4. Materi - Dirk Wolter (Alcatel Lucent)

8/10/2019 4. Materi - Dirk Wolter (Alcatel Lucent)

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Agenda

1. Introduction

2. OpenAccessBusinessModel

3. Technologychoiceandnetworkeconomy

4. Summary:proposalforregulatoryinitiatives


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3 |TMTFinance&InvestmentConference DirkWolter|April2010 Copyright 2010AlcatelLucent.Allrightsreserved.

Introduction


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Emergingmarketsseepentupdemandforconnectivity


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withcurrent

service

availability

woefully

inadequate


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andincumbentfixedinfrabeingofpoorqualityand

onlyavailableinurbanareas


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makingmobile

access

the

preferredoptionforusers

andforoperators.

Businesscase

Rolloutspeed

Uptake

Convenience

Availability

Affordable


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EmergingMarkets

DevelopedMarkets

withstrongprofitabilitydespitelowARPU.

Source:Frost&Sullivan,March2010


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ChallengesofWirelessBroadbandinEmerging Markets andSolutions

BroadbandCapacity

How

to

improve

broadband

experienceand

QoS?

Fixedbroadbandinfrastructureforresidentialusertooffload

mobilenetworks

QoS mechanismsfordifferentiatedserviceoffering

BroadbandoptimizedRANbasedonHOM(16QAM,64QAM),

MIMO,IP(eg.HSPA+,LTE,WiMAX)

Morespectrum

Smallercellsizes microcells

Datacentric(IP)backhauling

Marketdefragmentation

Lowfrequencybands:450/700/850/900MHz

Digitaldividend,LTE700MHz

Refarming(e.g.UMTS900)

Lowpower

consumption

and

alternative

power

solutions

Satellitebackhaulorlongrangemicrowavesolutions

Governmentincentiveprograms(USO/USF)

BroadbandCoverage

Howtoextendbroadband

coverageinto

rural

areas?


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OpenAccessBusinessModel


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Introduction

Governmentsarelookingforwaystoincreaseproductivity,nationalcompetitive

advantageandgrowGDP.

Withinthiscontext,Regulatorsareexaminingwaystorestructuretheinfocomm

industryto

stimulate

innovative

service

development

and

enable

commercially

viable

openaccesshighspeedbroadbandnetworks.

Highcostoflastmileinfrastructureandregulatoryuncertainty aremajorobstaclesforthe

widedeploymentofbroadbandnetworkinfrastructure.

Governmentprojects(NBN)andlongtermregulatoryinitiatives(suchasOpenAccess)

helpovercomingtheseissues.

Governmentsoftensubsidizethebuildoutofnationalizebroadbandinfrastructure

throughaPPP

(Public

Private

Partnership)


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OpenAccessModel

PrinciplesandEconomicalBenefits

OpenAccessModel=Separationofphysicalinfrastructurefromserviceprovisioning

Allowssharingoftheexpensivephysicalinfrastructureacrossmultipleoperatorsi.e.

improvescosteffectiveness

Nondiscriminatorytermsforserviceproviders(equalaccessandcharges)

Networkowner(N.O.orNetCo)focusesoninfrastructure,typicallyaimingfora

maximumofcoverage

MultipleService

Provider

(Communications

Operator,

C.O.,

OpCo)

ride on

the

NetCos

infrastructureandfocussolelyonattractiveserviceoffering


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Optionsforimplementation

#1 #2 #3 #4 #5


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Optionsforimplementation

Model#2

o AustraliasNBNCo (A$43b)

o NewZealand

(still

evolving)(NZ$1.5b)

#1 #2 #3 #4 #5

Model#5

o UK(BThasoperationalseparationofBTOpenreach (level0,1)offeringservicesto

customersincluding

BT

Wholesale)

o CitybycityinitiativesinplaceslikeAmsterdamandNordiccountries

o SingaporesOpennet andNucleusConnect(S$4b)

Model#1

o Statusquoinmanycountries,suchasIndonesia

o Localloopunbundlingnormallyaprecursortoseparation

GeneralObservations

Noonesizefitsallmodel dependsongeographiccomplexityandstateofcompetitiveness

Regulators

must

be

guided

by

an

understanding

of

desiredcoverage,

price

point

and

quality

of

service

o Thiswillidentifysubsidyrequired(topdown)

Consensusexistsacrossallmodelsthatcompetitiondoesnotexistatthebottompassivelayer


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Singapore Next Gen NBN Industry Structure

Blazing the Trail: Singapores Next Generation National Broadband Network (Next Gen NBN)

StructuralSeparation

Operational

Separation


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SingaporesNationalBroadbandNetwork(NBN)

TheTransformationoftheTelecomLandscapeinSingapore

OperationalSeparation


SingaporesNewIndustryStructure

NetCo

LicensetooperateandS$750msubsidyawardedinSept2008toSingTelledOpenNet Consortium,comprisedof

SingTel,Axia,

SPH

&

SP

Tel

Greenfieldbuildofpassivenetworkcomprisedmostlyofcivilworks(ducts),darkfiberandOSS/BSSsystem

FTTx networkrolledoutstartinginlate2010throughto2013

OpCo

LicensetooperateandS$250msubsidyawardedinApril2009toSharHubs Neucleus Connect.

WholesalesbroadbandconnectivitytoarmslengthRSPs onopenaccessterms

GreenfieldbuildofactivenetworkcomprisedofFTTx (GPON,AE),optical,IPCoreandOSS/BSS

RSPs

Packagesandsellsbroadbandservicestocorporate,government&consumerendusers

IncumbentssuchasStarHubareexpectedtobecomeRSPs,aswellasrumoured newentrantssuchasBT& NTT,aswell

asOver

the

Top

players


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18 |TMTFinance&InvestmentConference DirkWolter|April2010 Copyright 2010AlcatelLucent.Allrightsreserved.18 | Open Networks for Industry & Public Sector | Florian DAMAS |September 2008

Residential Nonresidential

RetailsServices (SetbyeachRSP) (SetbyeachRSP)

OpCo

100/50Mb/sforSG$21/month

1.0/0.5Gb/s forSG$121/month

(includeNetCo Wholesaleprice)

100/100Mb/sforSG$75/month

1.0/1.0Gb/s forSG$860/month

(includeNetCo Wholesaleprice)

NetCo SG$15/month SG$50/month

Asymmetrical offers for residential or business users with GPON

Symmetrical offers for business users with GPON and P2P/Active Ethernet, up to 1/1 Gb/s

Wholesale Service Offerings from OpCo to RSPs

Class A: real-time (video conferencing, premium VoIP, gaming)

Class B: near real-time (IPTV, video streaming, gaming, video conferencing)

Class C: mission critical (ATMs, data centres, control systems)

Class D: best effort (Internet surfing, VoIP)

SingaporeNextGenerationNationalBroadbandNetwork(NBN)


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Technologychoiceandnetworkeconomy


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Economicsofbroadbandworksagainstoperators

Vastincreaseoftrafficthroughdataapplications

Trafficincreaseisnolongermatchedbyproportionalrevenueincrease

Drivesaneedtotransformnetworks

ma

Traffic,Capacity

Revenue

DataEra

VoiceEra

Cost

Source:Unstrung

Conventional

networks

not

ready

for

data

traffic:

Revenue

Cost

ServiceAwareDataEra

VoiceEra

Traffic

Capacity

Source:AlcatelLucent

Data

Centric

Networks

flatten

cost

curve:

This presents challenges inlowARPU emerging markets


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AirInterface/Standardsevolutions

AlltechnologieshaveNOWanupgradepathtoLTE

CDMACDMA

3GPP23GPP2

TDMATDMA

3GPP3GPP

Deployed Arriving Nextstep

HSDPA

HSUPA

CDMA1X

BWABWA

IEEEIEEE

4GITU

100Mbps

(fullmobility)

1Gbps

(hotspot)

StillOFDM

!

GERAN

Evolutions

WiMAX16dWiMAX

16e

TDD

TDSCDMA

EDGE

WCDMA

LTER8/R9

FDD/TDD

HSPA+

EVDO

RevA/B

GSM

LTER10

FDD/TDD

UMB

TDSCDMA

Evolution

Recent updatesNewProposal

WiMAX16m

TDD/FDD


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DU

MU

SU

RU

Wimax

2300

UMTS 2100

UMTS 900

GSM/EDGE

900

LTE 700

0

1

2

3

4

5

6

7

8

Radius (km)

Technology

Morphology

Typ ical Cell RadiusWimax 2300

UMTS 2100

UMTS 900

GSM/EDGE 900

LTE 700

Impactofstandards&frequencyonnetworkeconomy

Frequencyimpactdominatestechnologychoice

Notes:Wimax,UMTSandLTEbasedon

128kbpsULatcelledgewithmobile/USB

device. GSM/EDGEatbesteffortdatawith

mobiledevice. Antennaheights30m

DU/MU;40mSU/RU

Inrural areas,networkeconomy is driven by radiopropagation,andtherefore

cell radius

Allocation oflow frequencybands is critical for rural areas

LowerbandssuchasDigitalDividendbands(700MHz)offermuchbettersystemeconomics


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Impactofstandards&frequencyonnetworkeconomy

Anillustration:800MHzvs 2.6GhzinRuralEnvironment

TypicalCellRangesforLTEshowasignificant

advantageofusinglowerfrequencies

Betterindoorpenetration

2.6GHz 800MHz

RelativeCAPEXandtypicalcellradiustocoveracertain

areainsuburbanenvironmentasafunctionofthe

frequencybandusedfordeployment

100% 126%

328%

455%

675%

1230%10

8.9

5.5

4.7

3.9

2.9

0%

100%

200%

300%

400%

500%

600%

700%

800%

900%

1000%

1100%

1200%

1300%

1400%

1500%

700MHz 850MHz 1900MHz 2500MHz 3500MHz 5800MHz

FrequencyDeployment

Relativ

eCapex(%)

0

2

4

6

8

10

12

CellR

adius(km)

Source:BusinesscasesummaryforNGMNMilanSallaba

Thetype&amountofspectrumavailabletoanoperatordeterminesitsabilitytocompeteinthefuture.


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Althoughmobileisthepreferredbroadbandtechnologyinemerging

markets,itwilleventuallyneedtobecompletedwithfixedtechnologies

Bandwidthperuser(Mbps)

0.1 0.2 0.3 0.4 0.5 1 2 5 7.5 10 12.5

2

16

64

100

200

400

800

1000

Broadband SDTV HDTV

Fibre+FTTN

Wirelessonly

DSLCO+

Wimax/FTTN

Wireless+Satellite

MobileBroadband

is

aquick

and

easy

approach

to

address

broadband

demand

but

flat

rate

dataoffersnotsustainable

Fixedtechnologiesscalebetterforhighdensityareasandgreaterbandwidthdemand

Optimumsolutionisacombinationofmultipletechnologies

Density(users/sqkm)


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withtherighttechnologymixbeingacombinationoffixed&wireless

Fixed (egFTTx,DSL,GPON)andCellular (HSPA,

LTE,EVDO,WIMAX)

Dense

Urban Urban Suburban

Rural

Cellulartechnologiesatlowfrequency

bands(eg HSPA,LTE,EVDO)

Extreme Rural

Wireline complements WirelessinUrban Areas

Satellite?(USO

funds?)


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Summary

TelecommarketinIndonesiahasstillexcellentopportunitiesforgrowth

o connecttheunconnected byimprovingaffordability,extendingreachanddifferentiatedquality(SLA)

o pentupdemandforbroadband&multimedia

Butface

distinct

challenges

o lowARPU(below$3permonth)

o geographiccomplexity&diversity(extremeurbantoextremerural)

o regulatoryambiguities&fragmentedcompetition

Keytechnologyconsiderations

o specifictechnologymixneededtoovercomeuniquechallenges

o allmajorlegacyradiotechnologies(GSM,CDMA,WiMax,UMTS)willevolvetoLTE

o theright

amount

&

type

of

spectrum

is

critical

to

compete

in

the

market

ruralmarketsneedlowfrequencybands(forbettercoverage)

urbanmarketsneedaquantityoffrequency(forsufficientcapacity)

o althoughmobileisthepreferredbroadbandtechnologyinemergingmarkets,itwilleventuallyneedtobe

complementedwithfixedtechnologies


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Summary:

Proposalforregulatoryinitiatives


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RegulatoryInitiatives(1/3)

Lackoftelecomanddatacoverageinruralareas:

Businesscasefortelecomservicesinruralareasischallengingneedtobestimulated

throughcrosssubsidies(USO/USFfunds,NBNprojects)

Availabilityofadditionalradiospectrum,suitableforruralareas

700MHz,DigitalDividendallowswidercoveragebutthisspectrum ismostlyassignedfor

broadcastingservices.

Rebalancespectrumassignmentsforbroadcastingandtelecommunicationservicesneeded

(DigitalDividend).


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Managingtheupsurgeofbandwidthdemandinurbanareas

InIndonesia,wirelessbroadbandservesasasubstituteforlackingfixedinfrastructurebutisfacingcapacitylimits

MobileNetworks:AdditionalSpectrumneeded

2.5GHzbandgraduallytobefreedupforLTE(Band7andBand38).

2.3GHzband allowsLTETDDoption(Band40)

Investmentsin

fixed,

fibre

based

infrastructure

needed

to

offload

wireless

networks

fromresidentialbroadbandtraffic.However,Investmentsinfixednetworktechnologytypicallyhaveaslowerpaybackpattern.

NationalBroadbandProjectswithinvestmentsintosharedfixednetworksinfrastructure(OpenAccessModel)areaneffectivestimulus.


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RegulatoryinitiativestoimproveTelcoeconomics:

EncourageadherencetoIndustryStandards

FixedNetworks:Restructuringfromverticallytohorizontallyintegratedoperators

Allowing/promotinginfrastructuresharing


Subsidized,regulatedOpenAccessModel

MobileMarket:OvercomeMarketandSpectrumfragmentation

4to6operatorscouldbeanoptimum


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www.alcatellucent.comwww.alcatellucent.com

DirkWolter

CTONSEARegion

[email protected]

+659650

6928

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4. Materi - Dirk Wolter (Alcatel Lucent)