Transcript If you build it, will they come?

4G: If you build it, will they come?
Bassam Hajhamad
inCode Telecom
www.incodetel.com
September 2nd, 2009
inCode is a management consulting firm focused entirely
on the Telecom World
Industry Segments
Mission:
To deliver innovative solutions
and effective strategies at the
intersection of business and
technology.
Customers:
Wireless & Wireline Carriers
Cable MSOs / Media Players
Infrastructure Vendors
Device OEMs
Private Equity
Emerging Players
Page 2
Service Offering Areas
Business Strategy Group (BSG)
• Corporate / Business Strategy - new market entry,
mergers and acquisitions, divestment strategy, strategic
planning, risk assessment, business cases development
• Financial Analysis and Modeling - business case and
pro forma financial development
• Market Analysis – market research, market trial and
launch planning, segmentation approaches and channel
strategies
• Business Formation and Launch – growth strategies
and product and service planning and development
• Strategic Sourcing – procurement strategies, RFP
strategies, vendor management strategies
Advanced Technology Group (ATG)
• Technology Strategy – spectrum strategies, migration
strategies, architectural roadmap options, technology
evaluations and operational requirements
• Program Management Office (PMO)
• Innovative Process & Tools – packaged and
customized solutions to benefit customers with Wireless
Networks; such as Wireless Pro, network optimization,
quality assurance, and benchmark testing
4G network deployment is gaining momentum worldwide
Technology: LTE
Trials: Now
Launch: 2012+
Technology: LTE
Trials: Q4 09
Launch: TBA
Technology: LTE
Trials: Now
Launch: Q4 2010
Technology: LTE
Trials: Now
Launch: 2011
Technology: LTE
Trials: Now
Launch: 2010
Technology: LTE
Trials: Now
Launch: 2010
Technology: WIMAX
Trials: 2007
Launch: 2008
Technology: LTE
Trials: Now
Launch: 2010
Technology: LTE
Trials: Now
Launch: 2010
Technology: LTE
Trials: Now
Launch: 2012
Technology: LTE
Trials: Now
Launch: 2010
Technology: WiMAX
Trials: Complete
Launch: 2007
Technology: WIMAX
Trials: Now
Launch: 2009
With support from major operators and ecosystem players worldwide, LTE will become the
mainstream technology by 2013, with WiMAX becoming more of a niche technology.
Page 3
4G is more of a technology push than market pull
Supply Side
Wireless Carriers
• Delivery of higher bandwidth
services and capacity
• Addressing the trend of
declining ARPU
• Reducing OPEX & Cost/MB
• Leveraging existing 3G
infrastructure
OEM Vendors &
Application Providers
• Time to market advantage
• Proliferation of emerging
devices, with rich mobile
applications and video
Policy & Regulation
Regulator
• Re-allocation of older
spectrum for 4G technologies
• Open access & net neutrality
4G
Launch
Demand Side
Consumer Segment
• Anywhere, anytime, any
device, any application
• High-speed, Internet-like,
user-controlled experience
• Bandwidth-intensive apps
• Seamless and personalized
mobility
Business Segment
• Emergence of machine-tomachine (M2M) applications
• Feature-rich mobile business
solutions (e.g. videoconferencing)
Ultimately 4G will be a win-win scenario for carriers and consumers. It will enable
advanced mobile internet applications at lower cost.
Page 4
4G subscriber growth forecast hinges on many factors
4G Subscribers Forecast By Region
LTE vs. WiMAX Market Adoption Forecast
Number of 4G Subscribers (in thousand)
210
5,045
20,644
64,501
162,124
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2009
North America
2010
Europe
2011
Asia
2012
Latin America
2013
MEA
Factors that will impact 4G subscriber growth forecast:
• Carriers’ capital investment decisions and available funding
• Overall economic recovery and broadband stimulus outcome
• Suppliers’ roadmap, chipset/device availability, and ecosystem support
• Product and service rationalization, including pricing
• National/regional government policies and funding
4G is about technology evolution and not revolution. A pragmatic approach to forecast 4G
subscriber growth is more realistic than an overly optimistic approach.
Sources: iSuppli, ABI Research, Analysis Mason, Light reading, Alcatel-Lucent
Page 5
New initiatives & government policies are making 4G more
attractive to consumers and driving adoption
Open Access
Stimulus
Package
Facilitate competition
through the gradual
removal of the walledgarden. Nontraditional operators to
serve the wireless
market with open
devices and mobile
applications.
U.S. economic
stimulus package to
support the
deployment of
wireless broadband
to rural and
underserved areas.
Bundled
Services
Wholesale &
CE Devices
Telcos and Cablecos
will leverage 4G to
enhance its quadplay bundle and
multiple screen
offerings.
Clearwire’s
wholesale model will
encourage new
players/MVNOs to
enter the market with
new type of devices.
One key value of 4G is the way it can be used as a catalyst to stimulate innovation,
competition, and new market development.
Page 6
4G enables multiple high-speed data applications
across multiple devices
2010-2011
2012-2014
2014+
2nd Wave (Early Majority)
Low Bandwidth Devices
High Bandwidth Devices
Wave (Late
Majority)
Next-Gen & M2M Devices
Real
1st Wave (Early Adopters)
3rd
Time
UMPC
MID
• Mobile high-speed internet
• Location based services
• Road warriors focus
Still Camera
Shifted
Laptop
Music
• Photo and music upload
and download
• No subsidy for data-only
device
• Low subsidy for dual mode
devices (to support voice)
• Relatively low ARPU
Page 7
Fixed TV
In-Car
Navigation
• HD video streaming, video calling,
push-to-video
• In-Car data applications,
• 3D Navigation
Camcorder
Networked
Gaming
Smartphone
• Video-on-demand, video sharing
• HD Networked gaming, DVR
• Driven by video-oriented
applications
• More application-specific
embedded devices
• Higher ARPU related to valueadded service
Internet
Multimedia Surveillance
Home
Automation
• Over-The-Top video streaming
and home monitoring
• Remote-access of M2M device
Health Monitoring Video conferencing
• Upload of patient info
• Telepresence
• Enterprise and residential M2M
applications
• More complicated ecosystem
• Low subsidy
• High ARPU opportunity
Uncertainty about the readiness and timing of voice
applications (over 4G)
• LTE was designed to handle heavy data traffic and not optimized for voice or SMS
• Voice-over-WiMAX is not yet figured out from a device & infrastructure perspectives
Potential
Support of
Voice over
LTE
Short-Term
Mid-Term
Longer Term
?
?
Circuit Switch (CS) Fallback
• IP-based LTE doesn’t support
legacy CS
• Leverage 2G/3G for traditional
voice
2010
Circuit-switch-over packet
• VoLGA: based on UMA and
adoption is low
• 2G/3G likely to continue to
support voice and SMS
2011
2012
IP Multimedia System
(IMS)
• IMS for wireless is still
being defined: Voice is
not yet a mandatory
requirement
2013
With high 4G capital cost and declining voice ARPU, Voice-as-an-application is not a
priority for carriers today and will not likely be available until 2012.
Page 8
Time
Carriers’ strategic options will drive various business models
Strategic Options
Business Model Approach
Key Target Markets
• Most Cost Effective Network
(Wholesale Model)
Other carriers, MVNOs,
content providers, device
vendors and Internet portals
2. Embedded
Device
• My Network, Your Device
(Network-Inside Model)
Electronics manufacturers,
high-end & mass consumers
and vertical enterprises
3. Convergence
Play
• Bundled Services Focus
(Three-Screen Model)
Consumer/Residential (family
oriented) and SMBs
1. Carrier’s
Carrier
4. Rural
Broadband
• Customized Offerings
(Low-Cost Model)
Underserved and unserved
markets
4G will enable carriers to pursue multiple strategic options at once. However, new pricing
models are expected to emerge based on multi-tier QoS.
Page 9
Q&A
Thank you!
[email protected]
(858) 539.3801
Page 10