July 25 th, 2010 HOW BROADBAND IS RESHAPING OUR MARKETING LANDSCAPE - MOBILE BROADBAND THE GAME...

July 25th, 2010

HOW BROADBAND IS RESHAPING OUR MARKETING LANDSCAPE- MOBILE BROADBAND THE GAME CHANGER-

CIZMIC CONSULTING

CANTOCaribbean Association of National Telecommunication Organizations

2www.cizmicconsulting.com

HOW BROADBAND IS RESHAPING OUR MARKETING LANDSCAPE

TABLE OF CONTENTS

Changing uses of broadband and shift in the industry

Speed matters

Mobile broadband

– Trends in 4G

– Importance of the ecosystem

– Importance of spectrum

– Evolution of Internet access devices

– Services and prices (data caps, unlimited plans, speeds, ...)

WiFi the bridge between mobile and fixed broadband



CHANGING USES OF BROADBAND

FROM TO

Basic Service Impersonal Single Service Best Effort Low Speeds Fixed, expect

subpar mobile broadband service

Single Device Nice to Have

Service

Full Service Personalized Multiple/Blended

Services Guaranteed

Performance Very High Speeds Fixed and Mobile Multiple Devices Must Have Service

“OLD” BROADBAND “NEW” BROADBAND



Content

Subscriber

Content

Subscriber and content

moving closer together applies

pressure to conventional

model

Subscriber

Industry Ecosystem Ecosystem Shift

SHIFT IN THE INDUSTRY

Traditional service

provider “silos”Service

provider type and service

definitions determine

d by technology

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ECOSYSTEM RECONSTRUCTION

Content

Subscriber

Deconstruction of

traditional model

results in horizontal specializati

on

Operational efficiency

and economies

of scale will

differentiate

operators

Access providers

Search

Storefronts

Social Media

( . . . )










SizeSize

Photo ~4 Megapixel

Music – Download

Podcast – News

TV Show – 40 minMovie –

compressed

Movie – Best Quality

What matters most is how fast you can upload/download Fiber to the

Home (FTTH)

Next Gen

GPRS/EDGE & Dial Up 1st Gen

SPEED MATTERS

< 0.5 Mbps< 0.5 Mbps 1.5 Mbps1.5 Mbps 10 Mbps10 Mbps 100 Mbps100 Mbps 1 Gbps1 Gbps

HSPA, DSL

ADSL, HSPA+, WiMAX

LTEAdvance

d LTE

4 MB4 MB 63 s63 s 21 s21 s 3.2 s3.2 s 0.3 s0.3 s 0.03 s0.03 s

4 MB4 MB 63 s63 s 21 s21 s 3.2 s3.2 s 0.3 s0.3 s 0.03 s0.03 s

114 MB114 MB 30 m 24 s30 m 24 s 10 m 8 s10 m 8 s 1 m 31 s1 m 31 s 9.1 s9.1 s 0.9 s0.9 s

200 MB200 MB 53 m 30 s53 m 30 s 17 m 46 s17 m 46 s 2 m 40 s2 m 40 s 16 s16 s 1.6 s1.6 s

1.5 GB1.5 GB 6 h 39 m6 h 39 m 2 h 13 m2 h 13 m 20 m20 m 2 m2 m 12 s12 s

2.5 GB2.5 GB 11 h 10 m11 h 10 m 3 h 42 m3 h 42 m 33 m 20 s33 m 20 s 3m 20 s3m 20 s 20 s20 s



BROADBAND MOBILE TRAFFIC DRIVERS

More Wireless Connections

Wireless Outgrows Fixed 3.3x

Faster Wireless Speeds

Faster Media Apps/Content

2G

Enhanced Computing

10-fold speed increase> 5.6 billion devices> 1.5 billion M2M nodes

Video = 2/3 traffic mix

By 2015 …

Wireless Momentum Metrics


GPRS/EDGE HSPAServiceCapabilities

10 20 50 200 400 1000 5000 +Kbps

Avg DL User Data Rates

Texting Interactiv

e Messaging

Forms based applications

Email text (no attachments)

Picture Messaging

Images GIF, JPEG Sounds Basic

Animations

Audio / video clips (<10 sec.)

Web browsing Corp Apps MSFT Office

Applications

Video / Audio streaming

Enhanced MMS Clips (~1-2 min) Text and Audio books

(graphics) Photo/Music

downloading

Video conferencing Movie downloads High resolution

pictures Real Time VoIP Full Album MP3

downloads DVB-H

FROM GPRS TO LTE HSPA+/LTE



Faster networksBetter

Smartphones, Tables, Netbooks,

…

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0

2010 2011 2012E 2013E 2014E 2015E

0.24 EBper mo

0.6 EBper mo

1.2 EBper mo

2.2 EBper mo

3.8 EBper mo

6.3 EBper mo

1 EB = 1,000,000,000,000,000,000 bytes

MOBILE DATA EXPLOSION

Mass adoption

More application

s

More traffic

Source: Cisco 2011

Increasing computing power, larger displays, and higher screen resolution



WIRELESS TRAFFIC GROWING FASTER THAN REVENUES

Voice dominant

Time

Data dominant

Revenues and traffic decoupled

Traffic

Revenues

Ultimate challenge is to close the gap between the data growth and revenues growth to make mobile data profitable

Initially operators launched flat rate to drive adoption rates - going forward this approach will create capacity issues

Operators must therefore spend to increase capacity to capitalize on this opportunity spectrum issues will however be a challenge

Video represents the fastest growing mobile data traffic - the high bandwidth requirement accelerates the gap between data traffic and revenue growth



TECHNOLOGY AND SPECTRUM CONSIDERATIONS To address the wireless paradigm operators would have

to:– address network efficiency to ensure that network costs grows

more slower than bandwidth capacity determined by amount of spectrum, spectral efficiency, number of cell sites

– new revenue and pricing models– organizational efficiency and cost management– customer services and segmentation

Implications:– technology with greatest spectral efficiency proven to be LTE– seek additional spectrum, as technology alone will not address

demand regulators will have to make available additional portions of spectrum for LTE (i.e. 700 / 800, 1700 / 1900, 1800, 2600 MHz)

– intelligent traffic routing to be able to control content and scale of services offered

– Next Generation OSS facilitate the introduction of new services and pricing/billing



COVERAGE VS. SPEED

LTE 42Mbps+

HSPA+ 21Mbps

HSPA+ 7.2Mbps

HSPA+ 3.5Mbps or HSPA at 1.2 Mbps

EDGE

Coverage Area Graceful Speed Steps

LTE 42Mbps+

HSPA+ 21Mbps

HSPA+ 7.2Mbps+

HSPA+ 3.5Mbps+

EDGE

Broadband will form part of a speed ecosystem that offers service to all data capable devices and coverage conditions

Example



Rich call – presence, multimedia with image sharing, VoIP, video sharing

Rich media – video streaming, video conferencing, video telephony

Devices

Service providers building new

ecosystem and business model

Content and partnerships

App store

BUSINESS

CONSUMER

Add and monetize

value(QoE, open, secure

network)

Revolutionary devices

(enriched, open services)

4G ECOSYSTEM


RETAIL STRATE

GY

DEVICE STRATEGY

NETWORK/

SPEED STRATE

GY

PRODUCT

STRATEGY

SUPPORT

STRATEGY

CUSTOMER

STRATEGY

Habit

Device

Affor-dability

Needs

Success is dependent upon establishing an ecosystem of mutually supporting strategies, enabled by Smartphone devices, tablets, etc.

IMPORTANCE OF DEVICE STRATEGY



THE MANY SCREENS OF LIFE …



PRICE BENCHMARKS(3G/4G)

Operator Plan Type Period Data Limit Price (US$) Price per GB (US$)

1 Day 200MB $4.0 $20.07 Days 300MB $11.0 $36.7

30 Days 400MB $31.6 $79.030 Days 1GB $34.8 $34.830 Days 4GB $47.5 $11.9

Overage 1MB $0.0 $50.0

1 Day Unlimited - 1 GB fup $5.6 $5.67 Days Unlimited- 2GB fup $19.6 $9.814 Days Unlimited - 3GB fup $25.2 $8.4

30 Days 4GB - 8GB fup $38.6 $9.730 Days 8GB - 10GB fup $55.4 $6.930 Days Unlimited - 15Gb fup $89.0 $5.9

1 Day 100MB $6.1 $61.07 Days 1GB $18.3 $18.330 Days 7GB $59.8 $8.5

30 Days 500MB $18.3 $36.630 Days 1Gb $23.2 $23.130 Days 3Gb $35.4 $11.830 Days 7Gb $47.6 $6.8

1 Day 100MB $2.5 $25.07 Days 1Gb $7.0 $7.030 Days 2GB $18.5 $9.230 Days 8GB $29.5 $3.7

30 Days 250MB $8.5 $34.030 Days 2GB $18.0 $9.030 Days 8GB $28.5 $3.6

1 Day 100MB $3.0 $30.07 Days 250MB $10.0 $40.030 Days 1Gb $30.0 $30.0

30 Days 1GB $25.0 $25.030 Days 5GB $40.0 $8.030 Days 15Gb $70.0 $4.7

Digicel Trinidad

Setar Aruba

LIME Cayman

Prepaid

Prepaid and Postpaid

Prepaid

Postpaid

Prepaid

Postpaid

Digicel Barbados

Prepaid

Postpaid

BTC Bahamas

Prepaid

Postpaid

Caribbeanprice per GB/month varies between ~$4 to $70 depending on carrier and plan

Source: operators websites 2012



PRICE BENCHMARKS (3G/4G)DATA USAGE

Fair Usage clauses are in place to avoid a few users from degrading the experience for most users. Most providers have “data caps” to avoid abuse and to provide tiers of pricing based on usage.

1GB 5GB 10GB 25GBInstant messaging 1 Hours 5 Hours 10 Hours 25 Hours

General Web Browsing (incl. social media) 4 Hours 20 Hours 40 Hours 100 Hours

Send/Receive Emails 200 Emails 200 Emails 400 Emails 1000 Emails

Voice/Video Over IP 1 Hour 5 Hours 10 Hours 25 Hours

Photo Downloading/Uploading 10 Photos 50 Photos 100 Photos 250 Photos

MP3 Downloads (1 song) 4 MP3 20 MP3 40 MP3 100 MP3

Movie Downloads 2 Movies 4 Movies 10 Movies

Software Downloads 1 Software 1 Software 2 Software 5 Software

Streaming Video 0.5 Hours 2 Hours 4 Hours 10 Hours

Streaming Audio 1 Hours 2 Hours 4 Hours 10 Hours

Ebooks Downloads 1 Book 4 Books 8 Books 20 Books

Data UsageMonthly Activity

NB Figures are based on typical user average and are to be used as a guide.



WI-FI BUSINESS MODEL

For public Wi-Fi businesses, it initially proved to be tough to entice enough users to pay for such “out and about” connections. It became a niche for traveling workers and retention tool for major cable and telco broadband/mobile providers

– Broadband / mobile customers got “no extra charge” Wi-Fi hotspot access – indirect business model

“Customer retention – not direct customer fees – might be the biggest part of the carrier public hotspot business model”, CTO BelAir Networks

– Adding metro hotspot access can provide a 10 to 15% churn reduction

Free55%

Paid45%

Public Wi-Fi business models[US 2010]

Source: JiWire 2010

The latest evolution; Mobile providers find public hotspots as a useful way to offload traffic from 3G and 4G networks to the fixed network Smartphones are changing the nature of the hotspot business, and becoming

important sources of broadband connections for Smartphones



• Networking Equipment - Access Point/Router – Wireless Router– Enterprise Access Point, Switch/Controller or

Router– Mobile Access Point

• Networking Equipment - Gateway – Cable, DSL or Other Broadband Gateway

• Consumer Electronics - Cameras – Digital Still Camera– Portable Video Camera– Networked Web Camera

• Consumer Electronics - Audio Devices – Digital Audio (speakers, receiver, MP3

player)• Consumer Electronics - Video Devices

– Set Top Box, Media Extender (incl players & recorders)

– Display Device (eg. television, monitor, picture frame)

• Consumer Electronics - Gaming Devices – Game Console or Adapter

• Consumer Electronics - Storage and Servers – Media Server– Network Storage Device

• PCs and Computing Devices– Laptop Computer– PDA (Personal Digital Assistant)– Ultra-mobile PC

• Printers – Printer or Print Server

• Voice-Capable Devices– Phone, dual-mode (Wi-Fi and cellular) or

single mode– Smartphone

• Other – Barcode Scanner– Other

Wi-Fi devices

Established ecosystem Thousands of Wi-Fi

devices CAGR (2009-2015): 25% WiFi

enabled mobile handset penetration

WI-FI TRENDS



OFF LOADING 3G/4G AND IMPACT OF WI-FI

Wi-Fi hotspots is becoming a way to defray mobile network investment by shifting huge amounts of traffic to the landline network and create more affordable ways to support bandwidth-intensive services, such as video

Public Wi-Fi business model is in the mist of a change, from “fixed broadband / mobile customer retention and acquisition” to a “major wireless access method and services platform”

Wi-Fi’s high speed + Wide availability = crucial to offload stressed carrier mobile network traffic

According to Morgan Stanley in 2010, “42% of 40 million iPhone usage on Wi-Fi plus 100% of 28 million iTouch usage on Wi-Fi. iPhone users may be in Wi-Fi enabled location 70% of time.”

Voice and data services and

content

3G / 4G macrocell base station

s

Mobile broad-casting solutio

n

Indoor systems- Wi-Fi- Femtocells

Side-loadin

g

3G /4G devices



THANK YOU

Richard St. JohnVP Sales and MarketingCizmic Consulting18503 Pines Blvd.Pembroke Pines, FL 33329954.330.1047 (M)[email protected]

mailto:[email protected]

http://www.cizmicconsulting.com/



BACKUP



TDMA

GSM

CDMA 2000

GPRS WCDMA

CDMA 1x

EDGE

Ev-DOEv-DO revA

HSPA

AnalogLTE

2G 2.5G 3G 3.5G 4G1G

MOBILE STANDARDS EVOLUTION

3G+/4G networks enable network operators to offer users a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency. Services include wide-area wireless voice telephony, video calls, and broadband wireless data, all in a mobile environment



OPERATORSwant to be the provider of integrated services

END USERSwant Convenience, Simplicity and Freedom of choice

Home

Road

Work

Consumer

BusinessUnified Billing

Consistent & UbiquitousIntegrated Services

Simple to use

Less devices

Easy to administer

Personalized

An

y A

ccess

MULTIMEDIA/VIDEO

ENTERTAINMENT

COMMUNICATION

INFORMATION

WHAT CONSUMERS AND OPERATORS WANT

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July 25 th, 2010 HOW BROADBAND IS RESHAPING OUR MARKETING LANDSCAPE - MOBILE BROADBAND THE GAME...

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