Maximilian Sandmann Vice Chairman WG3 COST TERRA

Roel Schiphorst Researcher University of Twente

Less focus on owning the architecture:

Rise of Managed Network Services

Reselling network capacity to virtual operators

MVNO’s

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

Major diversification of operators ends up to be the spectrum they (temporarily) own

Moore’s law requires increasing amount of Basestations

◦ Puts stress on operators for bringing them online and rising energy 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

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

◦ We’re in some cases already in a reality service degradation (dropped calls/data charges/data throttling, separate subscriptions for each device)

Disintermediation: Emergence of sharing platforms to enable 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?

Evolution: Wifi 2.0/”offload”: collaboration between hotspots and operators (“Republic Wireless model”), -> primarily driven by operators

Disruption: (the “FON model” or“Boingo, netblazrmodel”): “connectivity platform” with “store” for consumers and privileges for its participants.

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

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

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

Potential of great competition (“long tail” diversification of offerings) in a certain geographical area

Partnerships with fixed operators and “second-layer” companies like Boingo

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

Potential lower QoS

Hardware:-Limited hardware upgradability-No applications model-Only supporting one standard (802.11)

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 for regulators, plus enables diversification between band managers (in the command-and-control case it’s only one)

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

“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 the MVNO model

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

Regulator/Band manager : Enabling more dynamic spectrum access

potentially generates more transactions/economic value per MHz

Entrepreneur : Enabling more dynamic spectrum access and

frequencies allocation generates better adaption to market conditions

Consumer perspective: basically a “spec argument”, more dynamism

could enable more (and cheaper) application scenarios.

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

Should we primarily look for CR/SDR “killer app” use

cases 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 of “business fragmentation” (incl. potential negative consequences like patent issues)

-What stakeholders control and what weaknesses could spur disruption

-Regulatory and technology models fit for disruption

Thank you