The Need for a Socio-economic Approach in Assessing Spectrum Requirements for Future Mobile Communications Markets and Services
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1 The Need for a Socio-economic Approach in Assessing Spectrum Requirements for Future Mobile Communications Markets and Services Simon Forge SCF Associates Ltd simon.forge@whsmithnet.co.uk NYCN breaking news 4g ITU Geneva Ubiquitous Networks and Radio Aspects 07 April 2005 SCF Associates LTD ITU Geneva Ubiquitous networks and Radio Aspects SCF Associates LTD all rights reserved 1 SCF Associates LTD
2 New services have often been mysteries to the industry - greatly underestimated or overestimated Telecoms Industry view at launch The consumer speaks the street view ISDN WAP Iridium LEOs The next generation of telecoms- replace POTS The mobile user will really go for this technology Just what the remote business traveller needs UK / USA : Idiot Services users Don t Need WAP is crap - expensive, no services, difficult to use 20 times too expensive Internet/WWW Ignore... Oh still there?!!..horror -stifle!..voip wins Just use it (@ no cost) GSM digital mobile An extra (minor) feed for our fixed networks Just what we need! - till we see the bill! -so PAYG rules SMS Minor supplementary service (CLASS for Mobile) The only service (mobile or fixed) for many users While some of the biggest product launches in communications services over the last 20 years have delivered flops, seemingly trivial services have exploded. ITU Geneva Ubiquitous networks and Radio Aspects 2
3 ITU Geneva Ubiquitous networks and Radio Aspects 3 We need a better strategy to assess spectrum demands - the underlying concepts and policy need to be improved as we have a rapidly evolving market with exploding demand - a discontinuity in radio technology could occur at any time, in order to cater for a far larger user population than the industry has ever seen before as radio exceeds fixed line, and this effect is price sensitive - a transformation is under way from a mobile communications market for the transport of plain vanilla voice, over networks, towards a media and commercial transaction environment and again this effect is price sensitive However, many players in the traditional telecommunications world have yet to fully realise these developments will occur. Any useful approach must take account of this - it should track the most likely path for customer demand based on needs and income and the healthy development of radio services, not biased by a technical view or that of specific short-term interests.
4 ITU Geneva Ubiquitous networks and Radio Aspects 4 The context a global user population growth With globalisation, costs of services and handsets will slowly be set by average world prices Saturation is set by affordable price for the majority of users numbers which may reach near 65% of a global population of over 7.5Bn by 2020 = 5Bn users Billions of mobile services users worldwide Bn, 2006/7 1.5Bn, K, 2000 estimated
5 ITU Geneva Ubiquitous networks and Radio Aspects 5 Potential take-up of radio services: from communication to mobile applications relies on a price benevolent context for disposable income levels of the global mass market Number of Mobile Applications in mass usage 1000 Network service business Applications service business Phase 1 Network Communications services Voice Voice & SMS Phase 2 First Applications phase Phase 3 Second Applications phase
6 ITU Geneva Ubiquitous networks and Radio Aspects 6 Usage of a Public Service is dictated by cost with demand following to the Dupuit Curve (1840) Price of service High activity area of curve where Disposable income makes service affordable so- - service chosen depends on affordability -In Philippines, SMS is most affordable service some phones never used for voice -Youth/ Children in OECD countries often only use texting An added concept : the Perception of freeness = unlimited usage User Population
7 Understanding the potential take-up of services Measure against:- -utility value to users -affordability -accessibility ACCESSIBILITY High UTILITY VALUE High take-up space -Useful -Affordable -Available (accessible ubiquitously) High Low Low Low High AFFORDABILITY to user (includes terminal) ITU Geneva Ubiquitous networks and Radio Aspects 7
8 Mapping the potential of services to succeed ACCESSIBILITY Mobile Internet Services (if secure) GSM voice SMS High 3G Services 2005 UTILITY VALUE Fixed Internet Services (Unprotected) MP3 download High take-up space -Useful -Affordable -Available (ubiquitous) High Fixed Line Voice 2005 Fixed Line Voice 1950 Low Telegraph 1850 Low ISDN WAP-1 Low High AFFORDABILITY to user (includes terminal) ITU Geneva Ubiquitous networks and Radio Aspects 8
9 The strategy going forward in spectrum what form of spectrum allocation suits each type of underlying technology? Differentiation mechanism Usable Freq range (Actual range) Form of spectrum assignment 2G FDD & TDD & Limited Spread spectrum CDMA GHz ( GHz) Assigned Bands + Guard bands 2.5G FDD & TDD & Limited Spread spectrum CDMA GHz ( GHz) Assigned Bands + Guard bands 3G Limited Spread spectrum W-CDMA/ CDMA GHZ ( GHz) Assigned Bands + Limited Guard bands 4G Spread spectrum Under 5 GHZ, possibly 6-10 GHz Unlicenced spectrum, possibly in bands Other NON- cellular AWTs* (WiFi etc) Limited Spread spectrum/other Under 5 GHZ, possibly 6-10 GHz Unlicenced spectrum, possibly in bands *Alternative wireless technologies ITU Geneva Ubiquitous networks and Radio Aspects 9
10 ITU Geneva Ubiquitous networks and Radio Aspects 10 Growth of take-up of radio services Number of Mobile Applications in mass usage Services & capacity available Take-up Multimedia and transaction services with 2.5G and 3G constraints on affordability and richness 2.5G Data and WAP Machine to machine ubiquitous services AMI- style Lifestyle multimedia services at low cost Voice SMS
11 ITU Geneva Ubiquitous networks and Radio Aspects 11 Our perspective of demand is economic it sets social and technical parameters and features Economic parameters Social parameters Technical parameters
12 Focus on user needs gives a balanced estimate of future mobile services ITU Geneva Ubiquitous networks and Radio Aspects 12 Economic /Financial Setting User/ Social/Cultural environment Market/ Regulatory Supplier industry / Technology/ environment Questions to be answered What are the services that are wanted? What are the services that are to be offered?
13 ITU Geneva Ubiquitous networks and Radio Aspects 13 How can we draw socio-economic pictures of future demand? - paint Scenarios Assign individual theme within domain of interest with drivers Assumptions Scenario Framework (Static) Assertions List Hypotheses (to be tested) Scenario Known key Variables Causal Impacts analysis Scenario Behaviour (Dynamics) Relevance trees Scenario Construction for Forecasting
14 Scenarios generate motivations & user types with needs analysis Scenarios - Socio - economic patterns User Profiles usage types Disposable income User Population by type Needs Applications Application Attributes Cost vs. Disposable income Content Services Network Services Traffic Motivations Usage levels (amount of use) - and eventually applications, services, content and traffic ITU Geneva Ubiquitous networks and Radio Aspects 14
15 The study for IPTS : - FMS Future Mobile Services IPTS /DG JRC/EC Future Mobile Services and Markets in Europe Simon Forge Colin Blackman Eric Bohlin SCF Associates Ltd ITU Geneva Ubiquitous networks and Radio Aspects 15
16 ITU Geneva Ubiquitous networks and Radio Aspects 16 The whole FMS method can be summarised as 6 steps based on the economic, social and technical parameters 1 X scenarios Relative Disposable Incomes between scenarios User Types Relative Degree of Usage of Applications Amount of Usage Traffic Volume Motivations Needs Applications (eg financial Transactions) Services Traffic type
17 ITU Geneva Ubiquitous networks and Radio Aspects 17 The FMS method can be mapped on to the economic, social and technical parameters Economic parameters Numbers of Users in High/ medium/ Low income bracket, by Epoch Relative Disposable incomes User types Degree of usage of Applications Amount of usage Traffic Volume 1 X scenarios Motivations Needs Applications (eg financial transactions) Services Traffic type Social parameters Technical parameters
18 Mapping scenarios - against the economic and sociological conditions Favour the take up of services Economic conditions Inhibit take the up of services Scenario 1: Smooth Development Scenario 3: Constant Change Scenario 5: Natural Or Man-made International Disaster Main scenarios Scenario 2: Economic stagnation Scenario 4: Financial Crash Wild card disruptive scenarios may occur within any main scenario Favourable Social/ cultural/ political conditions Unfavourable ITU Geneva Ubiquitous networks and Radio Aspects 18
19 Comparing development in the Main Socio-Economic Scenarios Scenario SMOOTH 150% 2 ECONOMIC STAGNATION 100% 100% 90% 3 CHANGE Changing regions of prosperity 80% 110% 100% 90% EU Economic output Mean Disposable income ITU Geneva Ubiquitous networks and Radio Aspects 19
20 ITU Geneva Ubiquitous networks and Radio Aspects 20
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