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Techno-economical aspects of LTE mobile broadband at 800 MHz and 2.6 GHz

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Public conference on "LTE: new frequencies 2.6 GHz & 800 MHz – a chance for a new image of mobile telephony?", Friday October 8th, Warsaw, Poland.

Public conference on "LTE: new frequencies 2.6 GHz & 800 MHz – a chance for a new image of mobile telephony?", Friday October 8th, Warsaw, Poland.


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  • 1. 1
    Techno-economical aspects of mobile broadband From 800 MHz to 2.6 GHz.LTE: new frequencies 2.6 GHz & 800 MHz – a chance for a new image of mobile telephony? Friday October 8th, Warsaw, Poland.
    Dr. Kim (Kyllesbech Larsen)Technology Economics, T-Mobile
  • 2. 2
    Story…..
  • 3. 3
  • 4. Changing market.Social trends and technological indicators.
    Socialize
    Individualize
    Digitize
    2 x as active ! as fixed users
    1.60+ bn internet users.
    Next 1+ bn by 2015.
    25+ mn Mobile-TV users in APAC
    400+ mn active users.
    100+ mn mobile users.
    2.5+ bn photos per month
    4.1+ bn mobile users.
    <10% on mobile internet.
    20+ hrs video per day
    $4.5+bn mobile gaming revenue
    10+bn mobile apps downloads.
    250+ bn e-mails per day.
    40+% more than 5 MB.
    400+ mn registered users.
    86+ mn active ebay users
    17 June 2010
    4
    2009: 45M Mobile users, 2.8M mobile broadband users, 21M internet users,.3.6M Facebook users (56% female, 65% 18-35),
    4
  • 5. 5
    The incumbent mobile operator’s near-future … “it aint pretty”!
    The 3G traffic jam!
    3G capacity crunch.
    Re-farming existing spectrum.
    New spectrum demand.
    Empty 2G roads - in time?
    Re-farming GSM!
    HSPA+ versus LTE ?
    Technology timing!
  • 6. 6
    The Greenfieldspectrum… “happy” short-term, a tougher future.
    Tougher future … growth limitations.
    Fixed-like demand!
    Dramatic Hz / customer drop!
    Additional spectrum and/or
    technology needs!
    Happy startup … plenty of quality.
    Lots of Hz per customer!
    High speed mobile broadband!
    Great customer experience!
  • 7. 7
    Telco Europe is all about efficiency … … avoiding shareholder unhappiness …
    EBITDA GROWTH
    REVENUE GROWTH
    Growth markets
    OPEX GROWTH
    Western Europe
    REVENUE PRESSURE
    2010 – 2015 ILLUSTRATION
    Source: Pyramid Research 2010 & BoA Merrill Lynch 2010 Mobile Matrix.
  • 8. 8
    The Poland 2015 … broadband everywhere?, for everyone?
    Almost all house-hold will have a PC.
    Population
    38mn
    Trend 1 mobile internet devices will exceed PCs.
    Mobile
    Broadband
    (50%)
    430+%
    PCs
    (85% HH)
    6 out of 10 house-hold with (fixed) broadband 1.
    Fixed
    broadband
    (60% HH)
    Trend 2 demand for always best connected.
    1 out of 2 people will have mobile broadband 2.
    Trend 3 geometrical growth in data traffic.
    Source: Pyramid Research 2010.
    1 Fixedbroadband: xDSL, Cable, FTTx, … 2 HSPA, LTE.
  • 9. Spectrum benchmarking2.6 GHz requires least 9 times the site density to match 800MHz.
    850 MHz
    DL power
    UL power (typical limitation for coverage)
    2.6
    GHZ
    Large
    Very small
    Coverage area
    ×9
    ×1
    ×6
    ×4.5
    2.1 GHz
    2.6 GHz
    1.8 GHz
    900 MHz – 800 MHz (digital dividend)
    2×35 MHz
    2×30 MHz
    2×60 MHz
    2×75 MHz
    190 MHz
    Low
    High
    Available bandwidth for LTE
    Illustration
  • 10. Poland … Spectrum1 overview.
    • (Dense) Urban.
    • 11. High capacity.
    • 12. Poor coverage
    2500 - 2700
    MHz
    50
    TDD
    20 (UL) + 30 (DL) MHz TDD-LTE
    30
    2.1
    30
    2.1
    30
    2.1
    30
    2.1
    • Urban/Sub-urban.
    • 13. Very good capacity.
    • 14. Ok coverage.
    1700 – 2100
    MHz
    2×20 MHz FDD-LTE
    20
    1.8
    20
    1.8
    19*
    1.8
    19*
    1.8
    19*
    1.8
    • Rural – Urban
    • 15. Low capacity
    • 16. Very good coverage..
    18*
    0.9
    18*
    0.9
    14*
    0.9
    700 – 900
    MHz
    10
    0.9
    10
    0.9
    12
    0.8
    Era
    Orange
    Plus
    Play
    CenterNet
    Aero2
    Sferia
    67 to 62 MHz
    40 MHz
    112 MHz
    Illustration
    * Bands broken up 1 Total view of UL + DL 2 Based on 2009 actual customers.
  • 17. Poland … New spectrum opportunities.
    • (Dense) Urban / City coverage.
    • 18. High capacity
    • 19. Relative poor propagation.
    2500 - 2700
    MHz
    2 × 70 MHz @ 2.6 GHz
    1:30+
    • High-frequency spectrum can be valuable as capacity or for wireless DSL-business models.
    • 20. Bandwidth below 30 MHzis of lowervalue than higher bandwidths.
    • 21. Only urban population should be used for valuation.
    • 22. TDD spectrum is in general of lower value than FDD (i.e., due to propagationn characteristics).
    • 23. Rural - urban coverage.
    • 24. Very good propagation.
    • 25. Lower capacity.
    700 – 900
    MHz
    2 × 30 MHz
    @ 800 MHz
    1
    Low-frequency spectrum (≤ 2.1 GHz) is more valuable than higher-frequency spectrum
    Initial coverage is more valuable than limited coverage and high capacity.
    Low frequency spectrum can capture more population for significantly less cost.
    Below 20 MHz spectral capacity limitation will limits the overall spectrum value.
  • 26. Spectrum pricing & perceived value.2.6 GHz is perceived to be of very low value compared to lower frequency spectrum that offers economical and efficient coverage.
    Average spectrum price in US$/MHz/Pop.
    UMTS2.1 “hyper-hyped” value
    Log-scale
    10
    D
    UK
    Economical
    coverage
    Artificial scarcity
    NL
    US 1
    CAN
    India 3 Max
    Very dense, small area coverage, high GDP.
    1
    US
    D 2
    • Very dense, small area coverage (HK).
    • 27. Low absolute price compared to GDP.
    • 28. Perceived value add (DK, SE).
    India 3
    HK
    NL
    DK
    US
    SE
    CAN
    0.1
    D 2
    NOR
    Capacity
    enhancement
    AT 5
    D 2
    • Capacity overlay.
    • 29. No (real) demand.
    • 30. Government push for new entrant.
    0.01
    India 3 Min
    FI
    Large area, low pop density, very low GDP
    NL4
    0.001
    0.5
    1.0
    1.5
    2.0
    2.5
    3.0
    US 700 MHz auction 2008,
    German 800 MHZ – 2.6 GHz auction 2010
    Indian 3G / BWA 2.3GHz auction 2010.
    Dutch 2.6 GHz auction 2010.
    Austrian 2.6 GHz auction 2010.
    Auctioned spectrum in GHz
  • 31. The beauty of the “beast” Our customer, the smart-phone and its apps.
    13
  • 32. 1 + 1 = 2 (yesterday’s communications).
    …………
    …………….
    …….
    ……
    .....
    Mobile network
    Illustration
    14
  • 33. 1 + 1 is no longer just 2 (1 device - multi-tasking).
    Mobile network
    Apple push notification service (APN).
    Web 2.0
    Illustration
    15
  • 34. 16
    Mobile broadband versus fixed broadband demand.
    Lots of small volume events
    &
    very high signaling load due to mobile apps notifications
    High volume / P2P / streaming…
    100+
    70↑+
    20
    1
    1/3
    Mobile broadband
    700 MHz – 2.1 GHz
    BWA
    2.3 – 2.5+ GHz
    Fixed
    with
    WiFi
    Mobile industry: hardly any QoS pricing
    mainly based on volumetric FUP.
    Wireless & Fixed Broadband business model uses QoS-based pricing.
    Note: In relative usage
  • 35. 3G on vitamins, HSPA on steroids with HSPA+ & ++.HSPA roadmapoffers substantial speed and ecosystem scale effects.
    HSPA
    HSPA+
    HSPA+
    HSPA++
    84+ Mbps
    14.4 Mbps
    21- 28 Mbps
    42Mbps
    Network
    5 MHz
    5 - 10 MHz
    10 MHz
    15 - 20MHz
    1H 2009
    1H 2011
    1H 2010
    2012+
    Huawei Data
    Huawei Data
    Huawei
    Stick
    Card
    Data Stick
    Data Sticks /
    Nov. 09
    Netbooks
    Netbook
    (June 2010)
    31 / 11
    5
    July 2010
    1,000+
    Devices1
    Samsung
    Nokia
    Android
    Motorola
    Qualcomm
    Chipsets
    ST Ericsson M570-V3
    MDM 8200
    Qualcomm
    ST Ericsson M570 & U8500
    MDM 8200
    Qualcomm
    Qualcomm MDM8220
    MSM 7230
    QSC6295
    1 iPhone 3Gs supports HSDPA 7.2 Mbps for iPhone 4 & iPAD HSDPA 7.2 Mbps/ HSUPA 5.76 Mbps.
    17
  • 36. Current mobile broadband option space.
    For 3 major operators little existing LTE optionality.
    4 top players lack optimum LTE spectrum conditions (i.e., 40 MHz).
    C+A+S have (currently) the strongest LTE spectrum position in Poland.
    18
  • 37. How to perfect existing legacy spectrum – part 1.Re-farm own spectrum is complicated, costly and prone to be service affecting.
    Migration & re-farming to 3G & LTE.
    Customer migration from 3G LTE
    3G
    3G
    (215 @ 2.1 GHz)
    3G

    2G
    After some time 2G
    to 4G migration.
    Free
    LTE
    LTE
    2G
    2G
    (210 MHz @ 1.8 GHz)
    2G LTE
    (210 MHz @ 1.8 GHz)
    New Customers
    ILLUSTRATION
    Note: 3G includes R99, HSPA, HSPA+, similar 2G includes Voice, GPRS & EDGE
    19
  • 38. How to perfect existing legacy spectrum – part 2.Re-farming GSM to UMTS in rural area accelerate penetration of mobile broadband.
    Rural migration & re-farming to UMTS900.
    Today there are more than 400+ UMTS900 devices.
    3G
    3G
    (215 @ 2.1 GHz)
    3G

    2G
    Free
    New Customers
    2G
    (210 MHz @ 1.8 GHz)
    3G
    3G
    3G @ 900

    2G @ 900
    UMTS900
    Rural UMTS
    2G 3G
    (900 MHz)
    ILLUSTRATION
    Note: 3G includes R99, HSPA, HSPA+, similar 2G includes Voice, GPRS & EDGE
    20
  • 39. New spectrum allows more efficient technology migration.
    Balancing demand & quality.
    Dense &
    Urban
    Areas
    3G  LTE
    Migration
    LTE
    3G
    (220 @ 2.6 GHz)
    3G
    3G

    2G
    (215 @ 2.1 GHz)
    LTE
    Free
    2G
    2G
    (210 MHz @ 1.8 GHz)
    Rural
    to
    Urban
    Areas
    LTE
    New Customers
    (210 @ 800 MHz)
    ILLUSTRATION
    21
  • 40. 22
    Macro economical benefits of broadband internet access everywhere.
    Un-economical spectrum pricing will delay and limit such benefits.
    Mobile broadband smart phones will increase spectrum demand rapidly.
    Without access to new spectrum resources operators will be growth limited.
    Re-farming legacy spectrum will be complex, costly and impact quality.
    Why should we care?
    Access to new spectrum paramount to ensure existing customer quality.
  • 41. 23
    Thankyouverymuch!
    Contact:
    kim.larsen@t-mobile.nl
    Tel: +31 6 2409 5202
    http://nl.linkedin.com/in/kimklarsen

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