Transcript Advanced Mobile Data and Multimedia Communications

GEMINI CONSULTING
Advanced Mobile Data and Multimedia
Communications
Cap Gemini Group's Market Vision and Service Offering
October 1999
Agenda

Overview

Market Developments
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


Technology
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
Market Potential
Applications
Licensing scheme
Network
Terminals
Application platforms
Implications for Operators


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Strategy and Market positioning
Services
Tariffs and billing
Customer adoption
Technology implementation and migration




Network technology
Network architecture
System architecture
Organization and processes
Cap Gemini Telecom & Media
Advanced Mobile Data
JPL - July 1999 - 2
Overview
OVERVIEW
Emerging Third Generation mobile technology promises to
revolutionise mobile data communications . . .
Mobile Communications Networks
First Generation—
Yesterday
•
•
•
•
Analogue
Basic voice telephony
Low capacity
Limited local and regional
coverage
• E.g. NMT, AMPS, TACS
Second Generation—
Today
• Digital:
– Circuit switched
• Voice plus basic data
applications:
– Fax
– SMS (small message services)
– Circuit-switched data
• Low data speed
• Regional coverage, with
trans-national roaming
• E.g. GSM, D-AMPS, PDC,
CDMA
Third Generation—
Tomorrow
• Digital:
– Packet and circuit switched
• Advanced data—i.e.
multimedia applications
• Fast data access
• Global coverage
• E.g. UMTS (W-CDMA)
But Wireless data can be introduced without third generation mobile.
Source: “Mobile data feels pressure from the need for speed”, Network News, 2 June 1998.
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Advanced Mobile Data
JPL - July 1999 - 4
OVERVIEW
. . . by enabling a variety of multimedia content and
services to be delivered over mobile networks
Multimedia
Services
Multimedia
Content
• TV programmes
• Video-on-demand
• Films/video
• Interactive games
• Music
• Video telephony
• Electronic games
• Interactive:
• Educational material
• Reference material
• Banking and shopping
• Map information
• Virtual office
• Corporate databases
• Stock records
• Business news and reports
– Home shopping
– Banking
– Business TV
– Training
• Information retrieval services
• Video-conferencing
• LAN-to-LAN interconnection
• Internet/intranet access
• Application sharing
Source: UMTS Forum, The Future Mobile Market: Global trends and developments with a focus on Western Europe”, March 1999.
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Advanced Mobile Data
JPL - July 1999 - 5
OVERVIEW
The development of advanced mobile data and multimedia
communications will be driven by four factors
Growth in Mobile
Communications
and Internet
Technology
Development
• Network: GSM enhancements and Third
Generation open standard
• Protocol: Sim ToolKit, WAP
• Operating Systems: Symbian (EPOC),
Microsoft (Windows CE, 3Com (PalmOS)
• Connectivity: Bluetooth, Wireless
Knowledge
• IP explosion: world-wide data traffic on the
PSTN networks growing at 1000% per year
• Continuous increase in processing power:
doubles every 18th month
Cap Gemini Telecom & Media
Development of
Advanced Mobile
Data and
Multimedia
Communications
Regulatory /
Standards
Initiative
• Mobile revenue growth rate is 10 times that
of PSTN revenue growth rate
• Mobile penetration has reached 50% in the
most advanced market
• Internet usage is growing rapidly
• Use of wireless connections to access data
will increase dramatically
Content
Providers’ Push
• Content providers are looking for new
channels to reach customers
• Mobile is the natural extension of the
evolution from high street to telephone to
Internet commerce
• Banks, in particular, are actively
experimenting with mobile services
• ITU has defined a framework for standardisation (IMT-2000)
• Standards bodies have agreed to support an umbrella standard
unifying various CDMA proposals
• The industry is actively defining the Wireless Application Protocol
• Regulators are in the process of allocating licences for Third
Generation mobile networks
Advanced Mobile Data
JPL - July 1999 - 6
OVERVIEW
Mobile is fast outgrowing PSTN communications and
reaching high penetration levels
World-Wide Mobile vs. PSTN Revenue,
Mobile Penetration Rates in Europe
1992–2005a
1 July 1999b
600
Finland
CAGR
20.9%
2.1%
59%
Revenue ($ billion at 1998 prices
and exchange rates)
500
60%
55%
51%
400
50%
46%
41%
40%
36%
300
30%
30%
24%
200
20%
16%
100
7%
9%
11%
10%
5 6 .8 %
Sw eden
65%
62%
5 9 .8 %
Norw ay
70%
Mobile Revenue as % of PSTN Revenue
Region
Mobile Revenue
PSTN Revenue
Mobile Revenue
as % of PSTN
revenue
5 2 .3 %
Denm ark
4 6 .2 %
Italy
4 2 .1 %
Austria
3 9 .0 %
Portugal
3 7 .5 %
Sw itzerland
3 2 .3 %
Netherlands
3 1 .0 %
UK
2 8 .8 %
Greece
2 8 .1 %
Spain
2 4 .9 %
France
2 4 .4 %
Belgium
0
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0%
2 2 .4 %
Germ any
2 1 .7 %
0%
10%
20%
30%
40%
50%
60%
Operators are looking for new revenue sources, as mobile penetration has reached
half of the population in some countries.
Source: a. Observatoire Mondial des Systèmes de Communication, Key Figures and Indicators for the World Telecommunications Market, 1998–1999. b. “Mobile Communications guide to
West European cellular subscribers”, Financial Times Mobile Communications, 22 July 1999.
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Advanced Mobile Data
JPL - July 1999 - 7
70%
OVERVIEW
When strong Internet growth is combined with mobile
penetration, demand for mobile data appears inevitable
Method of Remote Data Access
Used by US Remote Professionals
in 1998 and Expected in 2000b
Growth of Global Dial-up and Permanent
Internet Connections
1998-2005a
(% of 300 telephone interviewees)
250
Connections (million)
CAGR
100%
20.5%
Dial-up
Permanent 66.2%
200
90%
183
153
150
129
80%
Wired connection
only
70%
Both w ired and
w ireless
60%
Wireless
connection only
50%
107
100
Don't know
206
89
40%
73
30%
50
0
56
20%
0.5
1998
1.2
0.7
1999
2000
2.3
2001
5.0
2002
9.8
13.7
17.5
10%
0%
2003
2004
2005
1998
2000E
By 2000, 63%of remote workers in the U.S. expect to use wireless
connection to access data, compared to only 16% in 1998.
Source: a. www.gsmdata.com, citing Ovum, Internet Market Forecasts: Global Internet Growth 1998-2005, December 1998. b. www.wirelessdata.org, citing Cahners In-stat Group, Access
Requirements: The Growing Demands of Remote and Mobile Users, September 1998.
Cap Gemini Telecom & Media
Advanced Mobile Data
JPL - July 1999 - 8
OVERVIEW
At the same time, content providers are looking to
extend channels to reach customers
Evolution of Channels
Banks: Examples of Push by Content Providers
• Banks in Hong Kong and Singapore are especially active in
launching mobile banking services:
High Street
– HSBC and Hang Seng bank are launching mobile banking services,
including securities trading, in Hong Kong in July 1999.
– American Express Bank plans to launch services in Hong Kong at the end
of 1999 that allow customers to trade stocks and foreign exchange, shop,
and move money between various banks.
Telephone
– Standard Chartered Bank formed alliances with telecom firms, universities,
mobile phone manufacturers, and smart card operators to develop mobile
services in Hong Kong and Singapore.
– Citibank also offers mobile banking services in Hong Kong and Singapore.
• Banks in UK and France are also trialing mobile banking
services:
Internet
– Barclaycard is teaming with Cellnet to launch mobile phone ATMS.
– Banque Nationale de Paris, Crédit Commercial de France, Crédit Mutuel
and Société Générale have linked up with SFR to experiment on mobile
banking services.
– Crédit Agricole offers “infomobis”, which sends daily account messages to
mobile phone subscribers.
Mobile
“Perhaps the net is already in danger of becoming ‘old-hat’ as banks
consider the potential of mobile phone banking”.
—A. Kahler, Australian Financial Review
Source: Textlines.
Cap Gemini Telecom & Media
Advanced Mobile Data
JPL - July 1999 - 9
OVERVIEW
Substantial progress is being made in mobile network,
terminal, and application enabling technology
• GSM enhancements: HSCD, GPRS, EDGE
Network
• Third Generation: IMT-2000/UMTS (W-CDMA)
Consortiums + small number
of open standards facilitate
world-wide adoption
Application
enablers
Terminals
• Improvements in performance/costs of semiconductors:
– Reduced size, cost and power consumption of mobile devices
•
•
•
•
Improvements in user interface and display technologies
Protocols: WAP
OS: EPOC, Windows CE, Palm OS
Connectivity: Bluetooth (wireless radio links between devices)
Cap Gemini Telecom & Media
Advanced Mobile Data
•
•
•
•
•
•
Internet, intranet
Web platforms
SimTool Kit, Java-like technology
Service creation technology
Billing technology, payment technology
Voice handling and recognition technology
JPL - July 1999 - 10
OVERVIEW
For mobile data, as for the Internet, technological
developments and user demands reinforce each other
Lower prices
Bigger Choice
Easier Buying
etc.
Latent End-User Needs
Internet Time
Fuels
Enables
Technological Developments
Abundant Bandwidth
Computing Power
Digitisation
etc.
Technology and application development interact in a virtuous circle
Cap Gemini Telecom & Media
Advanced Mobile Data
JPL - July 1999 - 11
OVERVIEW
Government regulators and industry groups are actively
promoting Third Generation mobile technologies

International Telecommunications Union (ITU) has defined a framework (IMT-2000a) for
standardization, and regional bodies have developed proposals:

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In June 1999, the Operators Harmonization Group (OHG)—an international ad hoc group
of cellular operators and manufacturers—recommended an umbrella standard unifying WCDMA and cdma2000 proposals:



ITU has endorsed the OHG recommendation.
In July 1999, Third Generation Partnership Project (3GPP)—a group formed by regional standards bodies
including ETSI and ARIB—has agreed to align its standards to the OHG recommendation.
Industry is actively defining the Wireless Application Protocol:




Europe: the European Telecommunications Standards Institute (ETSI) has adopted Universal Mobile
Telecommunications System (UMTS), based on W-CDMA, as the new standard.
Japan: the Association of Radio Industries and Businesses (ARIB) has also adopted UMTS as the new
standard.
US: the Telecommunications Industry Association (TIA) has endorsed cdma2000, while the Universal
Wireless Communication Consortium (UWCC) has endorsed a standard based on TDMA.
The WAP Forum gathers more than 100 players.
WAP v. 1.0 was released in April 1998, and WAP v. 1.1 was approved in May 1999.
WAP enabled servers, applications and devices are expected to be released later this year.
Government regulators are in the process of allocating licenses for Third Generation
mobile networks.
These bodies see Third Generation standards as the key to
achieving a truly global wireless network.
Source: “Standards body OK’s harmonised 3G technical changes”, 9 July 1999, www.totaltele.com; “Ericsson buries hatchet with CDMA group”, 15 June 1999, totaltele.com; “Operators propose
3G compromise”, 7 June 1999, www.totaltele.com; www.itu.int; “ITU gives up on single 3G standard”, 22 March 1999, www.totaltele.com; www.wapforum.org.
a. IMT = International Mobile Telecommunications.
Cap Gemini Telecom & Media
Advanced Mobile Data
JPL - July 1999 - 12
OVERVIEW
Third Generation mobile developments will create
significant new revenue opportunities for operators ...

The mobile voice market exploded, and growth may slow unless new valueadded revenue sources are found.
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The familiarity with and reliance on the Internet and multimedia is
increasing.
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The market for mobile data and multimedia communications is forecasted to
grow substantially over the next decade.

Content providers are looking to mobile as another new channel to
customers.

Development of bandwidth enhancing technology will enable delivery of
multimedia applications over mobile telecom networks.

Standardization of technology will facilitate global adoption of new
applications.

Innovation in facilitating ease-of-use will encourage trial and, more
importantly, acceptance.
Cap Gemini Telecom & Media
Advanced Mobile Data
JPL - July 1999 - 13
OVERVIEW
… however, the advent of mobile Internet forces operators
to reassess their business approach

Players need to define their precise positioning in the connectivity, hosting,
aggregation, and content creation segments of the Industry.

Various players will need to form partnerships and alliances to bring
products to market:


Operators will need to share revenues with content providers.

Content providers may become a revenue source for operators as they pay operators to
deliver their services to end consumers.
The move from circuit to packet switching means users will have a
permanent web-tone instead of minutes of connection:


Tariff schemes will need to reflect this new measure of usage.
Commodity services will face heavy price pressure:

Tariff schemes will need to differentiate between services that are commodities and
services that provide significant value.
Major Internet players are already developing and implementing these
business models.
Cap Gemini Telecom & Media
Advanced Mobile Data
JPL - July 1999 - 14
DEVELOPMENTS IN MOBILE DATA COMMUNICATIONS: MARKET
Operator revenue from mobile data is forecasted to grow
to $80 billion world-wide by 2010
World-wide Mobile Data Revenue
1998–2010 ($ billion)a
European and US Mobile Data Revenue
1998, 2003 ($ billion)b
Region
W Europe
90
80
US
CAGR
78%
44%
2.6
CAGR 59%
0.4
Revenue ($ billion)
7.4
0.4
70
1998
60
50
2003
Mobile Data Revenue as % of Total Mobile
Revenue, 1998—2003b
40
30
Region
W Europe
6%
20
US
4%
10
2%
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
0%
1998
1999
2000
2001
2002
2003
Western Europe is forecasted to experience substantially higher mobile
data revenue growth than the US.
Source: a. www.analysys.com/news/dom.htm,citing Data over Mobile: Commercial Strategies for Mobile Operators, 22 April 1999. b. www.mda-mobiledata.org/news/eurous.htm, citing
Strategic Analytics, European and US Cellular Data Market Forecast (1998–2003).
Cap Gemini Telecom & Media
Advanced Mobile Data
JPL - July 1999 - 15
DEVELOPMENTS IN MOBILE DATA COMMUNICATIONS: MARKET
In Europe, mobile multimedia could account for nearly 25%
of total mobile revenue and 60% of total traffic by 2005
Penetration of Future Mobile Services in EU
2005, 2010
EU Mobile Revenue, 2005
Billion Euro
150
Term inal Revenue
Population
Telecom Revenue
100
Mobile Users
Mobile Multimedia Users
104
50
10
400
24
0
Total Mobile Revenue
387
385
Mobile Multim edia Revenue
300
Million
260
6 000
150
119
100
3 000
6 320
3 800
50
32
0
0
Total Mobile Traffic
Mobile Multim edia Traffic
Mbytes/Users/Month
Million Mbytes/Month
EU Mobile Traffic, 2005
200
200
90
100
32
0
2005
2010
Mobile multimedia users are expected to reach 23% of the population in the
EU by 2010.
Source: UMTS Forum, Report on UMTS/IMT-2000 Spectrum, December 1998 (using Analysys/Intercai study).
Cap Gemini Telecom & Media
Advanced Mobile Data
JPL - July 1999 - 16