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Traffic Forecasting Models for the Incum-

bent Based on New Drivers in the Market


1 Introduction Gigabit Ethernet, Lamda wavelength, Dynamic

The circuit switched voice traffic has tradition- bandwidth allocation.
ally been a significant part of the traffic in the
transport network. However, during recent years Operators: ADSL, SDSL, VDSL, LMDS,
Leased lines ordered by different operators and Leased lines, Fast Ethernet, Gigabit Ethernet IP-
also the Leased lines ordered from the business VPN, Lamda wavelength, Dynamic bandwidth
market have expanded the transport network allocation. (mobile operators, ISPs, other opera-
capacity. A new capacity wave has also started: tors).
the data traffic moving from narrowband to
Kjell Stordahl (58) received his broadband. The data traffic is increasing expo- Network Platforms
M.S. in statistics from Oslo Uni-
nentially and will for some years be the dominat- Relevant network platforms are: PSTN/ISDN,
versity in 1972. He worked with
Telenor R&D for 15 years and ing traffic in the transport network. Important PSDN, Frame Relay/ATM, Digital Cross Con-
with Telenor Networks for 15 traffic drivers are broadband applications carried nect, Various IP Networks including IP net-
years, mainly as manager of
by HFC, ADSL, VDSL, LMDS, UMTS and works for mobile operators, Leased lines.
Planning Department Region
Oslo and then Market analysis. WLAN. PSTN/ISDN is a circuit switched network.
Since 1992 he has participated Leased lines have no concentration effect at all,
in various techno-economic EU
This paper analyses the traffic and capacity evo- while the other network platforms also have
projects (TITAN, OPTIMUM,
TERA, TONIC) analysing rollout lution of the transport network of an incumbent packet switched concentration.
of different broadband technolo- operator having the possibility to integrate dif-
gies. Kjell Stordahl has been
responsible for working pack-
ferent type of traffic into the network. A traffic 3 Traffic From the Residential
ages on broadband demand, volume indicator is developed for traffic in- Market
forecasting and risk analysis in crease in the transport network. The access fore- The residential market generates different types
these projects. He has pub-
cast modelling has been developed based on of traffic: Voice traffic, Dialled Internet traffic,
lished more than 140 papers in
international journals and con- parts of the results from the projects ACT 384 ADSL traffic, VDSL/LMDS traffic.
ferences. TERA and IST-2000-25172 project TONIC [1–16]. The voice traffic has nearly reached saturation.
During the next years, the circuit switched voice
2 Market Segments traffic will be rather stable before parts of the
circuit switched voice traffic are substituted by
Services IP voice. The dialled Internet traffic will reach
Traffic from the services is transported on differ- maximum within a few years. Then the dialled
ent network platforms or on leased lines. Impor- Internet traffic will continuously be substituted
tant services for the transport network are: by broadband traffic. A battle has already started
PSTN/ISDN, Internet, Leased lines, PSDN between broadband operators to capture parts
(packet switched data network), Frame relay, of the broadband market.
ATM, IP Virtual private network (VPN),
ADSL/SDSL, VDSL/LMDS, Fast Ethernet, Broadband access forecasts have been developed
Gigabit Ethernet, Lamda wavelength, Dynamic in the IST-2000-25172 project TONIC. Figure 1
bandwidth allocation. shows the market share evolution of ADSL,
VDSL, FWA (Fixed wireless broadband access)
Market Segments and HFC/cable modem for West European coun-
An incumbent operator leases transport capacity tries.
to other operators. In addition the incumbent
offers transport capacity to the residential and Figure 2 shows total broadband penetration. The
the business market. The incumbent operator total broadband penetration forecasts are ad-
offers transport capacity either via own service justed compared to the forecasts developed in
provider or as wholesale. A segmentation of the the TONIC projects. A combination of the fig-
market will be: ures gives the broadband penetration for each
Residential market: PSTN, ISDN, Internet,
ADSL, VDSL, LMDS, HFC. Now, the question is which traffic is carried in
the incumbent’s transport network. Usually the
Business market: PSTN, ISDN, IP VPN, Inter- cable TV/HFC traffic is carried outside the trans-
net, PSDN, Frame Relay, ATM, ADSL, SDSL, port network, while a part (market share) of the
VDSL, LMDS, Leased lines, Fast Ethernet,

122 Telektronikk 3/4.2003

60 ADSL Figure 1 Market share
VDSL distribution and prediction
40 HFC (cable modem) for West
European countries



2001 2003 2005 2007 2009

Figure 2 Broadband
50 penetration forecasts for the
European residential market
Penetration (%)





1999 2001 2003 2005 2007 2009

penetration of each of the other technologies will Market Share and Access Penetration
be carried in the incumbent’s transport network. The factor Nt Mit pit represents a forecast of
number of households connected to the incum-
A traffic volume forecast indicator,VR(t), for the bent’s transport network in year t using technol-
residential busy hour traffic into the transport ogy i. Suppose the incumbent operator has 40 %
network is given by: of the ADSL market share and expects to be in
the same position the next years, then M3t = 0.40
VR(t) = Nt Σi=1,2,3,4,5 bit uit Ait Cit Mit pit (1) for t = 2001, 2002, ... .

where Mean Downstream Access Capacity

and the Technology Evolution
i = 1 denotes voice traffic The downstream access capacity, C1t , for voice
i = 2 denotes Dialled Internet traffic is 64 kbs and will be the same the next
i = 3 denotes ADSL years. However, the downstream access capacity
i = 4 denotes VDSL C3t for ADSL changes. Figure 3 shows how the
i = 5 denotes FWA mean downstream access capacity increases.
Nt is the number of households in year t Now, the operators offer a set of different access
bit is busy hour concentration factor for tech- capacities. There will be an evolution from low
nology i in year t access capacities to higher access capacities
uit is packet switching concentration factor for especially because of new and enhanced applica-
technology i in year t tions. In addition, new functionality such as
Ait is the access capacity utilisation for tech- bandwidth on demand will be introduced by the
nology i in year t operators.
Cit is mean downstream access capacity for
technology i in year t So far, ADSL based on reasonable low down-
Mit is incumbent’s access market share for stream capacity is introduced. The next step will
technology i in year t be to enhance the ADSL capacity in the range 6
pit is the access penetration forecasts (%) for – 8 Mbs. However, the capacity size offered will
technology i in year t be dependent on the twisted copper pair length.
The capacity offered will decrease with the cop-
per pair length.

Telektronikk 3/4.2003 123

Figure 3 Evolution of 4.50
predicted average downstream
capacity in Mbs (Tonic 2002) 3.50




2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

An extension to the VDSL platform will Access Capacity Utilisation

increase the offered capacity further. New ser- A broadband customer is not utilising the maxi-
vices like VoD and peer-to-peer applications mum capacity all the time. The access capacity
based on downloading and exchange of films utilisation factor indicates average capacity use
will increase the capacity demand. The access taking into account the proportion of time during
capacity for VDSL will be in the range 15 – 24 the conversation for downloading and the pro-
Mbs depending on the copper pair length. portion of time for uploading. The factor also
reflects the degree of using the specified band-
ADSL2+ is a supplement to VDSL and ADSL. width.
While VDSL covers subscribers up to 1.5 km
from the exchange or the last fibre drop, Busy Hour Concentration
ADSL2+ has the possibility to offer 10 Mbs up The busy hour concentration effect is well
to 2.0 km and probably within a few years 2.5 known. Usually about 10 % (b1t = 0.1) of the
km distance from the exchange/last fibre drop. customers make phone calls in the busy hour.
Traditionally Erlang’s blocking formula (assum-
ADSL2+ and VDSL have enough capacity to ing exponential interarrival time and holding
offer Internet and digital TV while also offering time) is used for dimensioning. The busy hour
the possibility to use interactive TV. The number concentration factor is increasing because of the
of independent TV streams will be dependent on Internet. For broadband connections the busy
the selected solutions. It will also be possible to hour concentration factor is significantly higher
transfer traditional TV programs on the copper because of heavy users, longer holding times,
pairs like the ones seen in cable TV networks. flat rate and evolution of new applications.
However, only part of this capacity will be indi-
vidual, while the capacity for dedicated TV The busy hour for residential narrowband and
channels will be a common resource for all broadband traffic is in the evening.
households in the transport network.
Packet Switching Concentration
Dynamic Spectrum Management (DSM) will The circuit switched services PSTN and ISDN
enhance the copper line capacity further. The have no packet switching concentration (u1t = 1).
methodology is based on dynamic regulation of The other services have significant concentra-
the frequencies on the copper line to reduce the tions. Internet use consists of sessions based
noise and cross talk. downloading, thinking and uploading. Traffic
will be packet according to use. Traditional
The market share evolution for different ADSL Internet use gives low packet switching concen-
access capacities is described in the IST-2000- tration. Applications like music on demand and
25172 project TONIC. Mean access capacity is video on demand generate high packet switching
calculated according to the distribution of differ- concentration. The evolution of the packet
ent access capacities for each year. The results switching concentration factor is complex.
are shown in Figure 3.
Uncertainty in the Concentration
The capacity predictions are based on the Factors
assumption of flat rate principle for the first Figure 4 shows possible evolutions of combin-
years. However, there may be a delay in the ations between busy hour concentrations and
demand for capacity if and when traffic charges packet switching concentrations. There are sig-
are introduced by the operators. nificant uncertainties in the evolution. The basis

124 Telektronikk 3/4.2003

for the predictions in Figure 4 is 0.15 (15 %) 0.300 Alternative 1
busy hour concentration and 0.20 packet switch- Alternative 2
ing concentration in 2001. Four alternatives are Alternative 3
defined having a linear yearly increase: 0.200 Alternative 4

Busy hour concentration: 0.15 in 2001 to respec-

tively 0.195 – 0.24 – 0.285 – 0.33 in 2010. 0.100

Packet switching concentration: 0.20 in 2001 to

respectively 0.335 – 0.47 – 0.605 – 0.74 in 2010.
2001 2003 2005 2007 2009
Figures 2–4 show a nearly exponential evolution
of broadband penetration, capacity increase and
traffic concentration in the coming years. The
most probable prediction will be between alter-
native 2 and 3. The traffic volume indicator The mobile operators are important transport Figure 4 Description of
described in equation (1) has a much stronger network customers using leased lines in the possible evolutions of
exponential evolution because of a multiplica- transport network. In the coming years these concentrations of ADSL traffic
tive effect of the same factors. operators will generate the following traffic: as a function of busy hour and
packet switching concentration
4 Traffic from the Business • 2G traffic (Digital mobile systems such as
Market GSM)
The business market generates the following • 2.5G traffic (HSCSD, GPRS, EDGE)
types of traffic/capacity: Voice traffic, Dialled • 3G traffic (UMTS)
Internet traffic, PSDN, ATM, Frame Relay, DSL • 3.5G traffic (Ubiquitous roaming among 3G
traffic, IP Virtual Private Networks (IP VPN) and WLAN systems)
traffic, Leased lines, Fast and Gigabit Ethernet.
The access forecasts for the different systems
There are significant substitution effects between have been developed in the IST-2000-25172
DSL, IP VPN, Leased lines, Fast and Gigabit project Tonic.
Ethernet, which have to be taken into account in
the forecasting process. Leased lines are used to Subscription forecasts for the mobile systems,
establish fixed connections between sites often allowing the subscribers to have more than one
based on head office and branch offices or subscription have also been developed. The
between different enterprises. The established traffic capacity for data applications per user
network forms a local network with high service increases from 40 kbs to 1.92 Mbs from 2G to
quality. There are no busy hour concentration 3G, while WLAN offers up to 54 Mbs. The traf-
or packet switching concentration. Leased lines fic forecast model for mobile traffic is similar to
constitute a significant part of the transport net- the traffic in the fixed network. The busy hour
work capacity. Some parts of the leased lines concentration factor and the packet switching
capacity will be transferred to IP VPN or DSL concentration factor are extremely important for
because of cheaper tariffs and in spite of reduced the dimensioning. The services/applications are
service quality/SLA. defined in different service classes: conversa- Figure 5 Subscriber
tion, streaming, best effort, and the capacity is penetration forecasts for
A traffic volume forecast indicator VB(t) for the reserved according to service level agreements. different mobile systems
business market busy hour traffic is given by:

VB(t) = Nt Σi bit uit Ait Cit Mit pit (2)

where the different traffic/capacity types i are 2G
defined in the first paragraph of the chapter. 2.5G
80 3G
5 Traffic Generated by Other 3.5G
Operators 60 Sum
Different operators like mobile operators, ISPs
and other fixed network operators lease neces-
sary capacity in the transport network. The
capacity demand depends on type of services
offered and the market share to the operators and 20
of course the probability to use the transport net-
work of the incumbent. 0
1998 2000 2002 2004 2006 2008 2010

Telektronikk 3/4.2003 125

The traffic forecasting model VM(t) for mobile 7 Conclusions
operators is given by: A traffic volume indicator has been developed to
estimate busy hour traffic increase in the trans-
VM(t) = Nt Σi bit uit Ait Cit Mit pit (3) port network. The indicator estimates the traffic
entering the transport network. The traffic vol-
Here Nt is number of persons, not number of ume indicator does not include redundancy and
households. Mit denotes the market share to the protection capacity in the core network. Telenor
operator and i = 1, 2, 3, 4 the system generations uses the traffic volume indicator forecasts as
2G, 2.5G, 3G and 3.5G. The penetration fore- input to the transport network planning process –
casts pit are shown in Figure 5. The capacity Cit evaluation of new network structures, expansion
is a mean capacity. A 3.5G subscriber has the of the network and introduction of new core
possibility to use a data rate up to 144 kbs using network technology.
UMTS but a significantly higher capacity in
WLAN hot spot. The number of hot spots avail- The indicator depends on the application evolu-
able and the proportion of time the subscriber tion and also the tariff regime for broadband
uses WLAN compared with UMTS give the services. So far, most countries use a flat rate
mean capacity C4t . The factor Ait indicates the for broadband traffic. However, specific applica-
real utilisation of the capacity. tions will overload the transport network heavily
if no actions are performed. There exist no in-
Let VO(t) be the busy hour traffic forecasts for citements to control the size of the traffic in the
the other operators, then the total of busy hour transport network. A probable solution will be
traffic forecasts V(t) is given by: to introduce a tariff on high capacity traffic and
on bandwidth on demand and specific applica-
V(t) = VR(t) + VB(t) + VM(t) + VO(t) (4) tions. The traffic forecasts used assume that a
new tariff regime for broadband services will
There are definitely possibilities to reduce V(t) be implemented within the next two years.
since the business traffic has busy hour before/
after lunch, while the residential traffic has busy References
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