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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
All Rights Reserved © Alcatel-Lucent 20093 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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
All Rights Reserved © Alcatel-Lucent 20094 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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
All Rights Reserved © Alcatel-Lucent 20095 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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
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
All Rights Reserved © Alcatel-Lucent 20096 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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
Alcatel-Lucent 4G Primary Research
Apps driven by real time
information, multi-media messaging,
music, Internet browsing and simple games
All Rights Reserved © Alcatel-Lucent 20097 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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
Alcatel-Lucent 4G Primary Research
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.
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Definition of 2G/3G/4GTechnology and Solutions
All Rights Reserved © Alcatel-Lucent 20099 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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
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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
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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
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Update on “BIG 7”
AT&T
US CellularVerizon
Sprint
T-Mobile
MetroPCS
Cricket/Leap
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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.
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Update on Other Tier 2/3 Wireless Carriers
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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 !!
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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
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Implications on Migrating orDelaying Migration to 3G/4G
All Rights Reserved © Alcatel-Lucent 200918 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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
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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?
All Rights Reserved © Alcatel-Lucent 200920 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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.
All Rights Reserved © Alcatel-Lucent 200921 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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
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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
All Rights Reserved © Alcatel-Lucent 200923 | 2G/3G/4G: Is There A Generation Gap? – Oct 2009
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
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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)
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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
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Predictions for 2010/2011
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Predictions for 2010/2011
http://s
hifthap
pens.w
ikispac
es.com/
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