Contents
Executive Summary
Trend #1: Signaling Trafc Growing More Than Twice as Fast as Mobile Data
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Executive Summary
The Diameter signaling protocol has taken center stage in the mobility world in the past few
years. Used for activity coordination between Internet Protocol (IP) network elements such
as policy servers, online charging systems and mobility gateways, Diameter serves a crucial
function in mobility. And, as operators have migrated their networks to LTE, added new services
and implemented more sophisticated policy use cases, signaling volumes are skyrocketing.
To predict and accommodate Diameter signaling growth, service providers need to factor in
subscriber proles 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
trafc and signaling patterns. Data sessions, video downloads, and the invocation of policy and
charging rules all introduce additional signaling into networks, all of which must be considered
to accurately predict network needs.
This 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 Oracle Communications LTE Diameter Signaling Index is an important tool for
service providers to manage and monetize mobile data.
Last year, we released the rst edition of this forecast and analysis report to help operators
understand the impact of the phenomenal growth in signaling on their networks and ultimately,
on their customers experiences. In the 2012 report, we forecasted a rate of nearly 47 million
messages per second (MPS) by 2016. Using an evolved methodology, this years numbers also
show signicant growth. In fact, by 2017, worldwide LTE Diameter trafc will reach nearly 99
million MPS, a 140% ve-year compound annual growth rate (CAGR).
Other ndings of note include:
s
Policy signaling volumes are expected to more than triple in the next year. By 2017, policy
will account for 62% of signaling volumes, surpassing basic mobility;
Policy-related signaling is growing at a 164% CAGR through 2017, due to both the number
and complexity of use cases;
Online Charging (OCS) is the fastest growing Diameter use case, with a global CAGR of
180% through 2017;
North American volumes remain the worlds largest, reaching almost 43 million MPS by
2017, growing at a 127% CAGR;
Europe, Middle East and Africa (EMEA) and Central/Latin America (LATAM) regional growth
rates are both well over a 200% CAGR through 2017;
Subscriber behaviors and smartphone penetration continue to play key roles in the growth
of Diameter signaling; and,
The denition of the protocol itself is expanding. The number of Diameter interfaces,
commands and associated parameters is growing rapidly, adding to the need for careful
architectural planning and constant interface upkeep.
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This report outlines global trends in LTE Diameter signaling growth through 20171. Serving as a
barometer of demand for overall network capacity, the forecast includes regional breakdowns of
trafc and associated growth rates. Likewise, we analyze the key applications of Diameter and
chart their impact on trafc and growth rates through the same forecast period.
The Oracle Communications LTE Diameter Signaling Index CalculatorTM, upon which the
forecast is based, is helping operator technology executives more accurately plan their
networks architecture 2. At the same time, a use-case specic understanding of customer
behaviors and experiences is assisting operator business executives as they plan market-facing
offers, evaluate opportunities and incorporate third-party capabilities into their services.
Tiered services
Mobile advertising
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 trafc.
The scope of this report is limited to the LTE environment. It is important to note that the Diameter protocol also ser ves the IP segments of 3G networks
as well as xed networks.
Operators wishing a more detailed analysis are encouraged to contact us for a customized consultation employing the Oracle Communications LTE Diam
eter Signaling Index CalculatorTM
Execution of these services requires frequent Diameter signaling among the following
elements:
s
LTE penetration rates projected by industry analysts indicate North America is still moving
aggressively to replace legacy technology. At 56% penetration, it is currently the worlds largest
LTE market.3 JAPAC is second, but with only 11% penetration rate by the year 2017, this leaves
signicant room for growth. In fact, the JAPAC trafc rates being observed today are paltry
compared to what is to come.
Likewise, industry forecasts about the sheer number of devices, applications, and services are a
harbinger of what is on the horizon. By 2017, more than 10 billion mobility devices will process
more than 300 billion app downloads worldwide.4 All of these will generate increased Diameter
signaling trafc 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.
Finally, the notion of busy hour will evolve, because the level of signaling trafc an operator
experiences is driven by more than just the number of subscribers. It is also a function of
subscriber behavior, the devices they use and the services and applications they invoke. As
such, a busy hour is also affected by these variables, meaning that signaling trafc peaks and
valleys will not necessarily occur at the same time of day.
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When operators embrace policy, they typically begin with fair usage and trafc management
use cases. However, as they increase both the number and complexity of the use cases and
begin implementing more revenue-generating policy rules, the amount of Diameter trafc
between the PCRF and enforcement points expands rapidly. We have observed at least one
operator with more than 700 individual policy rules in its policy server, with ongoing growth
expected.
The fastest growing use case is online charging (OCS), with just slightly more than 24 million
MPS expected by 2017, a 180% CAGR. This is especially true in regions where prepaid
charging is dominant, as prepaid services require more Diameter dialog between the PCRF and
the OCS. Regions such as LATAM and JAPAC are dominated by prepaid service plans, driving
a speedier pace of Diameter growth. Not surprisingly, ofine charging (OFCS) is smaller and
growing more slowly.
Mobility (roaming from 3G to LTE networks and vice versa) does not show the same impact on
Diameter trafc volumes as Policy and OCS. We project Mobility in 2017 to reach 8.3 million
MPS with a CAGR of 76%.
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Policy
OCS
OFCS
Mobility
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Declining 3G penetration: We project mobility (3G-LTE roaming) will reach 3.1 million MPS
by 2017, at a CAGR of 59%. This represents more than one-third of the total global MPS for
mobility in 2017. This share is down signicantly from 61% in 2012;
Wi-Fi Roaming: Once standards have been completed, Wi-Fi roaming will begin to offset
the 3G decline, however modestly. Due to its high LTE penetration rate, North America
will have the lowest per capita 3G-LTE roaming trafc of all regions. Nevertheless, there is
some roaming growth in North America;
Policy Maturity: The rst policy use cases in North America were focused on trafc
management, but new use cases for revenue generation can be found as marketing
organizations build compelling offers with policy. There are also use cases supporting multi
media sessions such as video and voice quality of service (QoS) in evidence;
Online charging is becoming more prevalent in North America, which will contribute nearly
11 million MPS by 2017, representing a 205% CAGR in the forecast period. By contrast,
OFCS MPS is projected to grow at a CAGR of 97% to 3.6 million MPS.
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Policy
OCS
Mobility
OFCS
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2012 2013 2014 2015 2016 2017
Because EMEA has more national boundaries regularly traversed compared to other regions,
LTE and related service type trends will differ. According to industry reports, LTE penetration
for Eastern Europe is projected to reach 11% by 2017. Western Europe will grow to 25%
penetration by year 2017. Finally, the Middle East and Africa are expected to grow to 2%
and 4% penetration, respectively, leaving tremendous potential for growth in future years.8
Smartphone penetration will also be lower during this period, which will have a direct impact on
Diameter signaling trafc.
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Given the penetration rates, 3G will be in place in this region for several more years. Market
growth has slowed somewhat, due to economic factors. Consider, for example, that
London did not begin LTE deployments until the 2012 Olympics, and it has slowed postOlympics;
Roaming is much more common in Europe than other regions, due to the proximity of the
individual countries and ease of travel between EU member states. This ongoing roaming
will trigger higher trafc levels in Diameter networks. As the LTE penetration increases,
so too will roaming between 3G and LTE networks and between LTE networks, driving
signaling trafc upward;
Policy use cases will drive Diameter trafc as subscribers are expected to adopt more
multimedia related services and operators deliver more complex policies in their LTE
environments to coax subscribers to the newer networks;
While OFCS only represents 2% of the total MPS for this region, OCS represents 20%.
Charging trafc (both OFCS and OCS) will increase signicantly year over year due to
increased subscription numbers.
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Ibid
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Policy
OCS
Mobility
OFCS
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Ibid
JAPAC represents the second most highly penetrated LTE market by 2017, yet at 11%,
there is still tremendous growth to be had;
China will start to have a signicant impact on regional LTE penetration by 2017;
Mobility is projected to reach 3.5 million MPS by 2017, a CAGR of 84%. Mobility will
continue to grow in this region as developing countries continue to maintain their 3G
networks while they roll out LTE in metropolitan areas. It is not likely that these countries
will adopt LTE quickly and aggressively as subscriber buying behaviors still heavily favor
feature phones;
Policy shows aggressive growth again thanks to the ve countries with the greatest
penetration and mature market characteristics. A chief factor is video, which is quite
popular in Asia, as policy use cases supporting QoS for video sessions become more
common;
OFCS shows roughly a two-fold increase each year, at a CAGR of 119%, but OCS weighs in
most heavily here. Charging growth is directly related to subscriber growth in this case, and
as the market matures, so too will the Diameter trafc associated with charging;
Asia will go through much of the same evolution as North America, with policy and OCS
galvanizing Diameter MPS growth.
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The recently dened Sy interface allows the PCRF to bypass the GGSN/PGW when accessing
the OCS. This does not directly impact Diameter signaling volume since this same interface
already exists between the PCRF and the GGSN/PGW, and a service provider will choose one
path or the other for a given transaction. It may, however, present an opportunity for more
complex policy use cases in the future.
Finally, there is the Access Network Discovery and Selection Function (ANDSF), the standard
underlying the emerging HotSpot 2.0 service.13 This new standard burst on the scene recently
and the industry is busily dening how it will work. The concern is how to handle the constant
location updates as a subscriber moves from Wi-Fi hotspot to hotspot. No standards exist
yet for managing the ow of signaling messages generated by Wi-Fi roaming, but work is
underway. Regardless of the outcome, this will be another source of signaling trafc that
could equal or surpass the signaling trafc generated for wireless roaming in a 3G network.
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HotSpot 2.0 is dened and certied by the WiFi Alliance (w w w.wi -.org )
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SDN does not directly drive additional Diameter trafc, but it does enable new services to be
offered more quickly. As these new services are implemented in the network, the services
themselves will drive additional Diameter trafc in the core.
One of the benets of NFV and SDN is the use of industry standard hardware, whereas
proprietary implementations use hardware and operating systems optimized for the function.
As such, this migration toward standard hardware and operating systems will impose a
temporary performance tax, which in turn will drive some additional signaling. Estimates found
in multiple industry publications are as high as 80%, but hardware and software vendors are
actively seeking ways to tune their products for this new environment. During this evolutionary
period, it is reasonable to conclude operators will have to provision some additional hardware
to overcome the inefciencies, yielding incremental Diameter trafc. Optimization tools will
mature and eventually mitigate many of these inefciencies in the future, but for the present
there will be some performance hurdles.
Finally, virtualization opens up new opportunities to extend Diameter to other networks, along
with resource sharing across networks. This includes offering Diameter as a Service (DaaS),
which will undoubtedly drive additional Diameter growth.
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SIP Trunking: Realizing the Value for SMBs, http: / / att.v tp -media.com / smb
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Interface
Sh
Allows subscriber data exchange between a SIP Application Server (AS) and the HSS.
Dh
Connects the SIP AS to the Subscriber Location Function (SLF) to identify the subscribers HSS.
Sd
Connects the PCRF to the newly-dened Trafc Detection Function (TDF), where it is used to identify what
services subscribers are connecting to, and applying rules from the PCRF to those sessions.
Sy
Connects the PCRF and OCS for real-time billing, for example, in quota management.
Rf
Charging data exchange between AS and OFCS for non-real-time billing when a chargeable event
concludes.
Ro
Cx
Authenticates users and allows subscriber data and location exchange between CSCF and HSS.
Dx
Supplies location data between CSCF and SLF to identify the subscribers HSS.
Sp
Rx
Runs between an AF such as a P-CSCF and the PCRF for exchange of IP ltering information for service data
ow, and QoS criteria for bandwidth control.
Gx
Runs between the PCRF and the PCEF to exchange data from the PCRF to the enforcement points during
data session negotiation.
Gy
Connects various PCEF enforcement points (such as GGSNs, PDN gateways and MMEs) to send real-time
billing information to the OCS.
Gz
Connects various PCEF enforcement points (such as GGSNs, PDN gateways and MMEs) to send non-real
time billing information to the OFCS.
Gmb
Connects the 3G GGSN and the Broadcast-Multicast Service Center (BM-SC), used for controlling bearer
channels used in mobile video services.
SGmb
Connects the 4G PDN Gateway (PGW) and the Broadcast-Multicast Service Center (BM-SC), used for
controlling bearer channels used in mobile video services.
S6a
Exchanges subscriber data and location information between MME and HSS, and authenticates the
subscriber device when it connects to the network.
S6b
Connects the Authentication, Authorization and Accounting (AAA) Server/Proxy and the Packet Data
Network Gateway (PDN GW) for authentication of devices during a mobile data session.
S6c
Connects the PDN Gateway in the subscribers home network to a AAA server in a visited network.
S6d
Connects the LTE HSS and a 3G SGSN for authentication similar to the S6a interface.
S9
Connects a PCRF in the subscribers Host Mobile Network (HPLMN (H PCRF)) and a PCRF in the Visited
Mobile Network (VPLMN (V PCRF)), allowing for a subscribers services to be consistent when roaming
in another network.
S13
Enables identity authentication between MME and the Equipment Identity Register (EIR).
S13
Connects the SGSN in a 3G network to the EIR, similar to the S13 interface.
Gi
SGi
Connects the 3G GGSN to external IP networks when the subscribers SIM must be provisioned by an
Access Point Name (APN), typically when a device connects to a private IP network.
Connects the 4G PGW to external IP networks when the subscribers SIM must be provisioned by an APN,
typically when a device connects to a private IP network.
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This report contains both statements of fact and future estimates relating to Diameter signaling trafc and
global telecommunications markets and represents our 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
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