1 Now and the Future of Telecommunications Ken Zhang CTO & VP Ericsson (China) Ltd.
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Transcript of 1 Now and the Future of Telecommunications Ken Zhang CTO & VP Ericsson (China) Ltd.
bmc|02
Torbjörn Nilsson | B 1 | The Direction bmc|02 May 29-30 20022
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The Nasdaq Telecommunication Index
Many strategies and decisions were made here (“Growth driven”)
“Profit driven”
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1974
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bmc|02
Torbjörn Nilsson | B 1 | The Direction bmc|02 May 29-30 20023
Main factors creating the hyper-growth and crisisMarket Investments
The hyper- growth of the late
1990’s & 2000
“Technology” Investments
• Failure in new business models delaying new services
• Financing constraints (debts, cash,…)
• Network spending exceeds demand in several areas
• Increased competition & lower margins
• Hyper-growth gone/Macroeconomic instability
• Signs of subscriber growth maturity
NowSpectrum
Geographical expansion
New competitors Internet
LH Optics
Digital Mobile
Good GDP development (US driver)
bmc|02
Torbjörn Nilsson | B 1 | The Direction bmc|02 May 29-30 20024
The Current Status of the Mobile Industry
• hyper Competition: 4-7 operators in most European/US markets
• Heavy Debt for some major operators, from over-priced acquisition and spectrum/license fee (France Telecom and Deutch Telecom ‘repairing’ balance sheet). But not from operating side.
• But worldwide operator’s revenue still growing at 5%-7% in 2001/2002, amid global GDP 2% growth
• Major operators reporting healthy operating profit/revenue growth
• Voice traffic growing, data revenue soaring
5
Next likely Steps
• Many more Operators/SP will go “bankrupt”
• Fast consolidations to create necessary Returns
• The “incumbent” telcos will dominate & drive consolidations
Restructuring Suppliers
Consolidation has started. We will see 3 (4) operators per market. The top 20 globally will have more than 80% of revenues.
6
Fixed Broadband(Cable, xDSL, LMDS, Fibre)
Fixed(POTS/ISDN)
Mobile
Mobile Subscriptions Doubling to 1.8 Billion by 2007
2000 2001 2002 2003 2004 2005 2006 2007
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bsc
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(Year -end)
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~870 million new subscribers in six years
Global Mobile Subscriber Growth – 2002 to 2007
CEMA 19%
APAC 51%
NA 12%LA 10%
WE 8%
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What is next step for the infrastructure, technology selection?
what is the driving force for the development?
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Dat
a/IP
Net
wor
ks
Wire
less
Net
wor
ks
Wire
line
Net
wor
ks
Cab
le T
V N
etw
orks
A new communications architecture
Today Single-service networks
Future Multi-services network (carrier class)
Access Networks
Service Networks & Application enablers
Communication control
Connectivity/Backbone Network
ApplicationsContent
MGW MGW
MGWMGW
New
& M
igra
tin
g e
nd
-to
-en
d P
roto
cols
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Mobile -WWW(Browsing/streaming, download)
• Information (news, sport, etc)• Entertainment (Music, Games, Imaging)• Location Services
Mobile Commerce(Transactions)
• Banking• Trading• Ticketing• Shopping
• e-mail• Voice-mail• SMS/EMS• MMS (Imaging/Multimedia)• Instant Messaging (IMPS)
Mobile Services is the driver for 3G
Portal with Personalized Services (Consumer, Business)
Open Application standards (OMA)
Mobile Messaging
Open Connectivity standards (3GPP/IETF)
Rev PA1 2001/10/09 11 Nippon Ericsson K.K.Michael Björn CONFIDENTIAL
Two services areas for the mobile Internet
Mobile Internet
• a "wireless Internet" that starts from the wired Internet by "cutting the cord"
• saving time
Wireless Internet
Internet paradigm
Entry barrier:Corporate IT department
Entry barrier:Digital Rights Management
• the “mobile Media” starts from cable TV by “cutting the cord”
• killing time
Excite FriendsBy Excite
Tsurun de Amigo!By Bandai Networks
Chi-Q no TomodachiBy Nextech
@AJA Deai Channel By Cybird
Mobile Media
Media paradigm
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J-Phone’s (Vodafone) “Killer” Application –Pictures (Sha-mail)
• Built-in camera• Send photo-mail directly from phone• Easy to use
– 1 click to take a photo– Picture directly displayed on-screen– Simply attach to mail and send
• Photo + text: The First Step to Mobile
Multi-Media – already here!
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Stand by Screen
Picture
Video(light)
Handset Side Approach
Melody
Video Software
Camera
Colour Display
Specific Key
Video Music
Sound Software
Application Side Approach
Picture Mail
J-SKY(Web)
SKY Melody
E-mailSKY Walker
XXXXXX
Source: http://www.vodafone.com/download/investor/presentations/vodafone_japan_2002.ppt
Text
Key need
Coherent service evolution simplifies learningCoherent service evolution simplifies learning
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Development Sha-mail service, J-Phone
Sources: Ovum and Reuters
~47% of all subs
Standard subscriptions
Sha-mail users
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Aug 2002Dec 2001LaunchNov 2000
May 2001 Sept 2001
Rev PA1 2001/10/09 15 Nippon Ericsson K.K.Michael Björn CONFIDENTIAL
Two mobile operator worldsTwo mobile operator worlds
Operator branded handsets Vendor branded handsets
GSM Operators
De facto approach OMA approach
Platform requirement
Rev PA1 2001/10/09 16 Nippon Ericsson K.K.Michael Björn CONFIDENTIAL
Operator branded handset world
Operator Handset vendor
Brand-value +
(user selects operator, NOT
handset)
—
(cost-plus pricing)
Service end-end control + —Handset financial risk —
(operator commits to volume)
+
Intra-operability = ALL services work together in ONE operator brand
Operator Handset vendor
Brand-value —
(user selects handset, NOT
operator)
+
(user selects handset, NOT
operator)
Service end-end control — +
(e.g. Club Nokia)
Handset financial risk + —
Vendor branded handset world
Platform requirement
Some services work with some brand
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Mobile Revenues by Service Type (00-07)
Voice will continueto dominate
Messaging & Browsing/WWW dominate
BU
SD
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Data revenues
Voice revenues
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Local AreaNetwork (~50m)
Personal AreaNetwork (~20m)
Wide AreaNetwork (~10km)
Wireless Evolution
4GCombined
devices
Digital
DECT, PHS
Infra Red
Wideband
WLAN
Bluetooth
Analog
CT1
“wire”
3GWCDMA
(FDD/TDD), EDGE
CDMA2000
2GGSM, PDC
TDMA,CDMA
1GAMPS, NMT,
TACS etc
20
Cellular Subscriptions by System Standard (00-07)
GSM/GPRS/EDGE & WCDMA
PDC
TDMA
CDMA/CDMA2000
Analog & Others
~75 - 80% of CAPEX
~20 - 25% of CAPEX
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of
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riptio
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WCDMA
EDGE
CDMA2000Wide AreaNetwork
Local Area
Network
Combining Air-Interfaces
WLAN
Not to Scale1 Wide Area cell = ~10 000 WLAN cells
Complementing Technologies
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Bluetooth
WCDMA
EDGE
CDMA2000
Wide AreaNetwork
Local Area
Network
Personal Area
Network
Combining Air-Interfaces
Complementing Technologies
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3G is happening now-WCDMA
Many Networks has been launched (NTT DoCoMo, Austria Mobilkom, etc)
J-Phone and H3G UK, H3G Italy, has launched in the end of last year
20++ Networks are in installation/testing stage
Tens of Thousands of Base Stations have been delivered and installed worldwide!
24
Global Mobile Market
North America• 50% TDMA= 》 GSM/GPRS =>EDGE/WCDMA• 50% cdmaONe=>CDMA 20001x>cdma1xEV
Western Europe• Current all GSM• In process of launching WCDMA
Asia-Pacific• Vast Majority GSM, • some presence of
CDMA(growing in China,etc)• Licenses being issued during
2002 and 2003
Central Europe, Middle East, Africa• Still in the GSM build-out phase• First WCDMA during 2003• Price of licenses coming down
Latin America • Mostly TDMA, Pending
transition mostly to GSM• 30%
cdmaOne=>CDMA20001X
Japan/Korea•DoCoMo(PDC) launched WCDMA Oct 2001
•J-phone PDC=>WCDMA , Soft Launch June, Commercial expected in Dec.
•KDDI/LGT: cdmaONe=>CDMA 2000 1x
=>3G