Mobile broadband demand in emerging markets… will it be comparable to developed markets?

WiMAX Forum Global Congress 2010, Amsterdam 17th June 2010.

Dr. Kim Kyllesbech LarsenInternational Network Economics,Technology, T-Mobile

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 2

Changing market - tomorrow’s world.Social trends and technological indicators.

All IP … All Digital Networking and Sharing My-tech NOT Hi-tech

Digitize Socialize Individualize

1.60+ bn internet users.

4.1+ bn mobile users.

250+ bn e-mails per day.40+% more than 5 MB.

20+ hrs video uploads / day

400+ mn registered users.

25+ mn Mobile-TV users in APAC

$4.5+ bn mobile gaming revenue3+ bn iPhone Apps downloads.

86+ mn active ebay users

350+ mn active users.65+ mn mobile users.2.5+ bn photo uploads /month

Stationary79%

Nomadic20%

Mobile1%

Mobile broadband traffic demand is turning red hot.

Mobile10%

Nomadic20%

Stationary70%

Bytes 1 100+ (CAGR 50% pa)

Bits per second 1 300+ (CAGR 70% pa)

>

>

Today’s volume distribution Volume distribution 2020+

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 3

Asia emerging growth markets 2014 …broadband everywhere? for everyone?

1 out of 2 house-hold has a PC.

1 out of 14 people will have mobile broadband.

1 out of 4 house-hold has (fixed) broadband.PC12%

M&WBB7%

HH0.8bn

Pop3.2bn

More 60% by 2016.

1 in 3 by 2016.

1 in 7 by 2016.

Considering: China, India, Indonesia, Malaysia, Philippines, Thailand, Vietnam.

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 4

Emerging growth market’s mobile broadband quality will be difficult (or very costly) to match to western market’s QoS.

Delhi Amsterdam

19 mn pop & 12,000 pop per km2

2×5 MHz @ 2.1 GHz / 1×20 MHz @ 2.3 GHz

2.2 mn pop & 1,200 pop per km2

Min. 2×10 MHz @ 2.1 GHz

Coverage requirement 500 (2.1 GHz) to 650 (2.3 GHz)

7 kHz to 13 kHz

per MBB customer 1

100 kHz

per MBB customer 1

1 25% market share and 20% mobile broadband penetration.

Illustration

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 5

Mobile broadband quality depends (roughly) on distance to cell center, demand density and available bandwidth.

Cell range

DL power

2.1 – 2.6 GHz

UL power

900 MHz

Illustration

Quality (speed, capacity, latency, …)

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 6

The wired, the wireless and the mobile broadband.

11/3

20

Illustration: relative usage

70↑+

100+

Mobile broadband850 MHz – 2.1 GHz

BWA2.3 – 2.5+

GHz

FixedwithWiFi

Mobile broadband: hardly any QoS pricing mainly based on volumetric FUP.

Wireless & Fixed Broadband business model uses QoS-based pricing.

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 7

iPhone & alike35% growing

Data Sticks55%

Handsets10%

Devices with a supporting web-based service ecosystem generates substantially more traffic than “normal handsets”

Terminal distribution Corresponding volume

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 8

iPhone & alike55% growing

Data Sticks5%

Handsets40%

Need for speed depends on terminal device, price plan and supporting service ecosystems, e.g., Apps store, iTunes, p2p..

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 9

Increasing bandwidth and volumetric demand

Incr

easi

ng la

tenc

y re

quire

men

ts

Illustration

Social Networks

10%

Infotainment10%

Shopping15%

Streaming60%

Other5%

Social Networks

25%

Infotainment30%

Shopping10%

Streaming25%

Other10%

Streaming takes up 60% of mobile user generated http traffic.

URL distribution Corresponding volume per URL

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 10

Note: above distributions do not include peer-2-peer traffic.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 150

0.5

1

1.5

2

iPhone 3Gs iPhone 3G iPhone 2G

Months after launch of iPhone 3G

Device performance drives mobile broadband usage.

Illustration: relative volume-based usage versus device (& network) performance.

> 20+%3Gs: CPU ARM 600MHz (HSPA 7.2 Mbps)

3G: CPU ARM 412MHz (HSPA 3.6 Mbps)

2G: CPU ARM 412 MHz (EDGE 0.237 Mbps) 1

1 EDGE only market data17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 11

Mobile broadband usage versus pricing.

low mobilemedium

high mobile

low laptop

medium laptop

high laptop

Price plan

×34

×12×8

×21

6 × low mobile

34 ×low mobile

Prepaid mobile ×0.2 of low mobile (contract).

Prepaid laptop ×5.5 of low mobile (contract).

Illustration: Volumetric demand versus price plan

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 12

Volumetric demand

Available speed (per customer) is a function of distance from cell center and active customer density within cell.

Cell range

DL power

UL power

Illustration

Peak speed

Average speed

Speed @ Cell egde and beyond

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 13

Emerging market broadband …“happy” short-term, a tougher future.

Lots of Hz per customer!

Good quality.

Re-use site-grid or Greenfield with relative low TCO levels.

Happy start … plenty of quality.

Dramatic Hz per customer drop!

Relative quality drops

High investment level required to maintain quality.

Tougher future … QoS limitations.

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 14

17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile. 15

The emerging market mobile broadband

customer experience will depend on network quality, pricing and device portfolio (prepaid dominated?).

demand density per available Hz is likely to be much highercompared to western markets

customer is likely to experience worse broadband qualitycompared to that of developed markets.

10/04/2023 16

Contact:

kim.larsen@t-mobile.nlTel: +31 6 2409 5202http://nl.linkedin.com/in/kimklarsen

Thank you very much!Acknowledgement goes to Miruna Anăstăsoaie, Veli-Pekka Kröger and Minoo Abedi.