Global Drivers for Open Mobile Ecosystem

8/8/2019 Global Drivers for Open Mobile Ecosystem

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Open Mobile Summit

San Francisco

November 19, 2008

Global Drivers for an Open MobileEcosystem

Mike GrantHead of Media


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Confidential

Contents

Broadband service pricing

Network economics

Experience development


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New pricing structures have created

todays Open Mobile ecosystem

Source: Hutchison 3G UK Ltd

0

2

4

6

8

10

12

14

16

Sep-

Relativetrafficgrowth

Uplink

Downlink

Total

07

Oct-

07

Nov-

07

Dec-

07

Jan-

08

Feb-

08

Mar-

08

Apr-

08

Growth in 3 UK data traffic:

September 2007April 2008


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The success of mobile broadband has

taken many by surprise

Mobilebroadbandas%

oftotalbroadband

* Estimates based on: state of networks, price points relative to GDP, price pointsrelative to fixed, mobile-only households, number and type of MNOs

35%

0%

5%

10%

15%

20%

25%

30%

Austria

Belgium

Bulgaria

CzechRe

public

Denm

ark

Estonia

Finland

France

Germany

Greece

Hungary

IrelandIta

ly

Latvia

Lithuania

Netherlands

Norway

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

Switzerland UK

Estimated numbers

Mobile broadband as a proportion of total broadband, June 2008

Source: Analysys Mason, 2008


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Flat-rate pricing at levels below fixed

has driven uptake

Austrian mobile broadband issubstantially cheaper than TelekomAustrias DSL, which has essentiallybeen re-invented as triple play

Play in Poland offers the cheapest

mobile broadband (EUR12.60 for5GB per month)

Lowest prices are offered by newentrant 3G-only players

French and Swiss markets are notyet at a take-off point

Norway is a high-cost, high-GDPmarket

0% mobile

premium over

fixed

0

10

20

30

40

50

60

70

80

10 20 30 40

DSL (EUR per month)

C

heapestmobilebroadban

d(EURpermonth)

CH

AT

NO

FR

PL

BGGR

LT

FI SI

DE, IE, NL, SE

PT

ES

ROCZ

LV

HUIT

SK

BE

UK

DK

EE

* Based on incumbent DSL and cheapestMNO offering including at least 3GB downloadper month, at June 2008

Mobile broadband and DSL price

comparison, June 2008

Source: Analysys Mason, 2008


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Mobile broadband is not simply a

complementary service

In Austria, fixed broadband penetrationwas static for three quarters in 2007:

strongly suggests high proportion ofsubstitutive and new users

In the UK, at 1Q 2008, about 32% ofmobile broadband subscribers used it

instead of fixed broadband; in the 1624age group, this proportion was as high as47%*

In May 2008, 3 UK was reported as sayingthat about 50% of its subscribers wereusing mobile broadband in place of fixed

In Finland, the proportion of fixedbroadband users that would be preparedto change to mobile broadband if theprices of the two were the same fell from30% to 20% during 2007**

0.0

0.5

1.0

1.5

2.0

2.5

1Q2007

2Q2007

3Q2007

4Q2007

1Q2008

2Q2008

Broadbandsubscribers

(million)

Other

Mobile

Cable

DSL

Substitutiveusage

Broadband subscribers in Austria1Q 2007 2Q 2008

Source: Analysys Mason, 2008 *Source: Ofcom; **Source: FICORA


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Operator channel strategy is changing


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Mobile InternetDevice(MID)

Ultra mobile PC(UMPC)

Netbook Tablet PC

... with more focus being placed on newcomputing devices


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Contents


Network economics



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Network investment to support fixed

levels of data traffic is inevitable

Backhaul investments will enable a significantflattening of the cost curve:

TDM-to-IP migration

more point-to-multipoint topologies

With fixed Ethernet, the cost of backhaul

typically increases 23 times when bandwidthincreases 10 times (compared with 4 for TDM)

Operators should see a step change in RANair interface bandwidth supply:

extension bands at 2.6GHZ

re-farming of 2G HSPA > HSPA+ > LTE migration

With these investments, traffic levels>1Gbyte per customer per month can besupported

Time

Demand

Bandwid

th

Costs

ARPU

IP

backhaul

costs

RAN

bandwidt

h supply

TDM

backhaul

costs

Source: Analysys Mason


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Contents


Network economics


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But what about a handset-driven

ecosystem?

Twice as many people wouldkeep their mobile as their TV, if

forced to choose 78% of people have their

mobiles on at all times***

Average time to report a lost wallet:26 hours

Average time to report a lost mobile:68 minutes***

44% of UK adults use SMS daily,compared with 36% who use theInternet**

2 billion texts sent in China on NewYears Day

Texts sent per US subscriber exceededvoice calls for the first time in 2008

* Source: International Telecommunications Union (2008); ** Source: Ofcom (2008): ***Source: BBDO,

Wireless Works: Exploring New Brand Connections, 2008

900 million PCs worldwide

1.3 billion Internet users

1.5 billion TV households

3.3 billion mobile subscribers*

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Device data usage has yet to impact

network traffic

Source: Nokia, Entertainment: A Glimpse of the Next Episode 2007, based on 9000 interviews

worldwide with consumers who own a mobile phone (not restricted to Nokia devices), aged 1635

Smartphone users make four times more use of

Internet and multimedia services than basic phone users

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Smartphones still represent a small

proportion of the market

Out of 3.5 billion handsets in themarket today, 156 million are

Symbian phones*

Total global handset shipments in Q3

were 299 million**

13% of global handsets shipments in

Q3 08 were smartphones***

6.9

15.5

6.1

2.3

2.36.7

Nokia Symbian

iPhone

RIM BlackBerry

Motorola

HTC

Others

Shipments of smartphones (million)June to September 2008

*Source: Symbian; ** Source: IDC; ***Source:Canals s

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Touchscreen UIs should increase

smartphone penetration

Nokia 7700

Samsung i900 Omnia

HTC Touch

LG Glimmer

LG Vu

Neonode N2

All trademarks and rights owners acknowledged.

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.. but Apples vision of integrated

content consumption is compelling

TV

Internet

PC

Mobile

Source: Apple

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Nokia seeks to transform its

relationship with its customers

Ovi extends Nokias market-leadingposition in mobile devices in twodirections:

content aggregation (music,photos, maps and so on)

devices (PC and the Internet)

Several acquisitions have supportedservice delivery in music, games,maps, social networking, music andadvertising

Their control of the mobile deviceconfiguration gives Nokia anunprecedented opportunity to defineand deliver a seamless multi-devicecontent environment for users

Source: Nokia

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and in particular with those in

developing markets

With Nokia Life Tools, we strive to contribute towards empowering people with the

right tools to help them make informed decisions in their daily lives,"

Jawahar Kanjilal, Global Head of Emerging Market Services, Nokia

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Common themes

Pricing Network economics

Device + connectivity + aggregation = experience

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.. but many visions of the

Open Mobile ecosystem

Plain vanilla Internet browsing on laptops

Real Internet browsing on smartphones

Full video streaming to a fully functional, simple to operate

device like the iPhone Integration of access to personal and public content through a

common UI across TV, PC, Web and mobile

Delivery of agricultural prices to the farmers of India on a $50

phone to enable them to sell their produce at the best price ona given day

Documents

Global Drivers for Open Mobile Ecosystem