Spectrum limitations migrating to NGMN: a growth market dilemma?   5th Annual Mobile Network Evolution Conference, Singapo...
Story.   <ul><li>Peeping the Crystal ball </li></ul><ul><li>Prepared to be annoyed! </li></ul><ul><li>The 3G traffic Jam! ...
Changing Market - Tomorrow’s World Society Trends and Technological Indicators 1.60+ bn. internet users 50+ Tb user genera...
Trends for 2010 and beyond. Higher efficiency. Better connected.  New business. Mobile broadband traffic. Growth markets i...
Mobile broadband usage trends.  URL distribution Corresponding volume per URL
Mobile broadband traffic is expected to grow geometrically over the next 10 years.  Throughput 1  100+ (CAGR 50% pa) Volu...
The mobile broadband traffic jam …  … customer dissatisfaction …
The legacy mobile operator’s near-future.  The 3G traffic jam! <ul><li>3G capacity and quality crunch within the next 2 – ...
Example 1 … speeding towards a 3G traffic jam? Timing issue with mitigating the 3G traffic jam with legacy 2G spectrum. Cu...
Example 2 … speeding towards a 3G traffic jam?  “Spare” 2G spectral capacity that mitigates the 3G traffic jam 1 . Custome...
Converging to average user experience. When average is simply not good enough – prepared to be annoyed . Spectral efficien...
How to perfect existing legacy spectrum 1 . Re-farm own spectrum and/or acquire new spectrum for NGMN.   Migration & re-fa...
This is a place where socialism does not work. Most “fair use” policies address volumetric use and curbs speed after a vol...
FDD & TDD landscape. It will be a challenge to find new and suitable FDD-based spectrum for NGMN migration (and 3G off-loa...
G r ee n f i e l d   a t t ac k e r   s p e ct r u m   Is s u e
The growth-market Greenfield BWA’s “happy” short-term, a tougher future.  <ul><li>Lots of Hz per customer … high speed! </...
Speeding towards a broadband traffic jam? Without additional spectrum the Greenfield will become growth limited compared t...
Greenfield BWA - how to perfect limited spectrum. Customer experience management for a Greenfield is very important.   Spe...
How to perfect limited BWA spectrum 1 . Re-farm own spectrum and/or acquire new spectrum for NGMN.   Migration & re-farmin...
Summary.  Broadband traffic jam will be experienced by Legacy & Greenfield. Existing spectral flexibility will depend on t...
Thank you very much! Acknowledgement: Michael Lai (P1 Malaysia), Dirk Sch ö neboom, Xi Bin, Richard Marijs, Stefan Wilhelm...
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Spectrum limitations migration to NGMN: A growth market dilemma?

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Presented at the 5th Annual Mobile Network Evolution Conference, Singapore 24 March 2010.

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Spectrum limitations migration to NGMN: A growth market dilemma?

  1. 1. Spectrum limitations migrating to NGMN: a growth market dilemma? 5th Annual Mobile Network Evolution Conference, Singapore 24 March 2010. Dr. Kim Kyllesbech Larsen International Network Economics, Technology, T-Mobile
  2. 2. Story. <ul><li>Peeping the Crystal ball </li></ul><ul><li>Prepared to be annoyed! </li></ul><ul><li>The 3G traffic Jam! </li></ul><ul><li>Releasing the pressure? </li></ul><ul><li>Greenfield …happy start-up, </li></ul><ul><li>a tougher future!. </li></ul><ul><li>Key messages. </li></ul>
  3. 3. Changing Market - Tomorrow’s World Society Trends and Technological Indicators 1.60+ bn. internet users 50+ Tb user generated content per day. 4.1+ bn. mobile phone users 250 bn. Emails per day, more than 40% with 5MB 350+ m. active users with 65+ m mobile, 2.5+bn photos and 13+ m video uploads monthly. 20 hrs video uploaded every minute. 1bn. Downloads per day 400 m. registered users. Facebook has overtaken Skype in VoIP minutes. 25 m. mobile-tv users in Asia Pacific region 4.5 bn. $ worldwide mobile gaming revenue 86 m. active ebay users All IP/All Digital Networking and Sharing My-tech NOT Hi-tech Trend to Digitize Trend to Socialize Trend to Individualize Indicators : Digital Media; Cheap High Capacity data storage Indicators : Warcraft; MySpace; Flickr; Second Life etc Indicators : Web2.0; Personal & Social Networking; Facebook:
  4. 4. Trends for 2010 and beyond. Higher efficiency. Better connected. New business. Mobile broadband traffic. Growth markets in Asia. HH 1 2008: 30+%, 200+ mn and 2014: 50+% and 500+ mn. PC penetration Broadband access today 1 Dongles (5%) iPhone-like. “ Normal” devices. Traffic volume: <65% >30% <5% >50% <50% GPRS EDGE UMTS HSPA LTE 1 1:3 1:5 <1:300 <1:3000 Cost per Mega Byte.
  5. 5. Mobile broadband usage trends. URL distribution Corresponding volume per URL
  6. 6. Mobile broadband traffic is expected to grow geometrically over the next 10 years. Throughput 1  100+ (CAGR 50% pa) Volume 1  300+ (CAGR 70% pa) > > Today’s volume distribution Volume distribution 2020+
  7. 7. The mobile broadband traffic jam … … customer dissatisfaction …
  8. 8. The legacy mobile operator’s near-future. The 3G traffic jam! <ul><li>3G capacity and quality crunch within the next 2 – 3 years. </li></ul><ul><li>Slow down migration from 2G  3G, migrate to NGMN instead. </li></ul><ul><li>New spectrum demand. </li></ul><ul><li>Re-farming existing 900/1800 MHz spectrum if possible (in time). </li></ul>Empty 2G roads - in time? <ul><li>5 MHz in 3G will only take up ca. 1 MHz in NGMN. </li></ul><ul><li>NGMN could mitigate the 3G capacity crunch. </li></ul><ul><li>Re-farmed 2G spectrum might be too late for mitigating the 3G capacity crunch. </li></ul>
  9. 9. Example 1 … speeding towards a 3G traffic jam? Timing issue with mitigating the 3G traffic jam with legacy 2G spectrum. Customer adaptation. 2  15 MHz @ 1800 MHz 2G/NGMN. 2  10 MHz @ 2.1 GHz - 3G/HSPA. 2G 3G NGMN 0% 20% 40% 60% 80% 100% 2008A 2010F 2012F 2014F 2016F 2018F 2020F 2022F 2024F 0 10 20 30 0 5 10 15 -40 -20 0 20 2010 2012 2014 2016 2018 2020 2022 2024 -20 -10 0 10 DL+UL DL / UL DL+UL DL / UL 3G capacity crunch NGMN capacity available 2010 2012 2014 2016 2018 2020 2022 2024 Asian market mobile operator with 13 million customers and ca. 15% market share. 2012ish crunch likely 2014+ is capacity available!!!
  10. 10. Example 2 … speeding towards a 3G traffic jam? “Spare” 2G spectral capacity that mitigates the 3G traffic jam 1 . Customer adaptation. 2  30 MHz @ 1800 MHz 2G/NGMN. 2  10 MHz @ 2.1 GHz – 3G/HSPA. DL+UL DL+UL 0% 20% 40% 60% 80% 100% 2009 2011 2013 2015 2017 2019 2021 2023 2025 NGMN HSPA UMTS GPRS GSM DL / UL DL / UL European market mobile operator with 18 million customers and ca. 20% market share. 3G capacity crunch 2013ish crunch likely 3G mitigation “ spare” NGMN Capacity Good timing!! 1 Provided regulatory approval.
  11. 11. Converging to average user experience. When average is simply not good enough – prepared to be annoyed . Spectral efficiency & capacity. <ul><li>3G is 3 – 5  more effective than 2G per Hz. </li></ul><ul><li>The 3G usage per Hz is at least 6 times (and growing) higher than in 2G. </li></ul><ul><li>Most mobile operators have less 3G spectrum than 2G spectrum. </li></ul><ul><ul><li>Spectral efficiency of 3G cannot make up for the lower bandwidth. </li></ul></ul><ul><li>3G spectrum will congest faster than might be expected from pure spectral efficiency considerations. </li></ul><ul><li>NGMN is at least 5  more effective than 3G per Hz (for broadband data). </li></ul>3G (UL+DL)-Hz per active user. 2  10 MHz @ 2.1 GHz – 3G/HSPA. By 2015 there an active user will have only 20% of 3G Hz available compared to 2008. MIGRATION TO NGMN
  12. 12. How to perfect existing legacy spectrum 1 . Re-farm own spectrum and/or acquire new spectrum for NGMN. Migration & re-farming to NGMN. Illustration 3G (2  10 @ 2100) 2G (2  15 @ 1800) 3G  2G Customer migration from 3G  NGMN Free 2G  NGMN (2  15 @ 1800) NGMN New Customers After some time 2G to 4G migration. 1 Provided Regulatory approval for spectral refarming, Note this is far from given in most countries.
  13. 13. This is a place where socialism does not work. Most “fair use” policies address volumetric use and curbs speed after a volumetric limit has been reached. Bandwidth (Mbps) Time Network limit No relation between QoS and Price <ul><li>Poor quality for all customers. </li></ul><ul><li>Uncontrollable Opex and Capex demand. </li></ul><ul><li>Accelerated new spectrum demand. </li></ul><ul><li>Service (price) differentiated quality. </li></ul><ul><li>Better control of network expansion. </li></ul><ul><li>Less urgent new spectrum demand. </li></ul>Time Bandwidth (Mbps) 5% of base 20% of BW 15% of base 40% of BW 30% of base 25% of BW Today’s non-QoS policy QoS-based policy “ Unlimited” Gold Silver “ Best effort” Spectrum limit Un-controlled demand
  14. 14. FDD & TDD landscape. It will be a challenge to find new and suitable FDD-based spectrum for NGMN migration (and 3G off-loading) in growth markets. T-Mobile UK & Orange TD-TV UL (75 MHz) DL UL (35MHz) DL 900 MHz 1,800 MHz 2,500 MHz UL (60 MHz) DL 2,100 MHz TDD part TDD 2,300 – 2,400+ MHz part TDD This band provides interesting backhaul P2P options in some Greenfield scenarios. 3,400 – 3,500+ MHz Malaysia: WiMax China: TDD-LTE UL DL 400 MHz UL DL 700 / 800 MHz TDD T D D (20 MHz) (15 MHz) (20 MHz) In use in China TDD BSNL in India The 2.5 GHz is reserved for satellite applications in many parts of Asia. Below 900 MHz relies on digital dividend availability. Note: the above view is more in line with European and Asian spectrum landscape than US, e.g., 1700 MHz (AWS) used for 3G services and 1900 MHz for PCS/GSM services. Low availability in Europe. UL (70 MHz) TDD (50 MHz) DL
  15. 15. G r ee n f i e l d a t t ac k e r s p e ct r u m Is s u e
  16. 16. The growth-market Greenfield BWA’s “happy” short-term, a tougher future. <ul><li>Lots of Hz per customer … high speed! </li></ul><ul><li>Better availability than fixed broadband. </li></ul><ul><li>Higher speed than HSPA+ </li></ul><ul><li>Wireless DSL with demand-driven coverage. </li></ul><ul><li>ROI optimized. </li></ul>Happy startup … plenty of quality. <ul><li>Geometrical growth in demand. </li></ul><ul><li>Start-up quality difficult to maintain. </li></ul><ul><li>Hz per customer drops dramatically. </li></ul><ul><li>Demand for new spectrum demand and more efficient access. </li></ul><ul><li>Limited free cash available for growth and sustaining quality. </li></ul>Tougher future … growth limitations.
  17. 17. Speeding towards a broadband traffic jam? Without additional spectrum the Greenfield will become growth limited compared to legacy mobile operators with more spectrum dimensions. Customer adaptation. 2  30 MHz @ 2.3 GHz spectrum. TDD vs FDD TDD UL+DL WiMax (TDD) 802.16e NGMN (TDD) (802.16m or TDD-LTE) 0% 20% 40% 60% 80% 100% 2008 2010 2012 2014 2016 2018 2020 2022 2024 802.16e WiMax 2nd NGMN ? Modernize or NGMN Technology migration decision <ul><li>1  20 MHz @ 2.3GHz </li></ul><ul><ul><li>UL: 5 MHz (flexible, FDD is not). </li></ul></ul><ul><ul><li>DL: 15 MHz (flexible, FDD is not). </li></ul></ul><ul><li>Asymmetric UL/DL adjustment. </li></ul><ul><li>Simpler RF design (i.e., no concurrent UL/DL). </li></ul><ul><li>More sensitive to interference. </li></ul><ul><li>Link-budget worse than FDD (i.e., coverage wise more sites needed in likes-4-likes with FDD). </li></ul><ul><li>Wireless DSL / nomadic business model. </li></ul>-40 -20 0 20 2010 2012 2014 2016 2018 2020 2022 2024 BWA capacity crunch With 1  30 MHz crunch delayed…
  18. 18. Greenfield BWA - how to perfect limited spectrum. Customer experience management for a Greenfield is very important. Spectral efficiency & capacity. <ul><li>NGMN is assumed to be at least 3  more effective than WiMax 1 per Hz. </li></ul><ul><li>The NGMN usage per Hz expected to be fairly similar (initially) to WiMax. </li></ul><ul><li>Most BWA Greenfield’s have limited spectrum and rarely more than 1  30 MHz below 3 GHz. </li></ul><ul><li>Early migration to a more spectral efficient access technology will: </li></ul><ul><ul><li>Sustain growth longer. </li></ul></ul><ul><ul><li>Sustain competition with legacy. </li></ul></ul><ul><li>Migration from WiMax to TDD-LTE is not only about spectrum perfection. </li></ul><ul><ul><li>Results in fundamental change in network and business rules. </li></ul></ul>1 i.e., WiMax 802.16 e . 2  20 MHz @ 2.3 GHz – WiMax. In relative terms the Greenfield operator could end-up disappointing its customer a lot more than a legacy might do. BWA Greenfield player 3G/HSPA Legacy operator
  19. 19. How to perfect limited BWA spectrum 1 . Re-farm own spectrum and/or acquire new spectrum for NGMN. Migration & re-farming to NGMN. 1 Provided Regulatory approval for spectral refarming, Note this is far from given in most countries. 1  20 MHz NGMN 1  10 MHz Illustration WiMax 802.16e (1  30 MHz @ 2.3 GHz) New subscriptions ? NGMN  WiMax WiMax NGMN
  20. 20. Summary. Broadband traffic jam will be experienced by Legacy & Greenfield. Existing spectral flexibility will depend on the rate of technology uptake & migration. The Greenfield spectrum position is growth limited impacting quality & business model.
  21. 21. Thank you very much! Acknowledgement: Michael Lai (P1 Malaysia), Dirk Sch ö neboom, Xi Bin, Richard Marijs, Stefan Wilhelm, Zhou Yi, Alan Yeo, Jordan Yeo, Denis Gautheret and many other talented colleagues in DTAG. Contact: [email_address] Tel: +31 6 2409 5202 http://nl.linkedin.com/in/kimklarsen

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