The NGN is for Future? Victor Chiu 邱武志 Vice President Chunghwa Telecom Labs 右腦思維看 NGN Next Generation Network Right Brainer Creates.

Slide 1 The NGN is for Future? Victor Chiu 邱武志 Vice President Chunghwa Telecom Labs 右腦思維看 NGN Next Generation Network Right Brainer Creates Slide 2 CHT Proprietary 2/71 The NGN is for Future? 1.TL - Telecom Labs 2.Link the telecom services with Maslow‘s law 3.The human brain, the universe, the Internet 4.The Internet is broken 5.NGN is coming to the Rescue? 6.Light speed NGN in CHT (Chunghwa Telecom) 7.Taiwan matters 8. Paradigm shift: the Ad is the King 9. Concluding remarks Slide 3 中華電信研究所 右腦思維看 TL - Telecom Labs Slide Show Slide 4 CHT Proprietary 4/71 Taiwan: an ICT Island worldwide No. 1 Wi-Fi DSL CPE IP STB PC/Notebook Ethernet SW VoIP Router IP Phone e-Government Slide 5 CHT Proprietary 5/71 Source: ITU Slide 6 CHT Proprietary 6/71 Convergence service at CHT HOME BusinessPersonal VOBB PSTN 3.5G ADSL FTTx ISP Mobile Datacomm US$6Billions Slide 7 CHT Proprietary 7/71 Chunghwa Telecom TL - Telecom Labs 中華電信研究所 翠 1. 人文薈萃 1300 人 2. 資源充沛 (NT$300 萬 / 人 ) 3.10% 自主創意研發 4. 內外兼修 5. 國際化 6. 鳥語花香 7. 上 日 下 月兩湖 8. 鳥鳴蛙叫 9. 松 楓 櫻 野薑花 10. 濕地松 落羽松 11. 原生種植物列管 12. 數 ( 樹 ) 位造林 節能減碳 CSR Slide 8 CHT Proprietary 8/71 2. Link the telecom services with Maslow‘s Hierarchy of Needs Slide 9 CHT Proprietary 9/71 Paradigm Shift: from technology to user Time Importance Today Technology-driven Paradigm Customer-oriented Paradigm User-centered Paradigm Paradigm Shift ! Paradigm Shift ? 賣方市場買方市場共生市場 Slide 10 CHT Proprietary 10/71  Focus  Best Technology!  R&D for Technology not for customer  Characteristics  Conducted by Experts  Traditional marketing concept 4 P or 4C  Issues:  The returns may not always be proportional to the efforts  New products could not meet Users’ Needs Traditional old good days (1/2) 賣方市場 Slide 11 CHT Proprietary 11/71 Traditional old good days - 4P (2/2)  Product  The effect of differentiation is decreasing  The rise of No-Brand strategy  Price  The price is not equal to the value  Price-cutting competitions cause the bottleneck  Red ocean  Promotion  Advertisement lacks creativity  Customers are easy to lose their patience  Place  The depression of specialized channels  Customers could purchase at anytime on the internet easily. 賣方市場 Slide 12 CHT Proprietary 12/71 Customer-oriented- 4C (Deregulated Market) 3. Communication Be active to Communicate with customers 4. Convenience Be active to offer Conveniences for customers 1.Customer Needs Be active to find out Customers’ needs 2. Cost Be active to find out customers’ expected Costs ( Customer-oriented 4Cs, Complements of 4Ps) Customer-oriented 4Cs by Robert Lauterborn 買方市場 (1/2) Slide 13 CHT Proprietary 13/71 Building Customer’s Loyalty: 4Rs  Relevancy among Needs and Professions (Product -> Customer’s Need -> Relevancy)  Reward (Retribution) to Customers (Price -> Cost -> Reward)  Relationship (CRM) (CVM) (Promotion -> Communication -> Relationship)  Re-action/Response immediately (Place -> Convenience -> Re-action) Complemented by Don. E. Schuhz  Target : to build Customers’ Loyalty 買方市場 (2/2) Slide 14 CHT Proprietary 14/71 User-Centered Logic  Focus :  Abstracting Users’ Creativities & Innovations!!!  Users would be the Sources of Creativities.  Characteristics: Interactions between the operators and users - Users’ Participation  Issues ： - How to transfer users’ passive attitude into Active Users’ Participation? -How to Make Money from these creativities? 共生市場 (1/2) UGC: User Generated Content Slide 15 CHT Proprietary 15/71 共生市場 (2/2) Customers  Users = Human being Customer = Who Pays e.g. Entrepreneur, Advertiser… User = Operator Including: Entrepreneur, Employees, Client’s Customers, Client’s Suppliers, Client’s Shareholders, …etc. 共生市場 - 大家都是 CHT 的老爺 Slide 16 CHT Proprietary 16/7116 Maslow‘s Hierarchy of Needs (1954 Edition) Slide 17 CHT Proprietary 17/71 Maslow’s Hierarchy of Human Needs (8 level) Abstracted from Abraham Maslow (1908-1970 ) ”Personality Theories” (1970 edition) Safety needs protection, security, order, law, limits, stability, etc Aesthetic needs beauty, balance, form, etc Cognitive needs knowledge, meaning, self-awareness Esteem needs achievement, status, responsibility, reputation Belongingness and Love needs family, affection, relationships, work group, etc Transcendence helping others to self-actualize Self-actualization personal growth, self-fulfilment Biological and Physiological needs basic life needs - air, food, drink, shelter, warmth, sex, sleep, etc. NGN Broadband Services Transcendence: go beyond; aesthetic: appreciation of the art Slide 18 CHT Proprietary 18/71 Web 2.0 vs. Human Needs Safety needs Aesthetic needs Cognitive needs Esteem needs Belongingness and Love needs Transcendence Self-actualization Biological and Physiological needs NGN Broadband Services Community’s Interaction Participation Self- Expression by Sharing Goal Achievement Authority/Power Esteem Position/Status Belongingness Safety EnthusiasmPerfectionism !? Interaction Participation Sharing 獨立性、受肯定、成就感、休閒時 間、權力、聲望、財富、壓力、自 尊、家庭、安全感、成長 Slide 19 CHT Proprietary 19/71 Examples of User- Centered Google AdSense  Inter-dependency To Build good Inter- dependent relationship with users, furthermore, for coexistence with them.  Participation & sharing Participation & Sharing by users  Users’ III…  Incentives  Innovation  Invention  Value  Emphasized on Integrated Value (products, customers, users, brands…)  Generating Profits from offering Integrated Value User-oriented “Users’ III… are VIPs” Slide 20 CHT Proprietary 20/71 The human brain, the universe, the Internet Slide 21 CHT Proprietary 21/71 The universe? Internet Map from WiKi The brain network? The Internet! Slide 22 CHT Proprietary 22/71 Magical Human Brain (1/2)  Functions of left and right brain  In his famous book Blink, Malcolm Gladwell, a staff writer for The New Yorker since 1996, explained how the human subconscious interprets events or cues and how past experiences allow people to make informed decisions in the blink of an eye. R( 右 ) L( 左 ) rhythm 節奏 spatial awareness 空間認知 Gestalt (whole picture) 全形 imagination 想像 daydreaming 白日夢 colour 顏色 dimension 大小 words 文字 logic 邏輯 numbers 數字 sequence 順序 linearity 線性 analysis 分析 lists 清單 資料來源：工業技術研究院創意中心 Right brainer creates Slide 23 CHT Proprietary 23/71 Magical Human Brain (2/2)  When involved in higher mental activity, including perception, problem solving, fear, and consciousness, the EEG of human brain is often recorded as Gamma rhythms, with frequency ranging approximately 26–100 Hz.  James Watson, who won the Nobel Prize for helping discover DNA, described the human brain as “the most complex thing we have yet discovered in our universe”. “the most complex thing we have yet discovered in our universe” ri them Electroencephalography (EEG) is the measurement of electrical activity produced by the brain as recorded from electrodes placed on the scalp.electricalbrainelectrodes Slide 24 CHT Proprietary 24/71 Network of Human Brain  A typical human brain contains some 100 billion nerve cells, each of which connects and communicates with up to 10,000 of its colleagues, and forming a million new connections for every second of our lives.  The pattern and strength of the connections is constantly changing and extremely difficult to be simulated by computers.  Human brain has great potential… Light speed network is for the network of human Brain! Slide 25 CHT Proprietary 25/71 The Internet is broken Slide 26 CHT Proprietary 26/71 廢舊換新 網路面臨革命 聯合報 4/15/2007 Slide 27 The Internet is Broken? Slide 28 CHT Proprietary 28/71 Hypotheses design of Internet  Traffic flows are to be able to trust, every end point is well-behaved.  Network fairness rely on the well-behaved end points, the Internet is supposed no management to them. The communication protocols are supposed to work with rules, once the congestion is detected, they lower generating packets to the internet automatically End points pay costs ： buffer 、 jitter Diffserv 、 MPLS-TE 、 NSIS 、 RSVP are invented to patch the Internet ， however ， the original Internet design has become a barrier Slide 29 CHT Proprietary 29/71 The original design of Internet  Is not designed for commercial, including telecom Best-effort  The network seems to be a black box, and does not provide information of network allocation to end points Network administrators nowadays hope to see more information from network  IPv4 mobility issues Mobile IP is introduced ， with the problems of IP address cost 、 triangle transition IPv6 with embedded mobility  Multicast is a patched function it is still under question whether the benefits implied by the introduction of IP Multicast would compensate and overreach the complexity of its deployment and management in the network level. Slide 30 CHT Proprietary 30/71 Basic Principle of Internet  Connectionless 、 End-to-end 、 Best effort Original design ： connectionless 、 transmit ion of packet of variable length RSVP 、 MPLS-TE 、 DiffSer without constrains of traffic, it permits end points transmit packets to any other end points directly, and gives up the responsibility of security security issues such as junk mail 、 DDOS  IPSec is introduced ， increasing the overhead of end points Two end points may communicate without intermediate servers  cache 、 firewalls are introduced ， without considering the issues of IMS 、 SIP… Slide 31 CHT Proprietary 31/71 How could Internet keep progressing?  Patch is the only solution as a doctor’s operation The solution has always been patching the Internet issue individually, however, this way increases the complexity of Internet, makes the Internet more difficult to manage, and makes new application more difficult to be adopted. 例如針對出現的問題個別解決，在目前體系上增加容量 ，這是一直以來的方式， 但增加了 Internet 的複雜性，變得更難以管理、新應用更難以適應 Internet has been Ossified, it’s difficult to patch ！  Revolution ？ By the end of 2003, US NSF funded ”100x100 clean slate project” with $750M GENI 、 PlanetLab Ethean Orbit …. Slide 32 CHT Proprietary 32/71 NGN is coming to the Rescue?  The patched-Internet based technology  QoS  IMS  FMC  Triple play/ Quadruple play  SDP, SOA  Ecosystem  Let’s wait and see Slide 33 CHT Proprietary 33/71 Next Generation Internet is evolving  GENI - Global Environment for Networking Innovations (NSF)  Clean-Slate design for the Internet (Stanford University)  100x100 clean slate project  ORBIT  Ethane: A Security Management Architecture  FIND - Future Internet Network Design  Autonomic Communication Forum Slide 34 CHT Proprietary 34/71 100x100 Clean Slate Project  … if we were not bound by existing design decisions and would be able to design the network from first principles (a clean slate design), how should we do it? supports 100 Mbps of connectivity between all 100 Million American homes Slide 35 CHT Proprietary 35/71 PlanetLab  Key ideas Slice Substrate resources bound to a particular experiment Virtualization multiple architectures on a shared infrastructure Programmable virtually no limit on new designs Slide 36 CHT Proprietary 36/71 Prof. Dr. Dr. h.c. Radu Popescu-Zeletin ： Next generation Networks R&D Programme and Directions Slide 37 CHT Proprietary 37/71 Autonomic communication  AutoComm Applicability and Expectations In human-to-human Network elements transparently to humans... In business-to-business More seamlessly integrated into business tasks and environments In human-to-machine Perform services autonomously, or adjust the behavior of services the user might request implicitly or explicitly In machine-to-machine Help components to self-organize into composite entities, optimally providing required complex functions Fraunhofer Fokus ： Autonomic Communication Research Agenda for a New Communication Paradigm Slide 38 CHT Proprietary 38/71 Principles: Autonomic communication  Autonomic communication principles Gigabit over wireless will be the backbone Ad hoc wireless network will take over fixed networks Ubiquitous composability of P2P services On-demand protocol stack IPvX will not remain the only networking morpheme Self scalable (evolvable) systems Group communication for control plane tasks: programmable and controlled Policy will self-organize via policy computation and distributed conflict resolution and policy context Programmable rule-based systems Design for conflicts Role-based architecture Context awareness Self-similarity of selfware Security:auditing and danger models Autonomic routing composition Fraunhofer Fokus ： Autonomic Communication Research Agenda for a New Communication Paradigm Morpheme: like(1), unlikely(3) 语素 Slide 39 CHT Proprietary 39/71 Moving to NGI from current Internet current Internet Multicast complexity Mobie IP solutions: triangle routing, IP address issues RSVP DiffServ MPLS-TE IPSec for security issues NAT issues DDOS issues Firewall solutions Next Generation Internet NGN IMS FMC SDP SOA Quadruple play Disruptive/Clean slate innovation The patched Internet Slide 40 CHT Proprietary 40/71 Light speed NGN in Chunghwa Telecom Slide 41 CHT Proprietary 41/71 Means: Light-Speed NGN in Chunghwa Telecomm “not only speed & quality, but also instantaneously sharing & joining together. Because of high speed, anyone onto the NET acts into the same moment.” 賀陳董事長：「光世代」不只意味著網路使用上的高速度，與優質的傳輸品質，還帶有分享與 參與零落差的意義，「因為快速，讓每個人都可藉由網路融入在同一個剎那。 –HeChen Dan, Chairman Chunghwa Telecom Co., Ltd. FTTH, a kind of big thing, a big TRANSFORMATION! Slide 42 CHT Proprietary 42/71 CHT Broadband Network Evolution 2005200620072008 2009 2010 FTTB+xDSL Ethernet-based FTTB & FTTH NGN FTTH WiMAX / B3G NGN-FMC 10M High Quality Internet Surfing Differentiated Service Triple Play Services 100M Slide 43 CHT Proprietary 43/71 3 Broadband Plans in Taiwan 2002 2004 U-Taiwan 2003 M-Taiwan e-Taiwan project initiated in 2002 M-Taiwan plan in 2003 U-Taiwan plan in 2004  6 million broadband users by 2010.  Platform for Broadband applications and services.  FTTH and WiFi, WiMAX e-Taiwan Slide 44 CHT Proprietary 44/71 Regulator decides who win(s) ( 螳螂捕蟬 黄雀在後 獵人全看在眼裡 ) Telco IT/ISP Cable Slide 45 CHT Proprietary 45/71 Taiwan matters Slide 46 CHT Proprietary 46/71 46 Source: III Slide 47 CHT Proprietary 47/71 47 Source: III #1 Provider of notebook PCs, with 72% of the market worth $22 billion May 06, 2005 Slide 48 CHT Proprietary 48/71 48 Number of U.S. patents and rank Note: Number of U.S. patents (excluding new design) Source: U.S. Patent and Trademark Office, 2005 ’00-04’ USA JapanGermanyTaiwanKorea UK FranceCanada Italy (cases) (year) ’00-04’ Source: III Slide 49 CHT Proprietary 49/71 49 Paradigm Shift in the US 典範移轉 1900~19301930~19601960~1990 1990~2000 2000~ 美國鋼鐵 Steel 通用汽車 IBM Microsoft Intel What’s Next GAMeY? Source: III Slide 50 CHT Proprietary 50/71 50 World wide Software and Hardware in 2001 主要製造產業主要創意及內容產業 類別全球市場規模類別全球市場規模 造船 Ship 460 動畫 Animation 750 半導體 Semicon 1,390 遊戲 Game 1,704 記憶體 Memory 249 電影 Movies 677 影像顯示 Display 144 音樂 Music 337 影音設備 A/V 381 漫畫 Carton 1,220 鋼鐵 Steel 4,915 廣播及電視 Radio &TV 1,780 總計 ( 不含鋼鐵 ) 2,624 總計 6,468 總計 7,539 Unit: hundred million USD Source: KOCCA, Korea, 2003/10 Source: III Slide 51 CHT Proprietary 51/71 10. Why Right-Brainer Will Rule the Future? ‘Shakespeare invented humanity’ 右腦的世界 Slide 52 CHT Proprietary 52/71 52 Why Right-Brainer Will Rule the Future? 2 Story: Not just argument 1 Design: 理念的设计 Not just function 3 Symphony: Not just focus 4 Empathy: 同理心 Not just logic 5 Play: Not just seriousness Meaning: Not just accumulation 6 CEO CFO CIO/CTO Chief Creative Officer CCO Source: A whole new mind, Daniel H. Pink 2005 6 abilities of high concept Source: III CCO is coming Slide 53 CHT Proprietary 53/71 53 Everyone knows …… 運用數位魔法，讓經典文化「點石成金」 – 以英國為例 自 1996 年首度發行， 「古墓奇兵」系列遊 戲，全球已銷售超過 3 千萬套，更以「正 統英國風」訴求，讓 虛擬主角「蘿拉」魅 力無法擋，從遊戲、 代言、翻拍為電影， 一路紅到好萊塢！ 數位科技，讓英國傳統的文化創意界產生質變；而倫敦不再是大家既 有印象中的樣子，只有多霧的天氣，還有古老的石子路而已！ 經濟體質和城市外 觀的改變相輔相成， 古老的英國國會大 廈與大笨鐘，和當 初為了迎接千禧年 而建造的摩天輪 「倫敦眼」，隔河 相望！ 文化創意是筆好生意 古典與現代，人文與科技 驚艷倫敦「新 SOHO 」 1990 年代開始， 尋求較低廉房租 的藝術家們陸續 進駐，讓這裡搖 身一變，成為新 興的文化創意園 區，儼然是倫敦 的新「蘇活」區 自 1997 年第一集問世，「哈利波特」系列書與電影已 締造超過 30 億美元商機，電玩遊戲軟體，銷售數百萬 套；讓作者羅琳的財富高達 6 億英鎊，超越英國女王， 創造出一個產值驚人的「哈利波特」品牌企業！ Source: III 右腦的世界 Slide 54 CHT Proprietary 54/71 54 Beyond canvas, colors and paint brush Davinci Michelangelo Raffaello paint brush canvas colors Florence (Renaissance) Ref: III Innova- tion, value Infrastruc- ture, network 右腦的世界 Slide 55 CHT Proprietary 55/71 55 Why Taiwan matters but not that significant… 古典力學 / 蒸汽機、電磁學 / 電動 機、原子、 DNA 、電晶體 … Breakthrough discoveries 火車、收音機 / 電視、電腦 … killer product/applications industrial paradigms 資本主義、社會主義、新中 間路線、依賴理論 … Significant social thoughtsimpressive cultural projections 福特主義、物質經濟、知識 經濟、意義經濟 … Source: III 右腦的世界 Slide 56 CHT Proprietary 56/71 56 Software and Hardware in the US Production Value (Billion USD) 439.04 587.71 1,022.23 1,688.57 0 500 1,000 1,500 2,000 2,500 3,000 1997200020052010 Software & Information Service Hardware 57% 43% 61% 39% 63% 37% 65% 35% Source: III 右腦的世界 Slide 57 CHT Proprietary 57/71 57 Software (6%) and Hardware (94%) in Taiwan Source: Input, MIC/III, 2002/3 Production Value (Million USD) Taiwan’s ICT industry Source: III 左腦的世界 Slide 58 CHT Proprietary 58/71 58 Flat Panel Display Telecom ICT/HWBiomedical Semiconductor Cultural & Creative S/W & IS Digital Content Bio-IT 11. C $ R 可以賺錢 The Fortune at the Bottom of the Pyramid By C.K. Prahalad The world's most exciting, fastest-growing new market? It's where you least expect it: at the bottom of the pyramid. Collectively, the world's billions of poor people have immense entrepreneurial capabilities and buying power… It is being done-profitably. Whether you're a business leader or an anti-poverty activist, business guru Prahalad shows why you can't afford to ignore "Bottom of the Pyramid" (BOP) markets. Ref: III 右腦的世界 Slide 59 CHT Proprietary 59/71 59 Economist’s reflection on Digital Divide Behind the digital divide Mar 10th 2005 Mobile phones can boost development in poor countries—if governments let them The real digital divide Mar 10th 2005 Encouraging the spread of mobile phones it the most sensible and effective response to the digital divide Mobile phones and development Jul 7th 2005 Mobile phones can boost development in poor countries—if governments let them Source: EIU, 2005 Source: III 右腦的世界 Slide 60 CHT Proprietary 60/71 Device Network NGN IP Network Slide 61 CHT Proprietary 61/71 10/20/40/100M… ？ AudioMobilityVideo Web surfing E-mail Data Home Broadband Video Phone NGN IP Network Distance Healthcare Home Decoration Video Conference Multimedia Entertainment CE-based DVR Parallel recording Mobile phone Requirement for Future IP Network (IP always ?) 左腦思惟 Slide 62 CHT Proprietary 62/71 from Device Network to Human Network NGN IP Network Hearing Sight Touch Smell ？ Taste ？ …？…？ 右腦的世界 手感聽覺触覺外也要色香味 Body/sensor network Slide 63 CHT Proprietary 63/71 Advertisement is the King It’s time to find some way to generate revenue from online ad. Telco’s embarrassment 1.Decreasing ARPU 2.Large NGN CAPEX GAMeY* AD revenue boost 1. Google + Yahoo! =~58% of US Online Ad Revenue (2006Q3) GAMEY: Google, AoL, MSN, eBay, Yahoo! Key product of Google 1. AdWords Key product of Google 1. AdWords 2. Toolbar Plug-in for Web Browser What is the next step? Video search ? Unprofitable business model Intenet giant saw 46% increase in Q3/2007 profit on strong advertising operations. Google Slide 64 CHT Proprietary 64/71 64 Global Online Advertising Revenue (dollars in billions and % of total ad spend) Taiwan High penetration: 70.1 % (2010) Source: PricewaterhouseCoopers LLP, “Global Entertainment and Media Outlook: 2006-2010”, June 2006. Global Mobile Advertising Spending (dollars in millions) Source: eMarketer “Mobile Marketing and Advertising” (2007). Higher penetration rate of Internet and mobile service is advantageous for CHT to make money from online ad.. Good News !!! Paradigm shift: from Advertisement Flat rate $