DIGIWORLD SUMMIT Mobile Service Forum Redefining mobile business models

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DIGIWORLD SUMMITMobile Service ForumRedefining
mobile business models
IDATE Contact Frédéric PUJOL 33 (0)4 67 14 44
46 f.pujol_at_idate.org
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Redefining mobile business models
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3.5G deployment

• Faster speeds and enhanced capacity
• 3G, Turbo3G
• Up to 7.2 Mbps (downlink)

• cheaper rates
• Unlimited data packages

Source GSA October 2007
Source IDATE
? The real mobile broadband?
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Mobile terminals OS
?
Evolutions threatening mobile operators revenues
iPhone (not yet 3G)
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Mobile trends
World Telecom Services market
Apple, Google? Nokia Telefónica Mobile
advertising Mobile search

• Western Europe
• HSDPA deployment
• Decreasing ARPU
• MNO revenues and EBITDA margins under pressure
• Data services growing slowly voice SMS still
  represent the lions share of revenues
• Regulatory pressure termination rates,
  international roaming
• FMC
• Femtocells

Up
Mobile WiMAX Mobile TV
?
MVNOs CDMA 2000
Down
Source IDATE

• Western Europe
• HSDPA deployment
• Decreasing ARPU
• MNO revenues and EBITDA margins under pressure
• Data services growing slowly voice SMS still
  represent the lions share of revenues
• Regulatory pressure termination rates,
  international roaming
• FMC
• Femtocells

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3.5G issues disruptions / Japan and South Korea
3G pionners
3G market shares ()

• A more important 3G penetration rate
• Earlier launch
• Quicker diffusion

Source IDATE
2006 149 million 3G subscribers
2004 32 million 3G subscribers

• Asia is leading in terms of 3G subscribers figures

Source IDATE
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3.5G issues disruptions / Mobile trends 3G data
ARPU
3G ARPU 2006 data
Source IDATE
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South Korea

• 3G technologies competing

Source MIC
Mobile TV subscribers
Source IDATE
Source MIC
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South Korea
HSDPA rapid growth
Source IDATE
Source IDATE
but disapointing WiBro figures
LG PDA (LG-KC1)
Samsung PDA (SPH-M8100)
Source IDATE
? KT expects 3.1 million WiBro subscribers with
ARPU of 33 per month by 2010
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South Korea
Voice vs. data ARPU of SKT (KRW)
Data ARPU Total ARPU - SKT
Source IDATE
Source IDATE
Data ARPU by network - KTF
Voice vs. data ARPU of KTF (KRW)
Source KTF
Source IDATE
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Japan USA

• JAPAN
• A dynamic 3G market close to 60 of the mobile
  market (1Q07)
• EV-DO subscribers representing 51 of KDDIs
  subscriber base (1Q07)
• WCDMA 67 of DoCoMo subs and 48 of Softbank
  subs
• ARPU
• Data ARPU representing 32 of total ARPU (2Q07)
• Increasing competition
• Softbank more aggressive
• New mobile WiMAX licences
• But IP Mobile files for bankruptcy
• Reduced T/O and margins

The Japanese mobile market
Source DoCoMo

• USA
• A significant increase in data ARPU from 12
  of total ARPU in 2006 to 15.5 (1S2007)
• Verizon 3Q2007
• Revenues up 14.4 percent.  Data ARPU revenues up
  42.9. ARPU levels highest ever 52.17
• ATT 3Q 2007
• 41 rise in third-quarter net income
• 1.4 million iPhones since launching the
  Apple-branded device in late June
• A 64 percent increase in mobile data revenues
• SPRINT-NEXTEL Mobile WiMAX

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Spectrum issues / The spectrum hot topics

• ?WRC 07 (October-November 2007)
• Mobile or 4G frequency bands
• Mobile services in the UHF and 3.5 GHz bands
• ?The Digital Dividend (RRC 06)
• ?UMTS in the GSM bands
• ?The 2.6 GHz band WiMAX development in Western
  Europe

Source IDATE
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Spectrum issues

• Digital dividend broadcast mobile servicesin
  UHF bands
• 3G  extension band  (2.6 GHz)
• Refarming UMTS in 2G frequency bands
• IMT advanced bands ( 4G )
• Dynamic access to spectrum
• USA
• 700 MHz auctions

Short term
Long term
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Spectrum issues / Major breakpoints in the
spectrum field

• Main factors driving spectrum demand
• Development of mobile traffic, multiplication of
  wireless technologies
• Development of broadband wireless access
• Convergence in wireless industries
• New entrants

More spectrum and/or smaller cells? Evolution
1950-2000
Main users of radio spectrum
Ranking of spectrum users by sector below 1 GHz
Ranking of spectrum users by sector between 1 and
10 GHz
Source IDATE
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Spectrum issues / What is the spectrum / licences
price?

• 3G licences price

An average value of23 EUR per pop
An average value of10 EUR per pop(upfront
payment only)
A maximum value of106 EUR per pop
An average value of3.2 EUR per pop
A maximum value of164 EUR per pop
Source IDATE
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Spectrum issues / What is the spectrum price?
Price of WiMAX licensesin selected countries
Fixed / nomadic servicesin Western Europe
An average license valueof 1 EUR per pop
Source IDATE
Mobile services
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Options for 4G / Which spectrum for 4G?

• Predicted spectrum requirements by the year 2020
  for IMT 2000 and IMT-Advanced
• Candidate bands

Note to Table Predictions are based on one
network deployment Source ITU
Source IDATE
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Options for 4G
3G?4GVerizon LTE?
2G?3G Telstra, Vivo CDMA 2000 to HSPDA
migration
Source IDATE