Day 2-t10-1530 harbir-singh-20120524

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LTE World Summit Barcelona May 2012 Day 2

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Day 2-t10-1530 harbir-singh-20120524

  1. 1. When to move to TD-LTE ? Key Considerations from a 3.5GHz PerspectiveThursday, 24 May 12 © Aequator Capital Ltd. 1
  2. 2. A brief introduction  My name is Harbir Singh Nat  I am the CEO of Zapp.pt and  The founder of Æquator Capital Ltd. Thursday, 24 May 12 © Aequator Capital Ltd. 2
  3. 3. Zapp.pt  Zapp.pt is  a Portuguese company with a 20 year heritage  100% subsidiary of Saudi Oger which through its subsidiary Oger Telecom Ltd. Is a one of the largest telecom operators in the world with over 35 million subscribers  Oger Telecom is the controlling shareholder of Turk Telekom.  Zapp.pt operated CDMA450, TETRA and trunked radio networks throughout Portugal  Zapp.pt has 168MHz of 3.5GHz spectrum in Portugal Thursday, 24 May 12 © Aequator Capital Ltd. 3
  4. 4. Æquator Capital Ltd.  Æquator Capital is a advisory boutique which is focused on telecommunications, media and technology sectors  We focus on small to medium sized clients  Who need financing solutions which are not delivered by a standard cookie cutter approach  Our website is www.aequator.co.uk Thursday, 24 May 12 © Aequator Capital Ltd. 4
  5. 5. The peculiar case of 3.5GHz It should be doing very well…… One of the largest continuous spectrum bands from 3.4GHz to 3.8GHz (400 Mhz)  LTE Bands 42, 43  WiMax 2.0 band class 5 Accepted as a mobile band in Europe, with spectrum allocated (in part or whole of the band) throughout the world Nearly 300 deployments throughout the world…… Thursday, 24 May 12 © Aequator Capital Ltd. 5
  6. 6. The peculiar case of 3.5GHz ……..but it isn’t Spectrum is not invested in by any large international) MNO, not in a strategic way at least (before anyone objects, I would like to point out exceptions prove the rule) Limited device choices  No viable voice handset Absence of multiband or multimode devices No success stories No proven business case Thursday, 24 May 12 © Aequator Capital Ltd. 6
  7. 7. The peculiar case of 3.5GHz Why ?  No large MNO investor which can deliver demand  Therefore, a Catch-22 situation  Vendors will not develop economical CPEs without assured demand  Operators cannot generate demand without economical CPEs  Most widely used RF filters cut off at 2.7Ghz (co-incidence or physics ?). This prevents multi-band development Thursday, 24 May 12 © Aequator Capital Ltd. 7
  8. 8. The opportunity The hypothesis : The 3.5GHz spectrum will be valuable. The proof  Data consumption by smartphones is growing at an exponential rate (Softbank experience 200% pa)  Spectrum is limited hence scarce  Therefore with a linear extrapolation - one day 3.5GHz spectrum will be valuable  Q.E.D. But we don’t know when Thursday, 24 May 12 © Aequator Capital Ltd. 8
  9. 9. So what do we do now ?  To build or not to build, that is the question ?  (and another, followup question) If to build which technology – WiMax or LTE ? We have three options 1. Squat on the spectrum for now. 2. Start TD-LTE Rollout 3. Continue with WiMax and plan to rollout TD-LTE when device eco-system is ready (of course there is a fourth option – continue to rollout WiMax as if nothing happened. But with only 20 minutes per speaker slot, we will skip that one) Thursday, 24 May 12 © Aequator Capital Ltd. 9
  10. 10. Option 1 : Squat on your spectrum  This strategy follows an age old wisdom – when in doubt, don’t.  Least risk option (by that logic the wisest)  However, this option is  Not available perhaps in a majority of license conditions  Is a strategy to make some money but not to develop a business (in the end you will simple trade the spectrum – that way you never get really, really rich) Thursday, 24 May 12 © Aequator Capital Ltd. 10
  11. 11. Option 2 : Move to TD-LTE now Advantages  You start building a business today, this has advantages of  Building scale earlier  Lesser migration issues However, problem is  The CPEs you have are single band, expensive dongles and routers  The is no business case for mobility on a standalone 3.5GHz band  And there is no business case for universal coverage  Therefore the business essentially is fixed line substitution, which has low ARPUs and low performance (compared to fixed line) Thursday, 24 May 12 © Aequator Capital Ltd. 11
  12. 12. Option 3 : WiMax now, TD-LTE Later Advantages  You start building a business today, this has advantages building scale earlier  The WiMax eco-system is here today, now at viable CPE prices  It is still a fixed line substitution business But the problem is that at some point you will need to swap your network and CPEs to TD-LTE. Which could have potential costs. Thursday, 24 May 12 © Aequator Capital Ltd. 12
  13. 13. Conclusion  Unfortunately, there are no clear answers. (I am also looking for them)  However, I do not believe WiMax is dead or will die anytime soon  Also I do not believe we will see iPAD/iPhone/Galaxy TD-LTE on 3.5 GHz anytime soon, so we better have a strategy which takes this fact into account. Thursday, 24 May 12 © Aequator Capital Ltd. 13
  14. 14. www.aequator.co.ukThursday, 24 May 12 © Aequator Capital Ltd. 14

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