Who pays for mobile broadband?
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Who pays for mobile broadband? Open Mobile Summit, June 8 th 2011 London, UK. Dr. Kim Kyllesbech Larsen, Technology Economics Technology, Deutsche Telekom.
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This presentation was given as a teaser at the Open Mobile Summit 2011 in London followed by a Fireside talk on "Who pays for mobile broadband?".
Transcript of Who pays for mobile broadband?
Who pays for mobile broadband?Open Mobile Summit, June 8th 2011 London, UK.
Dr. Kim Kyllesbech Larsen, Technology Economics
Technology, Deutsche Telekom.
A bygone time … not so long ago ...When 1 + 1 was close to 2.
2
... Bla …
Bla bla bla
Mobile Network
We talked (a lot)
We SMS’ed (even more)
Rarely did we use the (mobile) web.
Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
1User
1+Device
User & application initiated bandwidth demand.Device & application (IP addr, keep alive, …) driven signaling resources.
A new paradigm … 1 + 1 is no longer “just” 2 ... Applications have “taken over” the communications.
Many applications
3Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
Its all in the data package ... Mobile revenues in an Apps centric world could decline rapidly.
4Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
22.4 23.0
12.7
Source 2010 & 2015 Pyramid Research March 2011 Western Europe.
2010A 2015EMobilecentric
2015EApps
centric
Western Europe ARPU development in Euro
CS Voice SMS & MMS PS Data
15.7
3.4
3.3
13.0
3.8
6.2
6.5
6.2
Illustration
?By 2015
more than 70%of users have a smartphone
When the mobile network becomes a bit-pipe ... Apple iTune promotion in NL ... free downloads.
Promotion day
Normal
9× increase in peak throughput.
More than twice the total volume.
30+ thsd downloads in the peak.
5Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
Smartphone traffic tsunami ... and growth expected to continue for quite a few years more...
Volume
Throughput
Smartphones
Data signaling
December 2008 to December 2010
×5
×4
×6
×7Smartphone indicators
Problems!
May – June 2010 (Netherlands).
“iPhone overload T-Mobile (NL) network” (Volkskrant, May 2010).
“T-Mobile (NL) gives compensation”. (2 month no data charge & iPhone users gets €30.)
“T-Mobile (NL) admits not able to handle data growth in its mobile network“ (Tweakers.net).
6Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
Illustration
ca. 20% unlimited subscriptions
takes ca. 60% of data volume.
ca. 20% unlimited subscriptions
takes ca. 60% of data volume.
Less than 2% of Laptops
takes more than 20% of data volume.
Less than 2% of Laptops
takes more than 20% of data volume.
Smartphone usage ... 2GB = unlimited ... for most.
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LaptopsToday
Illustration
Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
1 x3 x6 x5
x26
x64
Average 1GB 2GB Unlimited (iPhone)
Laptop 2GB
Laptop Unlimited
Outside bundle:4% of users with35% of volume
>2GB3% of users with30% of volume
Monthly volume relative to Average usage:
Mobile data growth will be very
challenging to support with HSPA-only.
Mobile data growth will be very
challenging to support with HSPA-only.
• HSPA alone cannot sustain the traffic.
• LTE deployment will be accelerated.
• In-door off-loading to WiFi and Femto.
• HSPA alone cannot sustain the traffic.
• LTE deployment will be accelerated.
• In-door off-loading to WiFi and Femto.
The profitability Squeeze.
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Cash pressure by un-controllablemobile data growth
2010 2012 2014 2016 2018 2020
HSPA only - No LTE
HSPA, with LTE deployment
HSPA+LTE, 50% off-load
Free cash flow
Trends
As it looks today
Operator illustration
Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
Significant Capex savings.
Substantial Opex prevention.
Best shared network.
Significant Capex savings.
Substantial Opex prevention.
Best shared network.
Network sharing a way to profitability and cash.
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The best sharing strategy depends on the business cycle and technology age.
Rollout
Illustration
Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
Rollout Phase (primarily coverage)
Steady State(capacity & in-fill)
Modernization (replacement)
< 5 years 4 – 8 years
HSPA / UMTS
> 7 years
HSPA+LTE
Little Capex benefits.
Substantial Opex savings.
Significant write-offs & re-structuring costs.
Little Capex benefits.
Substantial Opex savings.
Significant write-offs & re-structuring costs.
Steady state
Significant Capex savings.
Substantial Opex savings.
Minor write-off.
Re-structuring costs.
Significant Capex savings.
Substantial Opex savings.
Minor write-off.
Re-structuring costs.
Modernization
UMTS & GSM → LTE
The smartphone … The “killer” device and its “killer” applications…
10Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
The smartphone … The “killer” device and its “killer” applications…
Key challenges.What we need to be passionate about.
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How to spend it
How to earn it back
Kim Kyllesbech Larsen, Mobile Open Summit 2011, June 8th, 2011, London, UK.
Let the discussion begin!
Contact: [email protected]: +31 6 2409 5202http://nl.linkedin.com/in/kimklarsen
Acknowledgement: I am indebted to my fantastic team for always being patient with my data requests, for their great suggestions and support in creating this presentation.
The key value proposition of a mobile network is ....
mobility
