The document discusses the challenges faced by mobile network operators (MNOs) in preparing for increasing cellular traffic demand, highlighting issues such as shrinking margins and competition. It emphasizes the need for shared neutral host networks as a cost-effective solution to deliver rural broadband connectivity while ensuring quality of service. Additionally, it addresses the Digital Britain initiative advocating for universal high-speed broadband and the strategic auction of spectrum for efficient mobile broadband deployment.

1. Mobile Broadband World
Shared neutral host networks
Is now the right time?
Alastair Davidson
Director of Strategy and Business Development
23 September 2009

2. Cellular Traffic Demand
Operators always find it difficult to prepare for demand tomorrow by rolling out capacity today; under
or overestimating demand has serious implications on operator’s bottom line
TeraBytes/ Hour
190 TB
150 TB
110 TB
70 TB
30 TB
2009 2012 2015 2108 2021 2024
Source : Ofcom Predicting Areas of Spectrum Shortage 2009
Mobile Broadband World
23 – 24 September 2009

3. Growth of UK mobile Internet users
Operators always find it difficult to prepare for demand tomorrow by rolling out capacity today; under
or overestimating demand has serious implications on operator’s bottom line
10
8.1 8.1
8 7.5
Unique Audiences (millions)
6
6 5.7
4
2
0
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009
Source : Ofcom Communication Market Report 2009
Mobile Broadband World
23 – 24 September 2009

4. MNO Business Implications
Operators will see shrinking margins on Mobile Broadband. They will have to deliver the data at as low
a cost as possible, but without compromising the quality of the service
Mobile revenue in developed regions
Source : Analysys Mason 2009 2008 2015
Revenue per megabyte £0.54 £0.08 to £0.02
MNO Business Challenges
• Competition for customers – pushing MBB prices down
• Value added services (laptops etc) - not differentiators
• Market is moving to flat rate pricing model that will
reduce operators profits further as usage increases
• Digital Britain’s requirement to deliver Rural Broadband
RNC/BSC will aggravate MNO’s business troubles
Shared RAN
Key Advantages of Network Outsourcing
• Predictable cost to MNOs
Separate Core
Core Core • SLAs/ QoS gets priority
MNO1 MNO2
• MNOs need not worry about Network/Technology
• MNOs can focus on customer acquisition
Mobile Broadband World
23 – 24 September 2009

5. Cost of delivery
Cost of sales 40%
28% Site Rental
Sales and Marketing 38% 12% Transmission
29% Hardware and
software
Business Operations 10%
22% Core network
Network Operations 12% 10%
Power &
maintenance
Source: Deloitte Consulting Analysis and Arqiva Internal Analysis
Mobile Broadband World
23 – 24 September 2009

6. Digital Britain: Broadband for all
• Initiative to ensure that Britain is at the forefront of the digital
revolution and that the UK economy benefits by broadband for all
– Assesses Britain’s preparedness to
exploit digital technology
– Tackles content, infrastructure and
legislation and recommends
large-scale investment
– Proposes minimum 2Mb/s connection
to every home in the country
Mobile Broadband World
23 – 24 September 2009

7. Digital Britain on spectrum refarming and auction
Digital Britain report focused on the release and auction of 2.6
GHz and 800MHz spectrums
Immediate release Big Auction ASAP
2600 MHz unpaired 2570-2620 TDD
2500-2570 FDD (Uplink) 2620-2690 FDD (downlink)
2600 MHz paired
800 MHz 790-862
0 20 40 60 80 100 120 140 160
Mobile Broadband World
23 – 24 September 2009

8. Spectrum distribution
EU’s Radio Spectrum Committee has proposed the liberalization of 900 MHz
and 1800 MHz spectrum for 3G:
Vodafone O2 T-Mobile Orange H3G
2100 MHz unpaired 5 5 5 5.1
Spectrum in
2100 MHz paired 29.6 20 20 20 29.2 Question
1800 MHz paired 10.6 10.6 60 60
900 MHz paired 34.8 34.8
0 20 40 60 80 100 120 140 160
Mobile Broadband World
23 – 24 September 2009

9. Pembrokeshire: making the case for a shared network
• Coverage for those beyond the reach of exchanges could be provided by just 12 sites
• Could deliver connectivity in excess of 3.5Mbps
Mobile Broadband World
23 – 24 September 2009

10. Is now the right time?
• Trend for network sharing already underway
• An aspiration to provide universal broadband
• Will require hybrid solution – fixed and wireless
• Shared networks provide the most cost effective and rapid way
of delivering rural broadband connectivity
Mobile Broadband World
23 – 24 September 2009

11. alastair.davidson@arqiva.com
Mobile Broadband World
23 – 24 September 2009