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Small Cell Deployments: Poised for Rapid Growth
1. Small Cell Deployments: Poised
for Rapid Growth
Market and Technology Analysis
Hosted By:
&
NASDAQ: MSPD NASDAQ: RSYS
June 29, 2012
2. Forward-Looking Statements
This presentation contains forward-looking statements within the meaning of applicable federal
securities laws. Such statements include statements regarding the Company’s expectations,
goals or intentions, including but not limited to, statements regarding: product features and their
benefits; the Company’s expectations and estimates for growth of the small cell market;
anticipated small cell product deployments and the Company’s customer engagements; and the
depth and breadth of the Company’s small cell product portfolio. Forward-looking statements
are subject to substantial risks and uncertainties that could cause actual results and events to
differ materially from those stated in the forward-looking statements. The Company’s existing
business is subject to numerous risks and uncertainties, including fluctuations in its operating
results and future operating losses; loss of or diminished demand from one or more key
customers or distributors; the ability to successfully develop and introduce new products; pricing
pressures; and the potential for intellectual property litigation. Additional risks and uncertainties
that could cause the Company’s actual results to differ materially from those set forth in any
forward-looking statements are discussed in more detail under the caption “Risk Factors” in the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2012 and in
the Company’s future filings with the SEC. All forward-looking statements are qualified in their
entirety by this cautionary statement. The Company is providing this information as of the date
of this presentation and does not undertake any obligation to update any forward-looking
statements contained in this presentation as a result of new information, future events or
otherwise.
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3. Agenda
Small Cell Market Status
Why Carriers are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction Doug Pulley
CTO Wireless
Radisys Introduction Mindspeed Technologies
Conclusion
Rupert Baines
VP, Marketing Strategy & MarCom
Mindspeed Technologies
Todd Mersch
Director, Product Line Management
Radisys Corporation
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4. Significant Momentum for LTE Small Cells
AT&T “launches RFI for Small Cells” ...up to 100,000 units (Light Reading, June 21, 2012)
“AT&T has been an advocate of small cells for several years, and we’ve spent a lot of
time with our vendors working on a strategy for deployment”
– Kristin Rinne, SVP, Architecture & Planning (speaking at CTIA Wireless trade show May 9, 2012)
Planning on deploying small cells to enhance LTE capacity
– Hans Leutenegger, VP of Network: South Region (speaking at CTIA Wireless trade show May 2012)
“The end goal of our plans is a completely heterogeneous network. Small cells are a
fundamental part of this.” over 600,000 residential femtocells today; moving to indoor
small cells this year and outdoor small cells “to add much needed capacity” in 2013
– Iyad Tarazi, VP Network Engineering (May 2012)
· Announced launch of small cells for residential & enterprise across Europe & Latin America
· Now deploying multi-mode small cells for LTE
FCC Opens up 100MHz for small cell LTE (3.5GHz – 3.6GHz)
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5. Small Cell SoC TAM to Reach $1 Billion
in 2016
Market forecast to grow from <$100 million in 2012 to over $1 billion in 2016*
Informa predicts 91 million small cells deployed by 2016
– 4.6 million small cells currently deployed
– By the end of 2012, there will be 6.4 million small cells outnumbering the forecast
6 million macrocells worldwide
Currently, 43 small cell commercial deployments in 23 countries
54 40
35
30 Public
Access
25
Units
24 20 Enterprise
15
10 Consumer
5
0
2009 2010 2011 2012 2013 2014 2015 2016
Number of Operator Deployments $7.8B TAM, 92% CAGR -- ABI 4Q11
2Q12: Informa
* SOURCE: Industry and Company Estimates
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6. Deployments Already Underway
LTE deployments beginning in 2012 with ramp in 2013-2014
Carriers deploying small cells now
– 43 commercial launches
– > 100 trials
Metrocell requires multimode (3G + 4G + WiFi)
9 out of the 10 largest operators now have small cell deployments
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7. Small Cell Forum Industry Players
76 vendors and 67 operators representing nearly 3 billion subscribers
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8. Agenda
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
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9. Motives for Small Cell Deployments
Problem: Femtocells:
Coverage
- Basic RF coverage holes - Provide basic service coverage
- Particularly affects affluent homes - Primarily residential
- Some success stories (eg SPRINT,
- Requires improved voice coverage
SFR) and carrier support
- Rural areas “Greater Femto”
- Benefits: reduce churn, increase
customer lifetime value
Voice
Data
Problem: Small Cells:
Capacity
- Data loads exceeding capacity - Provide localized capacity
- Limited macro expansion ability - Expand overall capacity/ARPU
- Increase capacity economically - Clear acceptance and support
from carriers
by offloading to femtocells
- Benefit: Increase capacity,
increase customer satisfaction
with lower CapEx, OpEx
Future: Applications and New Services
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10. Data Demand Increasing Exponentially
Revenue vs. Traffic Growth
Traffic
Revenues &
Traffic Gap
Widening
Voice Era
Revenues
Data Era
Source: Cisco VNI Source: Heavy Reading
Traffic is more than doubling every year (Cisco MVNI 108% CAGR)
ARPU flat: Carriers need to increase capacity and efficiency
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11. Capacity: Technology Reached Limits
Increase performance
Most gain
from
shrinking
cells
Small cell
macro Shrink cell
Need more cells and tighter interference control Cooper’s Law: increasing the
(HetNet, SON) to increase capacity number of cells has always been
the primary way to add capacity
“Spectral efficiency can improve capacity by 1.5x. Spatial efficiency
Increases capacity by 10x or more” - Alcatel-Lucent
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12. Small Cells and WiFi – Solving
Problems Together
All operators now require WiFi with their pico / metro cells
WiFi alone is insufficient for carriers
– Short range requires too many sites, not economic compared to
WiFi + cellular small cell
– Poor performance and customer experience concerns
Multi-mode dramatically
improves economics
– Increase usage, value
– Minor impact on CapEx Best of Breed
Outdoor Wi-Fi
– TCO dominated by per site,
power, backhaul
LTE Small
Cell
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13. Economic Drivers for Small Cell
Deployments
Hierarchical Cell Structure / Self-Organizing Network / HetNet
Mobile Experts
Macrocell is 2.5x – 8 x
more expensive than a
small cell
Signals Research
(Carrier Data Costs)
Macro = $8/GB
Small cell = $5/GB
Femto cell = <$1/GB
Small cells reduce mobile network operator CapEx, OpEx and TCO
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14. Telefonica:
Small Cells Across Europe & LatAm
Triple mode: 3G HSPA + WiFi +
4G LTE
“Small cells are the only way for future capacity, even factoring in
extra spectrum and LTE-A” -- Robert Joyce, Chief Radio Engineer
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15. Vodafone Committed to Small Cells
• Small cells increase coverage and reduce churn
• Core part of marketing strategy
• Improved customer satisfaction: 96% “would
recommend”
• Small cells as dominant part of LTE deployment
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16. AT&T: Largest Deployments to Date
AT&T launched residential femto service in March 2010
Several hundred thousand deployed
– Informa estimates 800,000
Emphasis on coverage and churn reduction
Light Reading reported RFI for 100,000 multi-mode small cells for 2013
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17. Agenda
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
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18. Small Cell Product Categories
Residential Enterprise Pico Micro Macro
Femto Femto (indoor,
outdoor)
Business
Metro
4-8 16-32 64-128 128-256 256+
users users users users users
Number of Concurrent Users
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19. Small Cell Supply Chain
Mobile
Network
Operator
OEM
QCOM CAVM
System-on-Chip TXN FSL BRCM
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20. Product Development Strategies: A
Changing Paradigm
In-House Resell SW +
SoC
TTM X
Agility X
Control X
Shared Base X X
Differentiation X
Margins X
Software + SoC integration
Balance between control, cost and TTM
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21. Agenda
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
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22. Mindspeed: Powering Next Generation
Mobile Broadband Communications
Transcede®: First application-specific, Winner Winner Finalist
single-chip SoC for LTE small cells
The only TD-SCDMA SoC on the market
First to market with 3G and 4G solutions; Winner Winner Finalist
2010
Supporting 25* customer engagements
worldwide
Broadest portfolio of small cell SoC Finalist Winner Finalist
2011
solutions available today
T22xx and T33xx family addresses
growing multi-mode 3G/4G residential, Finalist Winner Finalist
enterprise and metro mobile
infrastructure markets 2010
*as of March 31, 2012
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23. Mindspeed’s Small Cell Portfolio
Residential Enterprise Pico Micro Macro
Femto Femto (indoor,
outdoor)
Business
Metro
3G
3G + 4G
Dual-mode
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24. Small Cell Adoption Already Underway
2015-16
2013-14
2012
2011
China
3G small cells United States UK
deployed in
over 23
countries South Korea
Japan Europe India
Mindspeed leading the wave of LTE small cell deployments
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25. Mindspeed Leading in Korea
Mindspeed in designs
in Korea for Transcede 4G/LTE SoCs
Supporting the world’s first LTE small cell
commercial deployments
Mindspeed: 2012 Small Cell Industry Award Winner
Commercial Deployment Award
Jointly with Contela and SK Telecom
Technology Enablement Award
Radisys for KT – based on Transcede
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26. Agenda
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
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27. Radisys At a Glance
Single Solutions Source Worldwide Customer Base
Wireless Software
Embedded
COTS Platforms Wireless Media Server / MRF
Infrastructure
Solutions
Professional
Services
Embedded Wireless Infrastructure Solutions
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28. Dual-mode Small Cell Software
3G Femtotality
Our Focus: Small Cells LTE TOTALeNodeB
Multi-mode
‒ 3G + LTE + Wi-Fi
Femto 60+ LTE / 3G Small
Capacity
Cell Customers
Metro
Micro Pico
Best Enabling
Macro
Technology:
TOTALeNodeB
Coverage
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29. Radisys Company Snapshot
2011 Revenue Employees Radisys Executive Leadership
~ $350M Mike Dagenais
950 in 12 locations Chief Executive Officer
worldwide
Long Life 500 Hardware &
Software Engineers Brian Bronson
Markets President and
Chief Financial Officer
150 Professional
Telecom /
Services
Networking
Aerospace & Manish Singh
100 Operations Chief Technology Officer
Defense
Public Safety
Medical
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30. Agenda
Small Cell Market Status
Why Carriers Are Deploying Small Cells
Small Cell Technology
Mindspeed Introduction
Radisys Introduction
Conclusion
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31. Small Cells Already Deploying Today and
Ready to Explode
Carriers deploying small cells today
– A strong ramp expected starting in late 2012
– Growing semiconductor TAM to roughly $1B by 2016
Solves key problems for carriers
Mindspeed and Radisys in core leadership positions
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32. Thank You
Questions?
Please contact us for additional information or to set up a briefing.
Kevin Trosian
Vice President
Business Development and Investor Relations
+1 949-579-3111
investor.relations@mindspeed.com
Lyn Pangares
Radisys Corporation
lyn.pangares@radisys.com
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