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Economics and Timing of Migration to IMT-2000

Economics and Timing of Migration to IMT-2000. Michael H Callendar C.Eng. M.I.E.E (Past Chairman of ITU-R Task Group 8/1). Mobile Generations. First mobile generation was analogue Second mobile generation is digital

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Economics and Timing of Migration to IMT-2000

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  1. Economics and Timing of Migration to IMT-2000 Michael H Callendar C.Eng. M.I.E.E (Past Chairman of ITU-R Task Group 8/1)

  2. Mobile Generations • First mobile generation was analogue • Second mobile generation is digital • Third generation offers multi-media communication capabilities, at higher bit rates, with improved spectrum efficiency • IMT-2000 is the ITU definition of 3G • Mobile has overtaken fixed users and represents the best option for improving global telecommunications access.

  3. Mobile Generations Source ITU (actual) and Deutche Bank (forecast)

  4. IMT-2000 for Mature Markets • Most developed mobile markets are close to saturation, so most future subscriber growth will be in developing regions • IMT-2000 multi-media services can enable increasing operator revenues, even when almost everyone has a mobile phone • Improved spectrum efficiency, and/or additional spectrum, needed for higher bit rate multi-media services

  5. Business Drivers in Mature Markets • Voice services ARPU falling and must be offset by increasing data service revenues • Cell sizes are already approaching the practical minimum size in some urban areas, so operators require improved spectrum efficiency and/or additional spectrum • Business case for IMT-2000 in mature markets driven primarily by potential future multi-media service revenues.

  6. Impact of Data Revenues

  7. Orange World Traffic Forecast

  8. IMT-2000 for Growth Markets • Improved spectrum efficiency and global standards help to reduce costs • New “Smart” Speech Codecs, e.g. AMR and SMV, allow operators to adapt voice coding to local economic needs • Flexible evolution of mobile networks to IMT-2000, i.e. at an appropriate time for each specific market, minimizes operator investment requirements

  9. Business Drivers in Growth Markets • Voice services are the major revenue provider • Service and handset costs are the primary considerations in most growth markets • Often significant barriers to increased data service usage, e.g. computer literacy and availability, plus more expensive handsets • Improved voice service transmission efficiency will be the primary business driver for migration to IMT-2000 in growth markets

  10. Migration to IMT-2000 • IMT-2000 offers various options to facilitate smooth migration from 2G • Some options allow upgrade to 3G within an operator’s existing spectrum, others require additional spectrum for IMT-2000 • Migration options generally build upon existing 2G core networks, e.g. GSM/IS-41

  11. IMT-2000 Radio Options UMTS FDD CDMA2000 TD-SCDMA UMTS TDD EDGE DECT

  12. Migration to IMT-2000

  13. IMT-2000 Technology Forecast Source Deutche Bank (May 2003)

  14. Spectrum for IMT-2000 • IMT-2000 defined by ITU technical specifications NOT by the frequency band • Most existing cellular bands identified for IMT-2000. Any “Mobile” band can also be used, e.g. 450 MHz NMT band • Multi-band/Multi-mode handsets can facilitate evolution from 2G to IMT-2000

  15. Spectrum for Mobile Services Source ITU

  16. Profitability of Mobile Services • Most operator revenue from voice services • SMS the major data revenue component • Prepaid services can be profitable (AMPU) • MMS should create significant revenues • Mature markets focus on new services • Growth markets focus on cost reduction • IMT-2000 can address both requirements

  17. Profitability of Mobile Services Source GSA

  18. Regional Mobile Growth

  19. Middle Eastern Mobile SubscribersSeptember 2003

  20. Outlook for the Middle East • Middle East represents approximately 2% of the global mobile market • Rapid growth is forecast for the region • Wide range of different market conditions • Some markets still only have one operator • IMT-2000 already deployed in some areas • IMT-2000 offers benefits to most markets

  21. Conclusions • IMT-2000 provides economic benefits for both mature and growth markets, e.g. improved voice transmission efficiency as well as new higher speed data services • Timing differs for specific mobile markets • IMT-2000 standards are evolving rapidly to offer greater efficiencies and capabilities • IMT-2000 will predominate by 2010

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