Value of UWB. Presentation to IQPC Ultrawideband Europe Conference

Transcription

1 Value of UWB Presentation to IQPC Ultrawideband Europe Conference Presented by Mathew Stalker, DotEcon On behalf of Mason Communications and DotEcon Ltd 11 March

2 Format 1. Introduction and Overview 2. Our Approach 3. Estimates of Net Private Benefits 4. Estimates of External Costs 5. UK Results and Conclusions 6. The European Impact -2-

3 Introduction to Study

4 The UK Study Commissioned by Ofcom Cost-benefit analysis of UWB for PAN applications Evaluate benefits from using UWB in PAN environments:» Better quality relative to alternatives» Lower cost relative to alternatives Evaluate costs from using UWB:» Interference with other services Identify net impact on society under different regulatory scenarios Consider the impact of alternative UWB techniques Provide input into Ofcom s policy decision on UWB Enable Ofcom to influence European policy debate -4-

5 What is UWB in the PAN Environment? Wireless technology capable of transferring large amounts of data wirelessly over short distances (up to 10m) Particularly Suitable for wireless personal area networking (PAN) Feasible substitute for wire in low and high data rate applications Rival technologies include Bluetooth and WiFi 1. INTRODUCTION -5-

6 UWB in the PAN Environment 1. INTRODUCTION Majority of usage will be indoors, in the office or home 1Gbps Possible UWB Market Intended UWB Market Data rates of greater than 110Mbps Potential advantages of UWB: Much faster data rates Battery life Price Data Rate/Capacity Capability 100Mbps 10Mbps 1Mbps 100kbps 10kbps DTV (Satellite) DTV (Terrestrial) 2G Macro Cellular WAN DAB (Terrestrial) 2.5G GPRS 3G Macro Cellular 3G Micro Cellular MAN 4G? 3G HSDPA BFWA MVDS BFWA LMDS 3G Pico Cellular LAN a WLAN b WLAN IEEE WPAN IEEE (a) Bluetooth IEEE WPAN IEEE a UWB Inductive Coupling RFID PAN Infrared Devices Extent/Range of Communications -6-

7 Five Regulatory Scenarios 1. INTRODUCTION FCC Mask 3.1 to 10.6 GHz bandwidth dbm/mhz emissions between 3 and 10 GHz ETSI Mask (a) Draft ETSI/CEPT mask (-65 dbm/mhz at 2 GHz) (b) Revised ETSI/CEPT mask (-85 dbm/mhz at 2 GHz) UWB limited to Lower Band Devices limited to 3 to 5 GHz UWB limited to Upper Band Devices limited to 6 to 10 GHz -7-

8 Industry consultation 1. INTRODUCTION Bilateral discussions with companies: Manufacturers of UWB chipsets Manufacturers of devices that might utilise UWB Providers of other services potentially affected Two workshops in conjunction with Ofcom, July 2004 to set out the methodology of the study October 2004 to discus the findings -8-

9 Our approach

10 Approach to Estimating Welfare Impact of UWB Impact on social welfare = 2. APPROACH Net private benefits from using UWB instead of alternative technologies Likely to be positive or negative? Total interference costs from use of UWB How large? How sensitive to alternative regulatory approaches? How sensitive to model parameters and assumptions? -10-

11 Approach to Estimating Welfare Impact of UWB Net private benefits External costs Value to the United Kingdom Quality Cost Take-up UWB relative to alternative technologies e.g. WiFi, Bluetooth UMTS Satellite Fixed links Interference with other services Wireless Broadband PMSE GPS Aeronautical Radio astronomy Military Positive or negative? How large? Impact of regulation? Sensitivity to assumptions? -11-

12 Estimates of Net Private Benefits

13 Methodology for Estimating Benefits I 3. BENEFITS Step I Step II Step III Step IV Step V Step VI Identify PAN applications for UWB Identify alternative technologies and compare to UWB Estimate willingness to pay for UWB Estimate relative costs of UWB and alternative technologies Project takeup for applications with UWB Estimate benefits from using UWB -13-

14 UWB versus alternative technologies 3. BENEFITS Handheld Devices Users benefit from higher data rate and extended battery life Differentiated UWB PAN Applications External Data Storage PC Networking PC Peripherals Audio Devices PC Video Audio/Video Streaming Users benefit from higher data rate Users benefit from higher data rate Alternatives offer greater range and wall penetration Many technologies provide service of equal quality Devices available of similar or higher quality Insufficient data rate for satisfactory service Currently insufficient data rate to compete with existing devices Alternatives offer greater range and wall penetration UWB offers additional benefits compared to alternative Homogenous Users benefit only though lower cost Video/audio downloads Currently insufficient data rate to compete with existing devices Alternatives offer greater range and wall penetration -14-

15 Measuring benefits for different applications Effect of Cost Savings and Quality Differences 3. BENEFITS price (cost) C A. Cost saving on units that would be sold under both technologies B. Effect of increased takeup owing to lower prices and increased willingness to pay A B c 0 c UWB D C. Effect of increased quality on willingness to pay on units that would be sold under both technologies D q 0 q 1 units sold We also considered the case where quality increases but cost also rises relative to alternatives -15-

16 Willingness to pay and cost Hedonic prices used to calculate additional willingness to pay for UWB relative to alternative technologies Results for all applications extrapolated from survey of handheld devices and network cards 3. BENEFITS Cost of UWB relative to alternative technologies estimated by extrapolating industry forecasts over the forecast period $16 $14 $12 $10 $8 $6 $4 $2 $ West Technology ABI Research Low case (higher costs*) High case (lower costs*) Central case* Bluetooth -16-

17 Take up Forecasts for take-up of and usage of all applications developed using industry data 3. BENEFITS 45.00% UWB PAN application take-up - central case Penetration (proportion of UK population) 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% PCs and keyboards / mice PCs and speakers PCs and microphones PCs and wireless monitor (with compression) PCs and other PCs / servers / access points (LANs) PCs and printers PCs and PDAs Mobile and PCs, other mobiles or PDAs PCs and other PCs (wireless fire sharing) PCs and digital cameras / camcorders PCs / DVD players and digital video cameras PCs and external storage devices PCs (or digital video players) and wirless projector Pcs and scanners PCs and MP3 players HiFis / CD players and speakers DVD players and TVs / projectors PCs and TVs / projectors (for home theatre) Digital set top boxes and TVs Games console and TVs / projectors DVD players / recorders and PCs PCs and HiFis -17-

18 Private Benefits Potential net private benefits from UWB very large Benefits sensitive to take-up assumptions, but still significant even under low case scenario Large-scale benefits only from 2011, once UWB reaches mass market Benefits greatest under either FCC or ETSI masks (assumes that initial chipsets meet both standards) Lower band restriction may reduce future benefits Upper band restriction significantly delays and reduces benefits 3. BENEFITS 1200 Net private benefits from UWB per annum, mn NPB from UWB under different regulatory scenarios, per annum ( mn) FCC or ETSI Masks Lower band Upper band -18-

19 Estimates of External Costs

20 Methodology for Calculating External Costs 4. COSTS STEP 1: Identify Existing Users STEP 2: Assess likely impact of UWB STEP 3: Interference Modelling STEP 4: Cost Calculation Which existing systems are operating in the spectrum occupied by UWB in the UK? List of 10 systems identified Exclude from CBA No Will co-existence with UWB lead to costs to the operators of those systems? Yes Include in CBA Cost Calculation Interference Calculations using Monte Carlo models based on given number of UWB applications -20-

21 Two engineering models UMTS Modified version of the Monte Carlo model developed by Mason for earlier RA work Simulate lost of quality of service in the presence of UWB Costs estimated for restoring the quality of service 4. COSTS FS, FSS and FWA Bespoke Monte Carlo model Estimate the noise impact on Probability of Error at the affected link Both models draw extensively on ITU-R studies -21-

22 Costs per UK UMTS Operator 4. COSTS 100,000 Yearly Costs of UWB to UMTS ( 000) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, dBm 86,482 73,803 83,399 62,280 58,985 49,508 47,754 48,265 48,777 49,289 52,771 50,823-65dBm 3,720 2,909 2,935 2,274 2,131 1,824 1,754 1,768 1,782 1,796 1,892 1,839-85dBm

23 Results and Conclusions

24 Net Value of UWB to the UK under different regulatory approaches 5, Results ETSI (-85dBm/MHz) 4,000 ETSI (-65dBm/MHz) 3,000 Lower band NPV to United Kingdom, mn, discounted at 3.5% from ,000 1, Upper band FCC Mask -1,000-2,000-3,

25 Conclusions 5. Results Draft ETSI mask is superior to FCC mask Net private benefits are identical (based on our understanding that initial chipsets meet both standards) External costs (interference) much lower under ETSI mask Possible scope for tightening the roll off of the draft ETSI mask to a level of 85 dbm/mhz at 2.1GHz External costs on UMTS providers are minimal under this scenario Benefits unaffected provided that initial chipsets are compatible Both upper and lower bands should be made available for UWB A lower band restriction may constrain future quality improvements for no clear benefits An upper band restriction would delay launch of UWB by five years or more and reduce quality -25-

26 Implications for Europe Indicative estimates of the value of UWB can be obtaining using simple benchmarks Benefit benchmarked using population Cost benchmarked using land area 9000 NPV of benchmarked value of UWB for , mn Austria Belgium Denmark Finland France Germany Greece Italy Luxembourg Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom -26-