the more complex pieces of RCS functionality or not. Also, whether the initiative's road map is moving at sufficient speed to ensure commercial success. The possible benefits which will drive trials and deployments among CSPs include: Consumers' ability to see the status of friends, this could trigger additional communication sessions, which would not have been made previously. Or encourage them to use, currently, more niche functionality such as video. By having all these functionalities, consumers will likely increase their general use of mobile data and voice services, therefore increasing ARPU. The functionality may also increase subscriber stickiness. Ownership of this type of functionality allows the operator, device manufacturer or over-the-top player to have a degree of influence over consumers' choice of communication service, and to act as a portal to their social contacts (rather than allowing entities such as social network sites to totally own the relationship). Benefit Rating: Moderate Market Penetration: Less than 1% of target audience Maturity: Emerging Sample Vendors: Alcatel-Lucent; Colibria; Critical Path; Ericsson; Huawei; Motorola; Nokia Siemens Networks; Sony Ericsson Recommended Reading: "Dataquest Insight: Are Carriers Leaving Money on the Table With Half-Deployed IMS Architectures?" "Key Issues for Carrier Service and Control Infrastructure, 2009" "Dataquest Insight: The Future for Telecommunications Operators in Social Networking" "Dataquest Insight: Telecom Service Providers: Evolving Toward the 2015 Horizon" "Dataquest Insight: Carriers Can Keep Control of LTE With IMS" "Dataquest Insight: The Future for Telecommunications Operators in Social Networking" "Network Operators Should Strive to Be Community Owners, Not Technology Providers"

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Self-Organizing Networks Analysis By: Sylvain Fabre Definition: Self-organizing networks (SONs) are a key feature of Long Term Evolution (LTE) and next-generation networks. In a nutshell, SON functionality resides partly in the operations support system (OSS) framework and partly in the radio access network eNodeBs, and is a set of rules and algorithms which define automatic actions to be taken by the system, upon given events. In the extreme, this would be the network running and managing itself. In practice, SON is likely to be used gradually as an adjunct to human operators for planning, alarms management and maintenance. SONs will provide a self-configuration, self-optimization, fault management and fault correction function at the base station of LTE or the next-generation mobile network. They should help mobile operators to manage the coverage, capacity, traffic and backhaul of the base station more easily. Vendors push this feature for its operating expenditure (opex) savings: less extra head count will need to be added to accommodate the new, additional LTE layer. In practice there will need to be expert operations, administration and maintenance (OA&M) and radio planning personnel in place anyway, but SONs may reduce the total numbers, or at least enable faster and more efficient decision making; however, effective opex savings compared to traditional OA&M still need to be measured. The feature requirements for SON are expected to be updated by operators as ongoing LTE trials and early deployments continue to yield results and operators have a clearer idea of how to run their LTE networks. But at its most basic, SON should allow self-configuration — the ability to simply add a cell in the network, and have it configure itself through negotiating neighbouring relations with its peers. SONs are a key issue for many operators, after backhaul costs and scalability, and have been a key requirement for next-generation mobile networks. Over the past two years, extra SON requirements have been defined in Third Generation Partnership Project (3GPP) and nextgeneration mobile networks. The rationale behind the SON functionality is that second-generation (2G), third-generation (3G) and LTE networks will coexist for some time, so cost-optimized operations, maintenance and planning are needed. A SON can help achieve stable LTE networks for operators, especially in the early stages. It is possible that femtocells may play a greater role in wider-scale LTE; incidentally, SON is already a key feature of femtocells. Interface specifications and use cases for SON have been defined and are part of 3GPP specification 32.500 in Release 8, with the first use cases of SON expected to appear in early deployments of LTE through 2010. Leading operators, including Vodafone, T-Mobile UK and T-Mobile International, have indicated that they value SON. SONs require specialized skills, and although all leading vendors have some ability in this area, there will be differences between them. As the quality of SON products will vary, SON will become a key differentiating feature in early LTE releases. Position and Adoption Speed Justification: While LTE has enjoyed a lot of attention and hype recently, what constitutes the key building blocks of early LTE releases is less understood. It will take time to mature — to determine what level of SON is adequate in the first few LTE network releases, and what architectures will be favored (for example, centralized versus distributed SON, or a hybrid approach).

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User Advice: Operators should place requirements on vendors for valued features, and evaluate the cost of these features based on estimated savings in operations, administration and maintenance, as well as network planning and head count. Business Impact: SONs can provide a significant saving in operations, and greatly automate the way that future wireless networks are set up, managed and planned. Benefit Rating: High Market Penetration: 1% to 5% of target audience Maturity: Emerging Sample Vendors: Actix; Alcatel-Lucent; Ericsson; Huawei; Motorola; NEC; Nokia Siemens Networks; ZTE Recommended Reading: "Magic Quadrant for LTE Network Infrastructure" "Dataquest Insight: LTE and Mobile Broadband Market, 1Q10 Update" "Emerging Technology Analysis: Self-Organizing Networks, Hype Cycle for Wireless Networking Infrastructure" "Dataquest Insight: IPR Issues Could Delay Growth in the Long Term Evolution Market"

VoIP Wireless WAN Analysis By: Phillip Redman Definition: The use of Internet Protocol (IP) in the wireless link for "packetized" voice transmission (as compared with circuit-switched transmission) comprises a voice over IP (VoIP) wireless wide-area network (WWAN). Position and Adoption Speed Justification: There has been a lot of activity in VoIP WWAN during the past year. In the U.S., one of the main providers, AT&T, will no longer block this capability. Companies are also looking to use VoIP over third generation (3G) for international roaming to reduce cellular voice costs. Most communication service providers support VoIP over Wi-Fi hotspots through VoIP clients from Truphone, Skype or fring, but don't support a handoff between the Wi-Fi and cellular networks. iPass is also supporting a capability under fixed mobile convergence (FMC) that allows a handoff among its subscribers on Wi-Fi hotspots internationally and the cellular networks. However, most systems that integrate quality of service (QoS) and VoIP over WWAN are not expected to mature before 2015, as next-generation broadband networks, such as Long Term Evolution (LTE), mature. To aid in this transition, industry efforts using voice over LTE via Generic Access (VoLGA) will provide common criteria to support voice services during the 3G and fourth-generation (4G) transition. However, IP Multimedia Subsystem (IMS) is expected to be the leading technology to support full IP voice over LTE. User Advice: Current high-speed networks support VoIP, but without QoS, resulting in a lowerquality and inconsistent experience. However, the next generation of wireless data technologies have the capability to add QoS as part of the network architecture, even if it isn't currently supported. Some operators are using VoIP for push-to-talk over cellular services, but it is not supported for cellular calling. See our analysis of VoIP for WLAN for information on using dualmode phones in local-area networks (LANs). Look to third-party FMC systems to support handoff and higher-quality voice.

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Business Impact: Many companies have begun to support VoIP and are looking for the same support outside their offices. Consumer users of popular VoIP services also want to extend that capability to their mobile phones. VoIP could add 20% to 40% in additional capacity on all IP networks, which could drive costs lower to support wireless voice services. VoIP also could support many softphones, which will increase the number of devices that support mobile voice capabilities, and it can also enable the simultaneous use of voice and data on a device. It is also the main technology to support FMC and mobile unified communications. Benefit Rating: Transformational Market Penetration: Less than 1% of target audience Maturity: Emerging Sample Vendors: AT&T; fring; Most cellular infrastructure vendors; Skype; Truphone

4G Standard Analysis By: Sylvain Fabre Definition: A fourth-generation (4G) worldwide standard being developed for a next-generation local- and wide-area cellular platform is expected to enter commercial service between 2012 and 2015. International Mobile Telecommunications-Advanced (IMT-A) is now called 4G. The development effort involves many organizations: the International Telecommunication Union Radiocommunication Sector (ITU-R); the Third Generation Partnership Project (3GPP) and 3GPP2; the Internet Engineering Task Force (IETF); the Wireless World Initiative New Radio (WINNER) project, a European Union research program; telecom equipment vendors; and network operators. Agreement on the initial specification has yet to be reached, but discussions point to some key characteristics. These include: support for peak data transmission rates of 100 Mbps in WANs and 1 Gbps in fixed or low-mobility situations (field experiments have achieved 2.5 Gbps); handover between wireless bearer technologies such as code division multiple access (CDMA) and Wi-Fi; purely Internet Protocol (IP) core and radio transport networks for voice, video and data services; and support for call control and signaling. Many technologies are competing for inclusion in the 4G standard, but they share common features such as orthogonal frequency division multiplexing (OFDM), software-defined radio (SDR) and multiple input/multiple output (MIMO). 4G technology will be all-IP and packet-switched. In addition, we believe that the network architecture will be radically different from today's networks. In particular, it will include all-IP, low latency, flat architecture and integration of femtocells and picocells within the macrolayer. Position and Adoption Speed Justification: The 4G standard is still in the early stages of development and has to incorporate a wide range of technologies. But these are not the only reasons why its introduction is some way off. Deployments of High-Speed Downlink Packet Access (HSDPA), High-Speed Uplink Packet Access (HSUPA) and Long Term Evolution (LTE) technology will extend the life of third-generation (3G) infrastructure for voice and, to some extent, for data. Also, network operators will want to receive a worthwhile return on 3G investments before moving to 4G. Then there is the problem of how to provide adequate backhaul capacity cost-effectively; this is already difficult with the higher data rates supported by High-Speed Packet Access (HSPA), and it will become harder with 4G. Ultra Mobile Broadband (UMB) — which, unlike wideband code division multiple access (WCDMA) and HSPA, is not being assessed for 4G — had been under consideration as a next-generation mobile standard in the U.S. and parts of Asia and Latin America, but it failed to gain a hold and will not be widely adopted. It appears likely at this point that LTE-Advanced (LTE-A) is a clear leader for 4G, with 802.16m a possible Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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distant contender. WiMAX had been considered but is not in the race anymore, although in the U.S. Sprint has been advertising WiMAX as 4G, even though this is not quite true, and it is losing momentum to time division LTE (TD-LTE). User Advice: It is too soon to plan for 4G. Instead, monitor the deployment and success of 3G enhancements such as HSDPA, HSUPA, High-Speed Packet Access Evolution (HSPA+) and LTE, as these need to provide a worthwhile return on investment before network operators will commit themselves to a new generation of technology. Carriers will also need to ensure interoperability with today's networks, as backward-compatibility might otherwise be an issue. Additionally, carriers should recognize that the cost of deploying and operating an entirely new 4G network might be too high to justify, unless a different network business model is found, including, for example, network sharing and femtocells. Business Impact: The business impact areas for 4G are high-speed, low-latency communications, multiple "pervasive" networks and interoperable systems. Benefit Rating: Moderate Market Penetration: Less than 1% of target audience Maturity: Embryonic Sample Vendors: Alcatel-Lucent; Ericsson; Fujitsu; Huawei; Motorola; NEC; Nokia Siemens Networks; ZTE Recommended Reading: "Magic Quadrant for LTE Network Infrastructure" "Dataquest Insight: LTE and Mobile Broadband Market, 1Q10 Update" "Emerging Technology Analysis: Self-Organizing Networks, Hype Cycle for Wireless Networking Infrastructure" "Dataquest Insight: IPR Issues Could Delay Growth in the Long Term Evolution Market"

Convergent Communications Advertising Platforms Analysis By: Jean-Claude Delcroix Definition: A convergent communications advertising platform (CCAP) is a scalable, multichannel set of interrelated applications and technologies used by communications service providers (CSPs) to deliver targeted advertising services. "Convergent" means open to several types of devices, content, applications and telecom services (such as fixed voice, mobile voice, Short Message Service [SMS], Multimedia Messaging Service [MMS], fixed Internet and mobile Internet, TV/video, e-books, car displays, train displays). It may extend to machine to machine services such as public display or public terminals. However, initially convergent platforms may be limited to one basic type of telecom offering — mobile communications, or multichannel video, for example — as long as they handle advertising bound to several individual services and different types of content in relation to user profiles managed in a unified way. A CCAP draws on user-related and contextual data that is controlled or collected by CSPs, such as a user's location, network presence, status and type of device. CCAPs require deep integration with communications services data, which may be accessed through network APIs. From an architectural point of view, a CCAP should include a range of dedicated processes and data systems but also connect to other subsystems and common data management systems to exchange relevant customer data. These include CRM, business intelligence (BI), business support and operations support systems, and service delivery platforms. Although advertising services are seen as one of the major markets for cloud computing globally, real-time needs and

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data protection regulations will also require proximity, something local CSPs can provide. Combining contextual data with specific customer demographic and service information by means of sophisticated analytics applications and rule engines allows CSPs to deliver dynamically targeted advertising content, in a variety of situations, on a customer-by-customer basis or for groups. The scope of a CCAP includes functions and data such as the following: general advertisement processing, various types of analytics, rule engines and recommendation engines, advertisement forwarding to users, campaign management, response management, agency management, advertiser management, advertising exchanges or link to them, billing, charging and rating, advertisement content management, digital rights management, campaign metrics, gateways and interfaces, user data, network and device data, storage, security, privacy (opt-in and opt-out). Platforms may also include self-service advertising using CSP APIs. Today, several non-convergent telecommunications-based advertising solutions exist, with different maturity levels, some being just Internet applications not specific to CSPs. These solutions include online Internet advertising, and mobile advertising and Internet Protocol television (IPTV) advertising, which are the least mature. They are linked to the respective technologies and services of the Internet, IPTV, and mobile data, games or SMS. These advertising solutions are dedicated to one type of service, such as mobile advertising or IPTV. They do not build on a CSP's cross-service user advertising network data. Over time, CSPs wanting to "monetize" their unique competitive position will need converged platforms, spanning the different networks, devices and services they operate. Orange, to give one example, provides similar content across fixed and mobile networks, but does not yet offer converged advertising. Orange is working on algorithms to process user profiles and announced a cooperation with OpenX, an advertising technology and service firm, to set up a European advertising exchange. In terms of CSP architecture, the move toward a convergent advertising platform is similar to the convergence in telecom operations management systems, which are moving away from silos into an end-to-end environment that covers multiple services and network technologies. Such a platform must link to advertising agencies, content distribution services (for music and IPTV, for instance), interactive services, games and social networking. It must also fully exploit Web 2.0 technologies, such as mashing and user-generated content. Convergent advertising platforms can exploit IP Multimedia Subsystem (IMS) technology, and vendors offering IMS solutions are targeting this opportunity. But non-IMS solutions are also possible and should have a broader market. Position and Adoption Speed Justification: CSPs started to use mobile advertising in 2001, mainly to promote their own services, not general goods and services. In 2005 and 2006, mobile advertising gained momentum, but revenue remained — and remains — relatively low. Since the first appearance of convergent advertising platforms on this Hype Cycle in 2007, the need for them has become recognized. They would broaden the customer base of CSPs which is welcome to advertisers. In particular, CIOs see the need for integration when they are faced with multiple applications dealing with user profiles and context data. Implementation is progressing through narrow approaches, covering mobile advertisements, new forms of business intelligence, advertisement exchanges and the selling of aggregated user data to advertising agencies. The concept of rich-featured platforms for operators is progressing rapidly. Most are supporting mobile advertising. Also progressing are solutions for video on three screens (Internet, TV and mobile) but these do not support SMS and voice. Few, if any platforms, cover both all screens and all channels such as both video and SMS, voice and other channels. Several vendors are emphasizing convergent solutions now through advertising platforms with a rich set of features. AOL has probably the largest set of technologies and companies supporting advertising, due to its many acquisitions. In the video world, Microsoft is also offering broad video

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and TV solutions including a video-related advertising platform. Oracle and Amdocs also offer a broad solution but limited to mobile. In 2009 Comverse, mentioned last year and which offer the Comverse HUB Mobile Advertising Platform, has not made visible progress. CSPs are slow in adopting a convergent or integrated approach to delivering content and advertising in a massive and productive way. In mid-2010, the need for convergent advertising platforms is gathering pace, but still the technology is not at its peak. 2009 was a lost year for adoption because of the retraction of the advertising market as well as reduction of investment by CSPs. Neither development nor penetration will be very fast, as we see in most other integration efforts, such as subscriber data management for instance. It appears now development will start with integration of silo application by internal teams or integrators. Software vendors targeting the telecom industry in the broad sense will progressively integrate their multiple applications and will likely include CCAPs, probably through acquisitions. Two major technology trends will boost the need for CSP advertising platforms; 1) the growth of mobile data services with location information; 2) the growth of the IPTV and mobile TV user base. We forecast moderate revenue growth through 2012. Major obstacles are regulations and consumer trends in personal data protection, as well as the difficult business transformation of telecommunication carriers. We believe that CSP CCAPs will reach the Plateau of Productivity between 2016 and 2019. User Advice: CSPs should capitalize on their user information assets as a matter of urgency, and have solutions running within the next three years. The strength of service providers lies in a synergistic approach to all information in order to deliver a broad and deep advertising service. CSPs should not limit their advertising activities to mobile services. Instead they should pool advertising services and cover mobile SMS, mobile data, Internet content and portals, as well as IPTV and new connected devices such as e-books and public digital displays. Many vendors offer partial solutions. CSPs should favor systems that; 1) build on all their services, 2) minimize duplication with their data systems, and 3) connect well within their service-oriented architecture and business process management systems. Beyond collection of user and context data, CSPs should consider vendors offering integration expertise and solutions in massive data management and storage, security and content management. For analytics, CSPs should look for marketing knowledge as much as tools. Business Impact: Convergent advertising exploits the convergence of network services, the rise of mobile content, IPTV, multiple connected devices (mobile, PC, TV, e-books, public displays) and contextual information (such as location, presence, device, time and user profile). Service providers that have direct and permanent relationships with customers through communications tend to have better access to a range of customer data than other providers having a less direct access to a complete user profile. However, it is unknown which CSPs will use this information and compete in the advertising market. The competitive position of CSPs will not only depend on the market's acceptance of CSP-based solutions. Competition in telecommunications and regulations on data protection and will also determine adoption rates. The benefits of convergent advertising stem from better profiling of customers — including demographics, presence data, location data and local time, and communications, searching and browsing history. In some cases, a shopping profile can be created (based on online and payment data). Moreover data can be grouped to offer instant topical or local trends. It is the pooling of customer data and context that creates a CSP's profiling power. With convergent advertising, it will be possible to improve targeted advertising, addressing the questions of "which customer?," "where?" and "when?" At the same time, a CCAP should make it easier to deal with privacy protection in a uniform way. By using different communications media (mobile data, messaging and IPTV, for example), it is possible to "follow" customers during the day and while Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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they are traveling. It is also possible to send information to customers at times when it is likely they will have an opportunity to watch it. Real-time interactive solutions work better with convergent solutions, as they give consumers the option to watch something on IPTV and then comment on it or forward it via a mobile phone or the Internet. In addition, multichannel interactive advertising will give advertisers a better understanding of customer behavior across locations and time slots. Social networks within wireless communities are becoming increasingly important for advertisers. When related to payments and purchases, CCAPs can offer the dream solutions for advertisers: linking advertising directly to sales results. This would bring a lot of value to providers of such solutions. A CCAP will enable a CSP to play a new role in the online advertising and content market, particularly in mobile, IPTV and multichannel telecom-based advertising. Only a convergent platform will enable a CSP to play to its strengths. Such convergent platforms, along with converged services, will support new CSP business models by increasing indirect revenue — that is, revenue beyond that related to transmission services — from at least some customer segments. However, a CCAP is not on its own a guarantee of success. A successful advertising strategy is also required, as well as advertising and marketing skills. Convergent advertising platforms are growing out of Internet advertising and mobile solutions. They will cover both fixed and mobile communications. Pure wireless CSPs also need convergent platforms that link advertising across different services, such as mobile Internet, games, instant messaging, e-mail, location, route-planning, payment and video services. Benefit Rating: High Market Penetration: 1% to 5% of target audience Maturity: Emerging Sample Vendors: 1SYNC (Data Pool); 2ergo; Acision; AdMob; Alcatel-Lucent; Amdocs; Apple; Atos Origin; Capgemini; Citex Software; Comverse Technology; Google; Huawei; IBM; Jumptap; MADS; Medio Systems; Microsoft; Millennial Media; Mobixell; Nokia; Openet; Oracle; SLA Mobile; Smaato; Tacoda; Third Screen Media; Time Warner; Velti; Wmode; Yahoo; Zad Mobile Recommended Reading: "Dataquest Insight: New Revenue Opportunities for Telecom Carriers, 2013" "Emerging Technology Analysis: Convergent Communications Advertising Platforms, Communications Service Provider Operations, 2009"

Addressable TV Advertising Analysis By: Andrew Frank Definition: Addressable TV advertising technologies enable advertisers to selectively segment TV audiences and serve different ads within a common program at geographic, demographic and (in some cases) household levels, through cable, satellite and Internet Protocol television (IPTV) delivery systems and set-top boxes (STBs). An alternate approach uses the Internet to deliver addressable ads to a broadband-connected TV or STB. Position and Adoption Speed Justification: In the U.S., where cable serves about 60% of television households and the largest share of TV advertising is sold, widespread addressable TV advertising suffered a major setback in June 2009 when Canoe Ventures, a joint venture of the six largest multisystem operators (MSOs) tasked with developing a national platform for addressable and interactive advertising on cable TV, announced that it was abandoning its first ad-targeting product on the eve of its launch. Instead, Canoe elected to focus on an interactive

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direct-response lead generation product focused on request for information (RFI) and survey applications. That product, called SelecTV, launched in March 2010, while TV ad addressability remained on the sidelines, available in pockets of cable systems operated predominantly by Cablevision and Comcast. Meanwhile, in a sign that competition may yet accelerate the development of nationwide addressable TV technology, in May 2010, Google led a $23 million round of investment in Invidi, a developer of addressable TV technology. They were joined by GroupM, a unit of WPP, one of the world's largest advertising holding companies. Since 2007, Google has been supplying TV ads to Dish Network, a U.S. satellite TV provider that is developing addressable ad capabilities for its network and also working with Google on Google TV. Also behind many of these efforts are data providers such as Acxiom and Experian. In IPTV, the issue of household addressability is somewhat more straightforward, owing to inherent IP switching capabilities, and IPTV providers have been employing household addressability in cooperation with broadcasters in the U.K. for at least two years. At least as significant as the technology issues are business issues affecting the adoption of addressable TV advertising. There are several issues to consider: General inertia and recalcitrance of the TV advertising market, for which addressability represents a disruption to entrenched business practices. Fragmentation of audiences, which represents a large jump in the complexity of media packaging and sales processes. Uncertainty as to how much additional value advertisers will assign to targeting, and whether this additional value will be sufficient to offset the costs. Potential privacy concerns associated with household segmentation. Limited subscriber base of most IPTV deployments worldwide, which makes effective segmentation too small to be of interest to advertisers outside of trials. Unresolved disputes regarding the allocation of revenue and control over addressable ads among broadcasters, distributors and third parties. One thing that has become clear in the past year or so of trials is that the measurable value of addressability varies considerably among marketing sectors and objectives. Communications service providers (CSPs) have found the technique to be highly effective in marketing new capabilities to customers on their networks based on the knowledge of what they already have. Automotive manufacturers have found value in the ability to switch the final image of an ad — referred to as an "art card" — to a screen that contains the address, phone number and Web link of a consumer's nearest dealer. (Comcast Spotlight, the cable operator's advertising arm, refers to this capacity as "Adtag.") Consumer packaged goods companies, however, which account for the largest share of TV spending, do not appear to have discovered a compelling formula for addressable TV advertising. Nonetheless, it is likely that the efficiencies derived from segmentation will prevail, and the practice will become widespread, at least within certain marketing sectors. Some regions will certainly outpace others, but the overall process of change represented by addressable TV ads is still likely to take closer to five years than two. Finally, whether incumbent TV distributors, Internet-based challengers or the broadcasters themselves will control the most lucrative part of the value chain remains to be seen. User Advice:

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Advertisers must consider how to position their media and sales strategies as well as privacy policies against emerging TV-ad-targeting technologies. Agencies must offer multichannel campaign management services that include support for various emerging segmentation and targeting capabilities in media. Agencies and advertisers should work with platform developers to define standard metrics that will enable transparency and optimization in the complexity that will result from addressable capabilities. TV service providers must continue to press ahead with trials, partnerships and STB upgrades, while adhering to standards like enhanced binary interchange format (EBIF) and resisting impulses to engineer individual stopgap solutions. Broadcasters must ensure that they preserve their direct relationships with advertisers and don't get intermediated by platforms over which they have little control. They must bargain aggressively to minimize intermediary revenue splits and may play competitive factions against one another to prevent lock-in to any single-provider solution. Internet portals and ad networks can continue to exploit delays in TV addressability by engaging more with traditional video-oriented advertising agencies and advertisers to develop online targeting and segmentation strategies and capabilities. They should also press for interoperability of TV standards with Internet and mobile channels, and challenge proprietary service provider data, such as customer addresses, being used for ad-targeting purposes without explicit advance informed consent. Business Impact: Addressable TV advertising technologies affect advertising agencies, TV distributors, TV networks and privacy advocates. These technologies also affect brand advertisers considering media strategy and the CRM implications of new targeting capabilities, as well as STB and related equipment manufacturers and software vendors considering how to implement privacy controls. Addressable TV advertising represents an opportunity for mainstream advertisers and broadcasters to benefit from the scourge of audience fragmentation — thus, turning a big problem into a benefit. Benefit Rating: High Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: Alcatel-Lucent; BigBand Networks; Canoe Ventures; Invidi; Microsoft; OpenTV; Packet Vision; SeaChange International; Tandberg; Visible World Recommended Reading: "Two Roads to TV 2.0"

Public Cloud Computing/the Cloud Analysis By: Daryl Plummer Definition: Gartner's definition of cloud computing essentially describes public cloud computing as a style of computing where scalable and elastic IT-enabled capabilities are provided "as a service" to external customers using Internet technologies. Therefore, public cloud computing is the use of cloud-computing technologies to support customers that are external to the provider's organization. It is through public consumption of cloud services that the types of economies of scale and the sharing of resources will be generated to reduce cost and to increase choices available to consumers.

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Public cloud computing carries with it the concerns that security, data management, trust, control and guarantees of appropriate performance will not be sufficient to support enterprise needs. Enterprises want the value delivered through cloud-computing services, but also need to ensure that the concept is ready for delivering services that a company can rely on over time. However, public cloud computing has proved itself time and again, in the context of the Internet and the Web, from what is commonly referred to as a "consumer perspective." Sites such as Flickr and Facebook, and countless business sites delivering services from entertainment to healthcare records, have been in use for some time in the public context. Position and Adoption Speed Justification: The public cloud is at (and a little past) the Peak of Inflated Expectations. As enterprises get heavily into experimenting with the concept, they begin serious budgeting efforts for real projects. Evaluation of peer projects that solve actual problems are under way. In addition, cloud providers are advertising their ability to deliver enterprise services and reduce cost. Customers should still be cautious about the claims of most providers, because their models are still unproved for enterprise use. User Advice: User companies should be moving experimental projects to feasibility discussions for serious implementation in 2010. The year 2011 will be one of continued investment, and the high growth of cloud computing will exist through 2012. Business Impact: The business impact of cloud computing in the public sense can be varied, but the basic opportunity is for businesses to consume services from other companies that will allow them to cease providing those services themselves. This can lead to companies eliminating work that previously might have been done in-house. It can also lead to massive changes in the way money is spent (for example, using operating expenses to fund external services, rather than using capital expenses to fund IT projects). Benefit Rating: Transformational Market Penetration: More than 50% of target audience Maturity: Early mainstream Sample Vendors: Amazon; Google; Rackspace; salesforce.com

Network Sharing Analysis By: Peter Kjeldsen; Joy Yang Definition: Network sharing is defined as a situation in which two or more communications service providers (CSPs) share network resources, either through joint ownership of network resources or by third-party-enabled network sharing (open networks). In principle, network sharing can happen with any technology, but it is most widely discussed in the context of open fiber-to-the-home (FTTH) networks and the joint ownership of various infrastructure components of mobile networks. Network sharing, especially radio access network (RAN) sharing, is also seriously considered in mobile infrastructure construction. The Third Generation Partnership Project (3GPP) has defined network-sharing scenario requirements, architectures and functions in its Release 6. This introduces two network-sharing architectural configurations: the Gateway Core Network (GWCN) configuration and the Multi-Operator Core Network (MOCN) configuration. In most cases it will be simpler to share passive infrastructure than active components — both in terms of allocating shared costs and of the operational challenges of running the network.

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Position and Adoption Speed Justification: Network sharing as a business model has been around for some years: Joint ownership of resources has been seen as a way to cap rollout costs for mobile networks, and the financial crisis has sharpened CSPs' focus here. Scenarios include different types of sharing that involve joint ownership of backhaul infrastructure, cell towers and RAN base stations, as well as core network components like data switches and softswitches. Third-party-enabled network sharing via open networks has attracted regulatory attention because of this model's ability to lower entry barriers for CSPs, while still allowing for differentiation in the higher parts of the value chain. Until recently, open networks were seen mainly in FTTH rollouts involving utilities and municipalities, but the open-network business model has experienced a renaissance as a result of government stimulus packages implemented to mitigate the effects of the financial crisis. FTTH initiatives in Singapore, Australia and Greece are prime examples of this development. In the third-generation (3G) cellular era, RAN sharing has been practiced by T-Mobile and Hutchison 3G in the U.K., Vodafone and Orange in Spain, Telus and Bell Canada in Canada, TeliaSonera and Teles in Sweden, Telstra and Hutchison 3G in Australia, and Hutchison 3G and Telenor in Sweden. Ericsson, Nokia Siemens Networks and Huawei are network infrastructure vendors that have proven able to support RAN sharing. In 2009, Tele2 and Telenor formed a joint venture, Net4Mobility, to build a RAN-shared Global System for Mobile Communications/Long Term Evolution (GSM/LTE) network in Sweden. Gartner expects that RAN sharing will attract more attention for LTE than 3G, as it could prove a cost- and spectrum-efficient way to deploy LTE. Note that the business models associated with network sharing will not appeal to all CSPs, and that the estimated Time to Plateau applies to adoption by relevant CSPs, not to all CSPs. It should also be noted that some CSPs will probably pursue more aggressive network-sharing strategies abroad than in their home market. User Advice: Network sharing should be considered by CSPs wanting to minimize their investments in the lower parts of the value chain. These are often unattractive as CSPs are looking for real differentiation in the higher parts of the value chain. However, CSPs should carry out careful analyses before embarking on network-sharing schemes, especially when the sharing will have an irreversible impact on their market position. They should consider network sharing only when this approach resonates with their core strategy. Also, the associated management overhead should be explicitly addressed in the underlying business case. Business Impact: The sharing of network infrastructure by CSPs lowers the overall investment needed for basic network infrastructure, thereby reducing risk factors for the individual CSPs' business cases. On the other hand, network sharing also levels the playing field between CSPs, removing differentiators that stem from superior network architecture. The business impact of any instance of network sharing depends on the type of sharing (open or bilateral, for example), the type of infrastructure shared, and the competitive landscape in which the sharing occurs. Network sharing is sometimes associated with a return to the monopoly days that preceded widespread telecom deregulation. However, there is a big difference between the vertically integrated monopolies of the past, which spanned the entire value chain, and the network-sharing schemes of today, which affect only a small part of the value chain. In fact, network sharing can Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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stimulate competition throughout the value chain by breaking down barriers to entry in the network part. Benefit Rating: Transformational Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: Netadmin Systems; PacketFront Recommended Reading: "Dataquest Insight: Radio Access Network Sharing Is One of the Key Success Factors in LTE" "Dataquest Insight: The Devil Is in the Detail; Making Radio Site Sharing in LTE and 3G Environments Different" "Australian Government Addresses Competition Problem with National Fiber-to-the-Premises Plan" "Governments Can Bring Moore's Law to Broadband Access (February 2006 Update)" "A Business Model for Next-Generation Broadband Access (February 2006 Update)" "Why Governments Should Care About Fiber-to-the-Home"

Sliding Into the Trough 10G PON Analysis By: Peter Kjeldsen Definition: 10 Gbps passive optical network (10G PON) is a next-generation solution following the current-generation gigabit passive optical network (GPON) (ITU-T G.984) and Ethernet passive optical network (EPON) (IEEE 802.3ah) solutions, basically offering higher bandwidth and additional features. Like its predecessors, 10G PON will allow multiple users to share the capacity over a passive fiber optical "tree" infrastructure, where the fibers to individual users branch out from a single fiber running to a network node. In September 2009, the Institute of Electrical and Electronics Engineers (IEEE) approved 802.3av as a 10G PON standard, including both 10/1 Gbps and symmetrical 10 Gbps implementations. In January 2010, the International Telecommunication Union (ITU) approved the ITU-T G.987.1 and G.987.2 standards with 10/2.5 Gbps and symmetrical 10 Gbps implementations. Position and Adoption Speed Justification: The fixed-access market is a high-volume market, and the challenge facing current-generation PON technologies is related more to deployment cost than to limited capacity. This implies that the time it will take 10G PON to reach the Plateau of Productivity on the Hype Cycle will most likely be determined by how quickly the total cost of ownership (TCO) for 10G PON comes close enough (usually within 15% to 25%) to the TCO of current-generation PON to become attractive. When it reaches this point, most "greenfield" deployments will switch to 10G PON. The evolution in the TCO for communications service providers (CSPs) will be different from the evolution in the equipment cost for technology providers. The equipment cost is a relatively minor component of the fiber-to-the-home (FTTH) TCO, and the price tag that technology providers will put on 10G PON will be shaped not only by production cost, but also by the competitive landscape that providers of 10G PON solutions will be facing.

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Another scenario for widespread deployments of 10G PON solutions that could potentially move 10G PON to the Plateau of Productivity is an upgrade scenario in which current-generation PON deployments start to run out of bandwidth — but with CSPs struggling to fully leverage the bandwidth of current-generation GPON/EPON solutions, this scenario is less likely than the nearcost parity scenario. In either scenario, 10G PON will likely compete against wavelength division multiplexing (WDM) PON solutions, but with a combination of 10G PON and WDM PON being a likely long-term scenario. User Advice: Expect the price premium for 10G PON relative to current-generation PON to erode over time, as when GPON replaced broadband passive optical network (BPON) (ITU-T G.983). When evaluating the price premium for 10G PON, ensure you do so from a total cost perspective. With civil works and fiber installation cost typically accounting for most of the total cost, the price difference between current-generation PON and 10G PON is lower from a total cost perspective than from a pure equipment cost perspective. When deploying or evaluating current-generation PON solutions, consider future upgrades either to 10G PON or WDM PON solutions. Business Impact: 10G PON could become the mainstream PON technology as the price premium relative to current-generation PON diminishes, but it also offers itself as one of the possible upgrade paths for CSPs that have already deployed current-generation PON solutions. Benefit Rating: Moderate Market Penetration: Less than 1% of target audience Maturity: Emerging Sample Vendors: Alcatel-Lucent; Huawei; Motorola Recommended Reading: "Emerging Technology Analysis: 10G and WDM PON"

TD-LTE Analysis By: Joy Yang Definition: TD-LTE, or LTE TDD as it is called by the Third Generation Partnership Project (3GPP), is a time-division duplexing (TDD) version of Long Term Evolution (LTE). According to the 3GPP's definition, TD-LTE will be the successor to Time Division Synchronous Code Division Multiple Access (TD-SCDMA). TD-LTE will be solely a physical-layer development from LTE frequency division duplexing (FDD), which, by contrast, uses a paired frequency spectrum separated by a guarded band to provide uplink and downlink data communications in dedicated spectrum. There is no operational difference between LTE TDD and LTE FDD at higher layers or in the system architecture. TDLTE has a different frame structure from LTE FDD at the physical layer and requires greater synchronization in the system. Position and Adoption Speed Justification: TDD technology requires unpaired spectrum, which means that transmit and receive signals use the same frequency spectrum and are separated through time-division duplexing. Unlike FDD, in which transmitter and receiver work in different spectrums, TDD has the flexibility to allocate channel capacity to the uplink or downlink dynamically, according to the demands of the traffic. Also, unlike FDD, TDD does not require a

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guarded band between uplink and downlink. Therefore, TD-LTE makes more efficient use of frequency resources. TDD is also a great alternative where FDD spectrum is too costly or insufficiently available, as license fees for FDD spectrum are very expensive and FDD spectrum is quite full up across the world. China Mobile, which owns the Global System for Mobile Communications (GSM) network with the largest number of mobile subscribers and is the only major TD-SCDMA operator, is heavily behind the TD-LTE ecosystem. TD-LTE is gaining momentum among technology vendors in relation to compliance. Qualcomm has announced a plan to support both LTE TDD and LTE FDD in its new chipset. Equipment vendors Motorola, Ericsson, Nokia Siemens Networks, Huawei and ZTE have cooperated with China Mobile and demonstrated their TD-LTE solutions at Expo 2010 Shanghai China. TD-LTE is also attracting the interest of WiMAX operators. WiMAX is another wireless broadband technology based on TDD technology. However, not enough effort has been invested in WiMAX's successor technology, WiMAX 802.16m. With several equipment vendors having announced that their current WiMAX solutions could in future support TD-LTE through software upgrades, many WiMAX operators are likely migrate to TD-LTE as their next-generation technology. User Advice: Operators that lack the opportunity, or are unwilling, to pay the high license fees for FDD spectrum should consider TD-LTE as an alternative option for providing mobile broadband services. Current WiMAX operators should keep TD-LTE in mind as an alternative for technological evolution. When choosing a WiMAX vendor, communications service providers should evaluate the likely ability of the solution to migrate to TD-LTE in the future. WiMAX equipment vendors without TD-LTE offerings should consider using their experience in TDD technology and their "footprint" in the WiMAX market to break into the TD-LTE market. Business Impact: TD-LTE will emerge in 2010 to deliver high-bandwidth, high-quality mobile broadband services to enterprises and residential users, with potential reductions in operational costs for operators. Benefit Rating: Transformational Market Penetration: Less than 1% of target audience Maturity: Emerging Sample Vendors: Alcatel-Lucent; Ericsson; Huawei; Motorola; Nokia Siemens Networks; Qualcomm; Samsung; ZTE

Next-Generation Service Delivery Platforms Analysis By: Martina Kurth Definition: A next-generation service delivery platform (NG SDP) is a set of integrated software components that supports the delivery of Internet Protocol (IP) and non-IP carrier services. The aim with NG SDPs is to create the core of a network/resource-neutral service delivery system that can automate service creation and service management. It provides more flexibility and faster service creation and enables the combination of many services and service features. Vendors' NG SDP offerings vary according to their key competencies in networks or IT. NG SDPs will include many functions, some of which may be considered a business support system or operations support system (OSS) by other vendors. These functions may include:

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Service creation: Service element creation. Service composition. Service business conditions. Service management (traditionally the domain of OSSs): Fulfilment. Assurance. Service operation subsystems (traditionally the domain of network resources): Databases/registers (centralized or distributed). Application execution. Integration platform and service-oriented architecture (SOA) environment (SOA service orchestration). Identity management (and profile management). Content management subsystems. Call-processing subsystems. Web portal technology. Mobile portal technology. Enablers and application programming interfaces (APIs): A set of APIs to interact with and virtualize the carrier's network elements. A set of APIs to connect services, including third-party content services and virtual network operator services. A set of APIs to connect to carriers' existing applications, such as billing, customer relationship management, ERP and OSS applications. Service enablers providing presence and location data, which can be shared between applications. The underlying transmission services can be traditional telecom services (voice, data or mobile), Session Initiation Protocol services or Internet services. Over time, NG SDPs will evolve toward an environment in which various NG SDPs, handling specific services are integrated and can work together through the use of common capabilities. The concept of an end-to-end integrated service infrastructure or service network is emerging. This software and hardware infrastructure includes all service-enabling functions of a future communications service provider. Therefore, it will include functions such as device management, user device clients, content management, end-user data, policies, next-generation operation support systems, parts of the control layer (IP Multimedia Subsystem or Internet protocols) and even end-user applications themselves.

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Position and Adoption Speed Justification: Communications service providers (CSPs) have gone through numerous generations of SDPs and so have a complex, expensive and slow service delivery environment. NG SDPs have an architecture that aims to simplify the complex service delivery environment to a minimal number of SDPs that work together and utilize modern software principles, such as SOA, for greater efficiency and lower costs. CSPs understand the concept of a horizontal service delivery environment with third-party exposure, but so far it has been implemented more in discrete areas. Implementations remain complex and "killer applications" have also been elusive. At present, most SDP implementations that support mobile services and mobile functionality are more advanced. Nevertheless, the worldwide market for NG SDP products and services has matured over the past year. Many CSPs around the world are either evaluating or implementing NG SDP at various stages, to enable the business case for new converged services, while mitigating legacy investment in telecom networks and IT. NG SDP infrastructures gradually mature as CSPs tend to pursue modularized, evolutionary enhancements of their existing architectures. Additionally, SDP architectures show greater alignment with CSPs' needs. NG SDP becomes a key business enabler as focus shifts toward new business models that entail third-party participation, revenue generation and improvements in customer experience. A key factor in this context is the monetization of existing network and IT assets. Therefore, the need for application development and legacy interoperability are among the main drivers for CSPs' investments in NG SDP. This trend also leads to the acceleration of network and service exposure, as well as amplified partnerships with the "ecosystem" of third-party developers and content and application providers and next-generation intelligent network (NG IN) integration. The main focus of CSPs is on the migration of NG IN and telco services to maximize revenue based on existing infrastructures. We also see a lot of hype around the enablement of application store, although this still represents a relatively small source of revenue at present. User Advice: CSPs should invest swiftly in a more agile creation and delivery environment for innovative services to be able to anticipate new value chains and sources of revenue. However, they should refrain from a risky "big bang" approach. Instead a step-by-step deployment model should be applied, based on a modularized, horizontal evolution and proven return on investment for each module. Center your immediate efforts on pragmatic enhancements to existing telco services to leverage legacy assets for new composite services. However, IT matters such as Web 2.0, service exposure and device enablers, application stores, as well as improvements to the user experience will simultaneously become more imperative. CSPs should not wait too long to tab into new domains, such as third-party abstraction and application stores to gain experience of the new service delivery environment. For example, enablers such as presence and location could be exposed to third parties to build innovative IT services, such as through social media on the Internet and consequently, charge for them. Consumers, small and midsize businesses and branch-office users could all benefit from an increased choice of services. However, large business users can develop or source customized services, so the effect is likely to be less dramatic there. To link all software components in a service delivery environment, CSPs will need to select and implement appropriate enterprise service bus and SOA tools. CSPs must define their architecture and ensure ease of integration by minimizing the number of tools and vendors they use.

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Business Impact: NG SDPs will have a profound effect on the service experience of end users in the long term. From a technological perspective, NG SDPs support the business case for new converged services without requiring heavy network investments. Once these platforms are wellunderstood and embraced by major carriers, additional innovative services will become available to users through a high-performance and highly secure "carrier-grade" service environment. The effect on CSPs' product creation capabilities will be significant as SDP enable new content and services. Flexible and open NG SDPs will also play an important role at the core of NG service networks where they will be crucial for enabling the "multidimensional" next-generation telco business model. In this model, end users can also be "producers," additional revenue streams can come from non-end-user third parties (for example, from advertisers) and CSPs also work together to increase their reach. Additionally, carriers are also enablers and wholesale providers. Benefit Rating: Transformational Market Penetration: 5% to 20% of target audience Maturity: Emerging Sample Vendors: Accenture; Alcatel-Lucent; Ericsson; HP; Huawei; IBM; Nokia Siemens Networks; Oracle

Long Term Evolution Analysis By: Joy Yang; Sylvain Fabre Definition: Long Term Evolution (LTE) is a Third Generation Partnership Project (3GPP) venture to define the requirements and basic framework for the wideband code division multiple access (WCDMA) mobile radio access network beyond third-generation (3G) technology. It is also known as Release 8, probably the last step before fourth-generation (4G) technology. The core specifications for Release 8 were completed by the end of 2007, and some early commercial deployments are expected in 2010. Objectives with LTE include theoretical data rates of 100 Mbps downstream and 50 Mbps upstream in 20MHz of spectrum; full mobility at speeds of up to 500 kilometers per hour; support for 3G network overlays; and handovers between 3G and LTE. LTE is likely to employ multiple input/multiple output (MIMO), Orthogonal Frequency Division Multiple Access (OFDMA) and single carrier frequency division multiple access (SC-FDMA) in the link layers. Notably, it will not use code division multiple access (CDMA) for the radio layer, and there is a major operator-driven effort by the European Telecommunications Standards Institute (ETSI) to cap intellectual property royalties for LTE at a maximum of 5% of the cost of the equipment. (For definitions of MIMO, OFDMA, System Architecture Evolution (SAE) and UMTS Terrestrial Radio Access Network [UTRAN], see "Glossary of Mobile and Wireless Communications Terminology, 2009 Update.") LTE will come in two types — frequency division duplexing (FDD) and time division duplexing (TDD) — to support deployments in FDD spectrum and TDD spectrum. Currently, most 3G communications service providers (CSPs) are adopting FDD-based 3G technologies, WCDMA and cdma2000. For them, FDD LTE will be a reasonable next-step migration technology. TDSCDMA, which has been adopted only by China Mobile, and WiMAX 806.16e are TDD-based 3G technologies. China Mobile is heavily promoting TDD LTE and is likely to adopt it as soon as it is ready for commercial use. The WiMAX Forum has claimed that WiMAX 16e will be able to migrate to next-generation 802.16m technology, which will be able to provide features competitive with LTE Advanced (LTE-A). However, several major mobile equipment vendors left the WiMAX

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market in 2008 and 2009, which leaves the WiMAX ecosystem looking slim. Gartner predicts that TDD LTE will beat WiMAX 802.16m in the TDD market. Position and Adoption Speed Justification: LTE gained momentum in 2009. In December, TeliaSonera launched the first public LTE services in Stockholm, Sweden, and Oslo, Norway, using equipment from Ericsson and Huawei. By May 2010, CSPs had announced 97 trials and commitments. Western European, North American and Japanese CSPs are early adopters and will launch services commercially in 2010 and 2011. CSPs in other markets are aiming for 2012 to 2013. Some operators have chosen to extend the life of their WCDMA networks by rolling out HighSpeed Packet Access Evolution (HSPA+) technology. This may delay the need for LTE by a couple of years. The evolution from High-Speed x Access (HSxPA) to HSPA+ would be less disruptive than going straight to LTE, and it could also be cheaper if CSPs do not add all the possible enhancements for HSPA+, such as 2x2 MIMO, 64 quadrature amplitude modulation (QAM) and additional carriers. Although LTE's performance is better overall, on 5MHz bands HSPA+ is just as spectrally efficient. Within LTE, the core network evolution from the general packet radio service (GPRS) packet core is covered by System Architecture Evolution (SAE), along with the Evolved Packet Core (EPC) network elements. LTE still faces challenges to provide traditional voice and short message services, which rely on circuit-based 2G and 3G technology. Options include circuit-based call fallback to 2G/3G networks, Voice over LTE via Generic Access (VoLGA) and Voice over IP Multimedia Subsystem (IMS), which the One Voice organization is working on. In the early stages of LTE, applications will focus on mobile data usage based on data cards and Universal Serial Bus (USB) dongles. User Advice: CSPs have been deploying WCDMA, High-Speed Downlink Packet Access (HSDPA) and High-Speed Uplink Packet Access (HSUPA), and they must carefully consider further upgrades for LTE, which will require new core and radio access networks, as well as new spectrum. End users should not wait for promises of an ideal technology, but evaluate price/performance criteria, choose the operator with the strongest service package, and investigate upgrade options for higher-bandwidth packages. Users should expect better performance, but, as with each of the preceding 3GPP network releases, typical data rates for mobile users are likely to be only 10% to 20% of the maximum theoretical rate — though this would still provide a significantly improved experience, compared with HSxPA. Advice for CSPs: Evaluate the revenue potential of mobile broadband to justify the cost of investing in technologies like LTE. Plan to segment your service portfolio and offer value-added services to generate more revenue. Prepare users for device upgrades by educating them about the benefits of fast mobile access. Focus on the user experience improvements that come with high speeds — including lower latency for voice and better Web surfing — rather than selling technology. Set realistic expectations about bandwidth speeds and resilience. Mobile broadband will not be a perfect substitute for fiber or very-high-bit-rate DSL. Challenge LTE infrastructure vendors regarding the extent to which their HSxPA/HSPA equipment is forward-compatible with or "upgradable" to LTE. Upgrades from WCDMA to HSxPA have shown that "software-only upgrades" can have unexpected hardware impacts. Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Business Impact: LTE is being widely trialed in 2010, and has been deployed by several major CSPs in leading markets, such as Western Europe, North America and Japan. It will deliver highbandwidth, high-quality mobile broadband services to enterprises and residential users, with potentially reduced operational costs for CSPs. Benefit Rating: Transformational Market Penetration: Less than 1% of target audience Maturity: Emerging Sample Vendors: Alcatel-Lucent; Ericsson; Huawei; Motorola; NEC; Nokia Siemens Networks; ZTE Recommended Reading: "Magic Quadrant for LTE Network Infrastructure" "Dataquest Insight: LTE and Mobile Broadband Market, 1Q10 Update" "Emerging Technology Analysis: Self-Organizing Networks, Hype Cycle for Wireless Networking Infrastructure" "Dataquest Insight: IPR Issues Could Delay Growth in the Long Term Evolution Market" "Early Commercial LTE Networks To Reach Sweden, Norway" "Vendor Rating: Ericsson" "Emerging Technology Analysis: Long-Term Evolution (LTE), Hype Cycle for Wireless Networking Infrastructure, 2008" "Dataquest Methodology Guide: Mobile and Wireless Communications, Worldwide"

Femtocells Analysis By: Deborah Kish Definition: A femtocell is a small, A5-size base station box aimed at improving indoor coverage, especially for higher-frequency services such as third-generation (3G) services. Similar to picocells, femtocells are even smaller cellular base stations, designed for use in residential or corporate environments that connect to the customer's own broadband connection using an Internet Protocol (IP) link for backhaul. Advantages include their lower cost when compared with existing microcellular technology, their physically smaller unit size and their greater network efficiency. Femtocells are offered in two form factors: as stand-alone units, much like a cable modem or wireless router; and as integrated solutions, which are simply Wi-Fi routers or cable modems with a femtocell inside. Position and Adoption Speed Justification: Still in their early commercial roll-out stage, femtocells could make mobile communications more pervasive and encourage more users to switch over to mobile as their main means of communication. However, the business case remains in question due to the cost of femtocells and the value they provide. Consumer's recent behavior suggests that they are more cost-conscious and less likely to want to increase their monthly living expenses, thereby inhibiting adoption. So communications service providers (CSPs) really need to work toward lower price plans, while vendors need to work toward reducing the bill of materials of the femtocell. With cost-conscious consumers in mind, CSPs around the world have been toying with the idea of femtocells, trialing them or actually deploying them. Most femtocell initiatives are still at the trial stage and are aimed mainly at consumer markets. However, the three largest CSPs in the U.S. have set the wheels in motion, while companies in

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other parts of the world, with a few exceptions, are still taking a cautious approach. The main drivers for deploying femtocells are in rural areas, where cellular coverage is poor, and in urban areas, where user density and the growing use of cellular data services is putting pressure on the existing base station architecture. The latter can be dealt with by Wi-Fi as a lower-cost alternative. From a technology perspective, as CSPs worldwide begin implementing and trialing Long Term Evolution (LTE), due to the higher spectrum used in Europe and Japan (2.6 GHz and 1.5-2.1 GHz respectively) it is necessary to use small cells with higher density, so femtocells (that is, small cells for macro coverage) are a necessity. LTE will see a higher usage of femtocells, not in the residential model currently pursued for 3G femtocells, but as a coverage tool for outdoors in the macro environment. To date, only 11 CSPs have commercially launched femtocell services, and there are anywhere between 60 and 70 trials still in operation. T-Mobile, for example, has already conducted several trials and commercial pilots, but in December announced that it will test interoperability between Ubiquisys and Huawei through mid-2010. But femtocell services are not for everyone, particularly those that have hung their hat on Wi-Fi. User Advice: CSPs should offer incentives — offering rebates, for example, is more likely to attract subscribers as consumers look for ways to cut their monthly living expenses. Alternatively, femtocells could be bundled with broadband and/or mobile plans. CSPs and vendors should work together to develop lower-cost solutions, and should be more aggressive with integrated solutions such as femtocells embedded in broadband routers or set-top-boxes. Integrated solutions will increase adoption as this will drive lower bill of materials costs, thus driving down cost and eliminating crowded desktops. Additionally, developing complementary mobile applications, such as services like "in-house presence alert," which will offer more value per subscriber dollar, will also increase femtocells' attractiveness. Business Impact: Recent government incentives (such as those in the U.S. and Germany) to increase broadband in rural areas can be advantageous to CSPs offering femtocells, since a broadband connection is needed for a femtocell service. Mobile services in these areas are likely to increase as subscribers may opt for mobile as their main means of communication, rather than voice over IP (VoIP), so the impact on consumer markets could be significant. From an enterprise perspective, as technology advances and femtocells' capacity to increase the number of registered users per femtocell grows, this could prove to be a driver in this market too. While we anticipate an estimated growth rate of about 40%, the number of public switched telephone network lines in the enterprise is not decreasing as fast as VoIP is growing. Alternative technology may be an inhibitor, as Wi-Fi is femtocells' strongest competitor. For example, Orange in the U.K. announced that it will not launch a femtocell service because it believes that femtocells are still too expensive, and it will continue to emphasize its "Livebox" WiFi residential gateways. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Emerging Sample Vendors: Airvana; Fujitsu; Huawei; ip.access; Kineto Wireless; Motorola; Nokia Siemens Networks; RadioFrame Networks; Sagem Telecommunications; Samsung; Ubiquisys; ZTE Recommended Reading: "Femtocells: The State of the Market" "Emerging Technology Analysis: The Mutual Benefits of Femtocells and LTE"

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"Magic Quadrant for LTE Network Infrastructure"

IMS Analysis By: Bettina Tratz-Ryan Definition: IP Multimedia Subsystem (IMS) is a standardized, open architecture based on Session Initiation Protocol (SIP). It defines how applications and services are delivered to customers, regardless of the access network on which they run. IMS separates session control from the actual applications for maximum flexibility, and standardizes signaling and control layer, together with network-based and Web-enabled applications and services. It helps carriers build their strategy on the convergence of platforms, technology solutions and services, as well as on end-user devices and terminals, including handsets and client premises equipment. Within IMS the Policy and Charging Rules Function (PCRF) is the policy entity that forms the link between the service and transport layers. The PCRF collates subscriber and application data, authorizes quality-of-service resources, and instructs the transport plane on how to proceed with the underlying data traffic. This function becomes interesting, especially when communications service providers need to deal with traffic from over-the-top players and Web service providers. Position and Adoption Speed Justification: The architecture around the IMS topology and the logic behind it has matured. However, implementation has been sparse, mostly deployed by service providers to fulfill certain needs and requirements on a network level or a service environment, such as to build out converged data, voice and collaboration applications for specific enterprise and consumer customers. Many deployments stem from fixed-line operators in their voice migration toward net generation voice, implementing rich communication suite in lockstep. During the past few years, the migration from an existing network topology to IMS continued to be quite complex. There are many competing IMS offerings from vendors, and service providers have selected vendor "ecosystems" to optimize an IMS-based network transformation solution around their specific core network requirements. In addition, the IMS application enablers, together with initiatives such as IMS Rich Communication Suite (RCS), will support the creation of compelling new services that will provide subscribers with an end-user experience they are willing to pay for. This remains a critical issue, because many blended services receive only a limited return on investment. Mobile operators are pursuing the IMS topology from a home subscriber server and application layer perspective and are interested in IMS RCS delivering a standardized set of applications (presence, instant messaging and active directory) using existing telephony. Wireline operators need a carrier-grade, future-proof voice over Internet Protocol (VoIP) platform blended with IPTV, and are interested in fixed-mobile service convergence for enterprise customers. IPTV should not be seen as a panacea for successful IMS implementation, but rather as a supplemental service capability. User Advice: IMS is a promising long-term architecture for session control, but needs considerable system integration to deliver on promised results. Consider vendors that have experience in technology migration and have the necessary capabilities to provide the integration and application development skills. Deploy IMS-capable softswitches and proceed with IMScompliant service delivery platforms. Watch for new service opportunities in the RCS community to justify mobile network development especially for long-term evolution (LTE) multimedia services. Business Impact: Network service providers will be able to support, control and charge for differentiated session delivery for multimedia services with a standards-based architecture. The world's largest carriers will embrace IMS, so it will help in carrier interoperability. In the longer term, IMS will be applicable to fixed and mobile operators, as well as cable operators. Network service providers will also be able to collapse various network layers to gain cost savings, because IMS will be able to, in future iterations of the architecture, support both fixed and mobile

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sessions. Residential and enterprise customers will be able to obtain more "carrier grade" services via a single terminal, with one authentication point for address book, voice and multimedia mail, and value-added services. In the future, even television via IP could be linked using IMS. IMS will have an impact on future mobile LTE broadband network designs and, therefore, future services that will be enabled on this architecture. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: Alcatel-Lucent; Ericsson; Huawei; Italtel; Metaswitch Networks; NEC Japan; Nokia Siemens Networks; Sonus; ZTE Recommended Reading: "Magic Quadrant for Softswitch Architecture"

MPLS-TP Analysis By: Peter Kjeldsen Definition: Multiprotocol Label Switching Transport Profile (MPLS-TP) is a connection-oriented packet-switched protocol. MPLS-TP is a joint effort between the International Telecommunication Union (ITU) and the Internet Engineering Task Force (IETF). The network architecture and network management principles behind MPLS-TP will be the same as those for Synchronous Digital Hierarchy (SDH)/Synchronous Optical Network (SONET) and Optical Transport Network (OTN), and together with its natural fit with MPLS this should be a technology that most communications service providers (CSPs) will welcome. The progress toward the standardization of MPLS-TP is captured in so-called request for comments (RFCs) issued by the IETF, see for instance "RFCs 5317, 5718, 5654 and 5860." Position and Adoption Speed Justification: CSPs are expected to welcome MPLS-TP as a standardized technology for cost-effective transport solutions for carrier Ethernet services. The battle that raged a few years ago between the Provider Backbone Bridge Traffic Engineering (PBB-TE), also referred to as Provider Backbone Transport (PBT) and Transport (T)-MPLS camps did not encourage CSPs to adopt either technology, even though the need for innovation in this space has been evident for some time. The standardization process is still in progress, so despite an anticipated quick uptake by CSPs due to a pent-up demand for standardized and costeffective carrier-class Ethernet solutions, the technology is expected to be more than two years away from the Plateau of Productivity. User Advice: CSPs should have MPLS-TP on their technology radar screens. If they have already deployed PBB-TE or T-MPLS-based solutions, a potential move to MPLS-TP should be evaluated as a likely scenario. Business Impact: MPLS-TP is expected to offer a standardized solution for cost-effective transport of carrier-class Ethernet traffic. It is significant that MPLS-TP is a joint ITU and IETF effort, and that the architectural principles are based on proven technology that is widely adopted among CSPs, partly because of the technology battle between PBB-TE and T-MPLS that preceded the announcement of MPLS-TP, but also because of the risk-averse climate that continues in the aftermath of the current financial crisis. Benefit Rating: High

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Market Penetration: Less than 1% of target audience Maturity: Emerging Sample Vendors: Alcatel-Lucent; Ciena; Cisco; Ericsson; Huawei; Nokia Siemens Networks

40 Gbps Transport Analysis By: Peter Kjeldsen Definition: To address accelerating traffic growth, transport systems are increasing channel capacity from 10 Gbps data rates to 40 Gbps. To facilitate higher line rates without sacrificing transmission reach, solution providers have had to introduce more advanced modulation schemes and thus more complex transceivers, with differential phase shift keying being the most widely adopted enabling technology to address this evolution. 40 Gbps (and also 100 Gbps) line rates are already standardized for Synchronous Digital Hierarchy/Synchronous Optical Network (SDH/SONET) and optical transport network (OTN) by the International Telecommunication Union (ITU). The Institute of Electrical and Electronics Engineers (IEEE) ratified the 802.3ba standard in June 2010 (see http://standards.ieee.org/announcements/2010/ratification8023ba.html), which will allow communications service providers (CSPs) to carry 40 Gbps and 100 Gbps Ethernet directly over transport networks supporting these line rates. This allows CSPs to consider the move to higher line rate systems in the wider context of what their future optical transport architecture should look like. Position and Adoption Speed Justification: Commercial deployments are gaining momentum in long-haul backbones and metropolitan networks alike. With large CSPs adopting the technology, economies of scale have kicked in to the point where the carrier cost of deploying 40 Gbps technology compares favorably with alternative approaches based on 10 Gbps technology (when comparing cost per transmitted bit). A number of routing platforms utilize 40 Gbps interfaces, which is an important driver toward wider adoption of 40 Gbps transport solutions. 40 Gbps will be a natural step on the way to 100 Gbps transport line rates, just as 10 Gbps was the step that preceded 40 Gbps solutions. 100 Gbps will take a few more years than 40 Gbps to be cost-effective, and 40 Gbps will continue as part of the solution hierarchy after 100 Gbps is introduced (just as 10 Gbps and 2.5 Gbps are still being used). User Advice: With major CSPs already adopting this technology, economies of scale are realized closer to realization and the pricing barrier is being lowered. The technology is mature enough for deployment as traffic demand and price points line up. Business Impact: The relentless traffic growth is driving the demand for more capacity at lower cost per bit, both in metropolitan and long-haul networks. Traditionally, moving to a channel rate that is four times higher only increases the cost by a factor of 2.5 to 3 — so there is an economyof-scale aspect to moving up in terms of channel rate. 40 Gbps is not quite there yet in terms of cost, but is rapidly closing the gap. Benefit Rating: Moderate Market Penetration: 5% to 20% of target audience Maturity: Early mainstream Sample Vendors: Alcatel-Lucent; Ciena; Ericsson; Huawei; Infinera; Nokia Siemens Networks; ZTE

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Broadband Over Power Lines Analysis By: Zarko Sumic Definition: Broadband over power line (BPL) technology — also called power line communications (PLC) — is a landline means of communication that uses established electrical power transmission and distribution lines. A service provider can transmit voice and data traffic by superimposing an analog signal over a standard alternating electrical current of 50Hz or 60Hz. Traditionally, the promise of BPL appeared to reside in electrical engineering domains, in which looping the transformers was cost-effective (for example, in Europe and Asia/Pacific, where, because of higher secondary distribution service voltage, several hundred consumers are served by one transformer, as opposed to North America, where only up to seven consumers are served by one transformer). However, with the recent development of new technologies and technological improvements, embedded utility infrastructures can be used to deliver voice, video and data services. Position and Adoption Speed Justification: Utilities, searching for options to increase revenue, are revisiting BPL, and, at the same time, exploring its potential to improve utility functions. Business models that highlight utility-focused applications, such as advanced metering infrastructure (AMI), appear to be driving new implementations — particularly in Europe, where they still have a strong presence. However, other broadband technologies — particularly WiMAX — are evolving faster and moving into position to take large portions of the addressable market for Internet access. User Advice: BPL technology is maturing, but some technical issues still must be resolved (such as tunneling/bypassing distribution transformers, signal attenuation and radio interference). Distribution feeders are dynamic in nature, resulting in changing network parameters as a consequence of capacitor and line regulator switching for voltage control, as well as sectionalizing and transfer switching. Utilities should understand that most BPL systems must be retuned for optimal performance every time a distribution component gets switched in or out of the network. Therefore, close collaboration should be established between BPL personnel and planning engineers to consider BPL dynamics in circuit design and operations. BPL continues to lag behind other mainstream broadband communication technologies, which are attracting substantially more R&D investments. Although not yet fully mature, electric utilities and broadband service providers should follow BPL development and conduct technical feasibility and economic viability studies. BPL appears to be more appropriate as a communication channel for AMI and other utility control-monitoring functions (although some initial deployments have raised performance concerns), but less appropriate for Internet access services. BPL must be evaluated as a vehicle that can increase system reliability, improve the use of the distribution asset, and enable sophisticated energy management and demand-response options, rather than a new revenue source by a company's entry into the broadband market. Users must ensure that business models, regulatory issues, and proper divisions between broadband service and utility functions have been achieved before attempting rollouts. In addition, users need to consider that, due to lacking scale and investment level compared with other mainstream communication technologies, BPL will become obsolete, which will impact product and supplier viability and deployment, resulting in a "stranded asset." Business Impact: Affected areas include broadband communications and energy management services, including on-premises, "home-plug-type" provisioning for consumer energy management applications. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience

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Maturity: Obsolete Sample Vendors: Ambient; Amperion; BPL Global; MainNet Recommended Reading: "Management Update: Top 10 Technology Trends Impacting the Energy and Utility Industry in 2010"

802.11r-2008 Analysis By: Timothy Zimmerman; Michael King Definition: 802.11r-2008 has been ratified as a standard by the Institute of Electrical and Electronics Engineers' (IEEE's) subcommittee as part of an amendment regarding Basic Service Set (BSS). The amendment enables a secure, fast handoff experience for clients while they're roaming among wireless LAN (WLAN) access points (APs). Fast roaming is achieved by quick reassociation and transfer of security credentials to a new AP, after the client moves out of coverage range of the AP where it was associated. The need for standardized, fast-roaming functionality is most noticeable when deploying loss-sensitive applications, such as voice over IP (VoIP). The intent of the amendment is to simplify the process that APs and clients must perform to hand off clients from one AP to the next. Position and Adoption Speed Justification: Most vendors have proprietary versions of fast handoffs for their networks. As the adoption of voice over wireless LAN (VoWLAN) and the use of video over WLANs increases, there will be substandard handoff delays while roaming from AP to AP, resulting in delays or calls being dropped. By standardizing and simplifying the handoffs, IEEE 802.11r provides a baseline of minimum functionality that all vendors must meet. User Advice: Although ratifying 802.11r as a standard will improve the base level of roaming functionality for devices as they move through the infrastructure, there may be no perceptible difference for most mobile users, because most use single-vendor implementations with proprietary methods for fast handoff. Enterprises need to ensure that vendors implement 802.11r as part of any WLAN evaluation to guarantee interoperability and establish a baseline of roaming functionality between access points across all vendors' products, and in controller and autonomous architectures. Vendors will continue using proprietary extensions beyond the standard to differentiate functionality to improve quality of service for data, voice and video applications. Business Impact: 802.11r will become the baseline metric for infrastructure roaming and fast handoff, and will be another contributing component to the overall movement toward WLAN AP interoperability. The more metrics that are defined to solidify the wireless environment, the more confidence enterprises will have in using it as their primary access layer communication medium. The standardization of another basic wireless element will motivate vendors to find new capabilities with which to differentiate themselves. Benefit Rating: Low Market Penetration: 5% to 20% of target audience Maturity: Adolescent Sample Vendors: Aruba Networks; Cisco; HP; Meru Networks; Motorola

WiMAX 802.16e-2005 Analysis By: Phillip Redman; Joy Yang

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Definition: WiMAX 802.16e-2005 is a mobile version of the Institute of Electrical and Electronics Engineers (IEEE) 802.16 standard. Its full flat Internet Protocol (IP) architecture supports time division duplex (TDD) frequencies in 2.3GHz to 2.5GHz and 3.3GHz to 3.5GHz. Korea Telecom in South Korea had built the first semimobile WiMAX-profiled Wireless Broadband (WiBro) network for USB dongles for broadband Internet applications. The WiMAX Forum launched the Wave 1 certification process in 2008 for the Korean market specifically around WiBro. 802.16e2005 is data-centric. Multimode handsets are just starting to come to market in the U.S., which has the largest mobile WiMAX network, that support voice over cellular and WiMAX for data. It has also seen some limited deployments in Russia and the Asia/Pacific region. Position and Adoption Speed Justification: Gartner still sees possibilities in emerging countries, as a "last mile" access technology to provide Internet services, especially where thirdgeneration (3G) and next-generation communications or media services have yet to be launched. The first mobile WiMAX network was launched two years ago in Amsterdam; although there are almost 600 WiMAX networks today in Amsterdam, only a small percentage support mobility. Most mobile WiMAX networks are deployed for rural coverage, beginning in a defined area, such as city networks, and will be used as a fill-in technology in markets for broadband access that are already using 3G services. The focus on data versus combining voice and data will limit market appeal for a full mobile solution, especially as rival wired and wireless broadband services are being launched close behind current plans. In the U.S., the largest mobile WiMAX network is being planned, but has not seen the same widespread adoption in other developed economies. Many mobile WiMAX operators are already talking about a migration to LTE in the next few years. Many operators in emerging markets are still interested in deploying a semimobile version of 802.16e-2005, but that version requires scalability, large-scale shipments and vendor support that are not often available. Notebook PC OEMS are staring to increase the use of WiMAX chipsets in their products. Over 30 SKUs worldwide support WiMAX, with Dell having the largest number available. User Advice: Mobile WiMAX network availability is limited internationally, and still does not support roaming. The U.S. availability is planned to reach 120 million points of population (POP), or about 38% of the population, by year-end 2010. Consider WiMAX as a broadband access service, especially if no alternative infrastructure is commercially available and national roaming isn't needed. WiMAX can also be considered an alternative for Wi-Fi on campuses for enterprise wireless data connections, if deployed in an unlicensed spectrum. However, enterprise customers should leverage product portfolios or ecosystems in which as many products and solutions as possible are certified to gain the cost economics and vendor support for technology road maps, especially for end-user devices and terminals. Business Impact: WiMAX 802.16e is a semimobile technology that will be used for defined areas, such as DSL fill-in in rural regions, rather than as a nationwide system for voice and data. It should also be assessed for private networks if frequency is available, because it is a lowercost alternative to public broadband, and offers voice and data capability to replace older private mobile radio systems. It will compete with high-speed 3G cellular services and WiBro when it is launched. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: Alvarion; Clearwire Communications; Motorola; Samsung Recommended Reading: "First WiMAX World Congress Draws Global Support But Challenges Remain"

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IPTV Analysis By: Ian Keene; Fernando Elizalde Definition: Internet Protocol television (IPTV) refers to the network architecture, equipment and technologies, middleware and software platforms used to deliver standard or high-definition television (HDTV) signals, in real time, over managed communications service provider (CSP) DSL and fiber-to-the-premises telecommunications networks. In the future, wireless-based distribution networks may be added to this list. IPTV delivery systems increasingly employ advanced video compression (AVC) technologies, such as MPEG-4 or VC-1, whereas early implementations of IPTV used MPEG-2. Position and Adoption Speed Justification: IPTV constitutes the CSPs' response to competition from cable and satellite operators. It is a major area in the field of next-generation telecom architecture and services; with the potential to be a transformational enabler for CSPs and for those end users who have not been able to receive interactive TV. However, factors that blunt its quick, widespread deployment and adoption are numerous. These include mature payTV markets in some countries and regions (especially North America), and competitive bundled offerings from, for example, cable competitors. There are also technological issues, as the required end-to-end solution is complex. IPTV means that CSPs need to manage complex server farms, home devices and networks. Set-top boxes to access the service are expensive and not all copper loops can offer enough noise-free bandwidth for standard-definition video, let alone HDTV. The inability of some CSPs to procure different and compelling content, or even content similar to current content deals, and consumer inertia when it comes to changing service providers are issues as well. Consumers are not universally convinced about the benefits of premium content and the market for over-the-top video on the Internet is growing fast. Global subscribers of IPTV services reached 19 million in 2008, and are forecast to grow to 36 million by the end of 2010, but this is still a small number when you consider that household penetration is at less than 2% worldwide. In most areas, CSPs cannot engage in effective advertising and marketing campaigns. It is becoming clear that IPTV is not a quick, easy answer to new revenue generation. Some CSPs have started to think about IPTV as a service delivery platform and are experimenting with, for example, digital advertising and marketing solutions; in addition to the "three-screen strategy" of providing their customers with content and content-related services on TVs, PCs and mobile screens. User Advice: Keys to success will be: To avoid "me too" offerings. To gain access to compelling content. To bundle IPTV with other services at favorable prices. If CSPs are to drive customer uptake in mature markets, they need to come to market with services that are either equal to those of their competitors' at a lower price, or superior to cable or satellite video services in terms of content, convenience and ease of use. CSPs will need to evolve new applications, usage and user behaviors to differentiate themselves from the established broadcast alternatives. In less-saturated markets, they will need to use the best combination of price, technology and content (as well as bundling with non-entertainment services) to bring new customers into the pay-TV market. Expect market development to vary by region and by country. The complexity of delivery means that integrated solutions will likely be the

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fastest and most cost-efficient way of deploying the necessary architecture. Increased video content in networks will drive capacity upgrades. The upside for service providers is still largely speculative and contingent on the ability to differentiate services and price aggressively, especially in regions with significant satellite and cable deployment. The most positive immediate effects for CSPs are loss of churn and the ability to sell more broadband to users. CSPs will need to embrace interactivity and user-generated video in their IPTV platforms, focus more on the home and home networks, embrace targeted advertising and promote further revenue expansion opportunities with broadband application development. HDTV, particularly HD video on demand, will be important. Business Impact: The effect of IPTV will be felt primarily in the residential market. IPTV service providers promised to deliver a new viewing experience compared with cable or satellite TV. However, most cable and satellite offerings have upgraded to deliver what IPTV originally promised to differentiate on. There is potential for virtually unlimited programming, thanks to the "switched" nature of the network architecture. In addition, more cross-platform integration between entertainment, communications and information services is possible. This can also be achieved between PCs, TVs and mobile phones, even though the real value, and "killer application," from this kind of three-screen strategy is still unproven; as is user willingness to pay a premium for this functionality. Other potential benefits include highly competitive pricing and more integrated search and navigation among broadcast/linear programming, on-demand and personal content such as stored music, photos and videos. Gartner enterprise clients in industries such as hospitality (hotels), transportation (airports) and education are also becoming increasingly interested in IPTV. Benefit Rating: High Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: Alcatel-Lucent; Cisco; Ericsson; HP; IBM; Microsoft; Motorola; Nokia Siemens Networks; Thomson Recommended Reading: "Dataquest Insight: Worldwide IPTV Growth to Remain Steady, but not Spectacular" "Dataquest Methodology Guide: IPTV Service Forecast and Business Model Definitions, Worldwide" "Market Share: Top 20 IPTV Carriers, Worldwide, 1H09" "Forecast: IPTV Subscribers and Service Revenue, Western Europe, 2007-2013" "Dataquest Insight: IPTV Ecosystems, 2009" "Dataquest Insight: Forecast Assumptions for IPTV Subscribers and Revenues, Asia/Pacific, Japan and Western Europe, 2007-2013" "Leading IPTV Carriers and Their Technology Vendors, Worldwide, 4Q09 Update"

802.11n Analysis By: Timothy Zimmerman; Michael King Definition: 802.11n is the next-generation wireless LAN (WLAN) standard developed by the Institute of Electrical and Electronics Engineers. Improvements in the technology have expanded

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the throughput and range that can be implemented in 2.4GHz or 5GHz. A single spatial stream operating in a 20MHz channel width can achieve 75 Mbps in a single coverage area, compared with the 54 Mbps of a similar 802.11a or 802.11g solution. Theoretically, with 40MHz channel bonding, which is double the channel size of the previous standard, and with spatial streams increasing from only one to up to four, 802.11n is expected to deliver as much as 600 Mbps of networking performance using four spatial streams and expanded channels. However, actual performance will depend on each vendor's implementation of functionality, such as frame aggregation, which is not covered by the standard. 802.11n uses multiple input/multiple output antenna technology to create separate spatial streams that turn multipath conditions in the environment into an advantage, whereas previously they diminished 802.11a/b/g performance. Position and Adoption Speed Justification: Ratification of the standard in late 2009 unleashed a rapid movement of 802.11n as the de facto WLAN implementation. Dual soft radio access points, which are capable of providing 802.11n functionality as well as addressing 802.11a/b/g migration issues either in a dedicated or backward compatibility mode, have become a mainstay of WLAN RFPs. In most decisions, 802.1n access points are delivered as the rule, and 802.11a/b/g access points are implemented as an exception. The speed of adoption to a full fourstream 802.11n 600 Mbps will move ahead — but more slowly — as 300 Mbps dual radio twostream products provide mobility and more flexibility than the 10/100 Mbps wired infrastructure that they are replacing. User Advice: Enterprises need to deploy 802.11n for their WLAN needs, but they must remember that 802.11n is a framework, not just a physical standard, which means it represents a wider set of implementation choices for manufacturers than previous 802.11 physical standards amendments (that is, for 802.11a/b/g). This will create vendor differentiation and technical competition that not only will improve wireless network performance in terms of capacity and robustness of communication, but also will create the need for use-case testing because vendor implementation choices will affect data, voice and video applications. Enterprises need to remember that the wireless communication from the client to the access point is only one part of a wireless solution. Network application services that work in conjunction with the physical radios are needed to implement a complete WLAN solution and will provide a better area of vendor differentiation. Gartner recommends that enterprises deploy 802.11n 2.4GHz radios for legacy connection as well as address migration issues and 802.11n at 5GHz solutions for clients that need higher throughput. Business Impact: 802.11n is the de facto standard for "greenfield" or expanded WLAN connectivity. It is becoming a requirement for conference rooms and reception areas for many enterprises as it expands to more coverage to increase the mobility in the enterprise. We believe that 802.11n will enable sufficient bandwidth, functionality and network application services for enterprises to consider moving not only data, but also voice and video for many enterprise applications to the WLAN. Benefit Rating: Moderate Market Penetration: 5% to 20% of target audience Maturity: Adolescent Sample Vendors: Aruba Networks; Cisco; HP; Motorola Recommended Reading: "Magic Quadrant for Wireless LAN Infrastructure" "Toolkit: Technology Section of a WLAN RFP" "Toolkit: Checklist for Building a Solid WLAN Access Layer"

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"Critical Components of Any WLAN Site Survey"

HSPA+ Analysis By: Joy Yang; Sylvain Fabre Definition: HSPA+ is also known as HSPA Evolution and Evolved HSPA, the abbreviation "HSPA" standing for High-Speed Packet Access. The Third Generation Partnership Project's (3GPP's) Release 7 specification has HSPA+ theoretically achieving 28 Mbps on the downlink and 11 Mbps on the uplink by using downlink 16 quadrature amplitude modulation (QAM), uplink 16 QAM, and downlink 2x2 multiple input/multiple output (MIMO) technology. In Release 8, the HSPA+ downlink will rise to 42 Mbps by using 64 QAM with 2x2 MIMO. HSPA+ works in the same spectrum as current Universal Mobile Telecommunications System (UMTS) networks. The 3GPP requires HSPA+ to be backward-compatible with Release 99 (R99) UMTS and with R5 and R6 HSPA networks and devices. This makes it possible for operators to make use of their existing UMTS and HSPA investments. This analysis focuses on the frequency division duplexing (FDD) type of HSPA+. There is also a time division duplexing (TDD) version, which is an upgrade to Time Division Synchronous Code Division Multiple Access (TD-SCDMA). TD-SCDMA is a 3GPP TDD-based third-generation technology, which has been deployed on a large scale only by China Mobile. Position and Adoption Speed Justification: In December 2008, Telstra launched the first commercial HSPA+ service and achieved 21 Mbps on the downlink. Ericsson supplied the network solution, and Sierra Wireless provided the handset, which had a Qualcomm chipset. The network had been upgraded to 42 Mbps by the end of 2009. By April 2010, 46 networks had launched 21-Mbps services and six had launched 28-Mbps services. According to the GSM Association, 103 networks have made commitments to HSPA+. Also, 42 HSPA+ devices have been launched by 11 suppliers. Although the performance of Long Term Evolution (LTE) is better overall, on 5MHz bands HSPA+ is just as spectrally efficient. In May 2010 at the Shanghai Expo, Nokia Siemens Networks' demonstration of HSPA+ achieved a peak rate of 112 Mbps using 64 QAM, 2x2 MIMO and four bundled wideband code division multiple access (WCDMA) channels (20MHz of spectrum). With the deployment of HSPA+, some bandwidth-hungry mobile applications are becoming possible, such as mobile video. User Advice: Together with deploying HSPA+, network operators should consider transforming their service and control layers to improve their ability to enable and manage new applications, including voice over Internet Protocol (VoIP) and multimedia applications. Mobile device vendors should synchronize their HSPA+ handset road maps with operators' road maps for network rollout. They should also recognize that HSPA+ is good for the brand image of handset designs incorporating MIMO, which will be a key technology for LTE devices. Business Impact: HSPA+ will significantly improve the mobile broadband experience. It offers enhanced bandwidth and has the potential to increase voice capacity for VoIP services. The recession has made operators conservative about investing in LTE. The backwardcompatibility of HSPA+ enables them to provide high-performance mobile broadband services in phases, as demand arises, and to keep using their existing UMTS and HSPA networks for basic services in areas without HSPA+ coverage. For existing HSPA operators, there is the possibility of migrating to HSPA+ through a software upgrade, depending on their vendor. This would

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protect operators' UMTS and HSPA investments. Some operators, such as Vodafone, have chosen HSPA+ as a more cost-efficient technology than LTE. Benefit Rating: High Market Penetration: 1% to 5% of target audience Maturity: Early mainstream Sample Vendors: Alcatel-Lucent; Ericsson; Huawei; Nokia Siemens Networks; Qualcomm; Sierra Wireless; ZTE Recommended Reading: "The Impact of LTE on Corporate Wireless Strategy" "Dataquest Insight: Mobile Operators Must Manage Costs While Nurturing LTE Revenue" "Early Commercial LTE Networks To Reach Sweden, Norway" "Vendor Rating: Ericsson" "Market Share: Mobile Carrier Network Infrastructure, Worldwide, 2008" "Forecast: Carrier Network Infrastructure, Worldwide by Country, 2003-2014, 1Q10 Update" "Dataquest Insight: Femtocell Market is Unlikely to Take Off Before 2012" "Emerging Technology Analysis: Long-Term Evolution (LTE), Hype Cycle for Wireless Networking Infrastructure, 2008"

Mobile Application Stores Analysis By: Monica Basso; Charlotte Patrick Definition: Application stores offer downloadable applications to mobile users, mostly consumers, via a storefront that is either embedded in the mobile handset or found on the fixed or mobile Web. Application categories include games, travel, productivity, entertainment, books, utilities, education, travel and search. Applications are free or charged-for. Position and Adoption Speed Justification: Mobile application stores are targeted to smartphone users, mostly consumer and prosumers, mainly for entertainment applications, such as games and ring tones, or phone utilities, such as screen savers. One of the original application stores was offered by GetJar, and is still in the market today. With Apple's App Store introduction in 2008, the market saw a revival in interest. The company recently announced that there are now over 225,000 apps, there have been over 5 billion downloads, and it paid out over $1 billion in revenue sharing to developers (June 2010). The application store generated excitement in the market with free (sometimes advertisement-based) or charged-for applications, and has been a differentiator for the iPhone. Other handset and operating system (OS) manufacturers looking to create similar excitement with their phones and/or OSs have also introduced application stores, including Android Market (Google), Ovi Store (Nokia), BlackBerry App World (Research In Motion), Windows Marketplace for Mobile (Microsoft) and Palm Software Store (Palm). Carriers are also offering upgrades to their own application stores and offerings for their feature phones, with a view to exposing services such as billing, location and messaging to developers — e.g., Orange App Shop and Vodafone 360. A number of third parties, such as Handmark, GetJar and Qualcomm, offer whitelabel solutions to carriers.

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One example of an enterprise-specific application store is Citrix Dazzle, which works across a range of client and mobile devices, and provides a mobile app store for internal deployment (i.e., the enterprise runs the store). Due to the expectation that the adoption of smartphones and high-end feature phones will increase, along with the popularity of applications, we expect application stores to accelerate rapidly to the Plateau of Productivity in fewer than two years. User Advice: Application stores are a "scale game," and those offering them need to create some unique selling points that will bring developers to their stores, rather than those of their competitors. An "ecosystem" needs to be created in which developers have the tools to easily write and port applications; consumers can easily access, download and use applications; and all sides have visibility into the accounting of application sales and an efficient billing system that allows everyone to get paid in a timely manner. Enterprises are particularly interested in this type of smooth ecosystem, as it takes the guesswork out of the application business. Device manufacturers and software manufacturers are able to insert icons into the mobile device user interface so that users can easily access the application store. However, having an application store is not for every device manufacturer. Smartphone manufacturers that do not offer their own applications will need to offer applications via third parties and operators in order to compete in the market. Other handset manufacturers that primarily offer high-end feature phones (with proprietary OSs) should look to their partners to offer applications, such as operators or third-party application stores like Handmark or Handango. The choice of applications, how your customers obtain them, and their ease of use on the device are important, rather than owning your application store. In essence, operators have been offering application stores for a long time. They need to increase their selection of applications and fight for good discoverability on the device versus other competing stores. One option is to work with third parties to create virtual application stores that can compete with some smartphone application stores or can work together in the Wholesale Applications Community (WAC) initiative. Important components of these stores are ease of search, discovery and downloadability. Operators can also use their billing functionality to facilitate payments, location information to enhance applications and customer demographics to improve advertising inside the applications. Being on a carrier deck can be an advantage to a third-party application store, as this is still a strong channel. Carriers can also offer APIs to attract developers. Application providers and developers should look for application stores that are associated with popular handsets and that can create a good user experience, and should weigh that against the difficulty of developing and porting applications and the potential popularity of an application. It is also important to choose application stores that have good distribution in terms of outlets and service from the application development community. Other features of application stores that would benefit developers include advertisement support (like the Google model, to allow vendors to be "top of deck"), user reviews, rankings and recommendations (as with Amazon), and good billing and reporting features. Business Impact: Mobile application stores are likely to have an impact on: Smartphone manufacturers, allowing a different degree of differentiation, depending on the user experience and the selection of applications offered by the store. Wireless carriers, primarily because of their interest in data access.

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Applications providers, giving them access to additional customers in a well-organized ecosystem. Brands, which can advertise and segment customers based on applications. The biggest issue for any party wishing to provide an application store is that it is unlikely to be highly profitable, given the current market price points and the necessary startup costs. Media reports suggest that the Apple store does not make a profit, and that it is part of the company's broader "halo" strategy (encouraging third-party content and accessories that make the product more attractive) for the iPhone and iPod touch family. Also, for operators, there are some opportunities to drive data usage. For later entrants rolling out a "me-too" strategy, the issue will be how much money is worth investing and what, if anything, can be sold to developers, aside from the opportunity to reach a company's customer base. A range of parties has announced stores, although, in some initiatives, this might not have a high impact on their bottom lines. More joint initiatives like the WAC are likely to develop — especially with vendors of apps stores bringing smaller communications service providers (CSPs) in different geographies together — to get economies of scale. Benefit Rating: High Market Penetration: 5% to 20% of target audience Maturity: Early mainstream Sample Vendors: Apple; Google; Microsoft; Nokia; O2; Orange; Palm; Research In Motion; Vodafone Recommended Reading: "Marketing Essentials: How to Decide Whether to Start a Mobile Application Store" "Dataquest Insight: Application Stores; The Revenue Opportunity Beyond the Hype"

VDSL2 Analysis By: Ian Keene Definition: Very-high-bit-rate DSL 2 (VDSL2) (G.993.2) is the latest DSL standard to be ratified by the International Telecommunication Union (ITU), in May 2005. Theoretically, it can deliver asymmetrical or symmetrical aggregate bandwidth of 200 Mbps on twisted pairs at short distances (up to 100 Mbps downstream and upstream). There are claims of achieving 500 Mbps under laboratory conditions and vendor enhancements continue to stretch the achievable bandwidth when installed in typical copper networks. However, practical deployments are expected to deliver 20 Mbps to 70 Mbps services during the next two years. VDSL2 essentially doubles the downstream data rates delivered by VDSL and quadruples those delivered by asymmetric DSL 2+ (ADSL2+). Based on discrete multitone (DMT) line code, the VDSL2 standard specifies eight bandplans or profiles, optimized for different deployment scenarios. VDSL2 allows for operation in spectrum ranging from a minimum of 8MHz up to 30MHz, allowing for better performance under various loop length and noise/crosstalk scenarios. Its achievements include longer reach than VDSL (up to approximately 2.4 kilometers from the DSL access multiplexer [DSLAM]), and speeds of up to 100 Mbps symmetric on short loops. A significant feature is that VDSL2 uses Ethernet as a multiplexing technology, eliminating asynchronous transfer mode (ATM).

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Position and Adoption Speed Justification: While most service providers are still upgrading their networks to ADSL2+, VDSL2+ is being positioned for extra-strength triple-play — the delivery of high-speed data, voice and digital video with the capability of handling multiple highdefinition television (HDTV) streams. Its deployment is being spurred selectively in markets that are facing strong competitive threats from cable multiple system operators and broadband cellular services. For communications service providers (CSPs) that do not want to pull fiber all the way to the home, VDSL2 is seen as a potentially economical in-between step. CSPs can still use their legacy copper infrastructure, while being able to provision advanced services, such as Internet Protocol television (IPTV), video on demand, interactive gaming and peer-to-peer applications, all of which require not only high bandwidth, but also better upstream capability than was possible with earlier DSL flavors. The main deployments of VDSL2 will be where carriers are expanding their fiber networks out of the central office with a fiber-to-the-node (FTTN) architecture, and carrier delays in doing this have caused the slow initial build out of VDSL2. This brings the DSLAMs closer to the end user in order to benefit from the higher-bandwidth services that VDSL2 can provide over shorter copper loop lengths. Several carriers have deployed some VDSL2 in selected areas. With further expansion of FTTN, more trials and deployments are expected, particularly where there is competition from DataOver-Cable Service Interface Specification (DOCSIS) 3.0 cable services. Where there is less competition, deployments are not expected in the next two to three years and asymmetric DSL (ADSL) or ADSL2 will dominate. User Advice: Carriers should consider VDSL2 where there is a high likelihood of intense competition from DOCSIS 3.0 cable services or High-Speed Packet Access (HSPA) cellular services. Factor in the expected arrival of Long Term Evolution (LTE) cellular services in some areas from 2010. Be aware that performance degrades as loop length increases. The best deployment scenarios will be FTTN, fiber to the building (FTTB) or fiber to the curb (FTTC), with VDSL2 serving the rest of the copper-based access network outside and in-building. Building out the fiber infrastructure will be a significant cost factor for carriers in provisioning for VDSL2 services. To ensure extra bandwidth, carriers may want to consider VDSL2 equipment capable of channel bonding. Ensure that equipment is multimode and maintains a high standard of performance, while being backward-compatible with ADSL/ADSL2+. Carriers that have weak competition should consider whether ADSL2+ is sufficient to deliver any additional broadband services that are planned, such as IPTV and triple-play services, especially if uptake of HDTV is still sparse. Keep in mind, though, that ADSL2+ offers only about 1Mb of upstream bandwidth without ADSL2+ channel bonding. Business Impact: It will primarily be the residential and small or midsize business markets that will experience significant bandwidth upgrades because of VDSL2. The standard may also have an impact in providing cellular network backhaul. VDSL2 will prove popular in countries where regulators favor the unbundling of FTTH, making the business case for fiber direct to the premises weak. Benefit Rating: High Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: Alcatel-Lucent; Ericsson; Huawei; NEC; Nokia Siemens Networks; ZTE

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Recommended Reading: "Forecast Analysis: Carrier Network Infrastructure, Worldwide, 20052014, 2Q10 Update" "Forecast: Carrier Network Infrastructure, Worldwide by Region, 2006-2014, 2Q10 Update" "Forecast: Carrier Network Infrastructure, Worldwide by Country, 2003-2014, 2Q10 Update"

Climbing the Slope DOCSIS 3.0 Cable Analysis By: Ian Keene Definition: A cable modem is a piece of customer premises equipment (CPE) that modulates data signals over cable operators' hybrid fiber-coaxial infrastructure to deliver broadband Internet access. Data-Over-Cable Service Interface Specification (DOCSIS) is an international standard specified by CableLabs that defines a protocol for the bidirectional exchange of signal data between a cable modem and a cable modem termination system (CMTS) at the headend. DOCSIS 3.0, the latest version, was completed in 2006 and supports up to four times as much bandwidth as DOCSIS 2.0. It achieves this chiefly by: Bonding four or more 6/8MHz channels for downstream transmission rates of 160 Mbps or more and upstream rates of 120 Mbps or more. Incorporating statistical multiplexing, to give more users a higher peak capacity. Using version 6 of the Internet Protocol (IPv6) to expand IP address space. It also employs the Advanced Encryption Standard (AES) for more secure connections. DOCSIS 3.0 requires compatible modular CMTS equipment to enable channel-bonding in both downstream and upstream directions. A tiered qualification system allowed CMTSs to be partially feature-compliant with DOCSIS 3.0 until March 2009, after which time they must now be fully compliant with all portions of the specification. Position and Adoption Speed Justification: Cable operators worldwide are demanding ultrahigh-speed products, so that they can compete more effectively against advanced digital subscriber line (DSL) and fiber-to-the-home (FTTH) services. In addition, mobile operators are offering attractive High-Speed Packet Access services. As a result, most high-profile cable operators in North America, Europe, Asia/Pacific and Japan have upgraded a significant portion of their infrastructure to be DOCSIS 3.0-ready. Consumer services are steadily being rolled out through 2010. In the U.S., Comcast continues to increase its "DOCSIS 3.0-ready" footprint. But other U.S. operators may reserve deployment of this higher-priced, more feature-laden equipment for markets where FTTH services, such as Verizon's FiOS offerings, put them at a disadvantage. Generally, services are limited to 50 Mbps. Providing higher speeds will require even further investment in their infrastructure. However, J:Com in Japan provides a 160-Mbps service and Virgin Media in the U.K. is testing a service of 200 Mbps. In Europe, the Middle East and Africa, and in Asia/Pacific, adoption is expected to be swift in the most competitive markets. Some cable operators will use the technology to leapfrog ASDL bandwidth offerings, bundle services and help to reduce customer churn. Worldwide adoption of DOCSIS 3.0 equipment will grow rapidly from 2010 to 2014. User Advice: Volume manufacturing of DOCSIS 3.0-based products has intensified. While the consumer market is the main target of the operators, enterprise and small and midsize business

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(SMB) customers might want to consider these solutions for their remote workers or for their offices. With the addition of DOCSIS 3.0 in their portfolios, cable operators wanting to attract SMBs will now have more solutions to offer targeted segments of the commercial sector, beyond using out-of-band overlay technologies that provide Ethernet-type bandwidth or direct fiber connections. Business Impact: The initial impact of DOCSIS 3.0 equipment will be mainly on the residential consumer market. Higher transmission rates of 100 Mbps and greater will give cable operators more effective competitive firepower against very-high-bit-rate DSL 2 (VDSL2) and FTTx-based competitors to meet the demands of early adopters of ultra-high-speed connections, keen gamers and high-end consumers, who will use the extra speed to download videos, play multiplayer interactive games and to access other media content from the Internet. Next-generation gateway devices with DOCSIS 3.0 channel-bonding technology will also set the stage for cable operators to combine their CPE solutions with "whole house" video solutions for multiroom video networking and other services. The longer-term impact of ultra-high-speed broadband also has the potential to change many aspects of pay-TV business models and the video content consumption habits of users, as more video content migrates to the Internet and availability of, and access to, this content on an "on-demand" basis takes place over broadband connections using PC-based displays, rather than via the TV using set-top boxes or the TV itself. Until Internet content is easily available on TVs, broadband networks using ultra-high-speed connections and simple home networking/whole house video technologies will predominate. Benefit Rating: High Market Penetration: 5% to 20% of target audience Maturity: Early mainstream Sample Vendors: Arris; Cisco; Motorola; Netgear; Thomson Recommended Reading: "Forecast Analysis: Carrier Network Infrastructure, Worldwide, 20052014, 2Q10 Update" "Forecast: Carrier Network Infrastructure, Worldwide by Region, 2006-2014, 2Q10" "Forecast: Carrier Network Infrastructure, Worldwide by Country, 2003-2014, 2Q10 Update"

Network DVR Analysis By: Fernando Elizalde Definition: Network digital video recorders (DVRs), also known as network personal video recorders (PVRs), are similar in consumer function to their stand-alone DVR/PVR counterparts; enabling consumers to record, store and play back content with DVD-like functions. The primary difference is that a stand-alone DVR has storage on a hard drive within the set-top box, while a network DVR stores on to the service provider's network. For larger operators, the required network storage will grow to be in the thousands of terabytes. Network DVRs have evolved into two primary versions: in one, consumers make pre-determined decisions as to what they will record; in the other, the service provider records all video content, or selects broadcast channels which are then available to the consumer for an established number of days. There are also hybrids; the consumer may have a combination of both versions, and there are implementations of combined network DVR and set-top DVRs.

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Position and Adoption Speed Justification: Internet Protocol television (IPTV) and cable operators are interested in the technology as a way to provide value-added services to their customer base. Despite its attractiveness as a customer retention mechanism and generator of incremental revenue, network DVR (in particular the version in which consumers make predetermined decisions) presents network storage capacity and quality of service (QoS) issues that need to be addressed. To date, most network DVRs deployed worldwide provide access to programs already broadcast for an established number of days. The majority of the deployments have occurred outside the U.S.; IPTV operator FastWeb in Milan, Italy, was one of the first IPTV operators to offer a network DVR product. British IPTV operator Talk Talk TV (previously, Tiscali TV) started offering selected time-shifted capabilities, start-over services and network DVR on selected shows in early 2007. A number of other European carriers have moved to the same type of network DVR solution, including: Orange, Free and SFR (formerly Neuf) in France; BT Vision in the U.K.; Imagenio in Spain; Teo LT in Lithuania for its Gala TV IPTV service and On Telecoms in Greece for its On TV service. In China, several cable and IPTV operators offer most channels on demand after the real-time broadcast. In the U.S., Time Warner Cable has been very successful with a reduced version of a network DVR, called Start Over, where a viewer can watch a broadcast show already in progress from the beginning. Verizon also introduced a network-based catch-up service (without the capability to fast-forward during commercials) for selected shows, which are available for a few days after being broadcast. These types of services are welcomed by broadcasters because the system does not permit skipping over commercial breaks. In the U.S., copyright issues dating back to 2006 (between cable operator Cablevision and a group of media companies) held back full network DVR services. The American Court of Appeal effectively took a copyright perspective position that a network DVR is the same as a set-top DVR. The U.S. Supreme Court refused to hear a final appeal on the matter in August 2009, leaving the road clear for Cablevision (and others) to deploy network DVR services. However, Cablevision has not yet renewed network-based DVR capabilities. In other markets, the copyright issues have been sorted out in a different manner. For example, in the U.K. and France the broadcasters make a selection of their programming available to pay-TV service providers for distribution on their network DVR. In Greece, On TV asks its subscribers to sign an authorization for it to record shows on their behalf (for 72 hours) on to the operators' servers. Network DVRs where consumers decide what to record on the operators' servers have seen limited deployments worldwide. The complexity, size of storage capacity, and stress on the network — together with copyright issues and cost of storage capacity — have pushed large operators away from network DVR platforms to successfully deploy premium set-top box DVRs. This type of consumer-driven network DVR platform is most often implemented in small IPTV deployments; for example Teo's Gala TV in Lithuania, Invitel and Wist in Poland, Iskon in Croatia, Amis in Slovenia and Minsk TV in Belarus. User Advice: Regional implementations will vary because of copyright laws and their interpretation; carriers must be prepared to address these discrepancies with different strategies and innovative ideas. No matter what the regional differences are, operators must have a working relationship with the studios and networks. A network DVR can offer significant benefits over a set-top box DVR. For example, network DVRs can handle how advertisements are treated — from not allowing advertisements to be skipped over, to enabling the advertiser to update and replace old advertisements for more targeted advertising. However, for large operators, set-top box DVRs are better positioned to address consumer recording decisions; this solution avoids issues around service provider network capacity and copyright, and results in less capital expenditure.

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Business Impact: Network DVR will affect most, if not all, of the players in the consumer pay-TV value chain. For consumers, its positioning facilitates greater time-shifting and movement to an "on-demand" environment. Cable and telecommunications companies benefit from lower capital and operating expenditures, but satellite operators will be the losers if they fail to emulate the network DVR services (by providing hard drives in the set-top boxes) to compensate for a lack of a return path in their offering. Benefit Rating: Moderate Market Penetration: 5% to 20% of target audience Maturity: Early mainstream Sample Vendors: Alcatel-Lucent; C-Cor; Cisco/Scientific Atlanta; Ericsson/Tandberg Television; Espial; Microsoft Recommended Reading: "Emerging Technology Analysis: Internet TV, Global Consumer Communications Services" "Forecast: IPTV Subscribers and Service Revenue, Worldwide, 2007-2013" "Dataquest Insight: Worldwide IPTV Growth to Remain Steady, but not Spectacular" "Leading IPTV Carriers and Their Technology Vendors, Worldwide, 2Q09 Update"

Switched Digital Video Analysis By: Ian Keene; Juan Fernandez Definition: A switched digital video (SDV) system is part of a service provider's video network infrastructure. It enables transparent delivery of multicast and unicast video programs to consumers from a network-based switch fabric. It works with the traditional video programming delivery system that sends linear broadcast video to all cable customers. The term SDV describes a collection of network elements that groom, stage, encrypt and send a broadcast video channel through a hybrid fiber-coaxial (HFC) network at the end user's request. An SDV system controls the delivery of broadcast video programs by managing the session and the edge resources available on each service group's edge quadrature amplitude modulation (QAM) modulators. SDV client software for end-user set-top boxes is also part of the system. Using an SDV system, network operators can move blocks of linear video programming channels to a multicast switched environment, thus freeing up large amounts of bandwidth on HFC-based networks to support the expansion of high-definition (HD), niche, on-demand and other programming content tiers. With each HD program using four times more MPEG-2 bandwidth in an HFC network than a standard-definition program, HD programming is particularly bandwidthintensive, especially given many cable operators' slow implementation of more efficient Advanced Video Coding (AVC) schemes — such as MPEG-4 Part 10/H.264 — in headends and digital settop boxes. In addition to improved bandwidth utilization, an SDV system enables greater resource efficiencies, such as QAM sharing between video on demand (VOD) and SDV. It also paves the way for future revenue-generating opportunities, such as targeted advertising and nextgeneration personalized television applications. Position and Adoption Speed Justification: During 2009 the regulatory uncertainty that kept investment restrained in the U.S. subsided and investment in SDV by mayor players like Comcast and Time Warner accelerated. Canadian multiple service operators (MSOs) also accelerated the pace of deployments. European deployments have increased gradually in 2009 and 2010.

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With competitive pressure mounting for MSOs to add more HD channels to compete with satellite and fiber-to-the-home offers, MSOs are becoming more aggressive in deploying bandwidth enhancement solutions to solve this challenge, and this is driving SDV adoption. Although SDV is only one way for MSOs to optimize and expand their available bandwidth, the technology has significant support from most leading vendors in the space. This support translates into the use of significant R&D resources to solve some of the challenges of integrating the technology into a very heterogeneous mix of set-top boxes. Some of these challenges, such as interoperability with TiVo digital video recorders that use CableCARDs to access cable channels, mean that some devices cannot tune to SDV channels without a special set-top box. However, the replacement cycle for some of these platforms continues to erode this limitation, and the cable industry is working with consumer electronics firms to develop customer premises devices known as tuning resolvers. Another potential benefit of SDV adoption is the added flexibility that the technology provides in terms of enabling more granular and targeted advertising, which could optimize advertising revenue. SDV also has potential in markets outside North America as cable providers introduce HD programs and as 860 (or lower) MHz-based networks experience capacity shortages. European operators introduced SDV technology to their networks in 2009. User Advice: Operators must weigh the potential costs, benefits and operational complexities of SDV against those of a number of other bandwidth optimization and expansion technologies. Business Impact: SDV technology is only one of a number of bandwidth optimization tools at cable service providers' disposal, but it has the potential, in the short term, to deliver bandwidth efficiencies as high as 50%. In addition, SDV will enable network service providers to reuse other common video network infrastructure elements for multiple purposes, thereby increasing the efficiency of their spending on VOD, digital program insertion, advertising insertion servers for dynamic advertisement placement in VOD streams, and more targeted "zone-based" advertising (tied to SDV service groups, for example). Benefit Rating: Moderate Market Penetration: 20% to 50% of target audience Maturity: Early mainstream Sample Vendors: Arris; BigBand Networks; Cisco/Scientific Atlanta; Ericsson/Tandberg Television; Motorola

FTTH Analysis By: Peter Kjeldsen Definition: Fiber-to-the-home (FTTH) is deployed as the most radical way (in terms of cost and performance), to facilitate very-high-speed broadband access. This high performance can be achieved, due to the ultra-high bandwidth of single-mode optical fibers. The high cost associated with the technology is related to the civil works involved when installing the fibers. There are two categories of FTTH technology: point-to-point (PTP) and point-to-multipoint passive optical networks (PONs). The former is standardized by the International Telecommunication Union's (ITU) G.985 specification and the 802.3ah standard from the Institute of Electrical and Electronics Engineers (IEEE). The latter comes in three types: Broadband PON

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(BPON, ITU-T G.983), Gigabit PON (GPON, ITU-T G.984) and Ethernet PON (EPON, IEEE 802.3ah). Note that 10G PON and wavelength division multiplexing PON are not included in this FTTH profile, as these two technologies are covered separately. Position and Adoption Speed Justification: Communications service providers (CSPs) are already deploying or planning to deploy significant amounts of FTTH-related fiber in several countries, including the U.S., Japan, South Korea, France, the Netherlands, Denmark, Norway, Sweden, Australia, Singapore, Greece and Portugal. As the cost of FTTH equipment decreases and deployment techniques improve, FTTH has proved to be the most future-proof, secure, reliable and bandwidth-agile technology for broadband access, and increasingly, for multimedia and video services delivery. As a result, FTTH has been gaining momentum in the market, although the high per-user capital expenditure (mainly related to the fibers and construction costs) remains as a barrier to even wider deployments — especially as end-users are reluctant to pay more simply for getting additional bandwidth. Successful FTTH deployments will increasingly depend on CSPs also investing in appropriate content delivery networks (CDN) and in some cases CSPs will favor near-term oriented CDN investments over longer-term FTTH deployments. The speed of adoption of FTTH is linked to CSPs in triple- or quad-play infrastructure and services, but also depends significantly on the competitive and regulatory situation that an operator faces. Service offerings and deployments do vary and will continue to vary significantly by country and region. As such, the position of FTTH on the Hype Cycle should be understood as a "geographic mean" of deployments across different geographies. Additionally, note that FTTH is moving more slowly toward the Plateau of Productivity than most other technologies, simply because of the huge investment and effort required to deploy it. The impact of the financial crisis, by default, tends to be bad news for large, strategic and longerterm investments like FTTH — with some CSPs opting for shorter-term very-high-bit-rate DSL (VDSL2) investments instead. However, some of the government stimulus packages have offset this and added to the heterogeneous picture seen across different geographies for FTTH. User Advice: Decide on the relative importance of short, medium and long-term successes before comparing FTTH with other broadband access technologies. When making risk assessments, be sure to incorporate an analysis of the particular regulatory environment concerned and to take the impact of relevant government stimulus packages into account. Be aware that while most FTTH business cases are justified — at least partially — by expectations of new revenue streams associated with video services, it is typically a strategic, competitive challenge or opportunity that triggers FTTH deployments. An example is Verizon's deployment of FTTH as a response to rival, cable operators' move to DOCSIS 3.0 and AT&Ts comparable services for ultra-high-speed broadband. Note that the popularity of the different types of FTTH varies in different regions. The main explanation for this is that the choice of technology is closely related to the type of CSP — mainly incumbent operators vs. utility and local government deployments — and that regional variations in the type of CSP that invests in FTTH, drive regional differences in the choice of technology. With future revenue estimates being intrinsically uncertain, it is vital for CSPs to accurately estimate the reduced operational expenses that typically follow a FTTH rollout (due to fewer active nodes and the passive nature of the infrastructure). Business Impact: The primary business impact will be the availability of higher bandwidth in the residential and small to midsize business markets. However, the long reach of FTTH systems Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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allows CSPs to operate with fewer active network nodes, which, along with the passive nature of the infrastructure, can have a significant impact on the operational expenses of CSPs deploying this technology. Benefit Rating: Transformational Market Penetration: 5% to 20% of target audience Maturity: Early mainstream Sample Vendors: Alcatel-Lucent; Calix; Cisco; Ericsson; Huawei; Mitsubishi; Motorola; NEC; PacketFront; Tellabs; ZTE Recommended Reading: "A Business Model for Next-Generation Broadband Access (February 2006 Update)" "Governments Can Bring Moore's Law to Broadband Access (February 2006 Update)" "Why Governments Should Care About Fiber-to-the-Home" "Australian Government Addresses Competition Problem with National Fiber-to-the-Premises Plan" "Tutorial: Green Perspectives of Fiber-to-the-Home; Ecology of Scale and Economy of Scale Join Forces"

MPEG-4 Advanced Video Coding Analysis By: Ian Keene; Juan Fernandez Definition: MPEG-4 Part 10, or MPEG-4 Advanced Video Coding (AVC), is the standard defined by the Moving Picture Experts Group (MPEG) for compressing audio and visual data for: Web (streaming media) and CD/DVD distribution; voice (telephone, videophone); and broadcast, cable, satellite and Internet Protocol television (IPTV) applications. It is part of the larger collection of MPEG specifications introduced in late 1998, which were designated as the standard ISO/IEC 14496 for a group of audio and video coding formats and related technologies. MPEG-4 AVC is technically identical to the standard known as H.264 for video compression issued by the International Telecommunication Union's (ITU's) Telecommunication Standardization Sector (ITUT), which coordinates standards for telecommunications on behalf of the ITU. The H.264 and MPEG-4 Part 10 standards are jointly maintained so that they have identical technical content. MPEG-4 AVC aims to provide good video quality at significantly lower bit rates (half or less of the bit rates of MPEG-2, H.263 or MPEG-4 Part 2), without an increase in the complexity of design, which would make it impracticable or too expensive to deploy. It also aims to be flexible enough to enable the standard to be applied to a wide variety of applications on a wide variety of networks and systems. The key features of the technology, which is embedded in encoders, decoders, receivers, set-top boxes (STBs) and other devices, include: significantly improved coding efficiencies (which reduce the amount of bandwidth required for video transmissions); the ability to encode mixed media data (video, audio, speech); error resilience for robust transmissions; and the ability to interact with the audio-visual scene generated at the receiver. Position and Adoption Speed Justification: MPEG-4 AVC technology has been adopted in many countries by digital terrestrial broadcasters (for Digital Video Broadcasting — Terrestrial [DVB-T]), a number of national and international programming suppliers, and select carrier/service provider networks for the transmission of high-definition television (HDTV) content over satellite, cable and IPTV systems. It is also under consideration for mobile broadcasting. Next-generation optical video disc formats include the H.264/AVC High Profile element as a

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mandatory player feature, and MPEG-4 is part of the Blu-ray Disc format of the Blu-ray Disc Association (BDA). The DVB standards body in Europe approved the use of H.264/AVC for broadcast television in Europe in late 2004. The Advanced Television Systems Committee (ATSC) standards body in the United States is considering the possibility of specifying one or two advanced video codecs for its optional Enhanced vestigial sideband (E-VSB) transmission mode for use in U.S. broadcast television. France has selected H.264/AVC as a requirement for receivers of HDTV and pay-TV channels for digital terrestrial broadcast television services, as have numerous other countries in Europe, the Middle East and Africa. In Asia, South Korea's Digital Multimedia Broadcasting service uses the standard; the Freeview DVB-T service is used in New Zealand; and in Hong Kong, broadcaster TVB will also use H.264 for its digital and HD transmissions. NHK and Fuji Television in Japan have adopted the advanced compression technology. In terms of mobile video broadcasting, the Third Generation Partnership Project (3GPP) has approved the inclusion of H.264/AVC as an optional feature in Release 6 of its mobile multimedia telephony service specifications. In Japan, mobile terrestrial broadcast services using Integrated Services Digital Broadcasting — Terrestrial (ISDB-T) technology will use H.264/AVC codecs. Programmers and service providers are adopting advanced compression technologies to save transponder capacity on the satellites they use to transmit their programming to customers nationally and globally. IPTV operators such as AT&T and others rely heavily on the bandwidth efficiencies of MPEG-4 AVC to enable IP video services to operate within the boundaries of strictly allocated broadband data rates per household. Many cable operators still have a significant installed base of MPEG-2-based headend encoders and STBs. While they are moving more aggressively toward adopting MPEG-4, it is expensive to overhaul their entire customer base with MPEG-4-compatible STBs. Dual MPEG-2/4 codec cable STBs are continuing to enter the market, particularly as more customers take an HD service tier and get their STB upgraded in the process. User Advice: Cable service providers need to align their business plans with their technology evolution plans with regard to MPEG-4 AVC. The technology is a key enabler of HDTV, and the overall strategy for promoting HDTV should dictate how aggressive cable operators need to be in transitioning STBs that are MPEG-4-enabled. Furthermore, integration of Web-based and cable delivery in business models will drive the transition to more advanced codecs that will enable a multiscreen strategy. Cable service providers must weigh the costs and operational effects of implementing MPEG-4 AVC in terms of operational efficiency improvements and revenue generation. This includes calculations for STB swap-outs and whether this can be accomplished with self-install kits, which will be key to understanding the real cost of migration to MPEG-4. Programmers that have finite satellite transponder capacity will need to consider MPEG-4 AVC as they move to HD programming formats, to stay within the bounds of their transponder "real estate," or else they may need to lease additional capacity. Business Impact: Implementation of advanced video encoding technologies will be crucial to the success of network service providers' operational efficiency for video, and their attempts to pursue additional revenue. This will enable cost savings due to lower bandwidth and capacity requirements, as well as new revenue from HDTV content. Additionally, the technology will be important for the contribution and distribution of content, especially in video-on-demand distribution systems. Benefit Rating: High Market Penetration: 20% to 50% of target audience

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Maturity: Early mainstream Sample Vendors: Cisco; Ericsson/Tandberg Television; Harmonic; Harris; Motorola; Technicolor

TD-SCDMA Analysis By: Joy Yang; Sandy Shen Definition: Time Division-Synchronous Code Division Multiple Access (TD-SCDMA) is China's homegrown third-generation (3G) standard for cellular networks. It requires only a single frequency spectrum to provide the uplink and the downlink, unlike FDD which requires a pair of frequencies. This is a possible advantage as there is a lot of unused time division duplexing (TDD) spectrum globally. Position and Adoption Speed Justification: China Mobile received a TD-SCDMA license on 7 January 2009, to become the only carrier running this technology. Given China Mobile's financial and managemental strength, TD-SCDMA may have a chance to keep its place in the market. In addition, trial networks have been set up in South Korea, and will also appear in Taiwan. These developments are mostly driven by politics, and although they give momentum to TD-SCDMA in the short term, we still believe this technology will become obsolete before reaching maturity, as Long Term Evolution (LTE) is expected to leapfrog TD-SCDMA before it reaches the Plateau of Productivity. So far, China Mobile's 3G network covers 238 cities. By the end of 2009, it had 3.41 million 3G subscribers. Currently, China Mobile is heavily prompting stakeholders in the mobile industry to ripen TDD LTE. China Mobile has formed an ecosystem with integrated circuit, mobile device and mobile infrastructure vendors to develop TDD LTE solutions. TDD LTE was demonstrated by vendors including Motorola, Nokia Siemens Networks, Ericsson, Huawei and ZTE at the 2010 Shanghai Expo, to test its performance. TDD LTE is gaining momentum with the support of vendors in the ecosystem. Major TD-SCDMA equipment vendors have claimed that current TD-SCDMA Node Bs will be able to able to migrate to TDD LTE with software upgrades. Very likely, China Mobile, the only TD-SCDMA communications service provider, will adopt TDD LTE as soon as it is ready for commercial use. This leaves limited room for a TD-SCDMA market. User Advice: Companies should resist signing up for TD-SCDMA data services until performance and indoor coverage improve. In the meantime, they should look at 3G options from other carriers that operate mature technologies such as wideband code division multiple access (WCDMA) and cdma2000. Business Impact: TD-SCDMA could adversely affect China Mobile's performance if it fails to live up to expectations. Vendors with multiple product lines are less exposed to the risks presented by TD-SCDMA. Benefit Rating: Low Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: Alcatel-Lucent; China Putian; Datang Telecom; Ericsson; Huawei; Nokia Siemens Networks; ZTE Recommended Reading: "Dataquest Insight: Opportunities From China's Reorganization and Shake Up of the Telecom Industry"

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High-Speed Uplink Packet Access Analysis By: Joy Yang; Sylvain Fabre Definition: High-Speed Uplink Packet Access (HSUPA) is also called Enhanced Uplink in Third Generation Partnership Project release 6. It is a standard for fast data uploads over Universal Mobile Telecommunications System networks and is integral to the third-generation (3G) cellular technology known as wideband code division multiple access. HSUPA complements High-Speed Downlink Packet Access (HSDPA) by increasing upstream data bit rates on 3G networks. At present, it is widely deployed at 2 Mbps, but the technology has been developed to support a theoretical maximum of 5.76 Mbps at cell level. HSUPA also improves latency, which will typically fall to 80 milliseconds (ms). In addition, the technology shortens round-trip times to approximately 70 ms. The aim is for HSUPA and HSDPA to deliver symmetrical uplink and downlink data rates, so that 3G networks can support applications such as videoconferencing. The two technologies share many of the same techniques, such as adaptive modulation and hybrid automatic repeat request. Position and Adoption Speed Justification: By May 2010, 100 communications service providers (CSPs) in 53 countries had launched HSUPA services, according to the GSA, compared with 77 in 2009. The uplink speed has been improved from 2 Mbps to 5.76 Mbps, which was deployed by 36 CSPs. Currently, 609 HSUPA devices are available, of which 281 can support, or are upgradable to, a peak of 5.76 Mbps or higher. User Advice: The improved uplink data rates delivered by HSUPA benefit knowledge workers and make it easier to upload user-generated content from mobile devices, but nobody should expect this technology to provide true "mobile broadband." Instead, it should be viewed as an improvement to 3G technology. However, in 2008, an uplink speed of 500 Kbps was typical, which has now been increased to 2 Mbps, and this helped to start a change in behavior, with more content uploads (social networking, YouTube and more), and generally higher data usage. Factors such as flat-rate pricing, better device user interfaces (as on the iPhone) and subsidized laptops also contributed. Corporate buyers should not make long-term commitments to any mobile data technology, but should use the various competing technologies and operators as leverage when negotiating contracts with carriers. Carriers must continue to manage the cost of backhaul carefully, because it will keep rising as data rates increase, making flat-rate charging an unsustainable policy. Business Impact: The effect will be faster access to mobile data services. Benefit Rating: High Market Penetration: 20% to 50% of target audience Maturity: Early mainstream Sample Vendors: Alcatel-Lucent; Ericsson; Huawei; Nokia Siemens Networks; ZTE Recommended Reading: "Hidden Costs and Performance Issues in HSDPA May Surprise Mobile Operators"

Mobile TV Broadcasting Analysis By: Carolina Milanesi

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Definition: The broadcasting of digital TV programs to cellular handsets using technologies such as Digital Video Broadcasting — Handheld (DVB-H), Terrestrial Digital Multimedia Broadcasting (T-DMB) and MediaFLO. Position and Adoption Speed Justification: 2009 was not an exciting year for mobile TV broadcasting. Most communications service providers (CSPs) offering this service were still delivering it for free and wondering how to make money from it. But there were some developments. Nokia, the biggest advocate of DVB-H, made a significant change of direction. From integrating DVB-H technology in mobile devices such as the N96, it shifted to providing an add-on solution. Mobile CSPs in New Zealand and Indonesia started offering video broadcasting services, and a trial began in Saudi Arabia. However, CSPs in markets such as Italy struggled to increase their subscribers, and, for some, business was so bad that they shut services altogether. The 2010 FIFA World Cup brought a major investment in Africa by broadcaster MultiChoice, which chose DVB-H as the technology to reach millions of football fans across the continent. Regional differences in the approach to mobile TV broadcasting were highlighted by, for example, ESPN's decision to take the application route to delivering tournament coverage to subscribers in the U.S. Despite a focus on digital broadcasting in the past few years, the numbers show that analog is the winner when it comes to mobile TV. For example, semiconductor company Telegent Systems, which has been providing free-to-air analog and digital solutions since 2007, saw a strong increase in demand for analog products during the past year. Connected devices other than mobile phones are also becoming interesting mediums through which to deliver mobile TV services. For example, at the end of 2009, chip provider Siano announced that leading portable navigation device (PND) vendors such as Garmin would integrate its mobile digital TV receiver chips into devices. As competition from smartphones grows, PND manufacturers are looking for ways to differentiate their offerings. Integrating TV and information delivery into in-car systems is one such way. As we anticipated in previous research, free-to-air has proved to be the only type of mobile TV service that attracts large numbers of subscribers. With more applications becoming available that offer time-shifting and Web-based video services, Gartner continues to believe that TV on mobile phones will remain limited. However, new device form factors, such as media tablets, may open up new opportunities for the integration of mobile TV receivers. If priced appropriately, these devices could be the first screen for many consumers in emerging markets. User Advice: CSPs looking to offer mobile TV broadcasting services in countries where an analog service is still available should consider using analog technology in preference to digital, as this would limit any risks in relation to the availability of digital spectrum. Mobile phone makers considering support for mobile TV broadcasting should look at offering integrated solutions for analog TV and accessory options for digital TV, in order to maximize buyers' options. Phone sleeves that function as chargers and receivers are an interesting option. Content providers should evaluate the return on investment from creating ad hoc mobile content. Consumers might be happy to receive non-mobile-specific content, if the service offered by the CSP is free.

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PC producers and broadcasters should assess media tablets as devices through which to deliver TV services to consumers in emerging markets. Business Impact: Mobile TV broadcasting will affect all areas of video production, rights management, syndication and advertising. Benefit Rating: Moderate Market Penetration: 5% to 20% of target audience Maturity: Adolescent Sample Vendors: DiBcom; LG; Qualcomm; Samsung; Telegent Systems; Texas Instruments Recommended Reading: "Dataquest Insight: Mobile TV Looking at Free-to-Air to Stimulate Adoption"

GMPLS/ASON Analysis By: Peter Kjeldsen Definition: The Internet Engineering Task Force's Generalized Multiprotocol Label Switching (GMPLS) standard and the International Telecommunication Union's Automatically Switched Optical Network (ASON) standard enable communications service providers (CSPs) to automate their transport networks by means of an intelligent control plane and associated signaling. GMPLS/ASON functionality can be applied to different types of fiber optical transport network, such as Synchronous Digital Hierarchy/Synchronous Optical Network (SDH/SONET), Optical Transport Network (OTN — as per the G.709 standard from the International Telecommunication Union) and emerging packet-oriented transport solutions such as Multiprotocol Label Switching Transport Profile (MPLS-TP). Position and Adoption Speed Justification: Adoption of these standards started slowly, but will speed up as CSPs upgrade and automate their transport networks to cost-effectively support bandwidth-hungry video services. GMPLS/ASON technology is adopted primarily by carriers that need to automate their transport networks; although it started as a technology only for the largest carriers, it is now starting to find its way to smaller networks as the wavelength count in these networks is increasing beyond the "automatization threshold." While CSPs need to rapidly add bandwidth to their infrastructure, it is rare that they need to take bandwidth away, so this relatively monotonous growth scenario does not utilize the full flexibility offered by GMPLS/ASON technology — which easily could cater for more dynamic provisioning scenarios. Examples of such dynamic requirements are starting to appear — one example being AT&T's Optical Mesh Service, where the ability to reallocate bandwidth as needed, by increasing or decreasing capacity in near real-time, is central to this offer in the business segment. User Advice: Investments in GMPLS/ASON must be justified by operational savings from the automation of tasks that previously were manual or semi-manual. The larger the network, and the larger the amount of traffic, the easier it is to justify this kind of investment. An additional prove-in factor is the ability to handle complex (and even malicious) failure scenarios by means of sophisticated protection schemes. Over time, as the technology matures and the cost comes down, it is to be expected that GMPLS/ASON will change character and will eventually be considered as merely "table stakes," rather than as a key differentiator.

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Business Impact: GMPLS/ASON enable service providers to optimize network operations by replacing centralized, network management-controlled manual procedures with decentralized, signaling-controlled automated ones. Benefit Rating: Moderate Market Penetration: 20% to 50% of target audience Maturity: Mature mainstream Sample Vendors: Alcatel-Lucent; Ciena; Ericsson; Fujitsu; Huawei; Nokia Siemens Networks; ZTE

Interactive TV Analysis By: Andrew Frank; Michael McGuire Definition: Interactive TV refers to any platform that enables two-way television services, such as electronic program guides (EPGs); video on demand (VOD); interactive advertising; games; and information, transaction and communication services. Interactive TV can consist of local or network interactions, but must support some return path to a network-based station that can collect data, process transactions and so on. Position and Adoption Speed Justification: Interactive TV has taken nearly 20 years to make its Hype Cycle journey, since it first emerged in trials in the early 1990s. During this long period, its architecture, design and business models have changed considerably, and they continue to do so. First-generation interactive TV applications, in general, did not include a return path to provide such services as EPGs, interactive games and information services. We are now entering an era where a return path is seen as essential for both commerce and measurement, and the model for providing it is a key point of competition. Another key factor affecting the speed and nature of interactive TV adoption is the division between "bound" and "unbound" applications. Bound applications are tied to a specific channel's video programming context, and delivered within that channel's bandwidth, while unbound applications are persistent and decoupled from a channel or program. Unbound applications can be delivered through the bandwidth managed by a cable or Internet Protocol TV (IPTV) provider, or through an open Internet connection to a TV or set-top box (STB; referred to as "over-the-top" or OTT). Bound applications require less storage and, therefore, can run on more legacy STBs. Bound applications are now clearly within five years of widespread adoption, while the time frame for unbound applications is hazier, but probably also within a five-year horizon. Bound applications tend to have limited return path capacity, and sometimes achieve this using out-of-band channels such as wired or wireless telephony, or store-and-forward polling methods. These methods are satisfactory for simple network applications such as product ordering, requests for more information, or polling and voting applications. More-complex group interactions such as gaming and social networking generally require more bandwidth, although clever work-arounds are abundant and likely to proliferate in the next few years. In the U.S., cable companies serve roughly 60% of the TV audience, and their approach to interactive TV is invested in Canoe Ventures, a spin-off from the industry's R&D arm, CableLabs, which has been promoting the Enhanced TV Binary Interchange Format (EBIF) standard under the SelecTV brand announced in early 2010. Initial applications are centered on RFI response overlays for TV commercials. Early last year, the industry produced estimates that about 32 million U.S. households would be live with EBIF by the end of 2009; the industry fell far short of

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this goal and recent estimates (June 2010) suggested 30 million by the end of 2010. Another issue for EBIF is variation in implementations (known as user agents) that result in a relatively small range of universally interoperable application possibilities. Nonetheless, EBIF clearly represents the first significant penetration of interactive TV capabilities in the world's leading TV market. A longer-term standard from CableLabs that supports both bound and unbound applications is tru2way (formerly OCAP), which has been licensed by STB and TV manufacturers, but is lagging behind the industry's deployment timetable by a far greater margin than EBIF, despite having publicly committed in 2008 to having tru2way capable digital cable systems by 1 July 2009. U.S. satellite TV providers have also licensed tru2way, and have the capacity to serve bound applications using EBIF or other technologies, such as the TiVo platform. IPTV providers, still a small minority in the U.S., have already deployed proprietary unbound application platforms. In Europe and South Korea, Digital Video Broadcasting Multimedia Home Platform (DVB-MHP) is available over the air on at least 20 million STBs, often with a telephone-service-based return path (wired or wireless). In the U.K., MHEG-5 has been deployed by Freeview (a digital terrestrial TV service reaching 70% of U.K. households) and Freesat (a joint satellite venture between the BBC and ITV), while OpenTV has been deployed by Sky TV satellite service. These deployments offer interactivity, but no return path. To address this, Project Canvas, another collaboration between BBC and ITV that includes BT, is developing a new interactive platform for free-to-air television that employs Internet connectivity to deliver two-way applications in a hybrid fashion. All these developments add up to a picture of accelerated deployment for interactive TV over the next five years, although questions persist about its ultimate business value, which is usually conceived to be based on enhanced advertising and television commerce (t-commerce) capabilities (including VOD movie rentals and games). While advertisers, merchants, manufacturers and content licensors generally acknowledge the promise of interactivity and addressability, there is scant proof that the value that these applications deliver will be enough in the near term to offset the cost and complexity of these platforms, especially given the legacy of engineering costs sunk into the pursuit of these visions over the years. Nevertheless, while revenue from interactive advertising and t-commerce may be unproved, the infrastructure for interactive TV will also provide access on the TV set to popular Internet-based services, such as Internet TV and social networking. Interactive TV is far more likely to achieve mass adoption now, compared to the 1990s, because it can leverage Internet behavior, rather than having to invent new behavior patterns. User Advice: Service providers need to align with their regional industry groups and negotiate collectively for interoperable standards that allow their network platforms (cable, satellite, IPTV, broadcast and online video) to remain competitive and economical to develop for. Service providers also need to focus on multiscreen strategies (TV, PC and mobile) for service bundling and integration. Broadcasters and content providers should focus on how to incorporate standardsbased interactivity into programming in order to bring more value to both audiences and sponsors. Manufacturers should resist the temptation to create differentiation on the level of standards implementations that would undermine interoperability, and seek advantage on the application level instead (such as better support for Internet TV and video device controls).

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Advertisers and ad agencies need to press for control over metrics and reporting standards, and work to ensure full transparency in interactive TV advertising markets. All commercial parties should focus in the near term on partnerships and alliances in the newly forming "ecosystem" for interactive TV services, and hedge their bets on any single technology solution. Regulators should focus on ensuring fair competition among service providers and standards bodies, and be aware that technology is creating media environments in which legacy regulations are often inapplicable or irrelevant. Business Impact: Cable, satellite and IPTV operators have a substantial opportunity to increase their revenue share from advertisers and direct marketers by offering interactive features that can support transactions and consumer engagement. Consumer electronics, middleware and STB vendors face potentially decisive competition over where to strike the right balance between features and cost. TV networks and advertisers, for which DVR-based ad skipping and Internet advertising spending shifts are significant disruptive trends, rely on interactive features, along with more-dynamic targeting, to shore up the value of the TV medium to advertisers. Benefit Rating: High Market Penetration: 5% to 20% of target audience Maturity: Adolescent Sample Vendors: BBC; Canoe Ventures; Ensequence; Ericsson Television; Intel; Invidi; MediaFriends; OpenTV; Rovi; Yahoo

Mobile TV Streaming Analysis By: Carolina Milanesi Definition: The streaming of live television from cellular networks to mobile handsets using narrowcasting or multicasting technology. Position and Adoption Speed Justification: As we anticipated in 2009, the popularity of YouTube and services such as BBC's iPlayer continued to gain momentum because of the increased browsing capabilities that many smartphones and feature phones now possess. These services put more power in the hands of the consumer in terms of what content to watch and how to watch it. This, combined with the fact that users do not need to subscribe to a separate service or acquire a specific TV-enabled device, represents an attractive proposition. Peer-to-peer video and sideloading remain the most popular forms of video consumption on mobile devices. Larger screens, higher resolution and touch functionality all help to deliver a much richer video experience. Among more traditional providers of streaming TV services, MobiTV is the most successful. It provides streaming services to operators across the Americas, working with content partners such as Disney, NBC, ESPN and Fox. Subscribers to the service have now passed the 7 million mark. Sport remains the strongest driver for streaming, as well as live services, as shown by the spikes in viewership in the U.S. registered by MobiTV during the National Basketball Association Playoffs on ESPN. MobiTV showed the 2010 FIFA World Cup live from South Africa on ESPN Mobile TV. One possible enabler of the uptake of mobile TV streaming is the rollout of Long Term Evolution (LTE) networks. Operators are looking to deploy LTE technology to increase network speeds and capacity, but they might face the same issues they encountered with their wideband code division

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multiple access rollouts in terms of finding a "must have" service. That said, the network speed and capacity that these networks will offer are ideal for video streaming. Video might, therefore, be the easiest "killer app" operators could use to market LTE. But we will have to wait to find out, as we do not expect LTE-enabled phones to be available across the world at mass-market prices before 2014. User Advice: Mobile operators offering TV- and video-streaming services need to look for solutions that help to optimize their networks, so they can ensure that delivery of crucial services such as e-mail are not adversely affected by TV streaming. LTE might be an opportunity to increase the quality of the video streamed because of the higher bandwidth available. Price remains key for consumers, so flexible pricing will encourage adoption. Business Impact: Mobile TV and video streaming have an impact on mobile data services, the production of content and content rights. Benefit Rating: Moderate Market Penetration: More than 50% of target audience Maturity: Mature mainstream Sample Vendors: MobiTV; YouTube Recommended Reading: "Dataquest Insight: Application Stores; The Revenue Opportunity Beyond the Hype"

Next-Generation Voice Analysis By: Deborah Kish; Bettina Tratz-Ryan Definition: Next-generation voice refers to the network architecture, equipment and protocols needed to replace the traditional time division multiplexing public switched telephone network (PSTN) with voice over Internet Protocol (VoIP), and to provide enhanced voice functions and applications in both fixed and mobile networks. In mobile networks, the architectural design for next-generation voice includes a IP Multimedia Subsystem (IMS) core, as well as the Global System for Mobile Communications Association's (GSMA's) voice over Long Term Evolution (LTE) — VoLTE — initiative. These approaches allow mobile communications service providers (CSPs) to deploy telephony in an efficient way while moving to upgrade their networks to accommodate broadband-based multimedia services. Position and Adoption Speed Justification: Approaches to next-generation voice are helping CSPs to reduce the cost of delivering telephony services. Although voice services don't constitute revenue growth because of their low ROI, they do provide a steady income stream, so CSPs have to reduce the cost of delivering them while simultaneously innovating toward provisioning new voice-enabled service bundles, particularly in fixed networks. In the case of mobile voice, the cost to provide it is relatively low, but the ROI is considerably higher. IMS in the core will complement LTE when mobile next-generation voice becomes available. CSPs are under pressure to maintain good quality voice services, so are working toward improving the quality to high-definition voice. User Advice: Continue to investigate and take advantage of the benefits of open and standardized technology architectures with interoperable interfaces, such as Session Initiation Protocol. Investigate the benefits of telephony emulation using VoIP rather than IMS architecture for multiservice delivery. Users should evaluate advanced features accurately, ignoring technology hype while acknowledging true added value and understanding the key benefits.

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Vendors and CSPs should participate in initiatives such as Rich Communication Suite (RCS) and work with software and handset vendors to improve interoperability and speed up time to market. Business Impact: The impact of next-generation voice is widespread and will affect CSPs, their corporate customers and residential users, and vendors of next-generation voice technology. VoIP will increase competition between service providers, and should encourage the appearance of a wide range of new Web application providers, such as Google and Skype, as well as cable operators offering voice services. Lower price points due to increasing competition and lower production costs will encourage residential users and enterprises to adopt services at an increased rate. Government initiatives will encourage service providers to increase their reach and upgrade their networks. Benefit Rating: High Market Penetration: 20% to 50% of target audience Maturity: Early mainstream Sample Vendors: Alcatel-Lucent; BroadSoft; Cedar Point Communications; Cisco; Ericsson; Huawei; Italtel; Metaswitch Networks; Motorola; NEC; Nokia Siemens Networks; Veraz Networks; ZTE Recommended Reading: "Magic Quadrant for Softswitch Architecture" "Forecast: Voice Switching, Control and Applications, Worldwide, 2004-2013 (2Q09 Update)" "Market Trends: Carrier Network Infrastructure, Worldwide, 2009" "Magic Quadrant for LTE Network Infrastructure"

ROADMs Analysis By: Peter Kjeldsen Definition: Reconfigurable optical add/drop multiplexers (ROADMs) are the wavelength division multiplexing (WDM) equivalent of the add/drop multiplexing that has been used in the Synchronous Digital Hierarchy (SDH) and Synchronous Optical Network (SONET) markets for more than a decade. ROADMs enable communications service providers (CSPs) to automate the way individual wavelengths of WDM systems are routed through their networks, mainly in ring configurations, with protection switching and easy provisioning being the major benefits. ROADMs are a trade-off between capital expenditure (capex) and operating expenditure (opex); where a capex premium is paid (relative to less-dynamic WDM solutions) to save on subsequent opex. In Gartner's market statistics for optical transport systems, ROADMs are included in the optical exchange equipment (OXE) segment; which includes all types of node equipment that handle traffic in the optical domain without relying on client-layer functions (such as those provided by SDH/SONET). The OXE segment also includes optical switches and optical cross-connects. Position and Adoption Speed Justification: ROADM equipment is currently being deployed; especially in large, bandwidth-hungry networks that are being enabled for video services. Many CSPs are already investing, or planning to invest during the next year or two. User Advice:

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Be sure to weigh the opex advantage offered by ROADMs against their intrinsic capex premium; ensuring that investment decisions are made from an appropriate total cost of ownership point of view. Smaller CSPs are likely to find that they will not have the same economic incentives to invest in ROADMs as larger CSPs, simply because of the lower wavelength count in their networks. Equipment vendors should focus their ROADM marketing efforts on midsize and large CSPs, and on those that are early adopters of bandwidth drivers — such as fiber to the home and Long Term Evolution. Business Impact: By automating wavelength handling, ROADMs enable CSPs to achieve "bitwise economies of scale" as well as faster, and more flexible, provisioning in their WDM networks. Benefit Rating: Moderate Market Penetration: 20% to 50% of target audience Maturity: Early mainstream Sample Vendors: Adva Optical Networking; Alcatel-Lucent; Cisco; ECI Telecom; Fujitsu; Huawei; Nokia Siemens Networks

Entering the Plateau Residential VoIP Analysis By: Deborah Kish; Bettina Tratz-Ryan Definition: Residential voice over Internet Protocol (VoIP) is a telephone service delivered via broadband cable or DSL connections using specialized end-user customer premises equipment (CPE), primarily a telephone adapter that is integrated with, or attached to, a broadband modem and associated headend/central-office broadband access platforms. These platforms include either Internet Protocol DSL access multiplexers (DSLAMs) for telcos or cable modem termination systems (CMTSs) for cable operators, along with softswitches and other associated call and customer management servers and software. Residential VoIP can be a managed service that provides quality of service (QoS), or a best-effort service, such as Vonage and magicJack, that plugs into an existing broadband connection or PC, but does not provide a managed service with QoS. Service providers can provide these services themselves over their own networks or they can offer VoIP that is hosted and managed by a third party. We do not define PC-to-PC-based calling services, such as Skype, which are best-effort "over the Internet" services, as residential VoIP services. Position and Adoption Speed Justification: Residential VoIP has been growing at an average of 26% and will continue that momentum through 2014. Government initiatives, such as those in the U.S., Germany and Australia, have been under way over the last two years in order to bring broadband to rural, unserved and underserved areas, which is expected to bring a spike in growth of residential VoIP by an additional 5% between 2009 and 2012 globally, while CSPs in rural areas complete roll-outs. Growth in broadband varies region to region, for example in mature markets it is expected to be anywhere from 60% to 80% by 2014 (such as, Iliad in France), whereas in emerging markets penetration varies depending on the size of the access network, but on average by the end of 2014, broadband penetration will be 20%.

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Fixed line replacement has been happening gradually over the last five years and globally, traditional wired line replacement is expected to drop by 4%. In mature markets it is forecast that wired line will drop 9% by 2014, from 85% to 76%, whereas in emerging markets the penetration is much less to begin with but replacement rate is lower. In emerging markets, wired connections will drop by 3%, from 37% penetration to 34%. While mobile broadband will be a major factor of fixed line replacement, this will be most evident in emerging markets. User Advice: Service providers need to look beyond voice services to find ways to differentiate themselves from competing providers, including "over the top" competitors such as Google and Skype. They need to add value to the VoIP platform by offering cross-platform integration with data and multimedia services, as well as integrating fixed and wireless platforms that can be used with any device. At a time when consumers are looking for ways to cut spending, service providers need to find ways to encourage subscribers to add services and pay for them at lower additional costs. An example of this would be developing software pricing models in which consumers can download additional features if they pay for the license. Look for variations of CPE to include gateway devices that incorporate combinations of broadband modems, voicesignaling adaptors, multiport routers and Wi-Fi access points or femtocells. Business Impact: Residential VoIP is delivering on the promise of new service and revenue opportunities. Its bundling with broadband is having a positive effect on the uptake of services and, in many cases, of digital video services as well. In an IP Multimedia Subsystem (IMS) environment, it also serves as an additional platform for integration with broadband data and video services, as integrated portals are emerging to manage all services from a single location. Caller ID on televisions, voice mail on PCs and televisions, voice-to-text or voice-to-e-mail services, single voice mailboxes for mobile and fixed lines, and the ability to view call logs are becoming common, offering greater simplicity and convenience to consumers, and increasing productivity and the perceived value of the bundle. As technology platforms become more converged, the portability and mobility of applications will increase. Residential VoIP can be used with traditional "black phones" or dedicated IP phones, however it is a matter of preference of the end user as to what kind of terminal is used. For residential users, we do not anticipate an uptake in IP phones, rather base station phones since the device needs to be plugged directly into the modem or router limiting the location of a single terminal. Benefit Rating: High Market Penetration: 20% to 50% of target audience Maturity: Mature mainstream Sample Vendors: Arris; AT&T; BT; Cablecom; Cablemas; Cablevision; Cablevision Systems; Cedar Point Communications; Charter Communications; Cisco; Comcast; France Telecom; Jupiter Telecommunications; Megacable Comunicaciones; Motorola; Nokia Siemens Networks; Nortel; Rogers Communications; Shaw Communications; Telenet; Telenor; TeliaSonera; Time Warner Cable; UPC; Verizon Communications; Videotron; Vonage Recommended Reading: "Forecast: Consumer Fixed Voice, Internet and Broadband Services, North America, 2007-2013" "Forecast: Consumer Fixed Voice, Internet and Broadband Services, Europe, 2007-2013" "U.S. Government Signs American Recovery and Reinvestment Act" "U.S. Broadband Initiative: Advice for Applicants and Telecom Vendors"

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"German Government to Enforce the Broadband Data 'Autobahn'" "Dataquest Methodology Guide: Consumer Fixed Voice, Internet and Broadband Services, Worldwide" "Key Issues for Consumer Services, 2009"

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Appendixes Figure 3. Hype Cycle for Communications Service Provider Infrastructure, 2009

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Source: Gartner (July 2009)

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Hype Cycle Phases, Benefit Ratings and Maturity Levels Table 1. Hype Cycle Phases Phase

Definition

Technology Trigger

A breakthrough, public demonstration, product launch or other event generates significant press and industry interest.

Peak of Inflated Expectations

During this phase of overenthusiasm and unrealistic projections, a flurry of well-publicized activity by technology leaders results in some successes, but more failures, as the technology is pushed to its limits. The only enterprises making money are conference organizers and magazine publishers.

Trough of Disillusionment

Because the technology does not live up to its overinflated expectations, it rapidly becomes unfashionable. Media interest wanes, except for a few cautionary tales.

Slope of Enlightenment

Focused experimentation and solid hard work by an increasingly diverse range of organizations lead to a true understanding of the technology's applicability, risks and benefits. Commercial off-the-shelf methodologies and tools ease the development process.

Plateau of Productivity

The real-world benefits of the technology are demonstrated and accepted. Tools and methodologies are increasingly stable as they enter their second and third generations. Growing numbers of organizations feel comfortable with the reduced level of risk; the rapid growth phase of adoption begins. Approximately 20% of the technology's target audience has adopted or is adopting the technology as it enters this phase.

Years to Mainstream Adoption

The time required for the technology to reach the Plateau of Productivity.

Source: Gartner (July 2010)

Table 2. Benefit Ratings Benefit Rating

Definition

Transformational

Enables new ways of doing business across industries that will result in major shifts in industry dynamics

High

Enables new ways of performing horizontal or vertical processes that will result in significantly increased revenue or cost savings for an enterprise

Moderate

Provides incremental improvements to established processes that will result in increased revenue or cost savings for an enterprise

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Benefit Rating

Definition

Low

Slightly improves processes (for example, improved user experience) that will be difficult to translate into increased revenue or cost savings

Source: Gartner (July 2010)

Table 3. Maturity Levels Maturity Level Embryonic

Status In labs

Products/Vendors None

Emerging

Commercialization by vendors Pilots and deployments by industry leaders

First generation High price Much customization

Adolescent

Maturing technology capabilities and process understanding Uptake beyond early adopters

Second generation Less customization

Early mainstream

Proven technology Vendors, technology and adoption rapidly evolving

Third generation More out of box Methodologies

Mature mainstream

Robust technology Not much evolution in vendors or technology

Several dominant vendors

Legacy

Not appropriate for new developments Cost of migration constrains replacement

Maintenance revenue focus

Obsolete

Rarely used

Used/resale market only

Source: Gartner (July 2010)

RECOMMENDED READING "Understanding Gartner's Hype Cycles, 2010" "Forecast: Carrier Network Infrastructure, Worldwide by Region, 2006-2014, 2Q10" "Forecast: Carrier Network Infrastructure, Worldwide by Country, 2003-2014, 2Q10 Update" "Forecast Analysis: Carrier Network Infrastructure, Worldwide, 2005-2014, 2Q10 Update" "Dataquest Methodology Guide: Carrier Network Infrastructure, Worldwide" "Key Issues for Carrier Network Infrastructure, 2010" This research is part of a set of related research pieces. See "Gartner's Hype Cycle Special Report for 2010" for an overview.

Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Publication Date: 30 July 2010/ID Number: G00205256 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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