Accenture - A Primer in Wireless Broadband

A Primer in Wireless Broadband

San Francisco, October 2006

Lars Kamp

Licensed under Creative Commons Attribution 3.0 Unported License (http://www.creativecommons.org/licenses/by/3.0)You are free to Share or Remix any part of this work as long as you attribute this work to Accenture (accenture.com)

Lars Kamp

Management Consulting

© 2006 Accenture. All rights reserved. 2

Suite 1200560 Mission StreetSan Francisco, CA [email protected]

Before we start – a quick contemporary wireless knowledge quiz

1. When was the first U.S. cellular system activated?

2. What was actress Hedy Lamarr’s contribution to the wireless industry back in 1942?

3. How many satellites make up the previously defunct Iridium satellite system?

4. What wireless carrier successfully bid for $4.2 billion for 120 licenses in the September 2006


4. What wireless carrier successfully bid for $4.2 billion for 120 licenses in the September 2006 FCC AWS Auction #66?

5. What’s the estimated value of the wireless spectrum in the US?

Contents

• Spectrum Fundamentals

• Wireless Networking


• Wireless Broadband Economics

• Future Business Challenges

Contents

• Spectrum fundamentals





In the beginning: radio signals and frequencies

� Amplitude: Signal strength

� One cycle: one complete wave

� Frequency (f): # of cycles/second (Hertz)

Wavelength (λ)

Amplitude

Time

+


Wavelength λ (m) =300

Frequency (MHz)

Source: The Essential Guide to Wireless Communications Applications; Accenture analysis

one cycle

-

� The wavelength λ has an inverse relationship to frequency

� The wavelength is equal to the speed of the wave divided by the frequency of the wave

� For electromagnetic waves this speed is the speed of light (≅ 3x108m/s) and therefore constant

Basic properties of radio signals

Propagation and range

• Higher frequency waves travel less distance per cycle than lower frequency waves: higher frequencies oscillate more often per second and therefore the wavelengths become shorter

• The lower the frequency, the longer the wavelength

T = 1s

1

1s

Sig

nal 1

low

er

frequency

λ=40 cm

Capacity and bandwidth

• One cycle presents 2 bits: positive and negative peak can carry each 1 bit

• As higher frequencies oscillate more often per second, they can carry more bits

• The higher the frequency, the higher the channel capacity

Signal speed = 3 x 108 m/s (const.)

low

er

frequency


f = 1/1 = 1 Hertz

Data rate: 2 bit/s

T = 1s

f = 4/1 = 4 Hertz

Data rate: 8 bit/s

Lower frequencies propagate farer and are less sensible to obstruction

Higher frequencies have a higher channel capacity and offer more bandwidth

Sig

nal 1

low

er

frequency

Sig

nal 2

hig

her

frequency

Source: Accenture analysis

0

1 1 1 1

0 0 0 0

f = 750 MHz = 7.5 x 108 cycles/s

λ = 3 / 7.5 = 0.4 m per cycle

λ=14 cm

Sig

nal 1

low

er

frequency

Sig

nal 2

hig

her

frequency

Signal speed = 3 x 108 m/s (const.)

f = 2,100 MHz = 2.1 x 109 cycles/s

λ = 3 / 21 = 0.14 m per cycle

The Radio Spectrum

3G

Radio SpectrumRadio Spectrum

“Sweetspot”

ElectricWaves

Radio Waves

Infra-redVisible Light

Ultra Violet

X-RaysGamma

RaysCosmic Rays

• Frequencies are high enough for there to be large total bandwidth

• Frequencies are low enough to allow fairly good propagation characteristics


Medium Wave Radio

30300

Long Wave Radio

FM Radio

GSM

3G

Microwave Radio LinksTV

kHz MHz GHz

330 300

DECT WiFiBluetooth

TETRALMDS

Decreasing RangeIncreasing Bandwidth

Increasing RangeDecreasing Bandwidth

30 33003

Source: Ofcom, "The Spectrum Framework Review“, November 23, 2004; “The Essential Guide to Wireless Communications”, 2002; Accenture analysis

VLF LF MF HF VLF UHF SHF EHF

10-100km 1-10km 0.1-1km 10-100m 1-10m 0.1-1m 10-100mm 1-10mmWavelength

In the US, the radio frequencies are regulated and allocated by the Federal Communications Commission


Source: U.S. Department of Commerce, October 2003.

Access schemes enable the shared use of a limited medium

FDMA

Fre

qu

en

cy f3

f2

f1

Time

TDMA

• Frequency Division Multiple Access (FDMA) divides spectrum into frequencies (“channels”) which then are assigned to users.

• With FDMA, only one subscriber at any given time is assigned to a channel. The channel therefore is closed to other users’ voice or data calls.

• Time Division Multiple Access (TDMA) splits each frequency into time slots and


TDMAf2f1 f3 f2f1 f3

Fre

qu

en

cy

Time

CDMA

32

Spread Code 1

Fre

qu

en

cy

Time

Source: ITU, "About mobile technology and IMT-2000", December 1, 2005

• Time Division Multiple Access (TDMA) splits each frequency into time slots and allows each user to access the entire radio frequency channel for a short period.

• Other users share this same frequency channel at different time slots. The base station continually switches from user to user on the channel.

• Code Division Multiple Access (CDMA) allows all users to occupy all channels at the same time.

• Transmissions are spread over the whole radio band, and users occupying the same spectrum are distinguished from each other by a unique spreading code.

Code domain

Managing downlink and uplink of a wireless connection

Downlink

D D D D D D D D

U UU U

Uplink

• A duplexing technique used in licensed solutions that uses a pair of spectrum channels, one for the uplink and another for the downlink.

• Proven technology for voice, designed for symmetrical traffic, does not require guard time.

• Cannot be deployed where spectrum is unpaired

• With asymmetric loads, portions of the

Cell site SubscriberRadio link

FDD: Frequency Division Duplex


Downlink

Up- and downlink

D U U D D U U D

• With asymmetric loads, portions of the spectrum are occupied but not used

• A duplexing technique used in license-exempt solutions, which uses a single channel for uplink and downlink.

• Enhanced flexibility, easier to pair with smart antenna technologies, asymmetrical

• Cannot transmit and receive at the same time.

Radio resource units

Cell site SubscriberRadio link

TDD: Time Division Duplex

“Spectral efficiency” is a measure of a technology’s efficacy at exploiting its allocated spectrum

• Spectral efficiency is a good proxy for the relative cost of wireless network equipment and sites in a radio network.

• Spectral efficiency (bits/s/Hz) is a measure of the performance of encoding methods that code information as variations in an analog signal.


sites in a radio network.

• Direct comparison is often tricky, as figures tend to be exaggerated due to test in different lab environments.

• Spectral efficiency kicks in with rising subscriber numbers and usage: the number of sites required by less spectrally efficient technologies can grow dramatically.

analog signal.

• An encoding using a 1 kHz of bandwidth to transmit a thousand bits every second has a spectral efficiency of 1 bit/s/Hz.

• Rule of thumb: the actual capacity in a multi-cell environment for any wireless technology is about 20%-30% of the peak theoretical data rate due to self-interference.

Source: Industry interviews, ArrayComm, Accenture analysis.

Modulation: applying Moore’s Law to radio

1 0 1

t

Amplitude Modulation

Analog Modulation Digital Modulation

12

25

37

10

20

30

40

The modulation scheme impacts the available throughput

Ra

w T

hro

ug

hp

ut

(Mb

ps

) p

er

10

MH

z

Ch

an

ne

l


• Digital modulation - also referred to as shift keying - is a modulation in which the modified parameter of the carrier signal can take only discrete values (on/off).

• Amplitude Shift Keying (ASK)

• Frequency Shift Keying (FSK)

• Phase Shift Keying (PSK)

• The higher modulation rate is reached through compressing a signal to the fewest number of bits necessary while maintaining fidelilty.

• Higher-rate and more robust modulation schemes enable higher bandwidth, farer reach and better QoS.

1 0 1

t

Frequency Modulation

1 0 1

t

Phase Modulation

Source: Lehman Brothers, Accenture analysis.

0

10

QPSK 16QAM 64QAM

Modulation scheme

Ra

w T

hro

ug

hp

ut

(Mb

ps

) p

er

10

MH

z

The distance-bandwidth trade-off: adaptive modulation means that speed will vary with range

A B C D E F

Data speed and range of WIMAX at 3.5 GHz

Modulation & Code Rate

Channel Bandwidth

QPSK

1/2

QPSK

3/4

16QAM

1/2

16QAM

3/4

64QAM

1/2

64QAM

2/3

64QAM

3/4

1.25 MHz 1.04 1.56 2.08 3.12 3.12 4.16 4.68


r

Source: Motorola; system metrics refer to Motorola Canopy Solution

17.1 13.6 7.6 6.1 3.8 3.0

5.8 8.7 11.6 17.5 23.3 26.2

A B C D E F

1/2 3/4 1/2 3/4 2/3 3/4

QPSK 16QAM 64QAM

1.75 MHz 1.45 2.18 2.91 4.36 4.36 5.82 6.55

3.5 MHz 2.91 4.36 5.82 8.73 8.73 11.64 13.09

5.0 MHz 4.16 6.23 8.32 12.47 12.47 16.62 18.70

7.0 MHz 5.82 8.73 11.64 17.45 17.45 23.27 26.18

10.0 MHz 8.31 12.47 16.62 24.94 24.94 33.25 37.40

20.0 MHz 16.62 24.94 33.25 49.87 49.87 66.49 74.81Range (km)

Throughput (Mbps)

Zone

Code Rate

Modulation

Contents

• Spectrum fundamentals





Wireless architectures and networks

Sensor Networks

WPAN WLAN WMAN WRAN

Point-to-Point

Point-to-Multipoint

Wireless Network Types Wireless Network Architectures

• Used for backhaul purposes with directional antennae

• Speeds up to the Gigabit/s range


IEEE Standards

Commercial Standards/

Names

Typical Cell Reach ~2m ~10m ~30m ~4km ~40km

agnostic 802.15 802.11802.16802.20 802.22

RFIDRuBee

BluetoothZigBee Wi-Fi

WiMAXFlash-OFDM

cdma2000UMTS

+-Distance from cell

Point-to-Multipoint

Mesh

• One point serves multiple points around it, with omni-directional or multiple sector antennae

• Speeds depend on technology and user load

• Every device can communicate with any other device within range

• “Self-healing”: network can still operate even when a node breaks

100 Watts1,000,000

1GMacrocellular

Systems(~8 mi)

10,000 sqm

700 sqm

280,000 sqm

2 G Cellular Expanded

Cell-based coverage: the trend to low-powered low-reach networks

Maritime Mobile HF

Radio(~ 300 mi)


The 4G“Sweet Spot”

1950 1960 1970

10 Watts

1 Watt

100 mW

Year

100

1,000

10,000

100,000

CellRadius(ft)

30 mW

.01 sqm

1980 1990 2000 2010

The 2G“Sweet Spot”

The 3G/Wi-Max “Sweet Spot”

700 sqm

Mobile/ Portable Maximum Power Output

Source: IEEE

200 sqm

50 sqm

12 sqm

Expanded Service(~ 4 mi)

0.75 sqm

MU-MKMobile

Telephone(~ 60 mi)

MetrolinerTrain

Telephone(~ 15 mi)

2.5 GMicrocells(~ 2 mi)

PCSMicrocells

(up to 2 mi)WLNAN/LAN

Nanocels(up to 0.2 mi)

Cellular architecture: sectorization of a coverage area for the re-use of the same frequency

G

FA

C

DE

B

G CB

G

FA

C

DE

B

B

B

Cell area

Cell tower A-F

Air interface

Frequencies


• A cellular radio has limited range

• The area served by a tower is a “cell”

• As a user moves out of range, the connection transfers to a different tower (a ‘handoff” that is often the source of dropped connections)

E

G

FA

C

DE

B

G

FA

C

DEG

FA

C

DE

BE

G

FA

C

DE

B

A

C

• Cells are laid out in a honeycomb pattern and can be subdivided into new cells as traffic increases

• Adjacent cells use unique frequencies to avoid interference requiring the phone to change channels

• Cells can also be “sectorized” to increase capacity

• Sectorizing ensures sufficient capacity, while overlay cells ensure seamless coverage

Generic wireless broadband infrastructure architecture

G

FA

C

D

B Ethernet Switch

Cell tower, antennae and base station

MobilityManager

3rd-Party email, Content & other

ApplicationServers

AAAServer

Network ElementManager

Connectivity Service Network

3GPP

PSTNMulti-stack

Routers

Cellular Infrastructure Interworking

Outdoor Antenna

Subscriber Modules


F DE

G

FA

C

DE

B

IP Router

3-5 km typical cell radius

Accounting,Billing &

Customer Care

UserRepository

DHCPServer

DNSServer

Core IP Network

Internet

3GPP2

3GPP

IP Router

Indoor Antenna

PCMCIA Card

3rd-Party Embedded Subscriber Module

Source: Cisco, Intel, Siemens, Motorola, Accenture analysis.

Four criteria to evaluate a wireless technology

Capacity Mbps

Coverage km2

• Total capacity (Mbps) able to be served by each cell (capacity limit)• Depends on spectral efficiency of underlying technology and channelization• Capacity is key efficiency factor in mature markets with high penetration rates

• Total reach of wireless signal (radius) and resulting coverage per cell (coverage limit)• Depends on frequency/spectral region and modulation capabilities• Coverage is key to determining initial system and service delivery cost• Determines the coverage-driven base station density for initial deployment


Capacity Mbps

Spectrum MHz

System Cost $

• Capacity is key efficiency factor in mature markets with high penetration rates• Determines the capacity-driven base station density

• Total available spectrum (MHz) and quality of spectrum (frequency and licensing regime)• Depends on regulation: licensed vs. unlicensed, paired vs. unpaired spectrum, spectral region• Determines cost: licensed (expensive, but protection against interference) vs. unlicensed (free,

but risk of interference); paired (expensive) vs. unpaired (less costly); propagation characteristics

• Spectrum, base station, infrastructure and device/subscriber module costs• Depends on $/MHz/Pop for licensed spectrum and degree of commercialization of technology• $/MHz/Pop mainly driven by household income, business density and penetration rates• Degree of commercialization depends on standardization efforts and vendor support

The US is divided into 734 cellular market areas which are governed by the FCC

Popu-lation

% of total

Area (SqMi) % of Total

Pop/ SqMi

Total US 293.7 100% 3,536, 604 100% 83

Urban Areas 196.0 66.7% 73,675 2,1% 2,660

Rural Areas 97.7 33.3% 3,462,929 97,9% 28

260,000300,000

Number of cell towers in the US, 2006 & 2010


� 734 cellular market areas, composed of:

� 305 Metropolitan Statistical Areas (MSA’s)

� 428 Rural Service Areas (RSA’s)

� a market for the Gulf of Mexico

� Licenses are granted through spectrum auctions

Source: FCC, US Census Bureau, CTIA, Lehman Brothers, Cell Tower Info Blog

175,000

0

100,000

200,000

2006 2010Estimates for number of cell towers per operator in the US, in thousands, 2005

2025

44

22 24

8

0

10

20

30

40

50

Nextel Sprint Cingular Verizon T-Mobile Alltel

Network standard convergence: the trend to non-proprietary all-IP 4G networks

Japan

Europe,

PDCTD-WCDMA

2G(10 kbps)

2.5G(64-144 kbps)

2.75 G(144-384 kbps)

3G(384k-2 Mbps)

4G(> 2Mbps)

OFDM Based Air GSM Association, ETSI* 3GPP*

© 2006 Accenture. All rights reserved. 22Source: ITU, ATS Network Consortium, Gartner Research 2005, EURESCOM, Accenture analysis

Migration Path *Regulatory bodies

Europe, China

US

US, Japan

China

GSM

TDMA

CDMA

GSM

HSCSD

GPRS

EDGE

CDMA 20001xRTT

CDMA 20003xRTT

SD-WCDMA(TDD)

OFDM Based Air Interfaces

3GP Future

Evolvement of 802.11802.16802.20

802.21 Seamless Mobility

GSM Association, ETSI*

UWCC, T1*

CDG, TIA*

3GPP2*

3GPP*

1998 2005 > 20102000 2002 2006

Contents






Wireless broadband’s problem: for similar price points, the average wireless broadband customer uses 10x the bandwidth compared to voice…

Cellular Voice Wireless Broadband

Subscriber price

ESTIMATE

� Consumers’ willingness to pay for 1 MB of airtime is approximately 10x higher for

Consumer willingness to pay for wide area mobile services


Subscriber price $29.99/Month1 $24.98/Month2

Package / Plan 300 Minutes1 1.5 Mbit/s upstream &

256 kbit/s downstream2

Typical consumption 30 MB/month3 300 MB/month4

Implied revenue per MB

$1.00 $0.08

[1] T-Mobile Plan “Basic Plus”, excludes activation fee.[2] Clearwire Plan ClearPremiumTM for the first year, excludes activation fee.[3] Calculated based on GSM codec of 13.2 kbit/s (bandwidth usage).[4] Calculated based on estimated daily traffic of 10MB upstream and 20MB downstream.

approximately 10x higher for mobile voice than for for wireless broadband

� For given price points, wireless broadband operations require an approximately 10x lower cost structure than cellular networks to yield the same profitability

… and it doesn’t stop there: business is expected to become more difficult

Demand side Supply side


• Low subscriber switching costs

• High sensitivity to service quality

• Extreme price pressure

• Exploding capex and opex requirements to support rising tide of subscriber usage

Source: ArrayComm

What it costs to roll-out a network: 70% of general capital expenditure components of today’s mobile networks are driven by the number of cell sites

Network Components as% of Capital Expenditure

Switching

Software/Billing

Microwave Links

Backhaul

15%

15%

5%

5%

75%

90%

95%

100% UL (Kbps)

DL (Kbps)

Subs. UL Capacity

DL Capacity

Platinum 512 1,024 10 10*512 10*1,024

Gold 256 512 30 30*256 30*512

Silver 128 256 60 30*128 30*256

Total 100 20,480 40,960

Acme ISP, Inc.WiMAX Offering Capacity Planning

61,44 Mbps


Radio

Site Costs

Switching

40%

20%

15%

40%

60%

Source: Lehman Brothers, Accenture analysis.

Airtime for all users: 50%Percentage of active users:

Residential 20% of users

SME / SOHO 40% of users

Enterprise 80% of users

Usage can be calculated as the product of:1. % of active users2. % avg. air time usage by active users

Oversubscription factor (OSF): 1 / (%usage) = 1 / ( (% active users) * (% avg. air time) )

OSF = 5Total data transmitted over long periods of accumulated peak-times will roughly be equal to12 Mbps ( = 61.44 Mbps / OSF)

• Clearwire is estimated to have approximately 840 subscribers per tower

• Unwired Tower’s in Australia each serve 600-900 customers

Grows proportionally tonumber of cell sites

Propagation characteristics of spectrum impact roll-out costs

Cost of wireless network deployment based on range and frequency1

15

25,000

30,000

Cell radius, km

Benchmark wireless network cost, US$ per km2

Rural range

Weighted average cost

(US$)

ESTIMATE


[1] Propagation calculations based on Okumura-Hata model; base scenario input data:$100,000 per cell site, morphology mix of 25% urban, 50% suburban, 25% rural, 600 kbit/s peak data rate, coverage-limited scenarioSource: ArrayCom, Accenture analysis.

0

5

10

0

20,000

15,000

10,000

5,000

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

Frequency, MHz

Urban range

Suburban range700 MHz

2,100 MHz

~ 3 x higher cost for roll-out in 2,100 MHz band

A simple cash flow model for operations and underlying drivers: what are the best KPIs to measure cost efficiency and where are the biggest levers to obtain it?

Market

• Geographic size• Population density• Pops/HH ratio• Broadband penetration• Number of SMEs in market• PC penetration

Deployment

• Sectors/cell• Spectrum available• Spectrum re-use• Antennae per sector• Spectrum operating point• Oversubscription factor

Business case variables and assumptions

Capacity &

Cash flow model


• Range: The range of the technology dictates the number of base stations required to reach initial coverage objectives, driving the peak negative cash flow point.

• Capacity: The capacity of the technology determines how many subscribers an operator can support and therefore how much revenue will be received per unit of capital expenditures.

• Coverage: The coverage quality of the system will affect marketing costs through its influence on unit subscriber acquisition expense and churn rates.

• PC penetration• Notebook share of PCs• Mobile phone penetration• Morphology mix

• Oversubscription factor• Coverage for fixed service• Coverage for mobile service• Backhaul approach

Customer Behavior

• Usage per average subscriber in busy hour by service segment

• Aggregate consumption as function of busy-hour usage

• Retail ARPU segment• Subscriber device price (paid by

subscriber vs. subsidized)• Subscriber adoption• Modem type mix

Operating Parameters

• Site acquisition/installation cost• Base station cost/sector• NOC cost per data subscriber unit

of capacity• Backbone connectivity per sub• Subscriber acquisition cost• Subscriber churn• Spectrum unit cost• Spectrum depreciation period

Range

Capacity & Coverage

Contents






There are four drivers that will determine the future wireless industry structure

Customer demand

•Consumers increasingly demanding “anywhere, any time” access to voice and data services

•Examples• High and still rising mobile penetration• Projected adoption of wireless data and home

networking

Regulation

•Congress and FCC clearing previously licensed spectrum, licensing additional spectrum, and opening more

Competition

•New players besides CellCos and RBOCs entering wireless market with offerings ranging from wireless data only to quad-play


Wireless increasingly becoming important part of integrated

communication services

opening more unlicensed/nonexclusive spectrum

•Examples• DTV

transition/FCC ATC order

• 700 MHz/AWS auctions

• 2.4/5.7 MHz unlicensed spectrum

Technology evolution• New network architectures blurring distinction

between wireless and wireline services • Examples

• IMS/SIP – seamless mobility• IP-enabled 3G/4G networks• Smart devices

data only to quad-play bundles

•Examples• Municipal Wireless

in unlicensed spectrum

• Clearwire largest owner besides Nextel of 2.5GHz spectrum

• CableCos bidding for spectrum in AWS auction

13%9%

22%

16%

Customers seem to want access to all services anytime, anywhere

Home networks grew by 80% in 2005; Wireless is in two-thirds of all home networks

40.7

32.9

19.5Mio. US

U.S. households are poised for convergence of cellular and wireless broadbandU.S. 2005, Millions

“Online” households All households

U.S. households with a home

network 2005

2006


Analysts predict significant adoption of Wi-Fi enabled phones in the U.S. Millions of wireless users, embedded base

26 50

197 204193

177

19.5`

Broadband households


with cell subscription


with cell subscription and Wi-Fi

access point

Mio. US households

Wi-Fi enabled phones <1

Non-Wi-Fi enabled phones

6

2006 2007 2008 2009

• Consumers’ familiarity with wireless broadband and cellular is growing• Wi-Fi functionality to be included in 40% of new phones by 2009

Source: Boingo Wireless, InStat, Forrester, FCC

There is a significant amount of new spectrum available to competitors

240

79160

80

50

976

700 MHz

Nextel

2.4 GHz band

5.7 GHz band

3.6 GHz band

Spectrum band classification

Megahertz

20

370

170

Results AWS Auction #66 Sep ‘06• T-Mobile• Verizon Wireless• SpectrumCo• MetroPCS• Cingular• Cricket• Denali Spectrum• Barat Wireless• AWS Wireless• Atlantic Wireless

$4.2 billion$2.8 billion$2.4 billion$1.4 billion$1.3 billion$710 million$365 million$127 million$116 million$81 million


185 185120

194

90

421

50

28

60

Licensed spectrum in use by wireless operators

Allocate licensed spectrum slated for auction

Total spectrum potentially available for non-incumbent wireless operators

Unlicensed/ nonexclusive-use spectrum potentially us-able with new technology

“New” spectrum coming available

Licensed spectrum not usable for mobile services

PCS

CellularSMR

BRS/EBS

MSV700 MHzCCI

AWS

700 MHz

Total spectrum available for wireless operators

524

15

185

251

• Atlantic Wireless…

1,087 licenses

$81 million….

$14 billion

• Price in AWS Auction #66: $0.53 per MHz per POP

• Spectrum values have historically ranged from a low of $0.15 per MHz per POP (Auction 22 in 1999) to a high of $4.74 per MHz per POP for the 10 MHZ of spectrum in the New York city BTA that was sold by NextWave to Verizon Wireless

Source: FCC, UBS Research, Accenture analysis.

Internet industry: data-centric

• all-IP fixed networks: processing power at the edge of the network

• Devices designed to provide superior processing power

• Zero marginal cost for service provision

• Consumers are making decisions, not

Technology evolution and convergence blurs the lines between wireline and wireless services

From: stove piped services

Service

Media functions

Subscriber data

Application

Service 1

Service

Media functions

Subscriberdata

Appli-cation

Service 2

Service

Media functions

Subscriberdata

Appli-cation

Service 3

Service

Media functions

Subscriberdata

Appli-cation

Media functions

Subscriber data

Appli-cation

Appli-cation

Appli-cation

To: service-agnostic delivery


• Consumers are making decisions, not the industry: highly innovative

Cellular industry: voice-centric

• Circuit-switched networks; processing power at the core of the network

• Devices designed to provide mobility and long battery life

• > 0 marginal cost for service provision

• Industry is making decisions, not the consumer: R&D trial & error

Co

nverg

en

ce

IMS and interim FMC technologies enabling seamless service delivery across multiple networks

Service deliveryService delivery

Service delivery

Service delivery

Wireline access

Wireline access

IP Multimedia Subsystem (IMS) delivery

Wireline access

Wireline access

Wireless access

Wireless access

There are numerous attackers in the market with wireless expertise and different business models

� Aloha Partners currently own 12MHz of spectrum covering 60% of the United States, all of the top 10 markets and 84% of the population in the top 40 markets.

� Aloha Partners have no network operations as of now, but plan to roll-out

� Clearwire has the second largest position of 2.5 GHz spectrum in the US

� Clearwire offers services in 27 markets in the United

Attacker Description

Wireless operations

��

Spectrum licenses

��

��

-Residential wireless broadband access and Mobile TV

Business model

Residential and SME wireless broadband access in underserved


� Clearwire offers services in 27 markets in the United States, covering more than 200 municipalities with an estimated 4.8 million people.

Source: Company websites, Yahoo! Finance, SEC filings, Accenture analysis. All figures as of May 17th, 2006.

� Towerstream operates in the license-free 5.8GHz band, with licenses in the 24 GHz band for backhaul

� Towerstream serves the markets in NYC, LA, Chicago, Boston, Providen and Newport, Rhode Island and San Francisco

��

��

��

-

� Tropos Networks and Mesh Networks are network gear vendors with focus on unlicensed WiFi mesh networks

� WiFi mesh networks are being deployed by municipalities across the US, usually in collaboration with an ISP, e.g. EarthLink and Google in San Francisco

�� -

access in underserved or Greenfield markets

SME and enterprise wireless broadband access in large metro areas, VoIP

White label network provider with turnkey solution

And then there also is… you!


• Meraki Mini: $49 wireless 802.11b/g router that allows users to build a wireless mesh network or extend the range of a municipal network.

• Meraki also has mesh routing software and hosted billing/user management tools “operators” need to run a production network.

• An “operator” can set pricing and also brand its service

• “La Fonera”: $5 wireless 802.11b/g router that allows users of the FON community to share their wireless Internet:

• Linus: Share their WiFi hotspot and get free roaming on Fon network

• Bills: Share their WiFi hotspot and get 50% of the revenue generated by aliens but no roaming

• Aliens: Customers that pay for access to the Fon network ($3 for day pass)

The future??

That’s all, folks!


May I be excused? My brain is

full!

Accenture - A Primer in Wireless Broadband

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