Transcript Data ARPU - Educause

Metro Wireless
Mark Morell
February 3, 2004
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 1
What’s Driving Wireless Today?
•
The Wireless Lifestyle has become mainstream
–
•
Traffic is shifting to the Wireless Network
–
–
•
Call the person, not the place
Fixed Voice migration in the home and office
Wireless as first infrastructure in developing markets
Data traffic is a growing profit driver
–
Already dominates fixed networks, emerging in Wireless
Users are driving services to Wireless
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 2
Traditional Market Growth Metrics
Monthly ARPU - Global Avg.
Global Subscribers
July ’03 - 1,256
2,400
2,007
$30
2,000
Data
$20
Voice
1,600
1,149
$10
1,200
$0
2002
800
2004E
2006E
Source: IMS Q1/03
400
0
1998
Americas
2002
EMEA
2006E
Asia
Source: EMC Q1/03
MOU/Month (Billions)
309
Global Monthly MOU
400
300
200
100
0
2002
2004E
2006E
Nortel Estimate
Subscriber Growth continues to drive Revenue
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 3
Wireless Today and in Five Years
19% of U.S. Voice Traffic is Wireless
…growing to 50%
Wireless is 34% of Global
Telecoms Service Revenue …growing to
50%
US Voice Traffic
Global Telecom Service Revenue
(Billions of Minutes/Yr)
$1,600
4,000
$1,200
3,000
50%
19%
Packet
2,000 4%
Millions
5,000
$800
$400
1,000
0
1998
2002E
Wireline
$0
2008E
Wireless
Local Fixed
Source: FCC / CTIA /
Nortel estimates
presentation name
NORTEL NETWORKS CONFIDENTIAL
1998
2002E
International
2008E
Data, Other
Mobile
ITU, 2003
PG 4
The US Wireless Players
Market Share
3Q03 ARPU- Avg Revenue Per User
$71
19%
26%
5%
5%
10%
20%
15%
Verizon
Cingular
AT&T
Sprint
T-Mobile
Nextel
Others
$50
$51
$54
$61
$63
Company Reports, financial analyst
Forrester – December 11, 2003
3Q03 Revenue
3Q03 MOU - Minutes Of Use
$2,887
740
483
456
778
553
830
Verizon
Cingular
AT&T
Sprint
T-Mobile
Nextel
$5,942
$1,934
$3,340
Company Reports, financial analyst
presentation name
Verizon
Cingular
AT&T
Sprint
T-Mobile
Nextel
NORTEL NETWORKS CONFIDENTIAL
$3,954
$4,374
Verizon
Cingular
AT&T
Sprint
T-Mobile
Nextel
Company Reports, financial analyst
PG 5
Data Bolsters Revenue
Steady Global Data Growth
Revenues increasing
% of Revenue increasing
Traffic increasing
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 6
Peak Data Rate
Wireless Networks Evolution
2G
2.5G
3G
SMS
< 1 sec
< 1 sec
< 1sec
E-Mail
4.2 sec
1 sec
< 1 sec
Web Page
30 sec
6.7 sec
< 1 sec
Picture
23 min
19 sec
2.1 sec
Audio Song
42 min
19.5 min
1 min
GSM
Music Video
5 hr
1 hr
2 min
EDGE
118 hr
26 hr
1 hr
Movie
UMTS
CDMA
1xRTT
2.4 Mbps
CDMA
1xEV-DO
384kbps
CDMA
1xEV-DV
3G Standards
Source : Reed Hundt, McKinsey and Co
170 kbps
GSM
GPRS
307kbps
CDMA IS95
3G Evolutionary steps timed to meet
market demands for high speed data and
increased voice capacity
GSM
TDMA IS136
2000
presentation name
2001
2002
NORTEL NETWORKS CONFIDENTIAL
2003
2004
PG 7
Assorted Devices
GTRAN
DotSurfer
6000
Fujitsu F2611
(FOMA)
Motorola
A835
GTRAN
DotSurfer
6200
LG KH-5000
Panasonic
P2402 (FOMA)
Motorola
A920
LG SV-110
Sharp
SH2101V
(FOMA)
NEC e808Y
LG KV-1100
SK Teletech
IM-6100
Many different styles
Not just typical handsets
Nokia 7600
NEC e808
Source: 3GToday.com
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 8
GPRS Summary
• 16.7M active GPRS subs. globally at end of 2Q03
– 37% increase from 1Q03
– 4.5M added in 2Q03
•
•
•
•
8.9M active GPRS subs in WE at end of 2Q03
4.7M active GPRS subs in AP at end of 2Q03
2.0M active GPRS subs in NA at end of 2Q03
>200 GPRS networks worldwide have been commercially launched
– Another 33 GPRS networks are in deployment and another 26 are planned
• >156 GPRS terminals made by more than 38 manufacturers available
– 47M GPRS devices were produced in 2002 and 95.7M expected in 2003
• GPRS growth driven by better terminals, improved coverage and content
– 3M Vodafone Live! subscribers by Oct. 2003, just one year after launch
– Over 1M subscribers outside Japan on i-mode over GPRS as of Sep. 2003
– RIM had 711K subs as of Aug 2003 and is targeting 1M by 5/04 (growth driven
by RIM on GPRS in Europe and NA)
Sources: EMC Data Metrics Sep. 2003, GSM Association
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 9
Data ARPU Progress – T-Mobile NA
90% increase in data ARPU year-over-year
Data ARPU/Postpaid Subs.
SMS Customers (M)
$1.44
1.50
Customers (M)
Data ARPU $US
5.0
$1.24
1.20
$1.01
$0.90
0.90
$0.76
0.60
0.30
4.4
4.0
4.0
3.0
3.5
2.9
2.5
2.0
1.0
0.0
0.00
3Q02
3Q02
4Q02
1Q03
2Q03
3Q03
3.4
3.5
3.0
2.0
2.0
1.3
0.7
0.7
0.5
Subscribers (K)
# Downloads (M)
4.0
1.0
2Q03
3Q03
RIM Subscribers (K)
Paid Downloads (M)
1.5
1Q03
1.1B billable SMS messages in 3Q03
3Q03 data ARPU: 2.7% of postpaid ARPU
2.5
4Q02
60
60
50
40
31
30
18
20
10
10
5
0
0.0
3Q02
4Q02
1Q03
2Q03
3Q03
Over 75% buy downloads using wireless handset
3Q02
4Q02
1Q03
2Q03
3Q03
International roaming capabilities
Source: T-Mobile USA
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 10
Global Summary
1xRTT Summary
Asia
• There were 64.6M 1xRTT subscribers at end of Sep.
2003 representing 37% of CDMA subscriber base of
174.1M
• Korea and Japan most advanced 1xRTT markets
• 23.4M active data 1xRTT subscribers globally end of
2Q03 with growth of 27% from 1Q03
• More than 25M 1xRTT subs (~56% of mobile subscribers) in
Korea
− 21.0M active data subs. in AP
− 1.6M active data subs. in NA
− Almost 1M active data subs. in CALA
• KDDI Japan has now surpassed 11M 1xRTT subscribers
(11/03)
• At the end of Sept., China Unicom announced a deal to
purchase 1M 1x color display handsets
• 63 CDMA2000 1X commercial networks launched
• 14 CDMA2000 1X networks are scheduled to be
deployed in the next 12 months
• Korea and Japan success attributed to:
− Low-cost terminals
− National coverage
− Multi-media content
• More than 422 devices are available with color
displays, cameras, and GPS capabilities
NA
Top 7 1xRTT Operators
• Sprint PCSs Vision subscribers were 2.7M in 3Q03,
up 29% from 2Q03
• Vision subscribers made up>40% of gross adds in
3Q03
• Data ARPU now >$2
• Verizon is experiencing increased demand for its data
services
−Test messaging usage was >400M text
messages/month and >1B for 3Q03, up 24% from
2Q03
−BREW-based downloadable ringtones, games,
and exclusive content grew to 4M
downloads/month, up 47%
−Picture messaging grew to 2M picture
messages/month in 3Q03, in less than 3 months
after launch
presentation name
* All of these subscribers are not necessarily users of 1xRTT data services
Operators
Sub
Penetratio
n
SK Telecom Korea
13,476,000
75%
KDDI Japan
10,203,000
67%
KT Freetel Korea
7,002,000
67%
Sprint PCS USA (PCS Vision)
2,700,000
14%
LG Telecom Korea
2,526,000
53%
China Unicom (2Q03)
600,000
1%
Telesp Brazil (2Q03)
540,000
8%
NORTEL NETWORKS CONFIDENTIAL
Sources: CDG 12/01/03, EMC, Company reports
3Q03
1xRTT
Subs
PG 11
EV-DO Status
• 8 commercial networks launched by end of 3Q03
−
−
−
−
−
−
−
−
APBW (Taiwan)
Brasil Telecom (Brazil)
KT Freetel (Korea)
Monet Mobile Networks (USA)
PT Wireless (Indonesia)
SK Telecom (Korea)
Verizon Wireless (USA)
Vesper (Brazil)
• 4 commercial networks to be launched in next 12 months
− KDDI (Japan) launched on November 28, 2003
− TELECSA (Ecuador)
• >45 EV-DO devices shipping or announced for 1H04
• 1x EV-DO has reached about 3M subscribers in S. Korea by Oct 2003
− SK Telecom’s 1xEV-DO subscribers exceeded 2.5M by end of 3Q03
• 1X EV-DO “killer apps” in S. Korea are video on demand services accounting for
over 50% of total downloads
− Other hot applications are ringtone and character downloads, karaoke, and TV broadcasting
• 2003 results in Korea expected to lay the groundwork for future revenue
generation from these services worldwide
Sources: CDG, company websites
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 12
EV-DO Data Uptake – SK Telecom
Data ARPU by Handset Type (Sep 2003)
Data ARPU
43,767
46,501
43,788
44,150
44,486 Total
ARPU (Won)
40,000
30,000
20,000
10,000
5,569
3,934
5,325
58,031
60,000
50,000
39,322
40,000
30,000
25,838
16,483
10,000
1,306
0
Sep-02
Dec-02
Data ARPU %: 9%
12%
Mar-03
12%
Jun-03
13%
95AB
Jukebox
11%
Picture/
Sound
16%
presentation name
1xEV-DO
June EV-DO
34%
EV-DO Tariffs by Application
7
Other
4%
6.5
6
Video-OnDemand
(VOD )
56%
Won per packet
Games
8%
1xRTT
Data ARPU %: 5%
13%
28%
• >2.5M EV-DO customers by end of 3Q03
• >1.2M June customers by end of 3Q03
EV-DO Contents Usage
Karoake
5%
4,936
0
Sep-03
15%
Data
23,102
20,000
Data
6,604
5,657
67,845
70,000
ARPU (Won)
50,000
Total
80,000
5
4
2.5
3
2
1.3
1
0
SMS/E-mail
NORTEL NETWORKS CONFIDENTIAL
Ring tones/Still
pictures
TV/VOD
PG 13
Where Does WLAN Fit?
Technology Comparison
Throughput
Subscriber Usage
Mobility
Coverage
Applications
Devices
Spectrum
Current Providers
Security
presentation name
CDMA2000 1X
1xEV-DO
Up to 153.6 kbps per user
Up to 2.4 Mbps per user
Wireless Internet
Wireless Internet & Streaming
Audio/Video
Wireless Internet &
Streaming Audio/Video
Full Mobility
Full Mobility
Limited Mobility; Portable
Macro; Wide Area coverage
(WAN),
Macro; Wide Area coverage
(WAN),
Pico ~300 ft range; Limited coverage
areas (LAN); Public or private networks,
Data and voice
Data
Data
Handset, PC Card, PDA
Handset, PC Card, PDA, laptop
Laptop, PC Card, PDA
Licensed
800 MHz & 1900 MHz
Licensed
800 MHz & 1900 MHz
Mobile operators
Mobile operators
Wayport, T-Mobile
High
High
Low
NORTEL NETWORKS CONFIDENTIAL
WLAN
802.11b - up to 11 Mbps
802.11a - up to 54 Mbps
per access point
Unlicensed (except UK, HK); RF
spectrum at 2.4GHz for 802.11b; 5 GHz
for 802.11a
PG 14
Public WLAN Global Status
Global Hotspot Tracking: # of hotspots in-service
2003
2002
0
5
10
15
20
NA:
• T-Mobile announced deal with Texaco to install
several hundred drive-up hotspots
• Verizon launches a competitive data service in
Washington and San Francisco, CDMA 1x EV-DO
for PC card and PDA access at $79/month with
$150 PC card.
• Intel’s dual band PC card (802.11b/a) is delayed to
4Q03
• RIM announced it is developing a Blackberry that
can roam between WiFi and cellular networks
CALA:
• Iusacell Mexico is planning service launch in 1Q04
25
30
35
40
Units
45(K)
Source: Pyramid
Europe:
• BT Openzone announced reseller relationships
with Vodafone and Orange, and Orange offers
trails immediately
• SFR France announced Paris railway hotspot
award to Alcatel
• Wind Italy certified Novatel’s Merlin PC card
Asia:
• Globe Philippines launches PWLAN, mostly in
shopping malls and hotels
• KT now over 8K hotspots, world’s largest
– launching an integrated PWLAN and EVDO service.
• NTT DoCoMo has introduced a dual-mode
3G/WiFi handset
• Global: analyst Disruptive Analysis predicts 25M cellular/WLAN multimode devices by 2006, starting in 2004
• Slowdown seen in volume of market events (new services, consolidations, etc.) in 3Q, compared to the first half of the year
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 15
Nortel “One-Bill” Solution with Seamless Mobile IP
BirdStep
Mobile IP
client
Terminals
MSC
HLR
CDMA
CS SS7
1X/DO
BSC/RNC
Metro Cell
Mobile IP Home
Agent for WLAN
and CDMA 2000
PDSN FA
Data Center
Internet
Nortel WLAN
2250 Security
Switch
Nortel WLAN
2201 Mobile
Adaptor
Nortel WLAN
2220 Access
Point
WLAN Data
Center
Customers access
WLAN network via
Mobile IP client
software to CDMA
operator
AAA Server
(Bridgewater
or Metasolv)
Shasta BSN
• Single sign-on
• Single bill
• Single authentication
WLAN
AAA Server /
Radius Proxy
presentation name
Mobile IP allows seamless handoff
between CDMA 1X/DO & WLAN
NORTEL NETWORKS CONFIDENTIAL
PG 16
Nortel “One-Bill” AAA-based Solution
MSC
HLR
CDMA
CS SS7
1X/DO
BSC/RNC
Metro Cell
Terminals
PDSN
Data Center
Internet
Nortel WLAN
2250 Security
Switch
Nortel WLAN
2201 Mobile
Adaptor
Nortel WLAN
2220 Access
Point
WLAN Data
Center
WLAN provider and
CDMA operator have
a billing/roaming
relationship that
AAA Server allows access to the
(Bridgewater CDMA AAA user
or Metasolv) authentication and
RADIUS billing
records
Shasta BSN
• Single bill
• Single authentication
WLAN
AAA Server /
Radius Proxy
presentation name
AAA partners (Bridgewater and MetaSolv) integrates
CDMA 1X/DO with WLAN authentication and billing
NORTEL NETWORKS CONFIDENTIAL
PG 17
Wireless Mesh Networks
•
Key characteristics
–
–
–
–
•
Advantages
–
–
–
–
presentation name
NORTEL NETWORKS CONFIDENTIAL
Auto-discovery of
nodes and routes
Auto-configuration of
network components
Mesh topology
Wireless
interconnection
Rapid network
deployment
Reduced infrastructure
costs
Reduced engineering
and operational costs
Increased network
reliability
PG 18
An innovative public WLAN access solution
Internet
at large
AAA, DHCP,
RADIUS
Optivity NMS
NOSS
Wireless
Gateway
7250
•
Enterprise / ISP / Metro
Distribution Network
Reduces installation and
commissioning costs by more than
75%
–
–
–
Border Gateway
(NAT, Firewall, etc.)
Enterprise / ISP
Backbone Network
Wireless
Gateway
7250
Layer 3
Switch
•
Layer 3
Switch
Reduces operating expenses by more
than 70%
–
–
Wireless AP
7220
presentation name
•
Community
Area Network
Self-configuring, self-healing
No RF engineering required
Outdoor packaging and low power
consumption permits installation almost
anywhere
Eliminates requirements for wired backhaul
connection to every AP
Basic router connection to backbone network,
Packet Gateway manages mobility, roaming,
and security
Provides differentiated WLAN access
in large areas
–
–
Mobility within the CAN
Broadband access and transit remove network
bottlenecks
NORTEL NETWORKS CONFIDENTIAL
PG 19
Example – Downtown Core (Toronto)
•
Situation
–
–
–
•
Service Area ~ 1.5 km x 1.4 km
requiring 133 Wireless APs and 5
NAPs
Dense urban area covering financial,
shopping, entertainment and
government centers
Today: Spotty hotspot coverage
With Nortel Networks PWLAN: High
capacity (200 Mbps), low cost data
service throughout area
Benefits
–
–
–
Lower OpEx – eliminate 133 T1’s;
replace with 5 T3’s
Add in-building coverage to adjacent
enterprises
Simplify deployment – fewer
connections to make and maintain
Wireless AP
presentation name
NORTEL NETWORKS CONFIDENTIAL
NAP
PG 20
Internal Trial at Carling
Lab 5
Lab 8
Lab 9
Lab 6
Lab 7
Additionally, 10 WARPs to be deployed inside
To Corkstown
(1km)
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 21
GPRS,
Mobile
Circuit
Switch
1xRTT, UMTS
EDGE 1xEV-DO
802.16e
802.20
Fixed
Nomadic
Mobile
Data Access Landscape
802.11 a/b/g
DSL
Cable
Modem
100 kbps
802.16
a/d
1 Mbps
10 Mbps
100 Mbps
Speed
IEEE is leading the wireless next generation OFDM standards
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 22
IEEE 802.16 WMANs
Wireless Metropolitan Area Networks (Chaired by NIST)
Task Groups (TGs):
802.16a (completed 1Q03)
New addition of MAC and PHY for 2-11 GHz, both licensed and unlicensed
This complements the original 802.16 (10 – 66 GHz) standard completed
previously
802.16c (Chairs: Ensemble Communications, Nokia)
Developing a series of three conformance standards in support of the 1066 GHz air interface specified in IEEE Standard 802.16
802.16d (Chair: WiLan Inc)
Ratifying set of 802.16a system profiles to reduce scope of standard to
specific, interoperable, subsets.
Contributions for 256OFDM will be developed and brought in by WiMAX
forum for ratification by 802.16d.
Targeting to add “hooks” to 802.16d for forward compatibility to 802.16e
standard
802.16e (Chairs: InterDigital, WiLan Inc)
Mobile Wireless MAN PAR approved December 2002.
Likely to proceed with deliberate speed
Likely to be based on OFDM, potentially with MIMO
Nortel
Networks
participates in
802.16
One 802.16a
chipset on the
market today
Products
expected to
reach market in
2004
Potential Applications:
Point-Multipoint backhaul, including Hotspot backhaul
Residential and SOHO DSL-like service
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 23
WiMAX Forum
•
Seen as analogous to Wi-Fi Alliance in WLAN space:
–
–
–
–
•
WiMAX membership includes Intel, Fujitsu & several others:
–
•
New members include Motorola and Atheros
802.16 history is a hodgepodge of point to multipoint solutions for 2 to 66
MHz:
–
–
•
Being pushed hard by Intel and Fujitsu
Strong push to focus on base profile of 256 OFDM w/o many options
Promote interoperability, certify conformance – I.e. interoperability certification
Marketing, branding, build industry momentum
The multitude of options result from an attempt to address several markets (with regulations
specifics) and failure to reach a compromise
No mandatory configuration makes interop difficult
WiMAX aims to define a set of system profiles that:
–
–
–
–
–
Reduce scope of implementations
Target specific market segments
Guarantee interop
Allow higher volumes and a more competitive market
Are ratified by IEEE 802.16d
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 24
IEEE 802.20 MBWA
Mobile Broadband Wireless Access
PAR was chaired by Flarion
PAR and separation from 802.16 driven by Mark Klerer (ex-Nortel, now Flarion)
Current leadership associated with Qualcomm, Lucent and NTT-DoCoMo
Goal is to develop low latency packet data “cellular-like” service
Technology direction unclear
Potential Threat to CDMA and UMTS?
Target Bandwidth:1.5MHz and 5 MHz
Target Spectrum: PCS allocation
Snapshot from May 2003 and November IEEE 802.20 meeting
Working methods/processes - 3 new correspondence groups created:
channel/traffic model
system requirements
evaluation criteria
Requests for more time to create this standard
Some recognition of (Nortel’s view of) need for differentiation from 3G
To be useful, 802.20 must provide greater value than 3G standards
New leadership is not seen as favorable to Flarion technology
presentation name
NORTEL NETWORKS CONFIDENTIAL
Nortel Networks
participates in
802.20
Too soon to tell
whether 802.20
will amount to
much
May be
preempted by
802.16e
PG 25
Security
IPT Prioritized list of Security work
1.
OS Hardening, including documenting the ports and services used on the
element
–
2.
Data encryption. Methods include encrypting the protocol (SSH, SSL,
SNMPv3) and/or encrypting the entire path (IPSec). Pros and Cons to
both, and we believe both are required in some areas of the solution.
–
3.
Very few NEs have implemented encryption. Large amount of work/resources required.
Strong Passwords, centralized control
–
4.
OS hardening work completed for some NEs and EMSs. Work required to document ports
and services.
MFT Framework implementing a Radius based solution in FWK 3.3 (delivers with PWI V5 –
CuR 2005). A good starting point, but large amount of work/resources required to implement
on the NEs, and integrate with all OAM applications. Work can be phased into multiple
releases.
Secure Logs/Audit logs, support for security trouble shooting by
maintaining an audit trail of user activities.

presentation name
Framework in place, but requires implementation on all NEs. Work can be phased into
multiple releases
NORTEL NETWORKS CONFIDENTIAL
PG 26
Security
CTIA stated Priorities
1.
2.
3.
4.
5.
6.
7.
8.
OS Hardening is considered fundamental - Customers want documentation
of valid services and ports, and want all unused services and ports disabled and
closed
Authentication with strong passwords and centralized administration
Encryption of credentials – don’t send passwords in clear text
Authorization – multiple levels of user access depending on role
Integrity of Data – ensure data received is the data sent
Session Logging – generate audit trails to enforce user accountability
Encryption of data – Prevent theft of data, fraudulent spoofing
Don’t store session logs in clear text – again to enforce accountability
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 27
In Closing…..
•
•
•
•
•
•
3G has arrived…
WLAN integration starting to take place with WWAN
Continued Development of Standards Continuing
Only Time will Tell on which standards are accepted by the Market
Many standards have come and gone in the past
Make no mistake – wireless access is a must!
presentation name
NORTEL NETWORKS CONFIDENTIAL
PG 28