11

Dennis RobersonSVP – CTO

3G and Hot Spot Networking

22

1 Billion + Subscribers

World Market Trend (circ fall 2000)World Market Trend (circ fall 2000)

1 Billion Subscribers

INTERNET

380 Million Subscribers

WIRELESS

580 Million Subscribers

2000 2004

“WIRELESS INTERNET”

Mar

ket

Siz

e

Source: Commerce Net Research, NUA.NET, Motorola

33

Advertising in Advertising in The EconomistThe EconomistAdvertising in Advertising in The EconomistThe Economist

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec 94 Dec 95 Dec 96 Dec 97 Dec 98 Dec 99

with Web address

44

Wireless Will Surpass Wired Access

Source: Salomon Smith Barney, Motorola Estimates.

WirelessInternet

WiredInternet

WirelessVoice

WiredVoice

*Estimate

1

10

100

1000

10000

1997 1998 1999 2000* 2001* 2002* 2003* 2004* 2005*

Sub

scri

bers

[M

illio

ns]

55

Worldwide Cumulative SubscribersWorldwide Cumulative Subscribers

Source: Motorola Forecast

2G

1G

3G

2.5G

2G

1999 2000 2001 2002 2003 2004 2005 20060

500

1,000

1,500

2,000

Cu

mu

lati

ve S

ub

scri

ber

s (M

illi

on

s)

66

3G CandybarVoice, Data

3G CandybarVoice, Data, Video

Voice Voice/Data Voice/Data/Image/Video

3G ClamVoice

DataData/Voice

3G ClamVoice, Data

iModeVoice, Data

Mini ComputerData

PDA/PHSData, Voice

2-Way CommunicatorData/voice

Card Phone

ElectronicWallet

Embedded

3G CandybarVoice

New devices are being introducedNew devices are being introducedNew devices are being introducedNew devices are being introduced

Enhanced Devices

77

3G

2.5G

2G

Data Transmission Speed - kbps 9.6 32 64 128 144 384 2,000 20->200K

Still Imaging

Video Streaming

Voice

Audio Streaming

Text MessagingE-mail

Mobile Radio

MobileTelevision

Mobile Video Conferencing

E-Commerce

Video On Demand

Incr

easi

ng

Val

ue

Wireless bandwidth isWireless bandwidth is increasingincreasing......Wireless bandwidth isWireless bandwidth is increasingincreasing......

3.5G

4GShared Environments

88

Technology Evolution

GSM

IS-95A

PDC

IS-136

cdma2000

iDEN

1xEV-DV(1XTREME)

IS-95B

1xEV-DO(HDR)

GPRS EDGE

W-CDMA HSPDA

2G 2.5G 3G

world

Japan

U.S.

U.S.

U.S./Asia

NTT DoCoMo

AT&

T

Korea

iDENpacket data

99

0

32

64

9.6

128

144

384

2,000 1G 2G 3G

VoiceVoice

Text MessagingText Messaging

Video StreamingVideo Streaming

Still ImagingStill Imaging

Audio StreamingAudio Streaming

Da

ta T

ran

sm

iss

ion

Sp

ee

d -

k b

ps

ElectronicNewspaper

RemoteMedical Service(image)

Video Conference(High quality)

Telephone (Voice)

Voice Mail

E-MailFax

ElectronicPublishing

Karaoke

Video Conference(Lower quality)

JPEG Still Photos

Mobile Radio

Viideo Surveillance,Video Mail, Travel

Image

Audio

Voice-driven Web PagesStreaming Audio

DataWeather, Traffic, News,Sports, Stock updates

Mobile TV

E-Commerce

Video on Demand:Sports, News Weather

The Promise of 3G

1010

0

32

64

9.6

128

144

384

2,000 1G 2G 3G

VoiceVoice

Text MessagingText Messaging

Video StreamingVideo Streaming

Still ImagingStill Imaging

Audio StreamingAudio Streaming

Da

ta T

ran

sm

iss

ion

Sp

ee

d -

k b

ps

Technology Data Rates

cdma2000

GSM, IS-136, IS-95A

GPRS

EDGE

WCDMA

1111

User Peak Data RateUser Peak Data Rate

1212

What has happened to 3G Expectations?What has happened to 3G Expectations?

Spain Licensing

With early TTM

Bumper UK Licensing

BumperGerman

Licensing

Limited WAP Success

SlippageOf

commercialGPRS

Italian + Swiss Auction Failures

Terminal Restrictions

Huge New Entrant Interest

IndustryFinancial

Impact

ExpectationsFor Early

3G Deployment

High

Low

DecJulJan

2000

1313

Evolution driven by…Evolution driven by…

1414

3G Challenges…3G Challenges…

1515

2G Cellular Volume Deterioration2G Cellular Volume Deterioration2G Cellular Volume Deterioration2G Cellular Volume DeteriorationS

hipm

ents

[M

illio

ns]

0

200

400

600

800

1000

1200

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

ARC (06/01)

Cahners (07/01)

Gartner/Dataquest (08/01)

Duetche Bank (08/01)

Merrill Lynch (09/01)

UBS Warburg (09/01)

Lehman Brothers (09/01)

Motorola

1616

Cellular Subscriber GrowthCellular Subscriber GrowthCellular Subscriber GrowthCellular Subscriber Growth

USA

ChinaEstimates

0

50

100

150

200

250

300

1990 1992 1994 1996 1998 2000 2002 2004

Cel

lula

r S

ub

scri

ber

s [M

]

Mexico UnitedStates France Germany

Italy NordicCountries Spain U.K.

Russia India China Japan

India

Japan

Germany Italy / UK

1717

3G Spectrum Costs3G Spectrum Costs

0

1

2

3

4

5

6

7

8

Ger

man

y

UK

Fra

nce

Ital

y

Ital

y

Net

her

lan

ds

Net

her

lan

ds

Bel

giu

m

Sw

itze

rlan

d

Den

mar

k

Po

rtu

gal

Sw

eden

Au

stri

a

Au

stri

a

Sp

ain

No

rway

Fin

lan

d

EstimatedCost per Licencein $Bn

= Already IssuedBefore Forecast

AuctionHybrid

Beauty Contest

Raised Half Of expectations

Actual Raised

Raised only 20%Of expectations

PostponedBecause of

lack of interest

Baskerville Forecast: Q200

Raised only 33% ofExpectations

1818

ITU

Japan

Europe

China

USA

3G

3G

3G

3G

3G

3G

3G

1885

1885

1885

2025

2025

2025

2025

2110

2110

2110

2110

2110

2200

2200

2200

2200

2200

MSS

MSS

1850

DECT

1880 1900

1895 1918.1

PHS

1980 2010

1980 2010

BroadcastAuxiliary

1930

1910 1930 1990

PCSPCS Unl.PCS

Reserve

MSS MSS

All Frequencies in MHz

* Region 2

MSS MSS

3G

MSS

MSS*MSS*

21702120

2170

1996 2010 2186

2150

MSS

DCS1800

DCS1800

1710 1785 1805

A D B E F C A D B E F C

3G Spectrum Availability3G Spectrum Availability

1919

3G - Operator Slippages3G - Operator Slippages

Original Plan Latest Plan Slippage Publicly announced reason Vodafone UK Nov-01 Nov-02 12-16 months HandsetsSK Telecom May-02 May-03 12 months Handsets, infrastructureTelefonica Aug-01 Jul-02 11 months Licensing relaxationJapan Telecom Nov-01 Oct-02 8-11 months Gain 3GPP standardsBT Cellnet Dec-01 Sep-02 10 months InfrastructureFrance Telecom Feb-02 H2-02 5-10 months HandsetsNTT May-01 Oct-01* 6 months Handsets, software, interference

BT Cellnet

SK Telecom

Japan Telecom

Vodafone UK

Telefonica

Q4 Q1 Q2 Q3 Q4 Q1 Q2

Planned Launch Revised Launch

May May

NovNov

Nov

Aug

2001 2002 2003

Q3

July

Oct

Dec Sep

France Telecom Feb Sep/Oct

NTT Oct*

Delay in Roll Out

2020

100

1,000

10,000

100,000

1,000,000

10,000,000

100,000,000

1,000,000,000

10,000,000,000

100,000,000,000

1960 1970 1980 1990 2000 2010

Bandwidths Trends ComparedBandwidths Trends Compared(early adopters, highest bandwidths)(early adopters, highest bandwidths)

bps

Office LAN

Home/WAN

Personal Wireless

Internet Backbone

WLAN

2121

Bandwidth Trends - Personal Wireless Bandwidth Trends - Personal Wireless (Mobile/Portable)(Mobile/Portable)

100

1,000

10,000

100,000

1,000,000

10,000,000

100,000,000

1,000,000,000

10,000,000,000

1960 1970 1980 1990 2000 2010

bps

GPRS

3G

4G

2G

3.5G

2222

Wireless Data TrendsWireless Data TrendsWireless Data TrendsWireless Data Trends

10

100

1000

10000

100000

1000000

1996 1998 2000 2002 2004 2006

Year

Ma

x D

ata

Ra

te (

Kb

ps

)Wide AreaB’tooth/802.15.3HiperLAN2Median2IEEE 802.11

W-CDMAW-CDMA

EDGEEDGEGPRSGPRS

HSCDHSCD

WLAN (~Fixed)

WAN (Fully Mobile)

PAN (Nomadic)

2323

Key WLAN / PAN Radio TechnologiesKey WLAN / PAN Radio TechnologiesKey WLAN / PAN Radio TechnologiesKey WLAN / PAN Radio Technologies

EnterpriseEnterprise

BroadbandBroadbandHomeHome

NomadicNomadic

20002000 200320032002200220012001 20042004

802.11b

HomeRF2 or 802.11a/e or HL2

Bluetooth/802.15.1 802.15.3

Speed: Speed: 11 - 22Mbps11 - 22MbpsTechnology:Technology: 2.4GHz, DSS2.4GHz, DSS

Speed: Speed: 22 - 100Mbps22 - 100MbpsTechnology:Technology: 5.XGHz, OFDM5.XGHz, OFDM

Speed: Speed: 1.1 Mbps1.1 MbpsTechnology:Technology: 2.4GHz, FH2.4GHz, FH

Speed: Speed: 10 - 22 – 54 Mbps10 - 22 – 54 MbpsTechnology:Technology: 5.XGHz, OFDM5.XGHz, OFDM

Speed: Speed: 700Kbps700KbpsTechnology:Technology: 2.4GHz, FH2.4GHz, FH

Speed: Speed: 20+ Mbps20+ MbpsTechnology:Technology: 2.4 GHz2.4 GHzStrategy:Strategy: Transistion toTransistion to

5GHz WPAN; UWB5GHz WPAN; UWB

Products: Set-top box, etcProducts: Set-top box, etcDriver: Reduce setup costsDriver: Reduce setup costsnew markets/servicesnew markets/services

Products: Cell-phones, etcProducts: Cell-phones, etcDriver: Competition,Driver: Competition,new markets & productsnew markets & products

All Speeds at RAW bandwidth. Delivered payload varies

Products: Vertical Products: Vertical Driver: CompetitionDriver: Competition

Bluetooth2

Speed: Speed: 2-10 Mbps2-10 MbpsTechnology:Technology: 2.4GHz FH2.4GHz FH

*Hotspots may use Enterprise or Nomadic technologies

802.11a or HiperLAN2

HomeRF

2424

Wide Area coverage Provided by 2G Carriers

Greater Washington DC Area

Broadband802.11x

Pentagon, coverage provided by “US Military Telecom”

2.5G GPRS

Broadband802.11x

Reagan Airport, coverage provided by 3rd Party Vendor

Broadband802.11x

Mall area coverage provided by Verizon

Requires a multi-mode device (GPRS and 802.11)

Requires a new billing model

Broadband “Island” Scenario

slide courtesy of Les Eastwood

2525

Enterprise Wireless Mobility Model

Campus

R

Level 3 - Regional Low Speed Wireless (56Kbps)

Level 2 - Campus HighSpeed Wireless LANs(100Mbps)

Level 1 - Personal Area Network (.5-10Mbps)

2626

WLANs and PANs Enhance Cellular

• Timeliness: 11Mbps available now• Low Cost for Operator/Owner and User

– Free Spectrum: 300-500MHz of unlicensed spectrum

– Low equipment cost – Enables low cost/flat fee Wireless to consumer

• Superior End User Experience– 54Mb/s vs. 1-2Mb/s – All existing and future Internet applications already work

slide courtesy of Les Eastwood

(and Could Threaten 3G)

2727

Wireless

Internet

Local Access & ControlData OnlyNo RoamingPrivate Network

WLAN TodayHigh Speed – Point Coverage

TechnologiesGeared towardData in the Enterprise

Slow Data RatesGlobal Roaming High Speed Mobility

Cellular TodayLow Data Rate – Wide Coverage

TechnologiesGeared towardConsumer Voice and Data

WLAN & Cellular ConvergenceIs there opportunity here?

2828

802.11Or AnyWLANTechnology

Internet

Benefits:Local Access, Common ControlData & VoicePoint to Point RoamingVPN over Public NetworkIncreasing Data Rates in More PlacesSeamless Roaming and BillingHigh Speed Mobility …

Integrate Cellular with WLAN

Common Features/Capabilities• Authentication• Billing• Preferences/Call Control• Access Capable (802.11, BT, Cellular)

iMGWiMGWPlatformPlatform

Technology Tailored for a Seamless Solution

Enterprise or Hot Spot

Nomadic

Home

2929

Beyond 3G (B3G)Beyond 3G (B3G)Beyond 3G (B3G)Beyond 3G (B3G)

1G

WLANHotspots

GPRS+802.11

3G 4G2G

1980’s 2000’s 2010’s

UMTS +HiperLAN

Cellular+WLAN+Bdcast

GPRS+DVB

B3G key attributes: interworking and cooperation between different Radio Networks user as the focus, opportune delivery of the content/services

multi-mode terminals free to camp on any available network

fully IP baseddisruptive technology

potentially complementary to 3G potentially competitive to 3G

1990’s

3030

DVB-T

UMTSGPRS

Hiperlan2AP

Ipv6 Backbone(s)

InternetIPv4IPv6

Services

Management domain

A moving IP- subnet

B3G VisionB3G VisionB3G VisionB3G Vision

Composite Radio Ressource

management(Spectrum utilization,

links/traffic optimization)

Composite Domain Management

(mobility, QoS, multicast, AAA)

Composite Service Delivery management

(Billing, …)

Management Functions

Main Attributes:Core network IPv6 based

Better support of mobility, security and “unlimited” address spaceWireless access points become IP gateways

Different radio access technologies deployed within a domainOptimization of the radio resources

3131

US

Japan

Europe

BRAN/Hiperlan

U-NII U-NII

5200 5400 5600 58005100 5300 5500 5700

MMAC

5.15 - 5.35

5.15 - 5.35 5.725 -5.825

5.470 - 5.725BRAN/Hiperlan

5.15 - 5.25

Unlicensed

300 MHz

License-exempt

455 MHz

100 MHz

Spectrum Allocation at 5 GHz

200mW 1W

1W

50mW

50mW 250mW

3232

WLAN Standards & TechnologiesWLAN Standards & TechnologiesWLAN Standards & TechnologiesWLAN Standards & Technologies

Hip

erL

AN

280

2.11

b2.4 GHz4ch.

(80MHz)

5 GHz

US: 12 ch. (300MHz) EU: 19 ch. (455MHz)JP: 5 ch. (100MHz)

•54 Mbps/channel net bit rate

•Simple and adapted to corporate apps

•“Wireless Ethernet", no QoS, limited for multimedia

•Future 802.11e, h incl. QoS, DFS+TPC, security, roaming

•54 Mbps/channel net bit rate

•Multimedia ready (supports QoS, Ethernet, ATM, 1394)

•Not widely adopted - pushed by Europe

•Better suited to Home & Multimedia applications

•11Mbs/channel net bit rate

•First on market, market education

•Limited in data rate, and capacity (spectrum, interference)

802.

11a

• 802.11a+e+h ≈ HL2• Japan is going 11a for Corporate, and HiSWAN (NTT) for Home & Public

IEEE802.11a evolutionary approach ↔ HiperLAN2 support of multimedia

3333

Forces affecting the Future of 5 GHz WLANForces affecting the Future of 5 GHz WLANEconomy/Industry Downturn

Consumer Confusion

22 Mbps 2.4 GHz solutions

Technical Challenges

Enabling Applications

Cost

Capacity collapse 2.4GHz

Speed/Media needs

Quality of Service

2.4 GHz interference

Security

Range

VOLUME

T I M E

3434

Wireless System LandscapeWireless System Landscape

Data Rate to the User

High Mobilityspeech, somedata

Limited Mobility:Speech, data

Fixed Access,High speed data

In-Home /In-Building

3G

Mobility,Functions

WLAN / PAN

4G

1Kbps 10Kbps 100Kbps 1Mbps 10Mbps 100Mbps

2G1G