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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.

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

  1. 1. 1<br />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.<br />Dr. Kim (Kyllesbech Larsen)Technology Economics, T-Mobile<br />
  2. 2. 2<br />Story…..<br />
  3. 3. 3<br />
  4. 4. Changing market.Social trends and technological indicators.<br />Socialize<br />Individualize<br />Digitize<br />2 x as active ! as fixed users<br />1.60+ bn internet users.<br />Next 1+ bn by 2015.<br />25+ mn Mobile-TV users in APAC<br />400+ mn active users.<br />100+ mn mobile users.<br />2.5+ bn photos per month<br />4.1+ bn mobile users.<br /><10% on mobile internet.<br />20+ hrs video per day<br />$4.5+bn mobile gaming revenue<br />10+bn mobile apps downloads.<br />250+ bn e-mails per day.<br />40+% more than 5 MB.<br />400+ mn registered users. <br />86+ mn active ebay users<br />17 June 2010<br />4<br />2009: 45M Mobile users, 2.8M mobile broadband users, 21M internet users,.3.6M Facebook users (56% female, 65% 18-35), <br />4<br />
  5. 5. 5<br />The incumbent mobile operator’s near-future … “it aint pretty”! <br />The 3G traffic jam!<br />3G capacity crunch. <br />Re-farming existing spectrum.<br />New spectrum demand.<br />Empty 2G roads - in time?<br />Re-farming GSM!<br />HSPA+ versus LTE ?<br />Technology timing!<br />
  6. 6. 6<br />The Greenfieldspectrum… “happy” short-term, a tougher future. <br />Tougher future … growth limitations.<br />Fixed-like demand!<br />Dramatic Hz / customer drop!<br />Additional spectrum and/or<br />technology needs!<br />Happy startup … plenty of quality.<br />Lots of Hz per customer!<br />High speed mobile broadband!<br />Great customer experience!<br />
  7. 7. 7<br />Telco Europe is all about efficiency … … avoiding shareholder unhappiness …<br />EBITDA GROWTH<br />REVENUE GROWTH<br />Growth markets<br />OPEX GROWTH<br />Western Europe<br />REVENUE PRESSURE<br />2010 – 2015 ILLUSTRATION<br />Source: Pyramid Research 2010 & BoA Merrill Lynch 2010 Mobile Matrix.<br />
  8. 8. 8<br />The Poland 2015 … broadband everywhere?, for everyone?<br />Almost all house-hold will have a PC.<br />Population<br />38mn<br />Trend 1 mobile internet devices will exceed PCs.<br />Mobile<br />Broadband<br />(50%)<br />430+%<br />PCs <br />(85% HH)<br />6 out of 10 house-hold with (fixed) broadband 1.<br />Fixed<br />broadband<br />(60% HH)<br />Trend 2 demand for always best connected.<br />1 out of 2 people will have mobile broadband 2.<br />Trend 3 geometrical growth in data traffic.<br />Source: Pyramid Research 2010.<br />1 Fixedbroadband: xDSL, Cable, FTTx, … 2 HSPA, LTE.<br />
  9. 9. Spectrum benchmarking2.6 GHz requires least 9 times the site density to match 800MHz.<br />850 MHz<br />DL power<br />UL power (typical limitation for coverage)<br />2.6<br />GHZ<br />Large<br />Very small<br />Coverage area<br />×9<br />×1<br />×6<br />×4.5<br />2.1 GHz<br />2.6 GHz<br />1.8 GHz<br /> 900 MHz – 800 MHz (digital dividend)<br />2×35 MHz<br />2×30 MHz<br />2×60 MHz<br />2×75 MHz<br />190 MHz<br />Low<br />High<br />Available bandwidth for LTE<br />Illustration<br />
  10. 10. Poland … Spectrum1 overview.<br /><ul><li>(Dense) Urban.
  11. 11. High capacity.
  12. 12. Poor coverage</li></ul>2500 - 2700<br />MHz<br />50<br />TDD<br />20 (UL) + 30 (DL) MHz TDD-LTE<br />30<br />2.1<br />30<br />2.1<br />30<br />2.1<br />30<br />2.1<br /><ul><li>Urban/Sub-urban.
  13. 13. Very good capacity.
  14. 14. Ok coverage.</li></ul> 1700 – 2100<br />MHz<br />2×20 MHz FDD-LTE<br />20<br />1.8<br />20<br />1.8<br />19*<br />1.8<br />19*<br />1.8<br />19*<br />1.8<br /><ul><li>Rural – Urban
  15. 15. Low capacity
  16. 16. Very good coverage..</li></ul>18*<br />0.9<br />18*<br />0.9<br />14*<br />0.9<br /> 700 – 900<br />MHz<br />10<br />0.9<br />10<br />0.9<br />12<br />0.8<br />Era<br />Orange<br />Plus<br />Play<br />CenterNet<br />Aero2<br />Sferia<br />67 to 62 MHz<br />40 MHz<br />112 MHz<br />Illustration<br />* Bands broken up 1 Total view of UL + DL 2 Based on 2009 actual customers.<br />
  17. 17. Poland … New spectrum opportunities.<br /><ul><li>(Dense) Urban / City coverage.
  18. 18. High capacity
  19. 19. Relative poor propagation.</li></ul>2500 - 2700<br />MHz<br />2 × 70 MHz @ 2.6 GHz<br />1:30+<br /><ul><li>High-frequency spectrum can be valuable as capacity or for wireless DSL-business models.
  20. 20. Bandwidth below 30 MHzis of lowervalue than higher bandwidths.
  21. 21. Only urban population should be used for valuation.
  22. 22. TDD spectrum is in general of lower value than FDD (i.e., due to propagationn characteristics).
  23. 23. Rural - urban coverage.
  24. 24. Very good propagation.
  25. 25. Lower capacity.</li></ul> 700 – 900<br />MHz<br />2 × 30 MHz<br />@ 800 MHz<br />1<br />Low-frequency spectrum (≤ 2.1 GHz) is more valuable than higher-frequency spectrum<br />Initial coverage is more valuable than limited coverage and high capacity.<br />Low frequency spectrum can capture more population for significantly less cost.<br />Below 20 MHz spectral capacity limitation will limits the overall spectrum value.<br />
  26. 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.<br />Average spectrum price in US$/MHz/Pop.<br />UMTS2.1 “hyper-hyped” value<br />Log-scale<br />10<br />D<br />UK<br />Economical<br />coverage<br />Artificial scarcity<br />NL<br />US 1<br />CAN<br />India 3 Max<br />Very dense, small area coverage, high GDP.<br />1<br />US<br />D 2<br /><ul><li>Very dense, small area coverage (HK).
  27. 27. Low absolute price compared to GDP.
  28. 28. Perceived value add (DK, SE).</li></ul>India 3<br />HK<br />NL<br />DK<br />US<br />SE<br />CAN<br />0.1<br />D 2<br />NOR<br />Capacity<br />enhancement<br />AT 5<br />D 2<br /><ul><li>Capacity overlay.
  29. 29. No (real) demand.
  30. 30. Government push for new entrant.</li></ul>0.01<br />India 3 Min<br />FI<br />Large area, low pop density, very low GDP<br />NL4<br />0.001<br />0.5<br />1.0<br />1.5<br />2.0<br />2.5<br />3.0<br />US 700 MHz auction 2008,<br />German 800 MHZ – 2.6 GHz auction 2010<br />Indian 3G / BWA 2.3GHz auction 2010.<br />Dutch 2.6 GHz auction 2010.<br />Austrian 2.6 GHz auction 2010.<br />Auctioned spectrum in GHz<br />
  31. 31. The beauty of the “beast” Our customer, the smart-phone and its apps.<br />13<br />
  32. 32. 1 + 1 = 2 (yesterday’s communications).<br />…………<br />…………….<br />…….<br />……<br />.....<br />Mobile network<br />Illustration<br />14<br />
  33. 33. 1 + 1 is no longer just 2 (1 device - multi-tasking).<br />Mobile network<br />Apple push notification service (APN).<br />Web 2.0<br />Illustration<br />15<br />
  34. 34. 16<br />Mobile broadband versus fixed broadband demand.<br />Lots of small volume events<br />&<br />very high signaling load due to mobile apps notifications<br />High volume / P2P / streaming…<br />100+<br />70↑+<br />20<br />1<br />1/3<br />Mobile broadband<br />700 MHz – 2.1 GHz<br />BWA<br />2.3 – 2.5+ GHz<br />Fixed<br />with<br />WiFi<br />Mobile industry: hardly any QoS pricing <br />mainly based on volumetric FUP. <br />Wireless & Fixed Broadband business model uses QoS-based pricing.<br />Note: In relative usage<br />
  35. 35. 3G on vitamins, HSPA on steroids with HSPA+ & ++.HSPA roadmapoffers substantial speed and ecosystem scale effects.<br />HSPA<br />HSPA+ <br />HSPA+<br />HSPA++<br />84+ Mbps<br />14.4 Mbps<br />21- 28 Mbps<br />42Mbps<br />Network <br />5 MHz<br />5 - 10 MHz<br />10 MHz<br />15 - 20MHz<br />1H 2009<br />1H 2011<br />1H 2010<br />2012+<br />Huawei Data <br />Huawei Data <br />Huawei <br />Stick<br />Card <br />Data Stick<br />Data Sticks / <br />Nov. 09<br />Netbooks<br />Netbook <br />(June 2010)<br />31 / 11<br />5<br />July 2010<br />1,000+<br />Devices1<br />Samsung<br />Nokia<br />Android<br />Motorola<br />Qualcomm <br />Chipsets<br />ST Ericsson M570-V3<br />MDM 8200<br />Qualcomm<br />ST Ericsson M570 & U8500<br />MDM 8200<br />Qualcomm<br />Qualcomm MDM8220<br />MSM 7230<br />QSC6295<br />1 iPhone 3Gs supports HSDPA 7.2 Mbps for iPhone 4 & iPAD HSDPA 7.2 Mbps/ HSUPA 5.76 Mbps.<br />17<br />
  36. 36. Current mobile broadband option space.<br />For 3 major operators little existing LTE optionality.<br />4 top players lack optimum LTE spectrum conditions (i.e., 40 MHz).<br />C+A+S have (currently) the strongest LTE spectrum position in Poland.<br />18<br />
  37. 37. How to perfect existing legacy spectrum – part 1.Re-farm own spectrum is complicated, costly and prone to be service affecting.<br />Migration & re-farming to 3G & LTE.<br />Customer migration from 3G LTE<br />3G<br />3G<br />(215 @ 2.1 GHz)<br />3G<br /><br />2G<br />After some time 2G<br />to 4G migration.<br />Free<br />LTE<br />LTE<br />2G<br />2G<br />(210 MHz @ 1.8 GHz)<br />2G LTE<br />(210 MHz @ 1.8 GHz)<br />New Customers<br />ILLUSTRATION<br />Note: 3G includes R99, HSPA, HSPA+, similar 2G includes Voice, GPRS & EDGE<br />19<br />
  38. 38. How to perfect existing legacy spectrum – part 2.Re-farming GSM to UMTS in rural area accelerate penetration of mobile broadband.<br />Rural migration & re-farming to UMTS900.<br />Today there are more than 400+ UMTS900 devices.<br />3G<br />3G<br />(215 @ 2.1 GHz)<br />3G<br /><br />2G<br />Free<br />New Customers<br />2G<br />(210 MHz @ 1.8 GHz)<br />3G<br />3G<br />3G @ 900<br /><br />2G @ 900<br />UMTS900<br />Rural UMTS<br />2G 3G<br />(900 MHz)<br />ILLUSTRATION<br />Note: 3G includes R99, HSPA, HSPA+, similar 2G includes Voice, GPRS & EDGE<br />20<br />
  39. 39. New spectrum allows more efficient technology migration.<br />Balancing demand & quality.<br />Dense &<br />Urban <br />Areas<br />3G  LTE<br />Migration<br />LTE<br />3G<br />(220 @ 2.6 GHz)<br />3G<br />3G<br /><br />2G<br />(215 @ 2.1 GHz)<br />LTE<br />Free<br />2G<br />2G<br />(210 MHz @ 1.8 GHz)<br />Rural<br />to<br />Urban <br />Areas<br />LTE<br />New Customers<br />(210 @ 800 MHz)<br />ILLUSTRATION<br />21<br />
  40. 40. 22<br />Macro economical benefits of broadband internet access everywhere.<br />Un-economical spectrum pricing will delay and limit such benefits.<br />Mobile broadband smart phones will increase spectrum demand rapidly.<br />Without access to new spectrum resources operators will be growth limited.<br />Re-farming legacy spectrum will be complex, costly and impact quality.<br />Why should we care?<br />Access to new spectrum paramount to ensure existing customer quality.<br />
  41. 41. 23<br />Thankyouverymuch!<br />Contact:<br /><br />Tel: +31 6 2409 5202<br /><br />