The Future of 3G Networks - ICC 2002...

May 1st, 2002ICC 2002

Panel on the Future of 3G NetworksNew York Marriott Marquis

New York City, NY

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The Future of 3G Networks

UMTS: Status of Development, Opportunities and Threats

Francesco VatalaroFrancesco VatalaroProfessor ofProfessor of RadiocommunicationsRadiocommunications

University ofUniversity of RomeRome Tor VergataTor Vergata

RomeRome,, ItalyItaly

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Contents

• UMTS Development Status• 2G/3G Evolution• Threats or Opportunities?• Concluding Remarks

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UMTS Development Status

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Technical and non Technical Facts Affecting UMTS Development – the Bad

The Financial front:The Financial front:• More than € 116 billion spent overall on 3G licenses in Europe• European Governments inhomogeneous policies for licenses

– € 8.4 billion in Germany– € 7.7 billion in the UK– € 2.9 billion in Italy (average) – only small administration fees in other Countries (Sweden, Finland, etc.)

• Some operators’ credit ratings downgraded due to high debt exposures• Large estimated cost for building nationwide UMTS networks

– from € 0.7 billion (Switzerland) to € 5 billion (Germany)

Difficult for operators to raise fundsto cover UMTS rollout costs

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The Bad...Continues

The Political/Regulatory/Social front:The Political/Regulatory/Social front:• Some European Administrations set demanding coverage requirements

– e.g. Italy: cover 10% main cities within May ‘02, full coverage within May ‘04

• New sites required for UMTS BTSs due to coverage smaller than GSM– Sites difficult to acquire due to opposition of some local Authorities and

spontaneous groups of citizens “against e.m. pollution”

The Technical/Operational front:The Technical/Operational front:• Dual-mode GSM/UMTS handsets shortage expected to last until 3Q 2002• Simultaneous roll-out of 3 to 6 networks per Country is placing a severe

demand on skilled (and scarce) human resources

Some network operators are delaying rollout

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Status of UMTS Introduction – The Good

• In Japan NTT DoCoMo started WCDMA experimental service in May 2001

WCDMA terminals in JapanWCDMA terminals in Japan

• NTT DoCoMo started commercialising the FOMA N002 terminal,first 3G cellphone “i-motion-compatible”(cost: 40,000-yen, i.e. about € 360)

• Commercial services started onOctober 4, 2001, initially covering the Tokyo urban area with 30 km radium

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The Good...Continues

• NTT DoCoMo video-clip distribution service (November 2002): – "i-motion" service to download files at 384 kbps directly from the

official i-mode-compatible portals (FOMA 3rd Generation)

• Initially 28 Content Providers will offer 37 different i-motionsites with music, news, and highlight

• Then the offer will increase and will include interactive channels

The UMTS already exists!

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2G/3G Evolution

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GPRS: the Forerunner

• The major step forward in mobile communications is packet transmission with the “always-on” feature

• With the GPRS, the customer pays for the amount of data transmitted or received, rather than the connection time

GPRS copes with the essence of 3G services, and is anticipating some main UMTS services

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Market Conditions Are Changing

• The value shifts towards contents and service provisioning• New players (Content Providers, Internet Service Providers,

Application Service Providers, etc.) will emerge

But the Network Operators “own” the Customer through...

• Access Network

• SIM/USIM

• Authentication

• Customer Profiling

• Billing

• Micropayments, transactions ...

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Simple Simple datadata

RoamingRoaming

Complex Complex datadata

VoiceVoice

SourceSource: HSBC 2000: HSBC 2000

‘97‘97 ‘98‘98 ‘99‘99 ‘00‘00 ‘01‘01 ‘02‘02 ‘03‘03 ‘04‘04 ‘05‘05 ‘06‘06 ‘07‘07 ‘08‘08 ’09’09

(€)(€)

5050

100100

Monthly ARPU in Europe

… and voice traffic still gets the largest

part of the “pie”!

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Market Growth

…search for the killer app is fuzzy!

• While the pie

VOICE VOICE

continues expanding...

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VAS Revenues/Traffic Revenues[ financial data]

19981998 19991999 20002000 20012001

(%)(%)

66

44

22

00

7%7%

Value added services revenue share is still less than 10% however notice the change in derivative

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Moore’s Law for “Air Interface Capacity”

Source: EURESCOM, 2002

1.0e-01

1.0e+00

1.0e+01

1.0e+02

1.0e+03

1.0e+04

1.0e+06

1.0e+05

1.0e+03

1.0e+04

1970 19801975 1985 19951990 2000

1.0e+05

1.0e+06

1.0e+07Transmission rate (kbit/s) Number of transistors

Air interface capacity

Modem rate

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Air Interface Capacity

• Air interface capacity is a scarce resource

• Even the UMTS networks will not have sufficient bandwidth to support services– typical 700 kbit/s/cell

• Need for easier access to faster information services at any place– Interworking: WLAN/Bluetooth and UMTS/GSM– Interworking: Broadcast (DAB/DVB) and UMTS/GSM

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Threats or Opportunities?

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Individual Space Hierarchy: the MultiSphere

• Local area network (LAN): nomadic access to fixed, mobile networks & to the Internet

• Body area network (BAN): sensors & interfaces friendly management around the body

• Personal area network (PAN):download information on peripherals

• 3rd Generation (3G):access and routing with full mobility and QoS

BANPAN

LAN

100m

10m1m

I/O devices &peripherals

Accessports

Sensors & interfaces

3G

Communications& routing

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Integration and delivery of corporate WLAN Intranet solutions

Enterprise

§ As a simple cable-replacement solution

§ To enable new services such as the “transparent” indoor mobility and roaming among parent companies

§ Remote secure access to Internet/Intranet

WLAN Business Opportunities

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Opportunities for Mobile Operators

• Integration of WLAN/GPRS and WLAN/UMTS offerings – Data services anywhere with maximum

QoS level§ Through the WLAN the user can get high-

rate access to Internet/Intranet§ Where the WLAN coverage is not available

the user can get service through GPRS or UMTS (e.g. in public areas)

• More efficient location-based services– In WLAN hotspot areas services otherwise

non easily available with GPRS or UMTS can be offered § Information on nearest stores § Access to local resources (e.g. printers)

GPRSnetwork

Corporate Abranch

BSBS

RR

BSBS

Corporate B

RR

IndoorHotspots

Corporate AHQ

RR

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•Authentication: performed through credentials (USER ID, PW) already present in the Corporate AAA (Authentication, Authorization & Accounting) system

• Intermediate RADIUS servers acting as Proxys• Traffic: Client’s traffic transported through VPN-IP with crypto tunnels as GPRS traffic•Service access and Accounting: Through SSG (Service Selection Gateway) client is addressed to appropriate Dashboards

CORPORATE BAAAAAAWeb DashboardCORPORATE A

GSM/GPRS

GGSNIP Network

Web Browser

SSG

Corporate IntranetTT

User IDPassword

Integrated GPRS/WLAN Access Alternatives (1)

HOT SPOT WLAN

SCENARIO: User of Corporate B accessing his/her Intranet through Corporate A WLAN

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AAA

Web Dashboard

GSM/GPRS

GGSN

IP networkWeb Browser

SSG

TT

Crypto Key

Wireless LAN HOT SPOT

SMS-C

VPN-IP tunnel IPsec

• WLAN crypto keys distribution can happen via SMS (time key client’s indicated, automatic generation and distribution, etc.)

• Client’s Traffic: transported through VPN-IP with crypto tunnels as GPRS traffic (as before)

• Service access and Accounting: Through SSG (Service Selection Gateway) client is addressed to appropriate Dashboards (as before)


User IDPassword

CORPORATE BAAA

Corporate Intranet

Server

CORPORATE A

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• Use of WLAN cards with integrated SIM (or USB readers)• AuC in the network able to interact (through a MAP Gateway) with GSM elements• Authentication and encryption of client’s data with same GSM methods


CORPORATE BAAA

CORPORATE A

GSM/GPRS

IP network

Wireless LAN HOT SPOT

Corporate Intranet

HLR

Authentication Server

Authentication

MSC

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Concluding Remarks

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Concluding Remarks

Transition from Transition from 2G 2G to to 3G 3G • More evolutionary than revolutionary• GPRS is a forerunner (although slow start)• Within 3G there will be many (r)evolutions

CustomersCustomers and and ServicesServices• GSM/UMTS operators will continue to dominate the marketplace as they

“own” the customer• Voice services will get the largest part of the “pie” for long time• Bandwidth shortage and the “Moore law for wireless capacity”• Easier access to faster information services at any place

ThreatsThreats and and opportunities from emerging opportunities from emerging wireless wireless technologiestechnologies• More opportunities than threats

– Interworking between WLAN/Bluetooth and UMTS/GSM (today’s issue)– Interworking between Broadcast (DAB/DVB) and UMTS/GSM (tomorrow’s issue)

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Thank you!Francesco VatalaroFrancesco VatalaroUniversità di Roma Tor VergataUniversità di Roma Tor VergataDipartimento di Ingegneria ElettronicaDipartimento di Ingegneria ElettronicaViale del Politecnico 1, 00133 Roma, ITALYViale del Politecnico 1, 00133 Roma, ITALY

ee--mail:mail: [email protected]@uniroma2.itMobile:Mobile: +39+39 335 6232098335 6232098Fixed:Fixed: +39+39 06 7259 744806 7259 7448Fax:Fax: +39+39 06 7259 743506 7259 7435

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