wireless data in africa – the next...
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Path to Profit – CDG Cape TownApr-08
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Wireless Data in Africa – The Next FrontierPertti Johansson
President, MEAQualcomm, Incorporated
April 08
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QUALCOMM Incorporated
• Global leader in developing and delivering innovative digital wireless communications solutions based on CDMA and other advanced technologies.
• Partners with wireless operators, device manufacturers, independent software vendors, distribution suppliers and Fortune 1,000-class corporations to drive adoption of mobility solutions based on 3G CDMA and other digital technologies.
• Founded in 1985• FORTUNE 500 Company• Revenue of $8.87B in fiscal 2007• NASDAQ Symbol: QCOM• ~5,700 U.S. patents and patent applications of
CDMA and related technologies including WCDMA• Member of the S&P 500 Index• “100 Best Managed Companies” — Industry Week• “100 Best Companies to Work for in America” — FORTUNE
INNOVATION – EXECUTION – PARTNERSHIP
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Qualcomm Operator
Vendor
Technology RequirementsServices, Applications
Phones RequirementsTechnical Specifications
Business Terms & Conditions
Chipsets and SoftwareTechnical Specifications
Engineering Support
Qualcomm works closely with Operators to integrate
their requirements in its products
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GDP and Data Penetration
0
5
10
15
20
25
30
35
Denmar
kNeth
erlan
dsSwitz
erlan
dKo
rea
Norway
Icelan
dFin
land
Sweden
Canad
aBe
lgium
United
King
dom
Austra
liaFra
nce
Luxe
mbour
g
United
Stat
esJa
pan
German
yAu
stria
Spain
New Z
ealan
d
Italy
Irelan
dPor
tugal
Czech
Rep
ublic
Hunga
ryPola
ndGree
ce
Slovak R
epub
licTur
key
Mexico
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Broadband penetration (subscribers per 100 inhabitants, June 2007)
GDP per capita (USD PPP, 2006)
Simple correlation = 0.58
Broadband penetration, June 2007 GDP per capita, 2006
OECD broadband penetration and GDP per capita
Source : OECD
3 0
7 0
1 1 0
1 5 0
1 9 0
2 3 0
0 5 1 0 1 5 2 0P e n e t r a t i o n r a t e o f b r o a d b a n d ( % )
G D P p e r c a p i t a ( E U 2 5 = 1 0 0 )
L U
IE
E EL TL V
Source : Broadband Internet as a Powerful Catalyst for GrowthProf. Edvins Karnitis, Public Utilities Commission, Latvia
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5Source: “Global Mobile/Wireless Forecast”, The Yankee Group, January 2005
• Pricing pressure on airtime will contribute to declining voice revenue• Data plays a critical role to compensate declining voice revenues
Voice & Data Revenue Share in AfricaAs voice revenue declines, the share of data revenue will increaAs voice revenue declines, the share of data revenue will increasese
Voice RevenueVoice RevenuePercent of Total RevenuePercent of Total Revenue
Data RevenueData RevenuePercent of Total RevenuePercent of Total Revenue
91.0%
92.0%
93.0%
94.0%
95.0%
96.0%
97.0%
2004 2005 2006 2007 20080%
1%
2%
3%
4%
5%
6%
7%
8%
Voice Revenue Share Mobile Data Revenue Share
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6Global Cellular Data Market Forecast (2001 - 2011), Strategy Analytics (2007)
Compelling Applications are Driving the Demand for High-Bandwidth Capabilities
Global Data Revenue by Application Type
0
50000
100000
150000
200000
250000
2007 2008 2009 2010 2011
Dat
a R
even
ue ($
Mill
ion)
Video Telephony Messaging Infotainment Personalization
Cellular Data Service Revenue and Share of Total Cellular Service Revenue
125.7144.4
162.9
200.1181.3
24%22%
21%19%18%
0
50
100
150
200
250
2007 2008 2009 2010 2011
Dat
a R
even
ue ($
Bill
ion)
0%
5%
10%
15%
20%
25%
30%
Dat
a Sh
are
of T
otal
Cel
lula
r Rev
enue
Cellular Data Revenue Data Share of Total Cellular Service Revenue
Indicators of the Future: Continuing Growth in Data Demand
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Operators Benefiting From Wireless Data Services
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Wireless Broadband– “Sweet-Spot”
Source: The Yankee Group - EMEA Mobile Market Adoption Monitor and Forecast
8.4%
91.6%
Rev enue Generated by"Medium-Large" Ent. Subs
Rev enue Generated byIndiv idual Cons umer, SOHO,and Small Enterpr is e Subs
Data Market Segments Operator Revenue by Market Segments
“As prices are now, those who require wireless at over 512 Kbps is probably below 5% of total subs and most of these are in the business world.” – Gartner Research
At current pricing levels, most of Operator’s Data Revenue will be generated by subscribers demanding reasonable broadband speeds
(512K or less)
At current pricing levels, most of Operator’s Data Revenue will be generated by subscribers demanding reasonable broadband speeds
(512K or less)
95.1%
4.9%
Individual Consumer, SOHO, andSmall Enterprise Subs
Medium-Large Enterprise (500+empl.) Subs
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EVEV--DOrA*DOrA*
EVEV--DOr0DOr0
WCDMAWCDMA
Data Rate (Mbps)
CDMA is delivering broadband data CDMA is delivering broadband data –– future enhancements are ongoingfuture enhancements are ongoing
1X1X
GPRSGPRS
EDGEEDGE
Wireless Data – How Fast?CDMA Serves the needs of most subscribers with optimum speedCDMA Serves the needs of most subscribers with optimum speed
50-90 kbps (1.25 MHz of BW)
20-40 kbps
70-100 kbps
0 0.25 0.5 0.75 1.0 1.5 1.75 2.0 2.51.25 2.25 2.75 3.0 3.25 3.5
64-250 kbps (5 MHz of BW)
600- 1,300 kbps (1.25 MHz of BW)
300- 700 kbps (1.25 MHz of BW)
400- 1,500 kbps (5 MHz of BW)HSDPA**HSDPA**
Peak Downlink Rate
Typical End-User Downlink Rate (commercial)
Typical End-User Downlink Rate (estimated)
Notes: Peak and average (typical) end-user forward link data rates are shown. CDMA2000 1X, 1xEV-DO and 1xEV-DOrA data rates are achieved in a 1.25 MHz carrier bandwidth, WCDMA (Rel99), and HSDPA (Rel 5, Category 12) data rates are achieved in a 5 MHz carrier bandwidth. * 1xEV-DOrA data rates are achieved with an equalizer and dual-receive antennas.** HSDPA and data rates are device-dependant, with devices supporting up 7.2 Mbps. Peak data rates could increase to 10.2 Mbps and the standard supports 14.4 Mbps.
Average Data Throughput per UserAverage Data Throughput per User
Data Services “Sweet-Spot”
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• Inadequate Wireline Infrastructure• Low penetration rates• Insufficient to cater demand in urban centers• Inexistent in rural area
• Lower-cost and Quicker Deployment than DSL, Fiber or Cable• Truck-roll to consumer premises not required for installs or service-outages
• Reliable • Copper theft and vandalism a huge concern for wireline• Lower/negligible down-time in emergencies/outage situations
• Cutting-Edge• Rapid innovation and improvements
Why Wireless?
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For new deployments, For new deployments, Rev A is a compelling solution for broadband data servicesRev A is a compelling solution for broadband data services
• EV-DO Rev A offers substantial CapEx/OpEx cost savings• 33% lower total cost of ownership versus UMTS/HSUPA
• 27% lower total cost of ownership versus 1X/EV-DO Rel 0
• The price premium for EV-DO Rev A base stations is more than offset by the reduced numberof cell sites required
• EV-DO Rev A (VoIP) may significantly reduce the core network CapEx• EV-DO Rev A (All-IP) Core Network CapEx may be as much as 70% lower than circuit switched
implementations over a ten year period
• CapEx savings also translates into lower OpEx
• EV-DO (All-IP) Transport OpEx is nearly 50% lower than leased lines over a ten year period
Source: CA-CHING OR KER-PLUNK, The Dollars and Sense of 3G, Michael W. Thelander Signals Research Group, LLC
Why CDMA?: Total Cost of Ownership Advantage
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Data Throughput AdvantageData Throughput Advantage - CDMA provides more sector capacity per MHz than WiMAXCDMA provides more sector capacity per MHz than WiMAX
Simulation assumptions:• SIMO full buffer, physical layer performance• 3GPP2 frame work• DV channel model mix• Equalizer gain simulated for DOrA, DOrB and HSPA• 5MHz FDD carrier for HSPA+ , 2 carriers in 2x10MHz. 1.25MHz FDD carrier for DOrA and DOrB, 7 carriers in 2x10MHz* Throughput for 10MHz TDD 2:1 carrier for Mobile WiMAX is 3 Mbps, scaled 1.5 to 10MHz effective FL bandwidth
Mbp
s
Mbps/sector4,5005MHz~4.5 8.96 10.5 10.4
0
2
4
6
8
10
12
Mobile WiMAX* DOrA DOrB HSPA
Effective Physical Layer Throughput per Sector in 10MHz (Mobile Effective Physical Layer Throughput per Sector in 10MHz (Mobile Scenario)Scenario)
Why CDMA?
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CDMA2000 Theoretical CoverageCDMA2000 Theoretical CoverageUsing RF propagation to its best advantage to serve humanityUsing RF propagation to its best advantage to serve humanity
CDMA450 coverage area:3x larger than in 900 MHz12x larger than in 1800 MHz & 2100 MHz
… and with excellent signal-to-noise ratio
12.261814.91800
3.3226926.9950
24.131210.02500
13.655313.31900
2.8271229.4850
1752148.9450
Normalized Cell Count
Cell Area (km2)
Cell Radius (km)
Frequency(MHz)
Source: Lucent Technologies and Antonio Valente, Vice President of ANATEL, Brazil, May 2004.Notes: 1. Flat terrain, tower mounted amplifier, 60 m tower height, maximum power output, and no interference.
2. The above ‘theoretical’ cell sizes may not be able to achieve in certain morphologies and are based on simplistic assumptions. It assumes all parameters are equal: terrain, output power, antenna height, etc.
CDMA450Conventional
CoverageGSM900
GSM1800WCDMA2100
CDMA800
100 m
• Reverse link determines coverage:• The reverse link is used to compare the coverage of different
technologies
• Link budget determines available margin required to achieve a high quality link
• Differences in coverage is affected by a variety of factors, including:
• Morphology• Tower height• Power output• Hardware used, rate set assumptions, etc.
CDMA2000 provides the largest coverage area and thus reduces the number of base stations
CDMA2000 provides the largest coverage area and thus reduces the number of base stations
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Cost = “Greenfield” Network Operations Expenses + Depreciation on Capital
Source: The Economics of Wireless Data, http://www.qualcomm.com/main/whitepapers/WirelessMobileData.pdfAssumptions: On demand Traffic: a) 15% of traffic demand occurs at the busy hour, b) 7,600 kbps / sq km at busy hour, c) 5 MHz
Multicast Traffic: a) 2,000 subscribers / cell, b) 30 live streaming minutes / day at 128 kbps data rate, c) 1.25 MHz
Spectral efficiency affects cost Spectral efficiency affects cost
GPRS$0.42
EDGE0.11
1X$0.06
1xEV-DO$0.02
WCDMA$0.07
CDMA Cost per Megabyte ComparisonCDMA networks support the most affordable delivery of bitsCDMA networks support the most affordable delivery of bits
Affordable and evolutionary mobile broadband technologies areenabling the mass market adoption of mobile multimedia servicesAffordable and evolutionary mobile broadband technologies are
enabling the mass market adoption of mobile multimedia services
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More CDMA Data DevicesPlenty of EVPlenty of EV--DO DO RelRel. 0 and Rev. A Devices Available. 0 and Rev. A Devices Available
Source : http://cdg.org/technology/product_pavilion/subscriber_device.asp
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Movicel (Angola) Example – Movinet Data Offering
Movicel able to generate up to $250/mo ARPU for EV-DO data•Example illustrates ARPU of ~$110, $175 and $250 for 150Kbps, 300Kbps and 1Mbps data rates
Source -http://www.movicel.net/TarMovinet.aspx Note: $1USD = 75Kz (Kwanza)
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Starcomms (Nigeria) Example – Broadband Data Offering
Source -http://www.starcomms.com/bbs_tariff.php 1 US Dollar = 119.099 Nigerian Naira
PCMCIA and USB devices
ARPU > $130/mo. !!
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Conclusion• Data increasingly becoming crucial for both operators and customers
• Wireless Data makes the most sense
• CDMA is the leading wireless technology in balancing the operators needs
• Speed• Return on Investment• Overall Performance • Widespread Availability• Future Proofing
• GSM cannot do meaningful DATA- CDMA has a head start over WCDMA
Thank you !Thank you !