Market Trends and Insights of

future mobile services

evolution and impact
Bosco Eduardo Fernandes
Chairman, UMTS Forum ICTG and
Manufacturers Sector Group
www.umts-forum.org

IV Fórum TELECOM
27, September, 2005,
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Pestana Palace Hotel, Lisbon
 Overview
• General overview of the Mobile
business
• Future vision of the Market
• Products and Service trends
• Finance and ROI
• Summary

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 3G/UMTS global update

• More than 75 W-CDMA networks in commercial service in over 35

countries with many others in trial/pre-launch
• Over 33 million 3G/UMTS subscribers (August 2005) out of a global
total exceeding 50 million 3G customers (WCDMA + EV-DO)
• 130+ 3G/UMTS licenses awarded in 45 countries
• W-CDMA take-up faster than GSM at the same stage

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 50 Million 3G Customers Worldwide
WCDMA
WCDMA now
now exceeds
exceeds EV
EV--DO
DO by
by aa factor
factor of
of 22 33.1
million

17.0

Sources: EMC, operators

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Turbulence in the Industry
A telecom industry faced with object of relentless
technological change and challenges on existing
Business.
-Regulatory environments, subject to change and desperate to regain some
stability and renewed revenue growth. Industry Standards vs Standards
bodies vs IT media standards.
• Skype reaches 100 million downloads, has 30+ million
users,1,500,000+ connected anytime, carried 7 billion+
free minutes!! Closing in on 10 billion by late june.
• Application Hosting and WEB Hosting is becoming very
popular.
• Bit-Pipe Carrier Business can be profitable- Yahoo
Broadband.
Business is moving to the Edge?

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Spheres of Influences
BROADCASTING INTERNET

Gray Area

Private Sector Public Sector

Service transparency
Convergence Service integration
Multiple-media Services
Service Regulation
Service Enabled Networks A converged archipelago
offers all services on all
devices

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 The regulatory framework
− Success of GSM (and UMTS) is
built upon concerted industry
approach.
− Requirement for roaming and
interoperability are met.
− Globally harmonised frequency
bands minimise requirements
for multi- mode / multi- band
terminals.
− Today's regulators are reluctant to influence
technology choices.
−„Technology Neutrality“ is supposed to
provide a level playing field, but destroys
economies of scale.
− Spectrum Trading provides new options for
underutilized frequencies,but increases risk
of incompatibility and fragmentation.
− Suitable (harmonized) spectrum is hard to
find and in high demand.
− New applications and usage scenarios
blur the boundaries.
− The purpose of the frequency band
should be retained: a cellular band
should be used for cellular systems, if
there is a demand? Mixing different
types of Services in the same band
causes fragmentation, inefficient use
of spectrum and may result in lack of
frequencies for the ‘main’ system.
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 The Vision towards one
integrated network
2012 & beyond
PSTN
PSTN // ISDN
ISDN
GSM IMS+iHSS
IMS+iHSS
GPRS/EDGE
WIMAX
WLAN

WiFi
WIMAX

3G
WCDMA-FDD PS
PS Core
Core

3G+HSDPA
WCDMA-FDD

3G+HSDPA+HSUPA
WCDMA-FDD IP BASED WIDEBAND
RAN
2002-03 2003-04 2005-06 2006-07 2008 2010 2012 & beyond
64-144kps 64-384kbps 384-5Mbps 3-20Mbps 10-50Mbps 20-100Mbps 20+to 100+ Mbps

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 Data traffic is increasing
fast!
Gigabits per second (Gbps)
30.000

25.000 Wireless data

Wireless voice
20.000
Non-IP data
15.000 Wireline IP
Wireline voice
10.000

5.000

0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Compound annual growth rate (2003 – 2010): 31 percent

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 What does IMS provide?
• Cost efficiency –best choice from a service architecture
perspective.
• Mixed Multimedia
− Ability to pick and mix various multimedia flows in
single or multiple sessions
– Can handle real-time voice, video, data
– QoS
• Access Independence
– Provides access to IP based services independent
of the access network (mobile / fixed)

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Mapping of 3GPP Functions to IMS
Products R-SGW
SGW
Applications Operator 1
and Sh
HSS
Services HLR
Si ISC
IM-SSF SLF BGCF
SLF Mi
OSA-SCS Cx Dx
Mj
Sc
CSCF MGCF T-SGW
SGW Enabling Services
AS PCF Mg
Mr
Mc R-
Mp Applications Payment@vantage
Sr
SCP MRF-C MRF-P MGW Prepaid@vantage
Gm
Gr Gc Go Rating@vantage
CAP
Location, Presence, ...
„Gi- Cloud“ ISC
GGSN Sh
UE GERAN
Gn
CMS 8200
SGSN HSS
SIP Client Uu UTRAN Iu PO/PS-Domain
CCS 1000 MRF
PSTN /
CFX 5000 CFX 5200 PLMN
TDM

CMG 3000
IP
SIP UTRAN, IP
BSS Network
terminals
3G SGSN GGSN
CPX 5000 CPG 3300

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Trends in Mobile Broadband
Narrowband User Data Rate Broadband
High
speed 2G 2.5G
GSM 3G
Cellular technologies GPRS/EDGE
W-CDMA HSPA 3Gplus
802.20
become more and more Flash-OFDM

broadband

Level of mobility
Low
(TDD-HCR, TDD-LCR, HSPA) speed WiMAX
IEEE 802.16e
Pedestrian IEEE
802.16d
Nomadic
Alternative wireless Wi-Fi
IEEE 802.11
Indoor
technologies become Bluetooth

more and more mobile

Cable BWA BWA
(WiMAX, Flash-OFDM, 802.20) Stationary Dial-Up
DSL IEEE 802.16a
IEEE 802.16

0,1 1 10 Mbps

Several technologies compete for mobile Broadband:

ƒ HSPA is the most promising candidate, not all can win.
Source: Siemens Status: March 2005

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 Cellular Access Network
evolution ????? 2015/2017

4G???
Super 3G 2008-15
„ Broad Objectives
-ALL IP
-100Mbps mobile
HSUPA 2006-07 „ Evolution of 3G -1Gbit/s fixed
instigated by -HDTV
Operators etc.
HSDPA 2005-06 „ OFDM/MIMO
„ Radical step change
2005 „ Integrated
Status Quo „ Up to 50% increase in -100Mbps downlink distrubtive
W-CDMA uplink - 50Mbps uplink technologies and
W-CDMA „ Downlink up to throughput
14Mbps. Typically - 10ms latency Trial concepts in
„ 50-70% increase in - IP services Japan, Korea and
„ Downlink 144-384kbps 1-1.5 Mbit/s uplink capacity
„ IPv6 based Radio China.
urban and 64-144kbps „ Falls back to W-CDMA „ 20-55% reduction in
rual throughput at cell edge Access Network
end-user packet call
„ Footprint simliar to GSM „ Typically €0.025/Mbyte -Gb, Iu …
delay
„ Typically double GSM across network „ IPv6 based transport
network capacity „ Latency >100ms plane (signaling
interfaces)
„ Typically €0.05/ Mbyte
across network „ OFDMA/MIMO
„ Latency >200ms Driver:
„ ATM/IPv4 application All IPv6 infrastructure
support
Note: 1xEV-DO Rev A, TD-SCDMA, EDGE Phase 2, HSDPA 2 are not indicated

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 3GPP Long Term Evolution
(LTE) philosophy
• Current LTE focus is on enhancement of the
Universal Terrestrial Radio Access (UTRA)
• With HSDPA and Enhanced Uplink, UTRA will
remain highly competitive for several years
• LTE project aims to ensure the continued
competitiveness of the 3GPP technologies for the
longer term (10 years and beyond)
• Similar initiative underway for
GERAN (GSM/EDGE radio access)

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 Spectrum issues
• Spectrum flexibility
– E-UTRA to operate in 1.25, 2.5, 5, 10, 15 and 20
MHz allocations…
– uplink and downlink…
– paired and unpaired
• Co-existence
− With GERAN/3G on adjacent channels
− With other operators on adjacent channels
− With overlapping or adjacent spectrum at
country borders
− Handover with UTRAN and GERAN
Possibly not a mandatory requirement (to help reduce
network and terminal complexity)
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 Spectrum efficiency
•
User throughput
Downlink target:
– 3-4 times that of Release
6 HSDPA
– Scaled according to
spectrum bandwidth
• Uplink target:
– 2-3 times that of Release
6 Enhanced Uplink
– Scaled according to
spectrum bandwidth
• Significantly improved
spectrum efficiency and
cell edge bitrate
– Whilst maintaining same
site locations
• Downlink target
(bits/sec/Hz/site):
– 3-4 times that of Release
6 HSDPA
• Uplink target
(bits/sec/Hz/site):
– 2-3 times that of Release
6 Enhanced Uplink
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 Mobility
• The Enhanced UTRAN (E-UTRAN) will:
– Be optimised for mobile speeds 0 to 15 km/h
– Support, with high performance, speeds
between 15 and 120 km/h
• Maintain mobility at speeds between 120 and 350
km/h
– And even up to 500 km/h depending on
frequency band
– Support voice and real-time services over entire
speed range
– With quality at least as good as UTRAN
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 Cost considerations
• Optimisation of backhaul
• Maximised re-use of existing sites
• Maximise Multi-vendor interface
• Terminal complexity and power
consumption to be optimised/minimised
• Avoidance of complicated architectures
and unnecessary interfaces
• Efficient OAM&P (Operation,
Administration,Maintenance and
Administration,Provisioning)
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 Timescales
• Initial studies and workplan creation to be
completed by June 2006
• Aim at developing relevant standards by
June 2007
Stong Industry interest to pull these dates
forward and have the technology ready by
2008!!!

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 WiMax Services & Applications
2005: Fixed Outdoor
–E1/T1 level service for
enterprises
–Backhaul for hotspots
–Limited residential broadband
access
2006 (16d): Fixed Indoor
–Indoor ‘last mile’ access for
consumers
–Wireless DSL
–Metrozone / Enterprise
campus piconet
2007/2008 (16e): Portable/Mobile
- ‘Portable’ broadband access
for consumers
- Always best connected

Metrozone
Fixed Portable/
Outdoor Mobile
Wi- Fixed
Fi
Indoor

Backhaul
Enterprise
Campus Piconet
Wi-Fi* Hotspot

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 A world of 3G/UMTS services

Information, entertainment, news, interactive games, video & movie clip downloads, high quality
streaming video, video telephony and conferencing, mobile TV, video messaging, sports
highlights, audio, ringtones, location-based services, mobile Internet & email, voice… AND MORE

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3G/UMTS Terminals

• Over 180 3G/UMTS terminals and PC cards

commercially available or announced by a growing range
of European, Asian and US manufacturers
• Latest models compare with 2G handsets in terms of
battery life, weight and size

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 Device availability
Manufacturer’s market vision…
2H 2005
Nortel: HSDPA datacards commercially available
Ericsson: HSDPA PC cards, 1.8 Mbps

1Q 2006
Nortel: HSDPA Handsets commercially available

1H 2006
Ericsson: First HSDPA handheld terminals, 3.6 Mbps PC cards in volume

2H 2006
Ericsson: Mass market 3.6 Mbps terminals, G-RAKE (high resolution
screens, high update rate, 4 Megapixel cameras), 2nd generation PC
cards (7.2 Mbps, G-RAKE / Dual antenna)

Q2 2007
Nortel: HSUPA commercial datacards expected

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 World ARPU Decline will bottom out in 2006
Voice ARPU continues to dominate, but data
45
drives growth
€ per human user per month

40

35

30

25
Data ARPU
20

Voice ARPU
15

10

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Com MN SM Market Assessment Status: August 2005
ARPU: Average Revenue Per Human User

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Pestana Palace Hotel, Lisbon
 SUMMARY
• 3G / UMTS is already a commercial reality with more than
33 million subscribers on almost 75 networks worldwide.
• 3G / UMTS uses globally harmonised spectrum and builds on
economies of scale of global GSM market (>1.3 billion customers).
• With HSDPA / HSUPA, mobile operators can significantly boost
performance of W-CDMA to achieve higher speeds & capacities.
• IMS offers the platform for 3G evolution and service convergence.
• IEEE technologies such as WiFi & WiMAX present
a valuable complement to operators’ pure cellular portfolios.
• Spectrum is the most critical resource in wireless communication,
worldwide roaming and economies of scale demand harmonization.
• The UMTS-Forum continues to contribute to the decision process.

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For more information…

www.umts-forum.org

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Value proposition of being
in the UMTS Forum

www.umts-forum.org

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UMTS Forum is the industry voice for
3G/UMTS evolution
1. Giving guidance on realistic market uptake and protecting
industry investments by efficient use of rare resources
such as spectrum
2. Defending the terrestrial mobile industry position against
other future interests in WRC-07 to secure incremental
growth for this industry
3. Giving guidance to Regulators, Governments and
Standards bodies around the world to orientate key
spectrum, regulatory and technological choices
4. Complementing the work of other fora and international
bodies in the complete value chain for revenue growth
5. Addressing issues of mid and long-term evolution of
3G/UMTS that are not addressed elsewhere
6. Open to all business sectors and players

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UMTS Forum Key Areas of Activity in 2005 (1)
Spectrum & Regulation
Studies and contributions on harmonisation of global spectrum and
additional spectrum arrangements for IMT-2000 and its evolutions in
preparation for WRC-07
Contributions to the development of the European decision harmonizing
the frequency band 2500-2690 MHz for IMT-2000/UMTS and defining the
channelling arrangements
Guidance to regulatory authorities and national administrations on 3G
licensing
Market forecasts (including UMTS Forum Report 37 “Magic Mobile
Future 2010-2020”) to assist with spectrum planning. Delivered as inputs
to ITU and CEPT.

3G Evolution
New edition of White Paper (Towards Mobile Broadband and Personal
Internet)
Report on HSDPA & HSUPA deployments
Studies on ultra low cost 3G terminals

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 The Way Forward:
A new mission for the UMTS Forum
• Support and assist the licensing of UMTS in new markets
such as Russia, Brazil, India and China.
• Represent the interests of UMTS operators in matters
of frequency allocation (e.g WRC 2007).
• Support operators in their understanding of the potential
of new services (e.g based on HSPA and IMS)
• Carry out common assessment of the risks and opportunities
presented by new technologies (e.g WLAN, WiMAX, OFDM).
• Forecast long term societal and industry trends and their likely impact
on UMTS operators.

The UMTS Forum has a new mission: to defend,

expand, and realise the full potential, of UMTS
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