mobile wireless services and technology in ubiquitous and...
TRANSCRIPT
A. SalcedoAMCIS 2006
Mobile Wireless Services and Technology in
Ubiquitous and Embedded Computing: Trends
Ante Salcedo
ITAM
AMCIS 2006
Current Status and Trends of Wireless Mobile in Mexico
A. SalcedoAMCIS 2006
Objective
Present an overview of the cellular industry
in Mexico, as well as its trends and future
expectations
A. SalcedoAMCIS 2006
Contents
• Current trends and situation
• Short term implications
• Global industry trends
• Long term implications
• Conclusions
A. SalcedoAMCIS 2006
We have seen a fast growth in the past
• Fast adoption of mobile voice communications, since it appeared in Mexico in 1989
• In the first half of 2006, the number of subscribers has surpassed 51 million 140
thousand (47.8 % penetration)
• 8% increase in penetration from 2004 to 2005, and 4% increase in penetration in the
first half of 2006
0.0 0.1 0.2 0.4 0.5 0.6 0.8 1.1 1.83.5
8.0
14.2
21.6
25.4
29.1
36.3
44.1
Mobile phone density
(lines/100 citizens*)
1989 20051990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
* Mexican population ranges around 100 Million citizens; estimated by the end of 2005 is 107.5 million
Source: COFETEL (Federal Telecommunications Commission)
Year
A. SalcedoAMCIS 2006
Mexico has potential for even more growth
0
20
40
60
80
100
120
140
$ 0 $ 5 $ 10 $ 15 $ 20 $ 25 $ 30 $ 35 $ 40 $ 45
Mexico
Peru
USA
Canada
Japan
Australia
Italia
France
England
GDP percapita
US$ Thousands
in 2005
Mobile lines/100 habitants
•Mexico has a lower penetration
than countries like Argentina,
Brazil, Colombia & Venezuela;
even though it has s similar GDP
• An 8% growth to reach 52%
overall penetration implies, 8.5
million additional subscribers;
which (assuming low utilization of
$10USD/month) imply additional
income of ~85 million USD/month
Chile
ArgentinaBrazil
Colombia
Ven
Source: UIT, COFETEL (Federal Telecommunications Commission)
A. SalcedoAMCIS 2006
What Mexican consumers look for?
• Pay few (low utilization), rather
than low fares
• Easy to install and use
• Convenience to buy and add time
• Local coverage at low cost
• Added value features
– Chat & messaging
– Take/send pictures
– Download/play music
– Download/view photos, videos
– Play videogames
– Watch TV
94% choose the “prepaid” form of
service, even if this option can be
more expensive that the subscribed
(“post payment”) form of service
Most popular market demands
A. SalcedoAMCIS 2006
Five service providers, with one incumbent
Mobile line participation
100% = 46.6 Million lines in 4Q05
2%3% 4%
14%
77%
Source: The Competitive Intelligence Unit
Telcel
Telefonica
Iusacell
Unefon
Nextel
35.9
6.5
1.9
1.4
0.9
A. SalcedoAMCIS 2006
Telcel (Telmex, AT&T) key success factors
• First player in the market
• Exploits 77% of cellular subscribers & coverage over 99% population
• Protected by regulation
• Aggressive marketing
• Promotion of loyalty and high utilization
• Extensive distribution chain: group retail stores, self stores, concession
stands and stores, salespeople at the streets
• Leverages synergies & economies of scale, with group companies
A. SalcedoAMCIS 2006
Yet, there is a strong fight for the market
• Numeric portability
• Interconnection between providers (cost)
• Who calls pay
• Triple play
Not Exhaustive
MarketingMarketing
Value added
services
Value added
services
Legal rightsLegal rights
• Offer photos, music & videos, for download
• Mobile TV broadcasting
• Mobile internet and e-mail
• Subsidize cool cellular phones, and keep exclusivity
• Shopping, electronic payments & financial services
• Strengthening of brands
• Encourage utilization:
The more you talk, the less you pay
A. SalcedoAMCIS 2006
Short terms implications
Legal rights
Value added services
Marketing
• Stronger adoption in the market
• Large investment
• Rich/complex services
– MMS
– TV to the cellular
– Shopping and financial services
• Fast migration to new technologies
• Lower fees for interconnection between
carriers and for fixed lines
• Facility to exchange service providers
A. SalcedoAMCIS 2006
However, the market is changing
• Globalization around the world
• Consolidation with other industries
(e.g., consumer electronics,
communication services, content
providers), to:
– Support the establishment of
wireless, smart, personal
environment area networks
– Provide mobile/fixed broadband
access everywhere and anytime,
supporting triple play
– Provide rich content for the
subscribers
• New competing technologies:
– VoIP
– Wi/fi, WiMax
– PLC
• New complementary technologies:
– Bluetooth, WUSB
• Convergence of voice, data and
video
• Consolidation across countries,
value chain, and industries, to
offer better/improved services,
gain synergies and leverage
economies of scale
Changing worldwide trends Implications for cellular industry
A. SalcedoAMCIS 2006
Consolidation with other industries blurs
the idea of cellular communications
Fixed access
– Telephone line
– Cable TV line
– Power supply line
– Mobile phone cells
– WiFi/WiMax cells
– Wireless (3.4GHz)
Mobile access
– Mobile phone access
– WiFi/WiMax access
Devices Services ContentsAccess
Local voice
Long distance
Mobile voice
VoIP
SMS, MMS
Voice messages
Video calls
Internet & e-mail
Shopping
Banking
Financial services
Broadcast TV
Video on demand
Music on demand
Photos
Movies
Gaming
Applications
PC
Laptop
Telephone
Cell phones
Camera
TV
DVD,VCR
Music player
PDA´s
...
* Software and application developers included in devices
A. SalcedoAMCIS 2006
Cellular providers in Mexico begin to compete and
establish alliances with other industry players
Compete with access &
service providers
Establish alliances with
equipment and content
providers
Not Exhaustive
A. SalcedoAMCIS 2006
Long term impacts for Mexico
• Mobile/fixed broadband access anywhere, supporting
the triple play
• Pricing based on mobile/fixed amount of bits
• Intelligent Personal devices that conform user
environment area networks; and optimize
communication resources transparently to the user
• Few consolidated groups of companies that offer
complete solutions including: devices, access,
services and content
A. SalcedoAMCIS 2006
Conclusion
• Mexico is an attractive market for cellular communications
• There are four players, but one dominates the market
• Current competition stands on legal fights, marketing and value
added services
• Due to worldwide technology and industry changes, cellular industry is
being incorporated into a larger one, that includes: devices, access,
services and content
• Consolidation and globalization will bring to subscriber a whole new
experience around their personal electronic devices, and communication
capabilities
A. SalcedoAMCIS 2006
APPENDIX
SUPPORT SLIDES
A. SalcedoAMCIS 2006
While 99.9% of the population has access to the
cellular signal, penetration is low
Region 1 (60%)
Region 2 (45%)
Region 3 (45%)
Region 4 (53%)
Region 5 (46%)
Region 6 (37%)
Region 7 (27%)
Region 8 (39%)
Region 9 (55%)
Source: UIT, COFETEL (Federal Telecommunications Commission)
0
10
20
30
40
50
60
70
1994 1996 1998 2000 2002 2004 2006
Mobile phone density
(lines/100 citizens)
A. SalcedoAMCIS 2006
Mobile has become the preferred option for
voice communications
Mobile lines have reached 50 million subscribers, substituting the use of fixed lines
Lines in service
(Millions)
0
5
10
15
20
25
30
35
40
45
1998 1999 2000 2001 2002 2003 2004 2005
Mobil
Fixed
Source: COFETEL (Federal Telecommunications Commission)
A. SalcedoAMCIS 2006
Prices reflect current competition framework (Prices for prepaid plans, in pesos, without 15% Tax)
Cell to cell
Same Co.
Cell to cell
Other Co.
Local
To/from
fixed lineUS &
Canada
Long distance (US, Canada)
Telmex
Telefónica
Iusacell
Unefon
Nextel***
$0.7 - 1 /min(+1yr)
$5 /min(new)
$5 unlimited $10 unlimited$3 / min $5 unlimited
$0* $22 /min$ 3.5 / min $ 2 / min
* Only with prepaid cards of $200; otherwise ± $4.5
** Only with prepaid cards of $300; otherwise goes up to 3.48/min
*** Does not offer prepaid plans, so the rates are only with plan
$1** / min $2.5 / min
Mexico
Same Co.
Mexico
Other Co.
$5 unlimited $3 / min
$2.5 / min $ 2.5 / min
$5 / min$4 / min $8 / min $11.5 / min $15 / min
$11.5 /min $11.5 /min
$ 0.8 – 1.8/min $ 0.8 - 3 / min $ 0.8- 3 / min
$ 1 / min $ 1 / min
$ 0.8 – 1.8/min $ 0.8 - 3 / min $ 0.8 - 3 / min
A. SalcedoAMCIS 2006
Globalization explains aggressive
investments in Mexico and L. America
0
10
20
30
40
50
60
70
80
1990 1995 2000 2005
Chile
Argentina
Colombia
Venezuela
Brasil
Mexico
Peru
Uruguay
• Telefonicas has invested
~ 100,000 million Euros in
Latin America (since 1993),
to earn a strong position in
such a global market
• Telmex, partnering AT&T
is also continuously
investing to sustain a
position that goes beyond
the Mexican border
• Nextel, partnering with
Sprint, is also in the fight
Source: COFETEL (Federal Telecommunications Commission)
A. SalcedoAMCIS 2006
Smaller competitors go for different strategies
* 95,000 Million Euros in Latin America, between 1993 and 2005; and planning to invest 7,000 million USD in Mexico in 2006
• Technology: 3G
• Coverage: All the country
• Huge investments to gain penetration with low fees and
aggressive marketing*
• Encourage utilization
• Constant fight for regulation that encourages competition
• Partner with Sprint (USA service provider)
• Technology: 3G
• Coverage over main cities
• Focus on the corporate/business market
• Long distance as local (Mexico, USA & Canada)
• Belong to the same owner
• Technologies: 3G (Iusacell), CDMA2000 (Unefon)
• Coverage: All the country (some regions with agreements)
• Marketing
• Constant fight for regulation that encourages competition
A. SalcedoAMCIS 2006
Steps taken Telmex/AT&T
• Small investments to try and learn about new technologies
• Be prepared for fast deployment of potential technologies
• Invest in large scale deployment only when necessary
Only provider with EDGE technology
Came up with Mobil TV two weeks after its competitors
• Take maximum advantage of a protective regulation
A. SalcedoAMCIS 2006
TV on the Cellular
$125.- + TAX
$173.- + TAX
A. SalcedoAMCIS 2006
User Environment Area Networks
UWB
Bluetooth
WiFi
¿Uno o varios
accesos a la red?
¿Uno o varios
accesos a la red?
• TV, VCR, DVD
• Equipos de audio
• Bocinas
• Teléfono
• PC, LapTop
• Impresoras
• Handheld
• Celular
• Videojuegos
• Cámara digital
• MP3 players/IPod
• Actuadores remotos?
• Memoria central?
• Servidor central?
• Acceso a red?
A. SalcedoAMCIS 2006
Cellular providers will have to compete
with access and service providers
• Avaya is rapidly taking over companies
• Skype and Vonage are taking over individuals
• CFE: Supply electric power to
• Avantel compite con RED UNO de Telmex
• Axtel: Wireless fixed local and long distance voice
services
• Alestra: Owns a fiber optic network, provides
access to the AT&T worldwide network, and
provides voice & data communications service
(100 MMUSD)
Not Exhaustive