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© Copyright 2008. Yankee Group Research, Inc. All rights reserved.
Evolution towards 4G
Phil Marshall, PhDSenior FellowYankee Grouppmarshall@yankeegroup.com
© 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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 3February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 4February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 5February 2009
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?”
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Anywhere Network –The Collision Media, Communications, Internet and Mobility
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.. but this challenges network economics
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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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 9February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 10February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 11February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 12February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 13February 2009
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
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Varied service provider migration strategies
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 15February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 16February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 17February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 18February 2009
Evolution of Mobile Internet Devices - Netbooks
LaptopNetbooksSmartphone
Acer Aspire
WiFiWiMAX3G/LTE
AtomMoorestownProcessor
Device
Intel ClassmateDell InspironLenova
Notebook
Connectivity
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 19February 2009
Evolution of Mobile Internet Devices - Consumer Electronics
LaptopNetbookMobile Internet DevicesSmartphone
UMPC Navigation GamingCommunications
WiFiWiMAX3G/LTE
AtomMoorestownProcessor
Device
Entertainment
Connectivity
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 20February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 21February 2009
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
© Copyright 2008. Yankee Group Research, Inc. All rights reserved. Page 22February 2009
Thank You – Questions?Phil Marshall
pmarshall@yankeegroup.com