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The Future of Mobile Broadband

The Future of Mobile Broadband. Cellular Subscriptions Subscriptions & Penetration per Region - End Q2, 2006E*. Japan (excl. PHS) 93 M, 73%. North America 240 M, 73%. Global users 2464 M, 38%. Asia Pacific 851 M, 24%. Latin America 275 M, 49%. Western Europe 423 M, 106%. Central &

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The Future of Mobile Broadband

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  1. The Future of Mobile Broadband

  2. Cellular SubscriptionsSubscriptions & Penetration per Region - End Q2, 2006E* Japan(excl. PHS)93 M, 73% North America 240 M, 73% Global users 2464 M, 38% Asia Pacific851 M, 24% Latin America 275 M, 49% Western Europe423 M, 106% Central & Eastern Europe 354 M, 74% Middle East and Africa 228 M, 20% * As reported by operators Source: Estimates based on EMC, Wireless Intelligence, MII & TRAI

  3. Broadband Everywherethe starting point and the potential FTTH WCDMA Cable 204 million subscribers xDSL 400 million subscribers 2005 CDMA2000 2009 WiMax

  4. 3G Evolved WiMAX Broadband data landscape... Currently un-served market? PC´s and Laptops without broadband connection Residential broadband industry Mobile industry ”Mobile broadband data” (Dial up) DSL Fibre EDGE/WCDMA/ CDMA CDMA Many PC´s yet to be connected: different enabling technologies

  5. 1 Gbit/s 100 Mbit/s 10 Mbit/s 1 Mbit/s 100 kbit/s 10 kbit/s Wireless Technologies Overview WiFi – Unlicensed short range radio Main usage as a cable replacement by consumers and enterprises Don’t expect contineous coverage with WiFi - Expensive and very hard to manage End-user bit rate WiMAX – Licensed radio OFDM based radio in TDD and/or FDD bands In higher frequecies than currenty used allocations Due to higher frequencies WiMAX will be more expensive than HSPA for same coverage Still immature – Products, valuechain and technology options 802.11g,a,n HSPA 802.16d,e 802.11b 3G HSPA – Licensed radio WCDMA based radio within already available allocations Fully integreted step in GSM evolution Supported by more than 2 Billion subscribers and 8 out of 10 largest operators has already choosen WCDMA Mature technology with unbeatable Economyof Scale 2G LAN WAN MAN Coverage

  6. WiMAX Forecast2005-2010 WIMAX Subscriber Forecasts 35 30 25 20 15 10 5 0 2005 2006 2007 2008 2009 2010 ABI TOTAL Moderate ABI TOTAL Aggressive Pyramid Main total Pyramid High total Maravedis Source: Various analyst firms

  7. Global Cellular Active Subscriptions Year End

  8. WCDMA Market OutlookNov 2006 • 123 WCDMA operators in commercial service in 55 countries • 407 WCDMA terminals launched in the market • 70 operators deploying combined WCDMA-EDGE networks; 46 launched • Over 80 million WCDMA subscribers • 130 HSDPA network deployments in 60 countries; 74 launched • 81 HSDPA Devices launched, 22 suppliers

  9. Issues in Brazil • Anatel issues public consultation for new 3G spectrum: i) 10 MHz in 1.9 Ghz band previously assigned to fixed WLL; mobile operators reject proposal ii) 40 MHz in 1.8 GHz band • VIVO (largest operator of the region with 25 million CDMA users) announces deployment of a GSM overlay for the end of 2006 • LNP being promoted by regulator for 2007 • Court suspended temporarily WiMax bidding in 3.5 GHz and 10.5 GHz due to conflicts establishing the minimum bid • Growing interest in UMTS/WCDMA in 850 MHz

  10. Latin America Concerns/Issues • 3G spectrum: “In-band” versus new frequency bands (1700/2100 MHz, 1900/2100 MHz) • Low ARPUs (US $ 13 average) pressures operators to look for economies of scale and reduce costs • Due to a high prepaid penetration (80%), users always expect a high subsidy in handsets • Voice still the “killer app”; operators trying to launch VAS to postpaid users first • Regulators involved in many issues: Fixed-Mobile Convergence, Triple Play, WiMax, LNP, Interconnection fees, Quality Service plans

  11. Technology Evolution

  12. Technology EvolutionComplementary solutions • Cellular technologies • become more and • more broadband • Alternative wireless • technologies become • more and more mobile • Several technologies for Broadband access: • HSPA (HSDPA+HSUPA) and WiFi / WiMAX

  13. MSG A-GW MSCServer A-GW MGW BGW RNC BSC Multi-Service Ericsson VisionAlways Best Connected” and IMS Concepts Service Layer Service Layer Messaging B2Bcontrol Otherenablers Content &Application USM Charging IMS Internet GRX TeS TeS Rede Core PSTN PLMN IP Backbone PacketDelivery Control Rede de Acesso IPRede de Acesso IPRede de Acesso WLAN xDSL 2/3G/HSPA WiMAX Banda Larga Common Network Core. Different access options.

  14. Today EDGE Evolution requirements • Extend throughput further out in cell • Increased coverage for a given bitrate, e.g. 128 kbps Mobile-TV at cell border • Increase peak bit rate > 1Mbps • To improve service experience when moving between 2G and 3G • Reduce latency (back to back pings) • Latency today: ~150 ms • Goal: Reduce e2e latencyto 50-100 ms • Reduce access time (first ping) • Today: ~700 ms • Goal: Reduce e2e accesstime to 500 ms Better Peak Better Coverage Throughput Future Radio Quality Bad Good

  15. Features are being standardized in 3GPP R7 to lift GSM/EDGE to a higher level Operator Value Increased end-user data rates Improved data capacity and spectrum efficiency Reduced latency Dependencies Terminal support is required Contributing companies in 3GPP Ericsson Nokia Siemens Motorola Panasonic Philips Intel Qualcomm EDGE Evolution has broad support 48 kbps GPRS EDGE 180 kbps 600 kbps 1,2 Mbps WCDMA – R99 384 kbps WCDMA –Evolved (HSPA) 1,8 Mbps 3,6 Mbps 14 Mbps 28 Mbps 40 Mbps 3GSM 100 Mbps 3G-LTE 2005 2006 2009 2007 2008

  16. Evolving WCDMA/HSPA HSPA • High Speed Downlink Packet Access in Rel 5 • Enhanced Uplink in Rel 6 • ”High Speed Packet Access+” in Rel 7 e.g.: • Multiple Input Multiple Output (MIMO) • Higher order modulation DL/UL • MultiMedia Telephony (MMTel) enhancements • Broadcast/Multicast enhancements HSPA+ LTE • Long Term Evolution in Rel 8 3GPP Rel 99/4 Rel 5 Rel 6 Rel 7 Rel 8 HSPA Evolved WCDMA WCDMA Evolved Enhanced Uplink HSDPA MBMS+ MBMS LTE LTE

  17. HSPA Improving the WCDMA downlink/uplink (vs R99) • Higher bit rates: up to 14 Mbps downlink SPEED • Higher bit rates: up to 5.8 Mbps uplink • 2 - 5 times improved system capacity downlink CAPACITY • 1.5 - 2 times improved system capacity uplink • Quicker response time with interactive services REDUCED DELAY STANDARDIZED • Integral part of WCDMA (3GPP Rel.5/6) Network Coverage • Short time to market with existing sites

  18. HSPA Evolution Improving the HSPA downlink/uplink (targets vs R99) • Higher bit rates: up to 40 Mbps downlink SPEED • Higher bit rates: up to 10 Mbps uplink • 6 - 8 times improved system capacity DL CAPACITY • 2.5 - 3 times improved system capacity UL • 2 times improved Broadcast/Multicast capacity • Quicker response time with interactive services REDUCED DELAY STANDARDIZED • Integral part of WCDMA (3GPP Rel 7) Network Coverage • Short time to market with existing sites

  19. Long-Term Evolution Targets on a 20 MHz bandwidth • Higher bit rates: at least 100 Mbps downlink SPEED • Higher bit rates: at least 50 Mbps uplink CAPACITY • 7 - 9 times improved system capacity DL • 3 - 4 times improved system capacity UL • Quicker response time with interactive services REDUCED DELAY STANDARDIZED • Part of 3GPP Rel.8 Network Coverage • Short time to market with existing sites Focus on services from the packet-switched domain !

  20. Summary HSPA+ Benefits vs R99 SPEED – 100x CAPACITY – 5x COST – 1/5x LATENCY – 1/10x The WCDMA/HSPA evolution has only just begun!

  21. Different types of Mobile Broadband segments Laptop mobility seekers Broadband performance everywhere, both indoor and outdoor Fixed Wireless Broadband Very cost efficient - ADSL/WiMAX alternative Enhanced handset services New multimedia services

  22. Fixed Mobile Broad Band subscription: 1 GB/month~ 6 600 subscriber per site (in one RBS cabinet) With potentially 4 Mbps per cell carrier ~ 10 500 subscriber per site (in one RBS cabinet) Radio interface is not a limiting factor Daily capacity per WCDMA site with HSDPA: 1 carrier 4 carriers per sector ~ 216 Gigabyte/Day 2.5 Mbps x 3 sectors x 3600 s x 16 h/8 ~ 54 000 Megabyte/Day Fixed Mobile Broad Band subscription: 1 GB/month~ 6 600 subscriber per site (in one RBS cabinet)

  23. Mobile BroadbandCost efficient capacity for mass market services Network Service Financial € Site CAPEX UTRAN + Transmission: 140k€ Depreciation: 6 years Site OPEX 100% of annual CAPEX depreciation ADSL equivalent 50kbit/s per subscriber 12 Busy Hours/day WCDMA site 3 carriers 3 sectors Average capacity: 4Mbit/s per sector carrier CAPEX depreciation [€/year] + OPEX [€/year] total delivered capacity [GB/year] (300k€ / 10years) + 100% x (300k€ / 10years) ((3carrier x 3sector x 4Mbit/s x 3600sec/hour x 10BH/day x 365days/year) / 8192Mbits/Gbyte) Total Cost /GB = = 1€/GB

  24. Mobile broadband terminalsA 3G network is no longer just a mobile telephony network Phones & PDA’s PC cards PC Integrated 3G Modems 81 HSPA terminal models available , Nov 2006

  25. Established end-user behavior Key success factor for building a mass market

  26. Commercial 2006 Availability HSPA in the laptopStrong industry commitment for embedded 3G 3G Operators Vodafone, Cingular, T-mobile Terminal and chipset vendors Ericsson, Option, SierraWireless, Novatel PC manufactures Dell, HP, FujitsuSiemens, Lenovo (IBM), Sony It’s already a reality today

  27. HSDPA in Laptops - examples Lenovo T60 Dell Latitude 620 Fujitsu Lifebook Q2010 Cat 12 HSDPA Laptop UMTS 1900/850 Quadband GSM Cat 12 HSDPA Laptop UMTS 2100 Quadband GSM Cat 12 HSDPA Laptop UMTS 2100 Quadband GSM Dell Latitude 820 Acer 5650 Lenovo X60 Cat 12 HSDPA Laptop UMTS 2100 Quadband GSM Cat 12 HSDPA Laptop UMTS 2100 Triband GSM Cat 12 HSDPA Laptop UMTS 2100 Quadband GSM

  28. Strong growth in handset sales expected

  29. WCDMA Handsets Prices

  30. WCDMA Handset Prices Erosion Price of low-end WCDMA handsets -12% per quarter Extrapolation based on Q403-Q106CAGR Source: Qualcomm

  31. Vodafone D2 are already leveraging WCDMA cost-efficiency Vodafone “at home”: • PSTN telephony line • FAX line • Internet Access, up to 384kbit/s • Wi-Fi access point delivered to the home or office over WCDMA 1000 voice minutes 20 € / month 5 GB Internet access 17 € / month Note: in-door CPE makes capacity and cost similar as for ”mobile” case

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