Analyzing Regulatory-economic Aspects of a Potentially Disruptive Shift in Telecommunications

8/3/2019 Analyzing Regulatory-economic Aspects of a Potentially Disruptive Shift in Telecommunications

1/14

Maximilian Sandmann Vice Chairman WG3 COST TERRA

Roel Schiphorst Researcher University of Twente


2/14

Less focus on owning the architecture:Rise of Managed Network Services

Reselling network capacity to virtual operators

MVNOs

Small scale: Network MIMO (many basestations acting as one)

Major diversification of operators ends up to be the spectrum

they (temporarily) own


3/14

Moores law requires increasing amount ofBasestations

Puts stress on operators for bringing them online and risingenergy cost as part of the total OPEX.

80% of the time customers are indoor Most traffic is local

Routers and Femtocells becoming cheaper

CPE (like Qualcomm Gobi) can communicate with multiple operators

Most traffic does not need a high QoS, ubiquity is more important


4/14

Rise of services Cloud (iOS Siri, iCloud etc..) Content consumption via apps Multiple devices who demand ubiquity

Demand for capacity is increasing more rapidly than3G/4G networks can provide

Were in some cases already in a reality service degradation (droppedcalls/data charges/data throttling, separate subscriptions for eachdevice)

Disintermediation: Emergence of sharing platforms toenable transactions between people (people to SMB) :

Ebay, craigslist (1.0), AirBnB (2.0+), ZipCar, Square,

Skype?, etc (well executed decentralization lead tobillion dollar+ valuations

Is Telecommunication headed for similar disruption?


5/14

Evolution: Wifi 2.0/offload: collaboration betweenhotspots and operators (Republic Wirelessmodel), -> primarily driven by operators

Disruption: (the FON model orBoingo, netblazrmodel): connectivity platform with store forconsumers and privileges for its participants.

Who will end up with the ownership of thisdistributed model of femtocells (Operators,platforms or consumer?)


6/14

Avoiding balkanization, achieving economies of scale, bigmarket for supply and demand results in a network effect(e.g. better roaming)

Global platform: (limited) global coverage, standardized

point of sale (pay by SMS) and terms wherever you are

Low cost of CPE (router) acquisition with potential for returnon investment (lowest barrier of entry)

Potential of great competition (long tail diversification ofofferings) in a certain geographical area

Partnerships with fixed operators and second-layercompanies like Boingo


7/14

Coverage per cell (higher frequency/lowtransmit power results in more basestationsneeded (cost)

Potential lower QoS

Hardware:-Limited hardware upgradability

-No applications model-Only supporting one standard (802.11)


8/14

Diversification, better QoS & usage of other standards

issues can be overcome by allocation of (temporary)

exclusive rights.

From the regulator to the local entrepreneur (command-and-control)

Band managers under regulatory control to local entrepreneurs

- Benefit: First and foremost decreases liability and overhead forregulators, plus enables diversification between band managers

(in the command-and-control case its only one)

- Threat: conditions might differ per country which increasescomplexity in technological standardization.


9/14

Open access: Unlicensed (WhiteSpaceColaition use case)

Open access with regulatory conditions: Light licensed variants

(better QoS)->

how much frequency?

how to enable many operators to coexist?assign spectrum under what conditions to the entrepreneur

Closed access: Exclusive rights where other schemes QoS

or business model fails. Exclusive rights to attract higher barrier

of entry investment in the form of spectrum auctions, beauty

contests, etc..

potentially limit the amount of competition even under theMVNO model


10/14

Band manager: the future of operators?

Entrepreneurs, providing wireless capacity- More business models enabled- Lower barrier of entry

Consumer- more choice- lower prices- better service


11/14

Regulator/Band manager : Enabling more dynamic spectrum accesspotentially generates more transactions/economic value per MHz

Entrepreneur : Enabling more dynamic spectrum access andfrequencies allocation generates better adaption to market conditions

Consumer perspective: basically a spec argument, more dynamismcould enable more (and cheaper) application scenarios.


12/14

Uncertainty:Can it be justified in terms of price for the consumer (iPad

vs. Kindle) and Entrepreneur (competitive advantage)

Opportunity:Disruption shakes up the stakeholders


13/14

Should we primarily look for CR/SDR killer app usecases which disrupt on their own or focus efforts [to

add value] to telecommunications developments that

might disrupt

Create framework focus for:

-What are the consequences ofbusinessfragmentation (incl. potential negative consequenceslike patent issues)

-What stakeholders control and what weaknessescould spur disruption

-Regulatory and technology models fit for disruption


14/14

Thank you

Documents

Analyzing Regulatory-economic Aspects of a Potentially Disruptive Shift in Telecommunications