CÓMO EVITAR QUE LA SEÑALIZACIÓN EN LTE SE VUELVA UNA PESADILLA

CÓMO EVITAR QUE LA SEÑALIZACIÓN EN LTE SE VUELVA UNA PESADILLA La llegada de las redes de banda ancha móvil, especialmente LTE, provoca que el mercado trate con mayor frecuencia las dificultades que los operadores tendrán para soportar todo el tráfico que demandará el usuario en los próximos años, a medida que aumenta la penetración de los smartphones y otros tipos de dispositivos con conexión móvil, como son las tabletas. Sin embargo, a veces, bajo el manto de los constantes reportes que hablan de las cifras de tráfico a través de las redes móviles, queda camuflado un asunto no menos importante y cuyos volúmenes son aún mayores que los del tráfico: la señalización. La señalización Diameter es a las redes de datos IP lo que SS7 era a las redes móviles de circuitos. En este sentido, se espera que Diameter tenga mucha más presión de la que jamás tuvo su predecesor SS7, cuyos patrones eran mucho más sencillos de predecir. Con Diameter soportando la comunicación entre todos los elementos de las redes de datos (bases de datos para la localización, billing, policy, etcétera) predecir su comportamiento es difícil, porque las mismas sesiones de datos de los usuarios son impredecibles. Los operadores latinoamericanos deberían estar muy atentos a la señalización en sus redes, pues entre el periodo que va de 2011 a 2016 su tráfico Diameter sufrirá un crecimiento anual compuesto del 962 por ciento, convirtiendo a Latinoamérica en la región del planeta con el mayor crecimiento en este tipo de tráfico. Además, su predicción se complica debido al dinamismo del mercado a la hora de lanzar nuevos servicios y aplicaciones por parte de los operadores, pero también por terceros fuera del control de los propios operadores. En definitiva, cuantos más servicios y dispositivos en circulación, más movimiento comunicacional se produce entre los elementos que forman la red central del operador. El índice de Señalización Diameter de Tekelec, que sigue después de esta introducción, muestra que los operadores latinoamericanos deberían estar muy atentos a la señalización en sus redes, pues entre el periodo que va de 2011 a 2016 su tráfico Diameter sufrirá un crecimiento anual compuesto del 962 por ciento, convirtiendo a Latinoamérica en la región del planeta con el mayor crecimiento en este tipo de tráfico. Este crecimiento, de todas formas, seguirá situando a la región a la cola en cuanto a volumen absoluto de tráfico Diameter, por lo que las experiencias de otros mercados pueden servir como un referente importante para evitar situaciones desagradables vividas por algunos operadores en mercados maduros. Y precisamente en los mercados más maduros y con índices de tráfico Diameter muy superiores a los registrados en Latinoamérica, los operadores se están movilizando para mitigar los ataques que sus redes sufren por flujos de tráfico Diameneter que se van de su control, colapsando sus redes y creando insatisfacción por parte de los usuarios. 1 www.telesemana.com @Telesemana

Y esto se produce justo en el año donde el tema de mayor actualidad entre los operadores móviles de todo el mundo trata sobre cómo mejorar la experiencia del usuario cuando accede a su red y servicios. A principios de año apareció una de las señales de alarma más importantes con respecto a la señalización, cuando NTT DoCoMo dijo basta. El operador, según citaban medios nipones, estaba sufriendo serios problemas en su red de señalización debido a los smartphones con ios y Android. La preocupación era tan grande que sus ejecutivos aseguraban que iban a presionar a Google para que modificara la forma en que las aplicaciones se comunican con la red de los operadores. El problema principal es, precisamente, que las aplicaciones, en un intento de actualizar constantemente al usuario, realizan llamadas a la red aún cuando el usuario no está utilizando el dispositivo para acceder a sus servicios de datos. Es por este motivo que como veremos en el Índice de Señalización Diameter de Tekelec el tráfico de señalización crecerá mucho más que el propio tráfico de datos, porque aún cuando no hay sesión de datos, los smartphones siguen obligando a la red de señalización a trabajar. A menos, claro, que los operadores puedan hacer que los smartphones cambien su forma de relacionarse con las redes. El tráfico de señalización crecerá mucho más que el propio tráfico de datos, porque aún cuando no hay sesión de datos, los smartphones siguen obligando a la red de señalización a trabajar. NTT DoCoMo pedía en aquel entonces que los operadores con problemas similares salieran del armario para ayudar en la presión a los proveedores de OSs y sus desarrolladores. Poco tuvo que esperar el operador japonés para recibir al apoyo de grandes grupos de telecomunicaciones, que aprovecharon el mayor altavoz de la industria, el Mobile World Congress 2012 (MWC2012), para realizar reclamaciones similares. Franco Bernabè, presidente y CEO de Telecom Italia, alertaba en su presentación sobre cómo los proveedores over the top (OTT) crean aplicaciones que no tienen en cuenta la realidad en la gestión diaria de la red. Es decir, que crean aplicaciones que hacen un uso intensivo de la red de señalización sin tener en cuenta lo importante que es tener esta parte de la infraestructura descongestionada para que las aplicaciones OTT y las del operador puedan funcionar sin problemas para los usuarios. Lejos de querer que estos OTT dejen de innovar, el CEO de Telecom Italia pedía a los desarrolladores que se acerquen a los operadores, para que entre ambas partes se puedan buscar soluciones que permitan seguir creando aplicaciones innovadoras, pero que tengan respeto por la realidad de las redes de señalización. 2 www.telesemana.com @Telesemana

Los casos más importantes de fallas en la infraestructura debido a un colapso en las redes de señalización incluyen: La red LTE de Verizon Wireless se colapsa a principios de 2011. La red LTE de Telenor queda fuera de servicio durante 18 horas impidiendo que sus usuarios realicen llamadas de voz o envien SMS. El caso de NTT DoCoMo, donde las aplicaciones Android causan una falla en la red debido al colapso de la red de señalización Diameter. Estos casos, y los que no se han hecho públicos, demuestran que es importante para los operadores tener una red de señalización Diameter capaz de soportar picos en el uso de ciertos servicios en momentos inesperados, para poder seguir garantizando la experiencia del usuario cuando accede a éstos. 3 www.telesemana.com @Telesemana

tekelec lte diameter Signaling index : FORECAST REPORT AND ANALYSIS 2011-2016 table of contents Executive Summary...2 Signaling Trends and Indicators...3 Diameter Signaling Index Forecast...4 The Future of Diameter Signaling...11 Conclusion...12 Annexes...13 2012 Tekelec, Inc.

Tekelec LTE Diameter Signaling Index : Forecast Report and Analysis 2011-2016 Executive Summary The industry business executives, network architects, engineers, analysts, and equipment vendors currently struggles to accurately forecast Diameter signaling traffic growth. This is already impacting LTE network performance and the customer experience. To predict and accommodate Diameter signaling growth, service providers need to factor in subscriber profiles and behaviors and the types of services and devices they have and plan to introduce on their networks. This is a shift for network engineers responsible for predicting traffic and signaling patterns. Data sessions, video downloads, and the invoking of policy and charging rules each introduces signaling into networks. All variables need to be considered to accurately predict the impact on Diameter networks. This first-of-its kind LTE Diameter Signaling Index serves as a guide for network architects and engineers building Diameter networks where policy intelligently orchestrates the subscriber experience and Diameter Signaling conducts communications among policy servers, charging systems, subscriber databases and mobility management functions. As a measure of network intelligence, the Tekelec LTE Diameter Signaling Index is an important tool for service providers to manage and monetize mobile data. This Index presents an LTE Diameter traffic demand model that enables operators to more accurately calculate and forecast LTE signaling traffic. It gives service providers a baseline for how different services and types of signaling affect Diameter traffic growth. It serves as a reference point from which service providers can layer on critical factors such as network architecture, topology, capacity requirements, geo-redundancy, and other implementation-specific factors that are needed to architect a robust, reliable and scalable Diameter Network that can accommodate rapid growth in signaling traffic. In this Diameter Signaling Index, Tekelec technologists and engineers calculate subscriber behavior averages and the overall growth of Diameter signaling for different types of services over a given period of time. The Index also takes into consideration traffic flows defined by standards bodies to validate the number of Diameter messages required to support different services. Messages per Second (MPS) calculations consider LTE subscriber growth from analyst reports and assumptions for mobility busy hours, subscriber busy hours, concurrent sessions, policy sessions and online and offline charging interactions. Tekelec also parses out MPS calculations according to the sophistication of session types, comparing for example the difference in Diameter signaling for a simple data session versus a Voice over LTE (VoLTE) session. Additionally, different Diameter interfaces for Mobility Management Entities, Home Subscriber Servers, Policy and Charging Rules Functions, and Online and Offline Charging Systems are factored in to further enhance the accuracy of the projections. These data points and assumptions are incorporated into the Tekelec Diameter Signaling Index Calculator, available for service providers forecasting Diameter signaling on their networks, and soon available as a mobile app. 2

Tekelec LTE Diameter Signaling Index : Forecast Report and Analysis 2011-2016 The results compiled in the Diameter Signaling Index confirm that Policy and Online Charging represent the largest impact on signaling growth, trumping Mobility and Offline Charging Systems. The signaling traffic analysis reveals that Diameter MPS will reach a compound annual growth rate (CAGR) of 252% between 2011 and 2016, representing almost 47 million MPS by 2016. To put this finding in perspective, Diameter signaling traffic will grow more than three times as fast as mobile data traffic 1. This is attributable to the sophisticated policy requirements in LTE networks such as advanced Quality of Service (QoS) for voice and video and more personalized data and roaming plans. Signaling Trends and Indicators Service providers evolving their mobile data business models face two challenges: offering data services that are compelling and ensuring that networks can handle the associated performance and scalability requirements. Though much attention has been paid to the pace at which data traffic is expected to grow, this Index demonstrates that Diameter signaling traffic increases will significantly outpace data traffic growth. For this reason, executives, engineers and network architects are moving Diameter signaling up the priority list. The growth in signaling traffic correlates directly to the sophistication of services and pricing plans in LTE networks, as the need for more subscriber and service intelligence triggers more communication among core network elements. Examples of such service plans include: Tiered services Shared data plans This Index demonstrates that Diameter signaling traffic increases will significantly outpace data traffic growth. Loyalty programs Toll-free or sponsored data usage Mobile advertising Quality enhanced over-the-top (OTT) applications Cloud and machine-to-machine (M2M) services Rather than risk under-engineering LTE networks, service providers need to consider how data sessions, video downloads and sophisticated policy and charging rules will affect signaling, and then ensure that a robust Diameter network is in place to manage the signaling traffic. 1 Cisco Visual Networking Index (VNI) Global Mobile Data Traffic Forecast for 2011 to 2016 3

Tekelec LTE Diameter Signaling Index : Forecast Report and Analysis 2011-2016 Execution of the above services requires frequent Diameter signaling among the following elements: Policy Servers (PCRF) Online Charging Systems (OCS) Offline Charging Systems (OFCS) Home Subscriber Servers (HSS) Mobility Management Entities (MME) Policy Control Enforcement Points (PCEF), like Packet Gateways (PGW) and Deep Packet Inspection (DPI) Session Management, like Call Session Control Functions (CSCF) Service providers should not take a wait-andsee approach to Diameter signaling. Service providers should not take a wait-and-see approach to Diameter signaling. Exact Ventures acknowledges that service providers face an urgent need for a new signaling infrastructure and are becoming more cognizant of how much of their future network plans depend on Diameter signaling. 2 Moreover, analyst forecasts about the sheer number of devices, applications, and services are a harbinger of what is yet to come. For example, IDC predicts 1.8 billion smart connected devices will be shipped in 2016, up from 1.1 billion in 2012. 3 These devices will generate increased Diameter signaling traffic in the core network. Many of them will be used in an always-on mode as subscribers engage in multiple concurrent data sessions, generating more Diameter signaling messages per subscriber. The concept of busy hour will evolve as signaling traffic peaks and valleys do not necessarily occur at the same time of day. Diameter Signaling Index Forecast Diameter MPS are expected to reach 47 million by 2016 with a CAGR of 252% between 2011 and 2016 as shown in Figure 1. This growth is attributed to a number of factors including: LTE subscriber growth Implementation of more complex policy use cases in LTE networks Increases in charging interactions with policy and policy enforcement points More sophisticated and personalized data plans 2 Diameter Signaling Controllers Forecast Report and Analysis 2012-2017, 4 Exact Ventures, 2012 3 Worldwide Device Tracker, IDC, 2012.

Tekelec lte DiameTer Signaling index : ForecaST report and analysis 2011-2016 Global Diameter Messages per Second 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 252% CAGR Tekelec Diameter Signaling Index, 2012 2011 2012 2013 2014 2015 2016 Figure 1. Global Diameter messages per second growth: 2011-2016 Global MPS 2011 2012 2013 2014 2015 2016 CAGR 87,141 881,570 2,573,753 7,132,104 18,848,978 46,943,835 252% Source: Tekelec Diameter Signaling Index, 2012 Table 2. Global Diameter messages per second growth: 2011-2016 Trend 1: policy has The LargesT impact on diameter signaling growth Policy has the largest impact on signaling traffic growth, reaching 24 million MPS by 2016. As policy use cases become more complex and personalized, Diameter traffic will ramp as PCRFs interact more frequently with charging systems, enforcement points and the mobile device itself. With the implementation of the Sy interface, the PCRF will interact directly with the OCS (today the PCRF communicates with the OCS via the PGW). 5

Tekelec lte DiameTer Signaling index : ForecaST report and analysis 2011-2016 Global Diameter Signaling Messages per Second 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 Tekelec Diameter Signaling Index, 2012 2011 2012 2013 2014 2015 2016 Mobility 178% CAGR Online Charging 280% CAGR Policy 269% CAGR Offline Charging 226% CAGR Figure 2. Global Diameter signaling message per second growth by message type: 2011-2016 Global MPS 2011 2012 2013 2014 2015 2016 CAGR Mobility 18,108 183,191 395,879 811,147 1,600,697 2,985,665 178% Policy 35,101 355,109 1,144,242 3,386,227 9,347,456 23,977,184 269% Online 17,551 177,554 587,378 1,805,987 5,207,868 13,986,690 280% Charging Offline 16,381 165,716 446,254 1,128,743 2,692,957 5,994,296 226% Charging Source: Tekelec Diameter Signaling Index, 2012 Table 2. Global Diameter signaling message per second growth by message type: 2011-2016 For the purposes of this Index, it is assumed that only fair usage and quota management policies are implemented. This conservative approach is adopted because it establishes a baseline for the growth in more complex policy use cases going forward. 6

Tekelec LTE Diameter Signaling Index : Forecast Report and Analysis 2011-2016 Online charging represents the next largest growth area for Diameter signaling and is expected to grow at the fastest CAGR of 280% over the forecast period. This is attributed to the interactions between the OCS, PGW and PCRF for complex, personalized use cases such as differentiated charging for service tiers, loyalty programs, and applications. Also, many service providers are maintaining legacy charging platforms. As these platforms migrate to IP, Diameter will replace legacy protocols. The same is true for offline charging. Mobility includes traffic between the MME and HSS for authentication and authorization in both the home and visited network. LTE roaming is not implemented as of this report date, however there are plans to introduce it in 2013. A sharper growth rate in mobilityrelated traffic will occur once roaming is implemented. Trend 2: Voice and Video over LTE are the largest contributors to Diameter signaling growth Diameter signaling from several different service types is presented in Figure 3. The data show how many signaling messages are generated when LTE subscribers perform the same task at one time. This could be a busy hour of the day or an event that causes heavy simultaneous usage such as a sporting event or a new device launch. Since this reflects the number of messages for one session, note that there could be multiple occurrences of a service type during a busy hour. The services analyzed are: Authentication Data Connection Fair Usage and Quota Management Social Media Video Streaming Roaming Voice over LTE 7

Tekelec lte DiameTer Signaling index : ForecaST report and analysis 2011-2016 160,000,000,000 Diameter Signaling Messages by Service Type 140,000,000,000 120,000,000,000 100,000,000,000 80,000,000,000 60,000,000,000 40,000,000,000 20,000,000,000 Tekelec Diameter Signaling Index, 2012 2011 2012 2013 2014 2015 2016 Voice over LTE Fair Usage/Quota Management Data Connection Video Streaming Social Networking Authentication Figure 3. Diameter signaling message growth by service type: 2011-2016 Global Messages 2011 2012 2013 2014 2015 2016 Authentication 48,889,854 494,937,885 950,108,780 1,752,077,683 3,143,187,013 5,374,196,420 Data Connection 97,779,708 989,875,770 1,900,217,561 3,504,155,366 6,286,374,026 10,748,392,840 Fair Usage/Quota 244,449,270 2,474,689,425 4,750,543,902 8,760,388,416 15,715,935,066 26,870,982,099 Management Video Streaming 268,894,197 2,722,158,368 5,225,598,292 9,636,427,258 17,287,528,573 29,558,080,309 Social 154,817,871 1,567,303,303 3,008,677,805 5,548,245,997 9,953,425,542 17,018,288,663 Networking Voice Over LTE 325,932,360 3,299,589,900 6,334,058,536 11,680,517,888 20,954,580,088 35,827,976,132 Source: Tekelec Diameter Signaling Index, 2012 Table 3. Diameter signaling message growth by service type: 2011-2016 There is a significant difference in signaling for VoLTE and for pure authentication, which is the starting point for many service providers rolling out LTE networks. Diameter signaling traffic grows as new LTE services are deployed. It is, therefore, critical that service providers incorporate these requirements in Diameter network architectures. The characteristics of Diameter signaling change depending on network design and implementation. The amount of Diameter traffic also differs from interface to interface. Finally, the service type requested by the device affects the number of Diameter signaling messages on each interface. 8

Tekelec LTE Diameter Signaling Index : Forecast Report and Analysis 2011-2016 A simple data connection with authentication requires a few Diameter messages per session. However, this number increases by an order of magnitude to support a roaming session with quality of service. While the exact counts vary based on network implementation approaches, assumptions are made for the purposes of this Index. Authentication assumes the device is turned on and registers with the network, as well as establishes a data connection. No other services are requested, so this is considered a baseline for Diameter dimensioning. Data connection assumes the device has registered in the network, but is in an idle state. The device requests an additional default bearer for a new session for web browsing or email. The number of Diameter messages more than double in this scenario. This is a good benchmark for a smartphone, which has higher concurrent data connections. Video streaming assumes a device is requesting service from an application such as YouTube or NetFlix. Quality of Service (QoS) is required in this case as well as a dedicated bearer channel. Social networking applications such as Facebook and LinkedIn drive behavioral changes in subscribers. The overall experience when using them as an application on a device is enhanced compared to accessing these applications over a web browser. This behavioral change has a direct impact on Diameter signaling, since subscribers use these applications more than they would if they were accessed using a web browser. Finally, in the case of Voice over LTE, a dedicated bearer is required to ensure QoS, and Diameter messages increase to establish multiple IP connections. Trend 3: North America is the largest contributor to Diameter signaling traffic through 2015, but is surpassed by APAC in 2016. CALA has the fastest growth rate followed by EMEA. North America leads the world in LTE subscribers and Diameter signaling traffic through 2015 and reaches 16 million Diameter MPS by 2016 (Figure 4). 4 The region has a high penetration of smart devices and is introducing usage-based LTE services that require policy and charging. 4 LTE subscriber data is derived from analyst reports on subscriber growth by region 9

Tekelec lte DiameTer Signaling index : ForecaST report and analysis 2011-2016 216% CAGR 320% CAGR 263% CAGR 962% CAGR 15,000,000 Total Number of Diameter Messages per Second 10,000,000 5,000,000 Tekelec Diameter Signaling Index, 2012 2011 2012 2013 2014 2015 2016 Figure 4. Total number of Diameter messages per second, by region: 2011-2016 Global MPS 2011 2012 2013 2014 2015 2016 CAGR North America 50,256 431,155 1,085,644 2,702,766 6,596,470 15,918,752 216% Asia Pacific 26,370 368,356 976,395 2,558,885 6,574,429 16,701,659 263% Europe, Middle 10,511 81,995 503,114 1,823,462 5,505,994 13,783,740 320% East, Africa Caribbean, 4 64 8,600 46,991 172,085 539,684 962% Latin America Source: Tekelec Diameter Signaling Index, 2012 Table 4. Total number of Diameter messages per second, by region: 2011-2016 The number of LTE subscribers in the Asia Pacific region surpasses North America in 2016. The region is expected to reach almost 17 million Diameter MPS in that same year higher than all other regions globally. While Japan, Korea, Singapore, and Australia are deploying LTE today, there is plenty of room for growth in this region as other countries follow with their own LTE implementations. MPS growth is expected to be most aggressive in CALA, with a CAGR of 962%. CALA is off to a slower start deploying LTE networks compared to other regions. However, Brazil recently auctioned LTE licenses and service providers in that country are aggressively planning LTE service launches in 2013 in advance of the FIFA World Cup in 2014 and the Olympics in 2016. Many other service providers in this region are launching 3G networks in 2011 and 2012 and will evolve to LTE beginning in 2013. 10 LTE spectrum auctions in Europe are off to a slow start, resulting in fewer LTE subscribers for 2012. However, LTE subscriber growth is expected to accelerate in 2013 and 2014. Northern European countries have been quicker to launch LTE and some service providers are benefiting from re-farming spectrum for LTE as a strategy to launch LTE services ahead of competitors and government auctions.

Tekelec lte DiameTer Signaling index : ForecaST report and analysis 2011-2016 The Middle East is a bright spot in the region with several countries such as Saudi Arabia and UAE with commercial LTE deployments. Overall, the region will experience the second-fastest growth in Diameter MPS growth over the 2011-2016 period with a CAGR of 320%. the FuturE of diameter Signaling Over the next several years, many service providers will evolve to become digital lifestyle providers that deliver new OTT, M2M, cloud, mobile advertising and mobile payment services. Diameter Messages per second Tekelec Diameter Signaling Index, 2012 2011 2012 2013 2014 2015 2016 Payment MPS M2M MPS OTT/Advertising MPS Network MPS It will be Diameter that facilitates policy and charging for new OTT, advertising, and M2M business models. Figure 5. Future growth in Diameter messages per second per subscriber In an all-ip world, Diameter signaling will enable these new business models, which will drive a sharp increase in the number of concurrent data sessions per subscriber and Diameter MPS as shown conceptually in Figure 5. It will be Diameter that facilitates policy and charging rules for these new business models such as: Opt-in OTT and advertising sponsored data Quality of service guarantees Personalized quota management Preferential rating of services Time-of-day rules for data back up to the cloud or smart meter transmissions Service, application, and device prioritization such as healthcare, mobile payment and emergency services Personalized mobile advertisements 11

Tekelec LTE Diameter Signaling Index : Forecast Report and Analysis 2011-2016 And, it will be Diameter that will help service providers expose policies, subscriber data, charging data, and analytics to new partners, as well as help ensure secure interconnection and privacy for subscriber information. Conclusion Diameter signaling traffic is expected to grow more than three times faster than mobile data traffic over the 2011-2016 period. As devices evolve and service providers add new personalized data plans and embrace innovative business models, it is expected that subscribers will continue to sharply increase their mobile data usage. Policy and online charging are the most significant factors in the continued growth of Diameter signaling, especially as new data plans and business models emerge, as use cases become more complex, and as new Diameter interfaces are introduced. As Diameter signaling grows, the need for a highly scalable, reliable and flexible signaling infrastructure becomes paramount. The early days of Diameter signaling have already illustrated the need for a centralized Diameter network architecture, and the future certainly indicates that Diameter signaling will continue to grow rapidly. As a measure of network intelligence, the Tekelec Diameter Signaling Index is an important tool for service providers to meet the challenges and opportunities in the mobile data marketplace. 12

Tekelec LTE Diameter Signaling Index : Forecast Report and Analysis 2011-2016 ANNEX A Index Assumptions and Methodology This Index makes a few assumptions regarding the implementation of LTE networks for the purpose of this report. The Index is an LTE Diameter traffic demand model rather than an engineered network model. It is a baseline model that serves as a starting point from which service providers can layer on critical factors such as network architecture, topology, capacity requirements, geo-redundancy and other implementation-specific factors that are needed to architect a robust, reliable and scalable Diameter Network. For Policy, traffic management use cases were factored in as well as the assumption that heavy data users drive more policy interactions with enforcement points than light data users. The additional Diameter messages generated by heavy users are included in the Index. The Index focuses on LTE networks. It does not account for Diameter traffic on 3G networks. It is based on home network activity and LTE-to-LTE roaming and excludes LTE to 3G roaming at this time. The Index also excludes IMS applications with the exception of VoLTE. Finally, the Index does not include additional Diameter traffic that will be generated by hundreds of millions of M2M devices that will come onto networks over the next few years. The Tekelec LTE Diameter Signaling Index is based on a number of resources. LTE subscriber data is derived from analyst reports on subscriber growth by region. 3GPP and GSM Association specifications and documentation are used for determining the traffic flows for each unique service. These are used to determine the number of Diameter messages that are created for individual session types. Traffic flows are validated in Tekelec s Diameter Traffic Laboratory, which is a dedicated facility that uses Tekelec s Diameter Signaling Router, Policy Server, and Home Subscriber Server network elements with the Developing Solutions dstest software for emulating User Equipment, MME, and OCS functions. Tekelec uses the industry standard metric Messages per Second (MPS) for the volume of signaling traffic in a network. The 3GPP standards refer to transactions as 2 messages (request/answer). In this Index total messages are counted. Transactions are not taking into consideration. To derive Transactions per Second from the Index, one TPS is equivalent to two Diameter messages (request/answer). Peg counts are used for the total number of Diameter signaling messages, assuming that a percentage of the total subscribers all initiated the same service within the same period of time. This does not address the number of times a subscriber implements the service within a day, but this can easily be calculated by multiplying by the number of events. It is meant here as an input to engineered network models. In an LTE network, the concept is that the device is always on and therefore active. In reality, the device may be turned on and registered in the network, but not actually transmitting any data (idle). The Index uses two means to indentify active versus inactive 13

Tekelec LTE Diameter Signaling Index : Forecast Report and Analysis 2011-2016 devices. Connected subscribers have devices powered on, but are idle in the network. Active subscribers have devices that are connected and actively sending data through the packet network. It is not assumed that 100% of all subscribers are active in a network, nor is it assumed that 100% of all subscribers are connected in a network. A factor obtained from various reports is used to reach a reasonable percentage of connected and active subscribers. Growth ratios, subscriber usage, the number of subscribers active during the busy hour and the number of concurrent session are based on Tekelec s experience and custom research provided by Heavy Reading. Insights into the evolution of services and business models are informed by Chetan Sharma Consulting, Signals Research Group, and Heavy Reading. Data points and assumptions are entered into the Tekelec LTE Diameter Signaling Index Calculator, available for service providers to forecast Diameter signaling on their networks and available soon as a mobile application for smart devices. As LTE deployment schedules change and services evolve, Tekelec will publish subsequent reports at regular intervals to reflect changing trends and impacts on the LTE Diameter Signaling Index. ANNEX B Disclaimer This report contains both statements of fact and future estimates relating to Diameter signaling traffic and global telecommunications markets and represents Tekelec s current understanding of these matters. This report is designed to offer general guidance to these subject matters only and is not intended as a substitute for a customer s own judgment or for that of its professional advisors. The information in this report is current only as of the date of release, and may therefore not contain complete, accurate or timely data. To the extent permitted by law, Tekelec and its employees and directors disclaim and exclude all liability for any loss or damage arising from the use of or reliance on the information and estimates contained in this report, whether or not such loss or damage is caused by any act of negligence. 14

Tekelec Global Headquarters +1.919.460.5500 888.628.5527 sales@tekelec.com EMEA +44.1784.437000 APAC +65.6796.2288 CALA +1.919.460.5500 Tekelec has more than 300 customers in more than 100 countries. For information on our worldwide offices, visit the Tekelec website at www.tekelec.com/offices. This document is for informational purposes only, and Tekelec reserves the right to change any aspect of the products, features or functionality described in this document without notice. Please contact Tekelec for additional information and updates. Solutions and examples are provided for illustration only. Actual implementation of these solutions may vary based on individual needs and circumstances. 2012 Tekelec. All rights reserved. TEKELEC, EAGLE, TekServer, G-Flex, G-Port, and CAMIANT are registered trademarks of Tekelec. The Tekelec logo, A-Port, EAGLE 5 ISS, V-Flex, nghlr, Diameter Signaling Router (DSR), BLUESLICE, and Subscriber Data Server (SDS) are trademarks of Tekelec. Other product names used herein are for identification purposes only and may be trademarks of their respective companies. www.tekelec.com