Pr

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DigiWorld Summit
15/11/2006
Contact IDATE Frédéric Pujol, Head of the mobile
services practice BP 4167 34092 Montpellier
Cedex 5 33 (0)4 67 14 44 46 Mob 33 (0)6 82
80 46 20 f.pujol_at_idate.org
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The future of mobile between providing content
and FMC
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Mobile trends the 100 penetration rate today in
W. Europe

• Threats - Western Europe
• Decreasing ARPU
• MNO revenues and EBITDA margins under pressure
• Data services growing slowly voice SMS still
  represent the lions share of revenues
• Regulatory pressure

• Opportunities
• M2M a penetration rate ?200 tomorrow?
• Increasing voice usage
• 3G development, HSDPA launch
• Fixed Mobile Convergence (FMC)

Voice traffic share of mobile networks in 2005
Mobile growing fast on a worldwide basis
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 New  mobile services will increase data ARPU

•  PC-like  inter-personal communication
• Email, MIM, Blogs
• Other promising services
• LBS, auctions

• Current revenue generators
• SMS
• Wallpapers
• Ringtones
• Games

• Hopes for growth will depend on the value of its
  content
• Mobile TV Video downloading
• Music

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Mobile TV services in broadcast mode are already
here
DVB-H services ITALY Tre has launched the first
commercial DVB-H service together with
broadcasters RAI, Mediaset and Sky Italia (July
2006) Walk TV Inlimited access to mobile
TV 13 channels - Series A competition of Italian
football 3 EUR for 24 hours, 12 EUR for one
week, 29 EUR for one month and 99 EUR for 12
months. Only one handset was available (LG
U900), priced between zero and 249 EUR 150 000
subscribers (Sept. 2006)
At the same time TIM launched its DVB-H service
TIM TV comprising 11 channels including La7 and
MTV Italia The Samsung handset SGHP920 comes free
with a subscription. TIM TV ? UMTS subscribers
(starting at 49 EUR a month) Includes access to
Series A and the Champions League

• Real cost of a DVB-H network?
• If indoor coverage needed ? same of base
  stations as a mobile network (in the same
  frequency band)?
• MBMS mobile networks strike back?
• Services operate on 3G frequency bands. Same
  network antenna masts, additional cards in base
  stations

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Introduction of broadband and convergence
strategies appear to be driving it towards fixed
internet models

•  Real  mobile broadband
• HSDPA is here
• HSUPA is coming

• Fixed Mobile Convergence
• Impact of FMS (Fixed Mobile Substitution)
• Why did FMC failed 10 years ago? Why home-zone
  services disappeared 10 years ago?
• Which strategies today?

• Convergence of networks
• FMC
• Full-IP transition has started

• Convergence of operating systems?
• The actors Symbian, Microsoft, Linux
• Microsoft OS in the mobile terminal

• More content creation for mobile actors?
• Mobile operators content management (DRMs)
• Or a shift towards Internet models ( dumb
  pipe )?
• A regulators dream?

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Mobile broadband innovation is here

• Increasing data rates

• From  broadband  to very high data rates
• Demos in Japan and in Europe
• 4G, LTE, IMT-Advanced

Mobile BWA technological positioning

• Mobile WiMAx an accelerated product roadmap

Source IDATE in BWA report

• Broadband Wireless Access Mobile WiMAX
• Complement to existing mobile networks in
  developed countries
• A solution in developing countries?

Source IDATE in BWA report
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FMC strategies (1/2)

• Integrated operators
• (Re-) Integration of the mobile subsidiary
• Network convergence
• Converging offers OnePhone (KT), Unik (FT)

Source KT

• Mobile Network Operators
• From the mobile-only strategy (Vodafone lt 2006)
• to FMC (mobilexDSL services)
• SFR buys Tele2 France, Vodafone, Orange UK

• Fixed operators
• MVNO agreements
• BT,
• NeufCegetel (business segment)

• ISPs
• Wi-Fi/GSM
• Free,
• NeufCegetel - Twin (residential segment)

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FMC strategies (2/2)
HomeZone services

• WiFi/Mobile integration Technological enablers
• UMA but restricted to 2G
• SIP

• HappyZone (SFR), HomeZone (02 Germany), Vodafone

Source O2
3G for fixed Internet access
Source Vodafone
Source Vodafone
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Regulation really maters

• Regulatory pressure
• SMS
• MVNOs
• International roaming
• International data traffic?
• New entrants in the European mobile sector

• Spectrum issues
• Short term
• Digital dividend mobile TV 3G in UHF bands
• 3G  extension band  (2.6 GHz)
• Refarming issues UMTS in 2G frequency bands
• Longer term WRC 07 (October 07)
• IMT advanced bands ( 4G )
• Dynamic access to spectrum

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MVNO Development
Markets shares of new mobile service providers ()

• A worldwide phenomenon with major differences in
  terms of market shares
• Europe first region in terms of providers
• Broad definitions of MVNO/ESP and SP
• Contrasts between Northern and Southern Europe
  (Advanced in Denmark, emerging in Italy)
• The USA first country in terms of MVNO/ESP/SP
  subscribers
• gt30 millions MVNO subscribers in Western Europe
  60 up in two years
• Major impacts of the low-cost/no-frills option in
  WE
• ARPU decrease 14 in Denmark
• Price fall 50 for SMS, 40 for voice (1H2003,
  Denmark)

Source IDATE in MVNO report
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MVNOs Towards Higher Sophistication,
Customization and ARPU
Communities
Distribution brand extension
Heavy data users
Content/Media
ARPU
Source IDATE in MVNO report
No-frills
Sophistication
Voice and SMS
Increasing data
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Key questions

• Will new services provide strong revenues
  margins for mobile operators?

Operating systems what is at stake?
Which role for mobile actors in the value chain?
Impact of FMC?