rca 2g-3g-4g is there a generation gap v32g/3g/4g: is there a generation gap ? focus on the us...

2G/3G/4G: Is There A Generation Gap ?

Focus on the US - T1/T2/T3 Market

October 22, 2009

Amit Patel

CTO, Strategic Wireless Accounts

Howard J Sears

CTO / SE, Strategic Wireless Accounts

All Rights Reserved © Alcatel-Lucent 20092 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009

2G/3G/4G: Is There A Generation Gap ?

AGENDA

� Drivers towards the next generation

� Definition of 2G/3G/4G technology

and solutions

� Update on the “Big 7” US wireless

carriers

� Update on the remaining Tier 2/3 US

carriers

� Implications on migrating or delaying

migration to 3G or 4G

� Predictions for 2010 and 2011


American End Users are Preparing for the 4G Lifestyle

TODAYUS Advanced Users Are Discovering

the Power of Wireless Broadband

TOMORROWUS Wireless Users Will Demand and Consume

Enriched Services and QoE

Consumers: video, image, location

Business: collaboration, video conference, data transfer

Trusted Web Experience More Presence and Location

Enriched Services

New Connected Devices Pay For QoE and Productivity Gain.

Accept Ads on some Consumer Services

� 3200 US consumer surveys (2500 Adults, 700 Teens, 8 Focus groups)

� 1000 US enterprise surveys (SME & large enterprises, 8 Focus groups)

Consumer Likelihood of Signing Up for 4G

24% 33% 31% 10%3%noyes

Corporate Likelihood of Signing Up for 4G

noyes

37% 37% 20% 4%

++ + +/- -++ + +/- -

Alcatel-Lucent 4G Primary Research


Smart Phone Phenomenon – USC Mobile User Survey Results

0%

20%

40%

60%

80%

100%

120%

$0 $1-$49 $50-$74 $75-$99 $100-

$149

$150-

$199

$200-

$249

$250-

$299

$300-

$349

$350 and

over

Smart phone Standard phone

Smart Phone Category is the Only Device Segment That’s Grown Over the Past Year(for 2Q09 WW, overall segment had -6% growth, smart phones were at +27% growth)

By 2013, 23% of all new handsetsare expected to be smart phones

AT&T is experiencing 350% year overyear growth on their data network overthe past two years due to iPhone users


Source: Pyramid

Global Active Mobile Data Users Per Application (Millions)

Information Service 86%

200

400

600

800

1000

1200

1400

06 07 08 09 10 11 12

MMS

Email

Ringtones

Graphics /images

Games

Information Service

Music

Video

Mobile data users growth rate between 2008-2012

Video 194%

E-Mail 83%

Games 95%

MMS 99% Graphics/Images 77%Music 136%

Ringtones 62%

What Can We Learn From the 3G Lifestyle ? – It’s All About the Applications


Apps driven by advanced gaming and

video (streaming, conferencing,

TV)

Consumer Application Prioritization

2.89

2.83

2.60

2.54

2.37

2.31

2.26

2.20

2.14

2.14

2.14

2.14

2.14

2.09

2.09

2.06

1.97

1.97

1.91

1.91

1.86

1.86

1.80

1.69

1.69

1.63

1.63

1.57

1.57

1.57

1.51

1.40

1.34

1.34

1.23

1.17

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Mobile Wii

3D virtual mobile w orld

Multi-player mobile gaming

Mobile gaming emotion and gesture capture

Real-time collaboration

Video conferencing

Mobile-only participatory game show s

Personal cloud computing

"Life Recorder"

Participatory content generation

Mobile HDTV

Real-time status updates via streaming uploads

2-w ay video streaming

Instant personal storage and backup

Location-based streaming multimedia

Vehicle virtual black boxes

GMaps street view w ith video

HD music

Video realistic 3D w alkthroughs

Real-time “mobile seating”

Vehicle security

Full-length text, video, interactive maps and 3D

RFID asset security tracking

Personalized real-time mobile video recommendations

Personalized streaming infotainment

Real-time streaming mobile monitoring

Personalized tracking

Video search recommendations

Long-form dow nloads

Video MMS

Home security

Mobile bookmarking

Identigrams

Peer-to-peer content sharing

"Line cutting"

Mobile consumer electronics monitoring and navigation

16

20

- Consumer Application Prioritization -

4G Threshold

3G Threshold


Apps driven by real time

information, multi-media messaging,

music, Internet browsing and simple games


Enterprise Application Prioritization

2.83

2.60

2.60

2.37

2.37

2.26

2.26

2.26

2.20

2.20

2.20

2.20

2.20

2.17

2.14

2.09

2.09

2.09

2.09

2.09

1.97

1.97

1.86

1.86

1.86

1.86

1.80

1.80

1.80

1.80

1.80

1.80

1.80

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Virtual presence

M obile collaborat ion

M obile emergency response

M obile video pat tern recognit ion

Airborne video swarms

Streaming educat ion

M ultiuser video auctions

M obile telecommands

3D design collaborat ion

Video 911 service

Video sales assistant

Location & target ing

Campus security

Remote controlled weapons

Surgical support

Worker safety

Virtual navigat ion

Traf fic sensing

Fleet management

M obile SCM

Parents' 24/7 surveillance

Authenticat ion

Design Trouble-shoot ing

Electronic Art icle Surveillance

M obile medical image t ransfer

M obile SCADA

Toll/ t raf f ic management

3D/holographic shopping

Locat ion-based multimedia descriptions of real estate propert ies

Insurance claim comparison

Embedded sensors

Real-t ime video/image-based insurance claims

Audio/video/map guides streamed on-demand to tourists

1.74

1.74

1.71

1.69

1.69

1.69

1.69

1.66

1.63

1.57

1.57

1.57

1.57

1.51

1.51

1.51

1.46

1.46

1.46

1.46

1.40

1.40

1.40

1.40

1.40

1.40

1.34

1.34

1.34

1.29

1.23

1.17

1.17

1.11

0.0 0.5 1.0 1.5 2.0

M ultimedia user forums

Public transit multimedia on-demand & channel programming

Pat ient monitoring

Bonded networks

M obile arbit rage t rading

Advanced regulatory services

Field research via video recording

Carbon footprint monitoring

M ultimedia public safety alerts (most wanted, amber alerts)

M ass transit t rip planning

Real-t ime mobile st reaming surveillance

Pushcast sales tool (product updates to sales force)

Real-t ime streaming mobile quotes

Unmanned bank branches

Location-based streamed ad insert ions (for mobile video)

Location-based streamed advert ising

Locat ion-aware video EM R

Video customer support

Parole management

Remote ATM

M obile test ing and dosing

Repet it ive motion gauges

Card-less payments

Real-t ime stock t rading

Targeted investment offers with mult imedia analysis

In-store recommendations, coupons, of fers

M obile t imecards

M obile “ Briefcase” stored on network

Remote video site monitoring

Road/bridge monitoring

In-building environmental controls

Installat ion direct ions

“ Safe Deposit Boxes”

Real-t ime mobile banking and alerts

- Enterprise Application Prioritization -

4G Threshold

47

20

3G Threshold


Apps driven by mobile multi-

media collaboration,

video (streaming, conferencing, sales portal, surveillance)

Apps driven by real time data xfer, location

services, mobile desktop, etc.


Definition of 2G/3G/4GTechnology and Solutions


Note:• Dates shown are standards completion dates (or expected completion dates.)• “Initial VoIP” not as spectrally efficient as “Optimized VoIP”. “Optimized VoIP” for 802.16 is TBD.

• “Mobility” indicates when each particular standard supports mobility inter-operability between the terminal and BTS.

2G/3G/4G - Evolution of Standards

802.16m

Rel’5(HSDPA)

Rel’6 (E-DCH, MBMS)

R’99(UMTS)

1xEV-DORev. B

Rel’7 (EnhancedHSDPA)

EBCMCS

802.16e802.16 (WiMAX)

802.16a 802.16dNew 802.16e? FDD Profile?

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

BCMCS

LTE

3GPP2

3GPP

IEEE/WiMAX Forum Mobility

Mobility

Init.VoIP

Opt.

VoIP

1xEV-DORev. 0

1xEV-DORev. A

Opt.

VoIP

UMBcdma2000

1X

Mobility

Init.VoIP

OFDM

OFDM

OFDM

OFDM

802.16m

Opt.

VoIP

March Ratification


PCRF

Small and/or Big Steps to Get to 2G – 3G – 4G

e

LTE

1X

DO

RevAPDSNDO RNC

RNC

GSM

UMTS

HSPA+SGSN

RNC

HLR

HSS

PCRF

HLR

PCRF

GGSN

4G

3G3G

2G


What is 2G/3G/4G? What Download Data Rates Can You Expect?

0

20

40

60

80

100

120

140

160

1.4 MHz/1.4MHz

3 MHz/3 MHz

5 MHz/5MHz

10 MHz/10 MHz

20 MHz/20 MHz

LTE Downlink Data Rates

25.812.86.63.91.6LikelyAverage

150.873.436.722.18.8Theory(Peak)

LTE Advertises 100+ Mbps� Need a lot of contiguous

spectrum to theoretically

achieve 100+ Mbps (20 MHz

up + 20 MHz down)

� Real world likely speeds will

be much lower

Rural Carriers Typically Have 5 MHz up and 5 MHz down

� 100 Mbps is NOT possible with this much spectrum

� OFDMA (LTE/WiMAX) benefit is reduced at lower

bandwidths

2.96.66.04.23.73.63.753.0LikelyAverage

58.036.736.728.821.014.49.37.2Theory(Peak)

3.1

61.0

0

10

20

30

40

50

60

70Mbps

EVDORev 0

EVDORev A

HSPA HSPA+ HSPA+2x2MIMO

LTE 2x2MIMO

LTE4x2MIMO

WiMAX2x2MIMO

WiMAX 4x2MIMO + BF

FDD 5 MHz Up / 5 MHz DownTDD 10 MHz


Update on “BIG 7”

AT&T

US CellularVerizon

Sprint

T-Mobile

MetroPCS

Cricket/Leap


4G Excitement – US Carriers Selecting LTE and WiMAX

Verizon Completes Successful LTE 4G Data Calls in Boston and Seattle Aug 14, 2009

Verizon expects to launch its LTE 4G network in up to 30 markets in 2010, covering 100 million people. Full nationwide coverage by 2013.

AT&T to Deliver 3G Mobile Speed BoostMay 27, 2009

Upgrade to HSPA 7.2 already started and planned to complete in 2011. Network will evolve to LTE. LTE trials to begin in 2010 with deployment beginning in 2011.

Sprint/Clearwire Introduces WiMAX in 10 New MarketsSep 1, 2009

Clearwire continues to move ahead with WiMAX. The carrier is planning to cover 120 million pops by the end of next year.

MetroPCS to Launch LTE in 2010Sep 3, 2009

MetroPCS is skipping EV-DO and moving straight to LTE. MetroPCS plans to launch LTE technology by end of 2010 to increase capacity and speed

T-Mobile USA Stays on 3G PathAug 29, 2009

The carrier has built out the lion share of its AWS spectrum and now covers 200 million people. Plan to ride out HSPA+ curve before moving to LTE.

US Cellular Accelerates EV-DO, Weighing LTE TrialMay 6, 2009

US Cellular will hold off on making any LTE decision for the time being.

Leap Wireless Focuses on EV-DOAug 12, 2009

Company continues to build out its AWS spectrum and now covers 92 million people. Cricket still leading with voice services over data.


Update on Other Tier 2/3 Wireless Carriers


Alcatel-Lucent Estimate on T2/T3 Deployments

CDMA

� ~10% have deployed EVDO Rev A

� ~40% have deployed EVDO Rev 0

� ~50% have deployed 1X

GSM/UMTS

� 0% have deployed HSPA+

� ~10% have deployed HSPA

� ~50% have deployed EDGE

� ~40% have deployed GPRS

Very few havedeployed 2.5G or 3Gin rural markets

For Those With Only 2G Networks – It’s All About Voice and SMS !!


T2/T3 Provider Thought Process

CDMA

� Rev 0 requires new hardware in the BTS and RNC

� Rev A requires a software upgrade on top of Rev 0

� Adoption to Rev 0 / Rev A higher where roaming revenues

with Sprint or Verizon are available

� Once deployed, most find that take rates are higher

than anticipated

� Backhaul networks are being improved earlier than planned

GSM/UMTS

� UMTS and HSPA is an overlay solution, requires new Node Bs, RNC and new/upgraded MSC

� HSPA+ is a software upgrade on top of UMTS

� Too little deployment of UMTS in T2/T3 to identify any trends

� Many customers applied for Broadband Stimulus funds to deploy a HSPA+ network

� If successful, could see ~15-20 new UMTS deployments by mid 2010

� If unsuccessful, could see ~5-10 new UMTS deployments by mid 2010

Both Types of Service Providers Wondering If They Should Wait And Deploy LTE Only


Implications on Migrating orDelaying Migration to 3G/4G


Worldwide Mobile Subscriber Forecast

0

500

1000

1500

2000

2500

3000

3500

2009 2010 2011 2012 2013

GSM WCDMA

CDMA CDMA EV

LTE WIMAX

Source: Alcatel-Lucent,Dell’oro (2009)

2G

2G3G

3G

4G

There’s A Very Long 2G and 3G Window


Factors to Consider Regarding Migration to 3G/4G

Business Strategy

� Customer profile – Young, middle age, old?

Low/middle/high income? Credit worthy?

� Residential vs Enterprise focus

� Competitive threats from other carriers – early mover

gets greater market share

� Rural Last mile voice/data opportunity

� Is Roaming revenue available ?

� What kind of CPE (data cards, handsets) are available?

At what price point?

� Is there a Mobile Data only market segment?

CAPEX/OPEX Implications

� Time Division (GSM) vs Spread Spectrum (CDMA/WCDMA)

vs. MIMO (LTE/WiMAX) deployment knowledge

� Running overlay networks with many duplicate cell sites

� More back office integration into existing billing and

operations systems

� Is there a switch share opportunity?

4G

3G3G

2G

Ready to Move?

If so – smooth evolution or leapfrog technologies?


Key Attributes Driving Operator’s Technology Choice

While technology is important, a developed eco-system is crucial for success.Alcatel-Lucent are working with industry leaders to bring the next gen ecosystem to life.

Ecosystem:Applications/Content

Devices (Diversity, Availability & Pricing)

Time to Market

Infrastructure CapEx& Capacity

Sensitivity Analysis on Operator Business Case

Adequacy with SpectrumAvailability/Frequency (No. of Cell-

sites)

Roaming / Inter-workingPartnership to provide adequate coverage/Inter-

working with existing network and subscriber base

.

.

Implications

Mature ecosystem will take 2+ years

to develop.

Understanding peer Operators’

decision is critical for Roaming.

Inter-working within Standards may

be more tightly integrated.

Efficient spectrum needed, requiring

less cell sites.

Follower vs. Leader strategy manages

risk and ensures stable ecosystem.

Migration strategy to NG technology

vs. fork-lift upgrades.


A Bit More On Time To Market

Maker Entry 2009 2010 2011 2012 2013

WSP 1 Mid-2009 50% 34% 29% 25% 26%

WSP 2 Early 2010 38% 35% 30% 26% 26%

WSP 3 Mid-2011 12% 16% 18% 22% 22%

WSP 4 Early 2012 0% 10% 15% 17% 18%

Others Mid-2013 0% 5% 8% 10% 8%

Market Share

HSD Competitive Market Scenario


Do You Have Spectrum for 3G or 4G ?

Frequency Band GSMCDMA

(Rev0/A)

W-CDMA

(UMTS)LTE WiMAX

700MHz 2Q10(Tier 1)TBD

(unlikely)

850MHz Cellular X X X TBD

1900MHz PCS X X X TBD

1700MHz/2100MHz AWS X X 2Q10 (Tier 2)

2500 MHz BRS/EBS X

X2

1900 MHz 700 MHz

LTE at 700 MHz well suitedfor Rural broadband marketonce equipment is GA and

devices are available

CDMA Rev 0 or UMTS HSPAwell suited for voice andbroadband data in therural market NOW


New Spectrum vs Farming Scnearios

Existing UMTS or CDMAAdd New Band

Capacity DrivenNew spectrum application Hot spots / femto cells

Existing GSM and UMTSRefarm Existing Band

Capacity DrivenNew spectrum application Hot spots / femto cells

850 1900

Existing GSM and UMTS

AWS

Refarm band to add LTE

850 1900 AWS

Greenfield DeploymentRefarm Carrier

Smooth LTE IntroductionDeploy UMTS or CDMA and refarm to later add LTE

700

Refarm carrierto add LTE

AWSOR

850

Existing GSM and UMTS

1900 850

Refarm carriers to grow UMTS/add LTE

1900Existing GSM and UMTSRefarm Existing Carriers

Coverage Driven

Free GSM carriers to grow UMTS and later add LTE

Current Future Scenario

UMTS CDMA LTELegend GSM

850 1900

Existing UMTS or CDMA

AWS700 850 1900

Add new band for LTE

OR

Deploy UMTSor CDMA

700 AWSOR

NothingAvailable


LTE CPE Availability

3GPP Device Band Plan – Ones Applicable to US

� Band 13 – 700 MHz Upper C [Driven By Verizon]

� Band 4 – AWS Bands [Driven By AT&T and MetroPCS)

� Band 17 – 700 MHz Lower B/C [Driven By AT&T]

� Band 12 – 700 MHz Lower A/B/C [No One Driving Yet]

Rural Carriers have 850, 1900, AWS and 700 Lower A/B/C

� Initial data cards from established vendors is focused on Band 13, followed

by Band 4 and 17; “high end” voice/data handsets will follow 6-12 months

after data cards

� No known devices for Band 12 yet (due to interference issues of lower A)

� When do these devices become affordable? Exclusivity deals?

UMTS Data Cards Are $60-$100 today (7.2 Mbps)LTE Data Cards Could Be $300+ in 2H2010 (Likely Band 13 Only)


Implications on Migrating or Delaying Migration to 3G/4G - SUMMARY

Begin with upgraded IP/Ethernet

backhaul that easily grows to 4GMaintain low rate T1 connectivityBackhaul

Learn about positives and pitfalls with a

wireless data network

Behind the curve on managing a

wireless broadband networkData Experience

3G devices are plentiful and affordable

(even at low volumes)

Limited set of mid/low end LTE CPE

until 2012 and voice support TBDDevice Eco-System

Cost for new radio network and data

network – most can be re-used with LTE

Remains steady (with no new

equipment being deployed)OPEX/CAPEX

Capture the 3G/4G lifestyle segmentARPU is flat/declining without data

offeringsRevenue

Capture greater share as the 1st/2nd

provider with wireless broadband

Could lose share as Tier 1s come in

with mobile broadbandMarket Share

Jump into 3G NowContinue to Wait for 3G/4G

If Done Right, There Is Substantial Investment Protection Between 3G and 4G


Predictions for 2010/2011


Predictions for 2010/2011

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