Transcript hkstp_030115

Now and the Future of
Telecommunications
Ken Zhang
CTO & VP
Ericsson (China) Ltd
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bmc|02
The Nasdaq
Telecommunication Index
1400
1200
1000
800
600
Many strategies and
decisions were made
here (“Growth driven”)
“Profit
driven”
400
200
0
Torbjörn Nilsson | B 1 | The Direction
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bmc|02 May 29-30 2002
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Main factors creating the
hyper-growth and crisis
Market
Investments
Geographical
expansion
New competitors
Good GDP development
(US driver)
“Technology”
Investments
Digital Mobile
The hypergrowth of the late
1990’s & 2000
Spectrum
Internet
LH Optics
Now
• Hyper-growth gone/
Macroeconomic instability
• Signs of subscriber
growth maturity
Torbjörn Nilsson | B 1 | The Direction
• Network spending exceeds
demand in several areas
• Increased competition
& lower margins
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• Failure in new business models
delaying new services
• Financing constraints
(debts, cash,…)
bmc|02 May 29-30 2002
The Current Status of the Mobile Industry
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hyper Competition: 4-7 operators in most European/US markets
•
Heavy Debt for some major operators, from over-priced acquisition and
spectrum/license fee (France Telecom and Deutch Telecom ‘repairing’ balance sheet).
But not from operating side.
•
But worldwide operator’s revenue still growing at 5%-7% in 2001/2002, amid global
GDP 2% growth
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Major operators reporting healthy operating profit/revenue growth
•
Voice traffic growing, data revenue soaring
Torbjörn Nilsson | B 1 | The Direction
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bmc|02 May 29-30 2002
Next likely Steps
• Many more Operators/SP will go “bankrupt”
• Fast consolidations to create necessary Returns
• The “incumbent” telcos will dominate & drive consolidations
Consolidation has started. We will see 3 (4) operators per market.
The top 20 globally will have more than 80% of revenues.
Restructuring Suppliers
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Subscriptions (million)
Mobile Subscriptions
Doubling to 1.8 Billion by 2007
Mobile
1800
1500
1200
Fixed
(POTS/ISDN)
900
600
Fixed Broadband
(Cable, xDSL,
LMDS, Fibre)
300
0
(Year -end)
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2000
2001
2002
2003
2004
2005
2006
2007
Global Mobile Subscriber Growth
– 2002 to 2007
APAC 51%
CEMA 19%
WE 8%
NA 12%
LA 10%
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~870 million
new subscribers
in six years
What is next step for the infrastructure, technology
selection?
what is the driving force for the development?
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A new communications architecture
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Future
Multi-services network (carrier class)
Cable TV Networks
Data/IP Networks
Wireline Networks
Wireless Networks
Today
Single-service networks
Service Networks &
Application enablers
Content
Applications
Communication control
Connectivity/
Backbone Network
MGW
MGW
MGW
Access Networks
MGW
Mobile Services is the driver for 3G
Portal with Personalized Services (Consumer, Business)
Mobile Messaging
Mobile -WWW
(Browsing/streaming, download)
Mobile Commerce
(Transactions)
• e-mail
• Information
• Banking
• Voice-mail
• SMS/EMS
• MMS (Imaging/Multimedia)
• Instant Messaging (IMPS)
(news, sport, etc)
• Entertainment
(Music, Games, Imaging)
• Location Services
• Trading
• Ticketing
• Shopping
Open Application standards (OMA)
Open Connectivity standards (3GPP/IETF)
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Two services areas for the mobile Internet
Mobile Internet
Internet paradigm
Media paradigm
Entry barrier:
Corporate IT department
Wireless Internet
• a "wireless Internet" that
starts from the wired Internet
by "cutting the cord"
• saving time
Chi-Q no Tomodachi
By Nextech
Entry barrier:
Digital Rights Management
Mobile Media
• the “mobile Media” starts
from cable TV by “cutting
the cord”
• killing time
Tsurun de Amigo!
By Bandai Networks
@AJA Deai Channel
By Cybird
Excite Friends
By Excite
Michael Björn
Rev PA1
2001/10/09
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CONFIDENTIAL
Nippon Ericsson K.K.
J-Phone’s (Vodafone) “Killer” Application –
Pictures (Sha-mail)
• Built-in camera
• Send photo-mail directly from phone
• Easy to use
– 1 click to take a photo
– Picture directly displayed on-screen
– Simply attach to mail and send
• Photo + text:
The First Step to Mobile
Multi-Media – already here!
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Key need
Coherent service evolution simplifies learning
Video
Music
XXX
Application Side
Approach
Picture Mail
Video(light)
J-SKY(Web)
Picture
SKY Melody
E-mail
SKY Walker
Stand
by Screen
Melody
Text
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Video Software
Colour Display
Camera
Handset Side
Approach
Sound Software
Specific Key
Source: http://www.vodafone.com/download/investor/presentations/vodafone_japan_2002.ppt
Subscriptions (million)
Development Sha-mail service, J-Phone
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Standard
subscriptions
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Sha-mail users
8
6
~47% of
all subs
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2
0
Launch
Nov 2000
May 2001
Sept 2001
Dec 2001
Aug 2002
Sources: Ovum and Reuters
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Platform requirement
Two mobile operator worlds
Operator branded handsets
Vendor branded handsets
GSM Operators
De facto approach
Michael Björn
Rev PA1
OMA approach
2001/10/09
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CONFIDENTIAL
Nippon Ericsson K.K.
Platform requirement
Operator branded handset
world
Vendor branded handset
world
Operator
Operator
Brand-value
Handset
vendor
Brand-value
+
—
(user selects
operator, NOT
handset)
(cost-plus pricing)
Service end-end
control
+
—
Handset financial
risk
—
+
(operator commits
to volume)
Rev PA1
—
+
(user selects
handset, NOT
operator)
(user selects
handset, NOT
operator)
Service end-end
control
—
+
Handset financial
risk
+
(e.g. Club Nokia)
—
Some services work with some brand
Intra-operability = ALL services work together in ONE
operator brand
Michael Björn
Handset
vendor
2001/10/09
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CONFIDENTIAL
Nippon Ericsson K.K.
BUSD
Mobile Revenues by Service Type (00-07)
700
Data revenues
Voice revenues
Messaging
& Browsing/WWW
dominate
600
500
400
300
Voice will continue
to dominate
200
100
0
2000
2001
2002
2003
2004
2005
2006
2007
Source: Ericsson
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Technology path and selection
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Wireless Evolution
Wide Area
Network (~10km)
Analog
Digital
Wideband
1G
AMPS, NMT,
TACS etc
2G
GSM, PDC
TDMA,
CDMA
3G
WCDMA
(FDD/TDD),
EDGE
CDMA2000
Local Area
Network (~50m)
CT1
DECT, PHS
WLAN
Personal Area
Network (~20m)
“wire”
Infra Red
Bluetooth
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Combined
devices
4G
No of Subscriptions (million)
Cellular Subscriptions by System Standard (00-07)
1800
GSM/GPRS/EDGE &
WCDMA
1500
PDC
TDMA
1200
CDMA/CDMA2000
Analog & Others
900
600
~75 - 80% of CAPEX
300
~20 - 25% of CAPEX
0
(Year -end)
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2000
2001
2002
2003
2004
2005
2006
2007
Complementing Technologies
Combining Air-Interfaces
Local
Area
Network
Wide Area
Network
Not to Scale
1 Wide Area cell = ~10 000 WLAN cells
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Complementing Technologies
Combining Air-Interfaces
Local
Area
Network
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Personal
Area
Network
Wide Area
Network
3G is happening now-WCDMA
 Many Networks has been launched (NTT DoCoMo,
Austria Mobilkom, etc)
 J-Phone and H3G UK, H3G Italy, has launched in the
end of last year
 20++ Networks are in installation/testing stage
Tens of Thousands of Base Stations have been
delivered and installed worldwide!
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Global Mobile Market
Western Europe
• Current all GSM
• In process of launching WCDMA
North America
• 50% TDMA=》GSM/GPRS
=>EDGE/WCDMA
• 50% cdmaONe=>CDMA 20001x>
cdma1xEV
Latin America
• Mostly TDMA, Pending
transition mostly to GSM
• 30%
cdmaOne=>CDMA20001X
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Central Europe, Middle
East, Africa
• Still in the GSM build-out phase
• First WCDMA during 2003
• Price of licenses coming down
Japan/Korea
• DoCoMo(PDC) launched
WCDMA Oct 2001
• J-phone
PDC=>WCDMA ,
Soft Launch June,
Commercial expected in Dec.
• KDDI/LGT:
cdmaONe=>CDMA 2000 1x
=>3G
Asia-Pacific
• Vast Majority GSM,
• some presence of
CDMA(growing in China,etc)
• Licenses being issued during
2002 and 2003
Concluding remarks:
• 3G is designed to be a cost effective solution for
high capacity voice, as well as high end-user
data rate
• Application is the driver for 3G development
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