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3G Mobile Services in the Arab Markets - Regional Issues and Challenges

3G Mobile Services in the Arab Markets - Regional Issues and Challenges

Dr. Ibrahim A. KadiProfessor of Communication & Electrical Engineering,

King Saud University, Riyadh, KSASenior Member IEEE

ITU Regional Seminaron IMT-2000 for the Arab Region

Doha (Qatar) 29 Sep. - 1 Oct. 2003


TopicsTopics

F Mobile Telecommunication

F Mobile Communications in the Region

F Mobile Data Services

F Regional Issues for 3G

F Conclusions

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Mobile CommunicationsMobile Communications

FFASTEST GROWING SECTOR (1991-2003):n Users : (16? 1329) 83 fold (45% AAGR)

n Revenues : ($19B ? 414B) 22 fold (30% annually)

F DIFFERENT SERVICES/SYSTEMS:n Land Mobile (e.g., GSM, IS-95)

n Satellite Mobile (Thuraya)

n Voice & Data (GSM, 3G)

n Data only (INMARSAT-C)

n Paging only (ERMES, FLEX)n Positioning (GPS, Glonas)


The Market Just keeps GrowingThe Market Just keeps Growing

0

500

1,000

1,500

2,000

2,500

1982 84 86 88 90 92 94 96 98 2000 02 04

Fixed

Mobile

> 50% of countries have more mobile than

fixed phones (2002)

June 2002:Mobile surpasses fixed

Internet surpasses PC’s

InternetInternetPC

Source: ITU

ICT USERS (millions)

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Mobile Comm. HistoryMobile Comm. History1946 First Mobile Service (USA)

(FM, One Base Station, 80 Km area, 120 KHz BW)

1965 MTS (Bell) : l Direct Dialing l Full Duplex

1970’s Cellular Concept

1980’s First Generation (1G) Systems (AMPS, NMT)

1980’s Development of First Digital System (2G): GSM

1991 GSM enters Service

1998 First Mobile Satellite Service (Iridium!!!!)

1998-…. 3G System Standardization (ITU: IMT2000)

2001 First 3G Services launched (Korea, Japan)


Mobile Overtakes FixedMobile Overtakes Fixed

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Mobile World GrowthMobile World Growth

215 318 49

0 740 95

5 1329

1155

2% 3% 4% 6% 9% 13%20%

27%38%

110%

91%75%

54%

102%

0

200

400

600

800

1000

1200

1400

1990 91 92 93 94 95 96 97 98 99 '00 '01 '02 '030

0.2

0.4

0.6

0.8

1

1.2Subscribers (M) As % of fixed

(Source: ITU & EMC)


Mobile World Indicators (May 2003)Mobile World Indicators (May 2003)

F Total Subscription …………… 1217 million

ð 2 % Analog ……… 24 m òò

ð 98 % Digital ………. 1195 m ñññ

ð 71 % GSM ………. 863 m ñññ

ð < 1 % UMTS ………. 1 m ñ

FGSM Data Subscribers (MMS & GPRS) … 25 million

(3% of GSM, 2% of all Mobile)(Source: EMC)

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Mobile Systems Market Shares1218 Million (May 2003)

Mobile Systems Market Shares1218 Million (May 2003)

Analog (24.5) 2.0%

W-CDMA (0.53 M)0.04%

CDMA (156 M)12.8%

D-AMPS (111 M)

9.1%

PDC (62 M)5%

GSM (864 M)70.9%

Source:EMC


Major Issues / ChallengesMajor Issues / Challengesn Frequency Spectrum Shortage

n Difficult Mobile Channel Environment

n Growing Demands / Market Pressure for :

è Subscription / Air Time (Capacity)

è Better Service (Quality / Coverage)

è Newer Services (Data, Messages)

è Security / Privacy (SIM, Encryption)

è Lower Prices (Competition)

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Spectrum ShortageSpectrum Shortagen Single Most Critical Issue in Mobile Growth / Performance (QoS)

n Limited Allocations for Land Mobile -l Non-mobile Services Allocated Most of Spectrum Below 1 GHzl GSM Spectrum 890-960 MHz, 1800 MHz , 1900 MHz

l New 3G Allocations (160 + 200MHz) - WRC 2000, Istanbul

n Spectrum License Costs

n Need to Maximize Spectrum Utilization Efficiency

n Basic Law of Economics: Limited Supply, Growing Demand

n Basis for any Meaningful Pricing Strategy: - Set Tariffs / Air Time Cost as per Spectrum Used


TopicsTopicsFFF Mobile TelecommunicationMobile TelecommunicationMobile Telecommunication

üMobile Communications in the Region

FFF Mobile Data ServicesMobile Data ServicesMobile Data Services

FFF Regional Issues for 3GRegional Issues for 3GRegional Issues for 3G

FFF ConclusionsConclusionsConclusions

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World GSM Subscribers864 Million (May 2003)World GSM Subscribers864 Million (May 2003)

Arab World (28 M)

Africa (28)Asia Pacific

(333 M)

Rest Of Asia (43)

Americas (32)

Europe (400 M)

Source:EMC


ICT -- How do we compare?ICT -- How do we compare?

17.8 18.7

9.3 9.7

2.62.9

8.0

8.7

0

5

10

15

20

25

Main lines Cellular PC Internet

Pene

tratio

n (%

), 20

02

Sub-Saharan AfricaSouth-central AsiaSouth-eastern AsiaArab regionLatin America & CaribbeanWORLD

Source: ITU World Telecommunication Indicators database

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FFF Mobile Communications in the RegionMobile Communications in the RegionMobile Communications in the Region

üMobile Data ServicesFFF Regional Issues for 3GRegional Issues for 3GRegional Issues for 3G

FFF ConclusionsConclusionsConclusions


Mobile Evolution (1/2)Mobile Evolution (1/2)F First Generation (1G) (1980s)

n Analog - voice onlyn FDMA: AMPS, NMT, TACS

F Second Generation (2G) (1990s)n Digital (voice, Data, SMS)n TDMA (GSM, PDC, DAMPS)n CDMA (IS-95)

F Data-Enhanced Second Generation (2.5G) (2000s)n Wireless Access Protocol (WAP)n General Packet Radio Service (GPRS): 171 Kb/s (Max)n Enhance Data GSM Evolution (EDGE): 384 Kb/s (Max)

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Mobile Evolution (2/2)Mobile Evolution (2/2)

F Third Generation (3G) (2000s)n ITU Standardization IMT-2000 (1998 - ……)

n Mostly CDMA (UMTS = W-CDM0A, CDMA2000)

n 384 Kb/s - 2 Mb/s

n Multimedia, Mobile Internet

n First Service Launch in Japan and Korea» NTT DoCoMo - Sept. 2001 (delayed from May)

» Competitors (DDI & J-phone) - Q1 2002

» dual-mode Hansets (PDC + 3G)


SMS : the Success Story!SMS : the Success Story!n Simple, limited, But Exceptionally popular.

n Standard GSM Service: “m-mail” or “g-mail”

n Worldwide - Dec 2002: 30B g-mails (1SMS/user/day)

n Offered by nearly all Regional GSM Operators:ð Very Popular especially among Youth ð Expanding Revenue Source

n Regional Limitations:ð Language Barriers / Arabic SMS length / Handsetsð Voice Centric Societiesð Reading / Typing Skills

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SMS : the Success Story!SMS : the Success Story!


SMS: Build on the Success…(MMS etc.)SMS: Build on the Success…(MMS etc.)

n Enhance SMS Revenues to Boost ARPU

n MMS the next wave – Logical extension of SMS

n Innovative SMS (&MMS) Services, e.g.:ð Ring Tones, Logos and Caricatures

ð Instant SMS vs. delayed SMS (off peak at lower rate)ð Market Segmentationð SMS Commercial Ads. (local, metropolitan, National)

ð Local and Culture-Specific Messagesð SMS-to-Email & vice-versa, Email Message Notificationð SMS-to-Voice (Reading Problems, Arabic Screen) - Net2Voice

ð Voice-to-SMS (Typing Problems, Non-Arabic Keyboard)

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GSM Data ServicesGSM Data Services


Multimedia Revenue GrowthMultimedia Revenue Growth

44 33

21481

3

0

20

40

60

80

2000 2008

Advertising

m-Commerce

Events (email,music,download,etc.)

Speech

Forecast average revenue per user, Europe (Euro)

Source: Wireless Internet Report, Morgan Stanley Dean Witter

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Wireless Access Protocol (WAP)Wireless Access Protocol (WAP)n WAP (introduced in Europe in 2000) was a disappointment:ü Poor data speeds / Shortage of handsetsü Limited Useful Content / Service Providersü Enhanced by GPRS

n Additional limitations in the Region:ü Low Penetration (Mobile & Internet)ü Language Barriers: Content and Arabic Handsetsü Voice Centric Societiesü No Real Consumer Demand

n Bleak Future for WAP (alone) in the Region


General Packet Radio Service (GPRS)General Packet Radio Service (GPRS)n Introduced in limited markets in Europe (2002) :ü Improved Data Services / Speedsü A Step on GSM Migration Path to 3Gü Shortage of Handsets / Applicationsü Uncertain Commercial Success

n Same Additional limitations in Arab World: Penetration, Language, Voiced-Centric, illiteracy, Content, Demand

n Questionable Future in the Region but necessary for: image and eventual (?) migration to 3G

n Recommendation for Regional Operators: limited targeted pilot deployment

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FFFMobile Data ServicesMobile Data ServicesMobile Data Services

ü Regional Issues for 3GFFF ConclusionsConclusionsConclusions


3G Issues/Challenges for Regional Operators3G Issues/Challenges for Regional Operators

¥ Market Issues – Is the Market Ready�

¥ Business Case / Business Issues

¥ Service Issues

¥ Regulatory Issues

¥ Deployment Issues

¥ Technology Issue

¥ Consumer / Cultural Issues

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Market IssuesMarket Issuesþ Is the Market Ready�

þ Demand (current and future, Real vs. perceived)

þ Geo-market Studies,

þ Customer profiles:

D >50% of current Arab subs are prepaid (low ARPU)

D Data Users are Youth/Students with low budgets

þ Internet Penetration in the Arab World

þ Affordability of 3G Services


IT Digital DivideIT Digital Divide

8

2.6 30

10

20

30

40

50

60

Hosts per1000

InternetUsers

PCs

World

Arab

Africa

Asia

Europe

N. Am.

Latin Am.

PCs and Internet (per 100 inhabitant)

15


Internet users per 100 peopleInternet users per 100 people

9.7

2.6

0

10

20

30

40Y

em

en

Sudan

Maurita

nia

Com

oro

s

Djib

outi

Syria

Alg

eria

Mo

rocco

Lib

ya

Egypt

Ara

b

Pale

stine

Tunis

ia

Jo

rda

n

Om

an

Sa

ud

i Ara

bia

World

Ku

wa

it

Qata

r

Le

ba

no

n

Bahra

in

UA

E

pe

ne

tra

tio

n

2002

Source: ITU World Telecommunication Indicators database


Business IssuesBusiness IssuesF Is there a Business Case for 3G ServiceF Is it VIABLE?FCompeting Solutions:

e.g. Broadband, WLL (Wi-Fi or 802.11x) F Capital Expenditure (CAPEX),

F Operating Expenditure (OPEX),

F Financing, Revenue Growth

F others: Competition, Pricing, market segmentation, Promotion / marketing

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Regulatory IssuesRegulatory IssuesF LicensingF Spectrum Availability / CostF Interconnection / RoamingF QoS RequirementsF Content Monitoring / ControlF Competition PolicyF Others


Service IssuesService Issues¥ Service Portfolio¥ Content¥ Coverage¥ Handover¥ Roaming¥ QoS / Priorities¥ Third Party Services

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Deployment IssuesDeployment IssuesFWhich Standard:

W-CDMA (UMTS) vs. CDMA-2000?

F Migration Strategies

F Co-siting

F Dual or Tri-Service (2G/2.5G/3G)

F Handover

F CAPEX / OPEX


Technology IssuesTechnology IssuesF Standards

F Mature Products / solutions

F System Integration / Support

F Proprietary Solutions

F Rapid Technological Advance

F Falling Cost of technology solution

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(1/2)Consumer/Cultural Issues (1/2)Consumer/Cultural IssuesF Regional Consumers:

è High Illiteracy Rateè poor typing inclination / Skillsè are Voice Centric

F Leisure/casual Use in the Region rather than Business:

è Busy Hours in the evening and week-ends rather than during business hours

è SMS popularity / heavy use thru forwarding (jokes/ greetings) rather than typing new messages


(2/2)Consumer/Cultural Issues (2/2)Consumer/Cultural IssuesF Local content (info + Language/presentation)

F English language limitations

F Arabic Language Peculiarities

F User Equipment / mobile sets:è Data enabled (for 3G)è Arabic enabledè Availability / desirability / Affordability

F Consumer Awareness / Education

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Factors on Internet UseFactors on Internet Use

Internet use =

Infrastructure

+ +

Affordability Human skills

Hard factors•Infrastructure•Pricing/affordability

Soft factors•Language/content•Education•Literacy




FFFMobile Data ServicesMobile Data ServicesMobile Data Services

FFF Regional Issues for 3GRegional Issues for 3GRegional Issues for 3G

ü Conclusions

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Conclusions (1/2)Conclusions (1/2)n Build on the Success of SMS: & MMS

è enhanced SMS-Services

è Multi-media Message Services (MMS)

nMobile Data: Regional Markets not Ready

n3G is the Future on the long term (8-10 yrs), but:

too many Uncertainties in the Short-Medium Term


Conclusions (2/2)Conclusions (2/2)n Recommendation for Regional Operators:

üGPRS gradual deployment targeting specific customer segments

üAdopt UMTS (GSM success globally & regionally, interoperability, easier migration, roaming, economy of scale)

üKeep Close Watch,

üPush for 3G Spectrum,

üMinimum Investments

üReassess position in 3-5 years

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Acknowledgements toAcknowledgements toP ITU, QTEL, Seminar Organizers/SponsorsP King Saud University (KSU)P ?Advanced Electronics Co. (AEC)

……… and QUESTIONS ……..

☺ ☺ ☺ THANK YOU ☺ ☺ ☺for your attention

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Topics - ITU€¦ · ITU Regional Seminar on IMT-2000 for the Arab Region Doha (Qatar) 29 Sep. - 1 Oct. 2003 [email protected] 3G Regional Issues & Challenges 2of 40 Topics FMobile