Transcript Session mobiles - DigiWorld by IDATE

www.idate.org
The European way to think the Digital World
Seminar - Mobile services
IDATE International Conference
Montpellier (France), 22 November 2005
Frédéric Pujol
Head of the mobile services division
IDATE
Program
www.idate.org
 Introduction
UMTS Forum & IDATE
 Keynote speech:
Dr Sung-Woon Cho, Kisdi
(South Korea)
 First round-table:
New Mobile Services Era
 Second round-table:
Business Models & Profitability
 Final round-table:
22 November 2005
IDATE © 2005
Spectrum & regulatory issues - 3G
forecasts & 4G emergence
Mobile services: business models and strategies
2
The importance of the mobile sector
www.idate.org
 The mobile sector is driving the growth of the telecoms sector
Telecom services markets in Europe
(27 countries – Billion EUR)
350
300
250
31
27
34
38
42
46
51
56
200
150
117
12 9
14 0
15 0
15 8
16 6
17 4
10 5
98
97
95
92
89
86
84
82
2001
2002
2003
2004E
2005F
2006F
2007F
2008F
100
50
0
Fixed telephony
Mobile services
Data and Internet
Source : IDATE (E) estimates – (F) forecasts
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
3
Main events in 2005
www.idate.org
Mergers & Acquisitions
Amena, mmO2...
3G development
MVNOs (Mobile Virtual Network Operators)
Mobile VoIP
Regulatory constraints
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
4
Mobile operators: M&A – Financial results
www.idate.org
 USA: Cingular/AT&T Wireless, SPRINT/Nextel
 Recent M&A in Western Europe:
Country
Target
Buyer
Status
Finland
DNA
TDC
October 2005 ?
Italy
Wind
Orascom
June 2005
Netherlands
Telfort (2G & 3G)
KPN Mobile
June 2005
Norway
Sense (MVNO)
TeliaSonera
August 2005
91% shares
Spain
Amena (2G & 3G)
France Telecom
July 2005
80% shares
Spain
Xfera (3G)
Hutchison ?
Discussions
50% shares
Sweden
Vodafone Sweden (2G &
3G)
Telenor
November 2005
$1.25 billion
UK, Germany, Ireland
mmO2 (2G & 3G)
Telefonica
October 2005
€ 26 billion
 Financial results:
EBIDTA margins in the 30-50% range
3G investments, cash available
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
5
Mobile services in Western Europe
www.idate.org
450
400
350
92%
300
74%
250
79%
85%
62%
200
150
100
97%
106%
105%
103%
102%
100%
243
Mobile diffusion
Mobile base
 Mobile subscribers and distribution
288
309
335
2001
2002
2003
384
394
403
410
416
421
363
2004
2005
2006
2007
2008
2009
2010
EU15 +
Norway & Switzerland
50
0
2000
years
Total mobile subscribers (millions)
Mobile diffusion-base w hole population
Source : IDATE (in « 3G economics » report)
 2 billion mobile subscribers worldwide of which 1.4 billion using
GSM technology
 Western Europe mature market seeking new revenue streams
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
6
ARPU (Average Revenue Per User)
www.idate.org
Western European: total ARPU
Close to 85% of data ARPU= SMS & MMS in 2005
EUR/m onth
40
35
2,1
30
2,8
3,7
4,7
5,2
5,7
6,4
6,9
7,7
27,9
27,1
26,4
25,8
25,3
24,8
24,3
23,8
8,5
9,3
Non messaging data ARPU
25
15
31,5
10
23,3
22,9
Billion EUR
20
60
50
40
5
0
30
2000
2001
2002
2003
2004
2005
ARPU voice
2006
2007
2008
2009
2010
ARPU data
20
10
0
Source : IDATE (in « 3G economics » report)
Voice represented 83% of the total ARPU in
2004 and will account for 71% in 2010
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Other revenue sources
0,0
0,1
0,6
1,4
2,2
3,9
5,9
8,5
12,0
15,0
17,4
SMS & MMS revenues
4,9
8,7
12,6
16,9
19,7
22,7
23,8
24,1
25,2
28,9
30,8
Source : IDATE (in « 3G economics » report)
Non messaging data ARPU will grow from
15% of total ARPU in 2004 to 35% in 2010
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
7
ARPU - Trends
www.idate.org
40
 Western Europe (€)
 USA (2004)
35
30
40
35
25
30
20
25
15
20
10
15
5
10
0
€42 Cingular, T-Mobile
€51.6 Sprint PCS
€56.7 Nextel
2000
5
2001
2002
2003
2004
0
2000
2001
2002
2003
2004
Germany
€46.7 Q2 2005
Italy
40
35
30
25
20
15
 South Korea
10
5
0
2000
40
2001
2002
2003
France
35
2004
40
€33.5
35
30
30
(Q2 2005- Merill Lynch)
25
€36.5
25
20
20
15
15
10
10
5
5
0
(SKT Q3 2005)
0
2000
2001
2002
2003
2004
2000
UK
2001
2002
2003
2004
Sweden
Source : IDATE (in « 3G economics » report)
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
8
ARPU - Japan
www.idate.org
 Average ARPU 2004:
€52 (DoCoMo & au)
3G ARPU:
FOMA/DoCoMo: €70 – 34%
data
KDDI: €53 – 26% data
Vodafone: €44 – 22% data
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
9
3G development
www.idate.org
3G is growing faster than GSM in the early 90’s
100 WCDMA networks launched worldwide (11/2005)
2
ar 003
ch
2
Ju 00
ne 4
20
0
se 4
p
De t- 04
c
2
M
ar 004
ch
2
Ju 00
ne 5
20
0
se 5
pt
-0
5
Top 10 European
markets
M
Hutchison is the
first 3G operator
18 000 000
16 000 000
14 000 000
12 000 000
10 000 000
8 000 000
6 000 000
4 000 000
2 000 000
0
Major mobile operators
have launched 3G
22 November 2005
3G expected to reach
25 million subscribers at
end 2005
De
c
3G subscribers
UMTS in Western Europe
IDATE © 2005
3G represents 4% of mobile
subscribers in Western Europe
Mobile services: business models and strategies
10
3G
www.idate.org
 Real launch of 3G by major players in Western Europe
- 3G brings higher data rates, capacity (and unlimited packages for voice)
3G
Launch
date
3G subscribers – June 2005
Technologies
Western
Europe
2003
WCDMA
12 million
Japan
2001
WCDMA
CDMA 2000
15 million (DoCoMo + Vodafone)
18.5 million (KDDI: including 3.2 million EV-DO)
South Korea
2002
WCDMA
CDMA 2000
2000 (KTF & SK Telecom)
31.3 million (EV-DO)
USA
2005
WCDMA
CDMA 2000
1000 (Cingular Wireless)
67 million (Sprint PCS + Verizon 1Q2005)
 Flat-rate tariffing for data:
- KDDI : 30€
- A trend in Western Europe – which tariff ?
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
11
3.5 G
www.idate.org
 WCDMA Evolution
 Main features of 3G
technologies
UMTS FDD
WCDMA
(R99)
VoIP support
22 November 2005
HSDPA
(release 5)
TD/CDMA
CDMA 2000
CDMA 1x
EV-DO
CDMA 1x
EV-DO
revision A
FLASH
OFDM
Yes
Yes
No
Yes
Yes
Circuit
Yes
switched voice
Yes
Packet
Yes
Yes
Yes
Latency time
250 ms
70 ms
Low
Low
<50 ms
Downlink
speeds
384 kbps
4-6 Mbps
4.58 to
5.16 Mbps
300-500 kbps
300-500 kbps
1-1.5 Mbps
Downlink peak 2 Mbps
rates
14 Mbps
-
2.4 Mbps
3.1 Mbps
3.2 Mbps
Uplink speeds
384 kbps
848 kbps to
1.13 Mbps
153 kbps
1200 kbps
300-500 kbps
IDATE © 2005
No
UMTS TDD
384 kbps
Mobile services: business models and strategies
12
Mobile data services
.
www.idate.org
Mobile data services
Other
applications
Mobile
office
LBS
First applications
Integrated applications
Micro-payment
solutions
Mobile payment
E-mail, Intranet &
Internet access
Music
Entertainment Games
Video
Future growth
Contactless
solutions
generators ?
Enhanced data rates
Music
downloading
Ringtones
Game downloading
multiplayer online games ?
Video streaming
TV
Browsing
Broadcast TV
Streaming TV
MBMS ?
PoC
Messaging
applications
mobile email
SMS P2P
Premium SMS
MMS & PMMS
Mobile blogs
Mobile IM
Network
capabilities
Enhanced data rates: UMTS
Enhanced data rates: EDGE
2000-2004
22 November 2005
2005
IDATE © 2005
Enhanced data rates: HSDPA
Enhanced data
rates: HSUPA
Beyond 3G
Mobile VoIP
2006-2010
Mobile services: business models and strategies
13
Regulatory issues
www.idate.org
Regulatory pressure
Termination rates: fixed to mobile calls
Price of SMSs
International roaming
Competition
New comers:
2.5 GHz band ?
new GSM spectrum (UK)
450 MHz band ?
MVNOs
Wireless VoIP
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
14
Spectrum issues
www.idate.org
Spectrum issues are strategic in the mobile sector
Frequency bands
Existing use / planned use
Comments
174-238 MHz
Broadcast TV (VHF Band III)
450 MHz
Digital cellular (was
analogue cellular)
460-860 MHz
Broadcast TV (UHF band)
Transition to digital TV could free some
spectrum for mobile TV (mainly DVB-H)
High interest from UMTS operators to use the
lower part of the band for cellular coverage
900 MHz
GSM
Can be used for UMTS 900
Band L
Can be used for mobile TV (T-DAB)
1452 – 1479.5 (1492)
MHz
1800 MHz
used
Could be used for mobile TV in broadcast
mode
for
Can be used for 3G services in CDMA 2000
or Flash-OFDM
GSM
2.1 GHz
UMTS
2.5 GHz
3G extension band
New comers in
Northern and
Eastern Europe
Digital dividend –
mobile TV ?
Proponents of WiMAX want to open this
frequency band to 802.16e ("mobile" WiMAX)
A decision at the
end of the year
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
15
BWA (Broadband Wireless Access)
www.idate.org
CDMA 2000
developements
in the 450 MHz
band
Country
Operator
RTC Telecom
2005
Czech Republic
Cesky Telecom
May 2004
Czech Republic
Eurotel Praha
August 2004
Finland
Nordisk Mobiltelefon
Latvia
Telekom Baltija
Norway
Nordisk Mobiltelefon
June 2004
Wins a 450 MHz licence
Poland
Centertel
2004
Tests
Portugal
Inquam - Radiomovel
Romania
Telemobil (Zapp Mobil)
May 2004
1xRTT service
Nordisk Mobiltelefon
Russia
Skylink
Country
IDATE © 2005
About to launch 1xEV-DO
service
450 MHz band to be allocated
Sweden
Russia
22 November 2005
Status
Bulgaria
Sweden
Flash-OFDM
developements
in the 450 MHz
band
Date
Delta Telecom
September 2004
Has licences in the 450 MHz
band for two-thirds of the 89
Russian regions
2004
Operator
Date
Status
Finland
DIGITA
June2005
Digita is committed to build
the network in three stages
(sparsely populated areas,
completed in September
2006. Nearly all of Finland
will
be
covered
by
December 2007 and the
last shadow regions by
September 2009)
Slovakia
T-Mobile Slovakia
September 2005
Commercial service started.
Fast Internet service provided
at 1 Mbps max. for the
downlink
Mobile services: business models and strategies
16
BWA (Broadband Wireless Access)
www.idate.org
UMTS TDD developements
Country
22 November 2005
Operator
Nature of
the
operator
Nature of the deployment
Spectrum
Solution
Australia
IQ Networks
ISP
Commercial service in Townsville
in North Queensland
1.9GHz
Axcera
IPWireless
Czech
Republic
T-Mobile
3G operator
Prague
UMTS
TDD
IPWireless
Germany
AIRDATA
New Entrant
Commercial service in Stuttgart &
Berlin
2.6GHz
IPWireless
Japan
IPMobile
New Entrant
Trial system in Tokyo
20102025 MHz
IPWireless
Japan
NTT
Communication
s
Incumbent
Trial
-
IPWireless
Japan
Softbank
ISP
Trial
-
IPWireless
Kazakhstan
AKSORAN
New Entrant
Roll-out of a commercial service
in Almaty, Astana and Atyrau
2.52.7GHz
Axcera
IPWireless
Malaysia
AtlasONE
ISP
Deployment of a national
broadband wireless network in
Malaysia
2.5GHz
IPWireless
New
Zealand
Woosh
Wireless
New Entrant
Commercial service in Auckland,
Wellington, Christchurch &
Invercargill
20532082 MHz
IPWireless
Portugal
Optimus /
SonaeCom
3G Operator
Commercial trial in Lisbon
2.6GHz
IPWireless
Singapore
M1
Mobile
Operator
Trial
-
IPWireless
South
Africa
Sentech
Stateowned
Broadcaster
Sentech’s initial deployments are
located in Johannesburg,
Pretoria, Midrand, Cape Town
and Durban.
2.52.7GHz
Axcera
IPWireless
Tanzania
Cats-Net
New Entrant
Cats-Net’s initial deployment will
cover Dar-es-Salaam
1.9GHz
Axcera
IPWireless
UK
UK Broadband
New Entrant
Commercial trial in London's
Thames Valley
3.4GHz
IPWireless
UTStarcom
IDATE © 2005
Mobile services: business models and strategies
17
Mobile VoIP
www.idate.org
 New technologies now enable end-to-end mobile IP communications
(UMTS TDD, UMTS FDD: release 6, CDMA 2000 EV-DO rev.a, Flash-OFDM, I-Burst,
WiMAX)
 A real threat:
-
New technology enablers
Dual-mode terminals
FMC
Existing services
 Wireless VoIP network technologies and availability:
Network
Terminal
Availability
Wi-Fi only
PC cards, handheld terminal
2004-2005
Wi-Fi/cellular
Dual-mode terminal
2005
WiMax
PC cards, handheld terminal
2007
Cellular EDGE or 3G
PC cards, handheld terminal or smartphone
2005
Impact on voice ARPU likely
Western European mobile operators seem to be reluctant to introduce dual-mode
handsets
22 November 2005
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Mobile services: business models and strategies
18
Mobile VoIP
Configurations (1/2)
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Wireless VoIP
Configurations
22 November 2005
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Mobile services: business models and strategies
19
Mobile VoIP
Configurations (2/2)
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Wireless VoIP configurations
22 November 2005
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Mobile services: business models and strategies
20
FMC (Fixed Mobile Convergence)
www.idate.org
 Example of integrated
operators’ offers
 Wi-Fi/ Cellular integration:
Korea Telecom
NTT DoCoMo
BT Fusion (initially based on Bluetooth)
 Use of UMTS networks:
Vodafone zu hause
O2 Surf@home
22 November 2005
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Mobile services: business models and strategies
21
Key questions – round table #1
New Mobile Services Era
www.idate.org
1
Mobile TV: looking for a business model ?
2
Potential and hurdles for mobile music ?
3
Which tariffing structures for new services ?
4
Impact of fixed Mobile Convergence ?
5
Other services: potential for video streaming, video telephony,
Instant Messaging ?
22 November 2005
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Mobile services: business models and strategies
22
Key questions – round table #2
Business Models & Profitability
www.idate.org
1
Strategies for the launch of 3G services
2
Impact of new mobile services (TV, music...) on ARPU ?
3
The mobile broadband: which applications/cost for HSDPA ?
4
Impact of FMC, MVNOs and mobile VoIP ?
5
Role of the actors in the mobile value chain ?
22 November 2005
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Mobile services: business models and strategies
23
Key questions – final round table
Spectrum & regulatory issues - 3G forecasts & 4G emergence
www.idate.org
1
Spectrum:
2
Regulatory issues:
What will be the Decision for the 2.5 GHz band ?
Spectrum for mobile TV ?
Spectrum trading
Termination rates, SMS and roaming tariffs
3
Market forecasts
4
3.5 G and 4G developments
5
New comers in the mobile sector ?
22 November 2005
IDATE © 2005
Mobile services: business models and strategies
24