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Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
Who pays for mobile broadband?
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Who pays for mobile broadband?

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This presentation was given as a teaser at the Open Mobile Summit 2011 in London followed by a Fireside talk on "Who pays for mobile broadband?".

This presentation was given as a teaser at the Open Mobile Summit 2011 in London followed by a Fireside talk on "Who pays for mobile broadband?".

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  • 1. Who pays for mobile broadband?Open Mobile Summit, June 8th 2011 London, UK.
    Dr. Kim Kyllesbech Larsen, Technology EconomicsTechnology, Deutsche Telekom.
  • 2. A bygone time … not so long ago ...When 1 + 1 was close to 2.
    Blablabla
    ... Bla …
    Mobile Network
    We talked (a lot)
    Rarely did we use the (mobile) web.
    We SMS’ed (even more)
    2
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 3. A new paradigm … 1 + 1 is no longer “just” 2 ... Applications have “taken over” the communications.
    1
    User
    1+
    Device
    Many applications
    User & application initiated bandwidth demand.
    Device & application (IP addr, keep alive, …) driven signaling resources.
    3
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 4. Its all in the data package ... Mobile revenues in an Apps centric world could decline rapidly.
    Western Europe ARPU development in Euro
    Illustration
    CS Voice
    SMS & MMS
    PS Data
    23.0
    22.4
    By 2015
    more than 70%
    of users have
    a smartphone
    6.2
    ?
    3.3
    3.4
    3.8
    12.7
    15.7
    13.0
    6.2
    6.5
    2010A
    2015E
    Mobile
    centric
    2015E
    Apps
    centric
    Source 2010 & 2015 Pyramid Research March 2011 Western Europe.
    4
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 5. When the mobile network becomes a bit-pipe ... Apple iTune promotion in NL ... free downloads.
    9× increase in peak throughput.
    More than twice the total volume.
    30+ thsd downloads in the peak.
    Promotion day
    Normal
    5
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 6. Smartphone traffic tsunami ... and growth expected to continue for quite a few years more...
    Smartphone indicators
    ×7
    Data signaling
    Problems!
    May – June 2010 (Netherlands).
    “iPhone overload T-Mobile (NL) network” (Volkskrant, May 2010).
    “T-Mobile (NL) gives compensation”.
    (2 month no data charge & iPhone users gets €30.)
    “T-Mobile (NL) admits not able to handle data growth in its mobile network“ (Tweakers.net).
    ×6
    Smartphones
    ×4
    Throughput
    ×5
    Volume
    December 2008 to December 2010
    Illustration
    6
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 7. Smartphone usage ... 2GB = unlimited ... for most.
    Monthly volume relative to Average usage:
    >2GB
    3% of users with
    30% of volume
    Outside bundle:
    4% of users with
    35% of volume
    Illustration
    Laptops
    Today
    ca. 20% unlimited subscriptions takes ca. 60% of data volume.
    Less than 2% of Laptops
    takes more than 20% of data volume.
    7
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 8. The profitability Squeeze.
    Cash pressure by un-controllable
    mobile data growth
    As it looks today
    Mobile data growth will be very challenging to support with HSPA-only.
    Free cash flow
    Trends
    • HSPA alone cannot sustain the traffic.
    • 9. LTE deployment will be accelerated.
    • 10. In-door off-loading to WiFi and Femto.
    HSPA only
    -
    No LTE
    HSPA, with LTE deployment
    HSPA+LTE, 50% off
    -
    load
    2010
    2012
    2014
    2016
    2018
    2020
    Operator illustration
    8
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 11. Network sharing a way to profitability and cash.
    > 7 years
    < 5 years
    4 – 8 years
    The best sharing strategy depends on the business cycle and
    technology age.
    LTE
    UMTS & GSM -> LTE
    HSPA / UMTS
    HSPA+
    Rollout Phase
    (primarily coverage)
    Steady State
    (capacity & in-fill)
    Modernization
    (replacement)
    Illustration
    Rollout
    Steady state
    Modernization
    Significant Capex savings.
    Substantial Opex prevention.
    Best shared network.
    Little Capex benefits.
    Substantial Opex savings.
    Significant write-offs & re-structuring costs.
    Significant Capex savings.
    Substantial Opex savings.
    Minor write-off.
    Re-structuring costs.
    9
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 12. The smartphone … The “killer” device and its “killer” applications…
    The smartphone … The “killer”device and its “killer”applications…
    10
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 13. Key challenges.What we need to be passionate about.
    How to spend it
    How to earn it back
    11
    Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
  • 14. Acknowledgement: I am indebted to my fantastic team for always being patient with my data requests, for their great suggestions and support in creating this presentation.
    The key value proposition of a mobile network is ....
    mobility
    Let the discussion begin!
    Contact: kim.larsen@t-mobile.nl
    Mobile: +31 6 2409 5202
    http://nl.linkedin.com/in/kimklarsen

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