Evolution Towards 4G

© Copyright 2008. Yankee Group Research, Inc. All rights reserved.

Evolution towards 4G

Phil Marshall, PhDSenior FellowYankee [email protected]

© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 2February 2009

Network transformation fueled by market disruption and new business models

• Device and application ecosystems place tremendous pressure on traditional mobile business models

• Mobile service providers are struggling with appropriate timing for network evolution

• Radio spectrum resources are coming under tremendous pressure

• New network design philosophies focused on improving service delivery economics

• As 4G becomes a reality, the traditional radio centric view to network evolution cannot prevail


Drivers and inhibitors for 4G migration

• Radio spectrum allocations and refarming• Channelization (TDD, FDD etc)• Rights and obligations (fixed, mobile etc)

• Technology performance• Ecosystem maturity• Integration and legacy installed base

• Market maturity• Industry structure and competition

• Market demand for broadband services• Propensity to evolve usage behavior• Interest in service personalization

Regulation

Technology

Commercial

End User


Pent up demand for mobile broadband creates opportunities to disrupt status quo

I want to be able to get access to the Internet, email, IM and other online services, where ever

I go and from any device

What is discouraging you from using your mobile phone to browse the Internet

Source: Yankee Group Connected Consumer Survey


Device and service variety is set to proliferate

0% 10% 20% 30% 40% 50% 60%

Personal Navigation Device

Handheld Game System

External Storage

Laptop computer

Portable MP3 Player

Mobile Phone

YG Penetration & Usage survey: Responses to the question: “How many of the following products have you purchased in the last 6 months?”


Anywhere Network –The Collision Media, Communications, Internet and Mobility


.. but this challenges network economics


Ecosystem transformation to the Mobile Internet

Voice Centric

Media Internet Centric

DeviceAccess and Backhaul

Network

Narrowband Usage

Broadband Usage

User Channel

User Channel

Broadband Users

Core Network

Connectivity Centric

Internet Media Centric

Internet

Service/Application Environment

Vertically Integrated

Hybrid Vertical/Horizontal

Tele

phon

yM

essa

ging

Rin

gton

es

Tele

phon

yM

essa

ging

Rin

gton

es

Internet Apps

SanDisk launches 2TB SD card

Spend on Ethernet and IPMPLS is

accelerating

Virtually all Tier 1 carriers establish CDN strategies

Over 50 percent of mobile users

want mobile Internet


Technology led acronym chowder

AMPSNMT

1980

EDGECDMA 1x

UMTS/HSDPACDMA 1xEV DO

IMT-AdvancedWiMAX (802.16)

1990 2000 2010 2020+

1G 2G 3G Advanced 3G and 4G

GSM/GPRScdmaOne

TDMA

HSPA/HSPA+LTE WiMAX

2.5G Advanced 3G

Dat

a Sp

eeds

~10kbps

~100kbps

300-500kbps

1-10Mbps

100Mbps


Technology led acronym chowder

AMPSNMT

1980

EDGECDMA 1x

UMTS/HSDPACDMA 1xEV DO

IMT-AdvancedWiMAX (802.16)

1990 2000 2010 2020+

1G 2G 3G Advanced 3G and 4G

GSM/GPRScdmaOne

TDMA

HSPA/HSPA+LTE WiMAX

2.5G Advanced 3G

Dat

a Sp

eeds

~10kbps

~100kbps

300-500kbps

1-10Mbps

100Mbps

IP CentricCircuit Switched


Regulation and spectrum is the lynch-pin for 4G

3.5GHz700MHz 850/900MHz 1.8/1.9GHz AWS 2.1GHz 2.3GHz 2.5GHz

• 700MHz (LTE/WiMAX) –FDD/TDD– Re-farmed broadcast spectrum– Recently licensed in US market and potential availability in other markets– In US market, predominantly FDD channelization with some TDD allocations– Likely spectrum clearance and interference challenges– Excellent coverage, with potentially compromised capacity and device form

factor constraints• 850/900MHz and 1.8/1.9GHz (GSM/CDMA/3G) -FDD

– Traditional cellular spectrum– Challenges in re-farming for 3G because of historical rights, obligations and

economic value assumptions• AWS (3G, LTE, WiMAX) -FDD

– Auctioned in North America and will become available in various Latin America– Will be used for LTE deployments in the US


Regulation and spectrum is the lynch-pin for 4G

3.5GHz700MHz 850/900MHz 1.8/1.9GHz AWS 2.1GHz 2.3GHz 2.5GHz

• 2.1GHz (3G) –FDD (5MHz TDD in most markets)– Traditional 3G spectrum UMTS/HSPA/HSPA+– Candidate for LTE in some markets like Japan – however questionable

whether adequate bandwidth is available• 2.3GHz (WiMAX) -TDD

– Licensed in variety of markets outside of North America– TDD channelization means it is well suited to WiMAX

• 2.5GHz (LTE, WiMAX) – FDD, TDD– Coveted in many markets because of its alignment with WiMAX and 3G-

extension band– TDD prevails in markets where previously allocated for MMDS or satellite– In other markets like in Western Europe adequate spectrum being availed for

FDD/TDD– In the US, players like Clearwire have massive 2.5GHz spectrum resources

• 3.5GHz pre-WiMAX/WiMAX (TDD, FDD)– Allocated for fixed wireless services– Highly fragmented and currently carries lower valuation because of its inability

to support mobility– Has potential to bring much needed bandwidth in overlaid configuration


WiMAX versus LTE ……or……. LTE versus HSPA+

• Available now and targeted primarily towards fixed and portable markets

• Deployments predicated on spectrum availability (will remain subscale until 2.5GHz becomes more readily available)

• Significant activity in emerging markets (India recently become strategic focus for WiMAX community)

• WiMAX TDD focus defines spectrum allocations and truncates opportunities in Western Europe

• Accelerated development of FDD profile likely to align with 802.16m (2011 timeframe)

• Brought to market early in response to WiMAX

• Anticipate protracted timeline with HSPA and HSPA+ will slow development of LTE outside of the US

• CDMA operators like VZ aim to accelerate LTE but will be challenged by lag in ecosystem/business model development

• Other 3G Operators will maintain slow and steady evolution toward 4G unless spectrum is readily available or competition demands an accelerated deployment plans

WiMAX LTE


Varied service provider migration strategies


How realistic is the prospect of a broader connected universe?

• Forecaster’s Dilemma: The “cone of uncertainty” is a function of time, technology, market structure evolution and business model drivers

• Mainstream device category trending -e.g. PND, laptop, DSC, gaming devices- is not necessarily a good predictor of connected market growth

Cone of Uncertainty


Expect more, high profile Kindles, but don’t look at traditional vendors

Driven by Business Models

• 2009 should see active experimentation with alternative models and device categories

• Not likely share takers, but these will influence consumer perceptions• “Success” will be less tied to scale and more directly measured in value

creation and the effective extension of business models in other domains• Opportunity for neutral market makers to facilitate service distribution and

management for next wave of connected devices


Current Mobile Internet Devices

LaptopNetbook3G Smartphones

WiFiCDMA EVDO revA3G HSPA

ARM1176JZF 620MHz

Qualcomm MSM7201A 528 MHzProcessor

Device

Samsung Instinct Apple 3G iPhoneHTC G1

Qualcomm MSM7600 528 MHz

2G Phones

Blackberry Storm

Connectivity

HTC Max 4G

WiMAX


Evolution of Mobile Internet Devices - Netbooks

LaptopNetbooksSmartphone

Acer Aspire

WiFiWiMAX3G/LTE

AtomMoorestownProcessor

Device

Intel ClassmateDell InspironLenova

Notebook

Connectivity


Evolution of Mobile Internet Devices - Consumer Electronics

LaptopNetbookMobile Internet DevicesSmartphone

UMPC Navigation GamingCommunications

WiFiWiMAX3G/LTE

AtomMoorestownProcessor

Device

Entertainment

Connectivity


Conclusions

• Complex regulatory, technical and commercial challenges in bringing 4G to market

• Current technology migration strategies are driven primarily by competition as service providers grapple with the economics of mobile broadband

• Consumers will drive the market towards an open mobile internet and fuel the fire of disruption

• Huge upside potential for players that get it right – but that does not necessarily imply a first mover advantage


2009 Programs

Yankee Group Summit: Broadband Network Investmentand US Economic Recovery at SUPERCOMMJune 9-10, 2009 in Chicago

4G WORLDSeptember 15-18, 2009 in ChicagoFeaturing:• WiMAX World• Mobile Internet World• WCAI 15th Annual International Symposium

- WCAI Broadband and Wireless Policy Summit- WCAI Global Development Committee Summit on Wireless Broadband in Emerging Markets

• Backhaul Summit• Femtocells Summit


Thank You – Questions?Phil Marshall

[email protected]

Documents

Evolution Towards 4G