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IMT-2000 The business case and Key Markets. A presentation from UMTS Forum, Market Aspect Group. IMT-2000 Workshop, St Helier, Jersey, 10-11 November 1998. Content. 2G Experience Challenges 2G versus 3G 3G at the beginning Framework for commercial case conclusion. Medium. - PowerPoint PPT Presentation
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IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 1
U M T SF o r u m
IMT-2000The business case and Key
Markets
IMT-2000 Workshop, St Helier, Jersey, 10-11 November 1998
A presentation from UMTS Forum, Market Aspect Group
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 2
U M T SF o r u m
Content
• 2G Experience
• Challenges
• 2G versus 3G
• 3G at the beginning
• Framework for commercial case
• conclusion
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 3
U M T SF o r u m
2G ExperiencePhasing the Mobile Evolution in Western Europe
Medium Market driver Phase Action Competition MobilePenetration
GSM
phase 1
Voice centric Infancy Attracting
subscribers
1 or 2operators
Marginal
GSM
phase 2
Services
- voice mail
- pre paid
- messaging
- pre-data
Sophistication
Differentiation
Keeping subscribers,
IncreasingTraffic
2 or 3operators
10 to 30%
GSM
phase 2+
-Data (64 kb/s)
-Internet
Maturation
andTechnological
limits
Increasing traffic
Developing dataapplications
PreparingNext Step
3 or 4operators
30 to 40%
UMTS
3rdGeneration
Mature Multimedia
Content (2Mb/s) New Age
Developing the market
40 to 50%
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 4
U M T SF o r u m
2G ExperienceCompetition at Operator Level
Operator 1
Operator 2
Operator 3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Million Subscribers
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 5
U M T SF o r u m
2G ExperienceThe future will very likely be Service Driven
Time
Infra.Capex Coverage
CapacityQoS Services
Packet Data capability
Deep Indoor Coverage
Approach per Segment
A typical investment profile from Operator’s perspective, in 2G packet data capability is an issue.
Was National
in 2G
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 6
U M T SF o r u m
ChallengeDelivering information services over mobile
Informing Searching Banking & Transacting
Travelling and Scheduling Weather Publishing
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 7
U M T SF o r u m
ChallengeThe value proposition to the end user must be obvious(and affordable)
21 3
4 5 6
87 9
+3312567889Phone Number
&
0# *
Voice centric
command
Voice …and more
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 8
U M T SF o r u m
3G at the beginningEarly Adopters likely to be Business Users
Mass Market
Business
Starting point of mobile businessVIP
Penetration Process over
Time
Solution for Corporates
Pre-paid
Data Services
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 9
U M T SF o r u m
3G at the beginningNon voice adoption over mobile (Western Europe)
50
100
150
200
250
300
350
1995 2000 2005 2010 2015
10%
20%
30%
40%
50%
60%
70%Million Subscribers Multimedia Penetration
among mobile users
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 10
U M T SF o r u m
ChallengeIndustry relationships
• End user categories in different contexts
– Value Proposition (Voice and Non Voice based services)
• Operators
• Service Providers
• Value Added /Content Service Providers
• Vendors (Infrastructure, Terminal, Software Application, Components…)
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 11
U M T SF o r u m
ChallengeNew relationships
Content Providers
Value AddedService Providers
Service Broker
Service Providers
ISP or Corporate
Access Network Operator
Core Network Operator
Subscriber/User
Usage
Billing
Payment New for Mobile Networks
Note: this is a logicaldiagram and do notaddress the possibilitiesof integrations.
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 12
U M T SF o r u m
2G versus 3G
New productExisting Product
Existing Market
New Market
Where 2G is = Mobile Voice
Where 2G will be = Information Service on mobile with data
bearer service
Where 3G will be
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 13
U M T SF o r u m
2G versus 3GExpanding The market
Voice Multimedia
Fixed
Mobile 3G
3G will enable a wide range of services and combinations with fixed
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 14
U M T SF o r u m
3G at the beginningIMT-2000 is likely to emerge in a strong 2G installed base
• UMTS will emerge as islands in an ocean of GSM
• Dual mode terminals will be key
0
50
100
150
200
250
98990001020304050610%
20%
30%
40%
50%
60%
70%UMTS
GSM
analogue
Penetration
Million SubscribersPenetration (%)
• Western Europe case
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 15
U M T SF o r u m
3G at the beginningRevenue Side
0
10
20
30
40
50
60
70
80
90
1994 1995 1996 1997 1998 1999 2000 2001
Data-Professional
Data Corporate
Voice-Corporate
Voice-Consumer
Voice-Professional
Billion $
Mobile market prediction for Western Europe by 2005
0%0% 50%50% 100%100%
Mobile Multimedia Mobile
200 millions
104 billion ECU
6.3 billionMbytes/month
Users
ServiceRevenues
Traffic
The likely traffic Revenue picture in Western Europe before 3G
Source: UMTS Forum 97
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 16
U M T SF o r u m
Framework for commercial case
• Business versus mass market
• Services what are they?
• How different from 2G Services?– Business, Social, Entertainment
• Timing-time to market dates
• Basic relationship of Service Charge
Revenue = Volume users x Traffic mix x Charge per Service
Less Cost of Distribution and Delivery of Service
Equals Margin/Profitability of Services
IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 17
U M T SF o r u m
Business Case for IMT-2000
• Will vary among operators
• Need full industry support to meet a scale effect (vendor concerns)
• Need new relationships and content player to bring information services on mobile (Challenge)