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Celia Desmond IEEE Communications Society 1 Trends in Trends in Telecommunications Telecommunications ANDICOM’2004 Cartegena de Indias October 2004

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Page 1: Celia Desmond

Celia Desmond IEEE Communications Society

1

Trends in Trends in TelecommunicationsTelecommunications

ANDICOM’2004 Cartegena de Indias

October 2004

Page 2: Celia Desmond

Celia Desmond IEEE Communications Society

2

Trends in CommunicationsTrends in Communications

--An Environment OverviewAn Environment Overview

Celia DesmondPresident

World Class –Telecommunications

Past President IEEE Communications Society President IEEE Canada (2000-2001)

Page 3: Celia Desmond

Celia Desmond IEEE Communications Society

3ANDICOM’2004 Cartegena de Indias October 2004

Value Chain and Main Categories Value Chain and Main Categories of Players in Telecom Industryof Players in Telecom Industry

Material Suppliers

Material Suppliers

ElectronicComp.

Provider

ElectronicComp.

Provider

Original Equip.

Manuf.

Original Equip.

Manuf.

Equip.Vendor

Equip.Vendor Service

Provider

ServiceProvider

Electronic ComponentProvider:

IntelQualcomm BroadcomJDSU

Electronic ComponentProvider:

IntelQualcomm BroadcomJDSU

OriginalEquipmentManufacture:

FlextronicsCelestica

OriginalEquipmentManufacture:

FlextronicsCelestica

EquipmentVendor:

CiscoAlcatelEricssonMotorolaNortel LucentSiemensNEC …

EquipmentVendor:

CiscoAlcatelEricssonMotorolaNortel LucentSiemensNEC …

ServiceProvider:

VerizonSBCNTT DoCoMoDeutsche TelekomVodafoneChina TelecomBell Canada …

ServiceProvider:

VerizonSBCNTT DoCoMoDeutsche TelekomVodafoneChina TelecomBell Canada …

Page 4: Celia Desmond

ANDICOM’2004 Cartegena de Indias October 2004

4 Celia Desmond IEEE Communications Society

Telecommunications Service Industry Telecommunications Service Industry Key Players in CanadaKey Players in Canada

2001Revenue

$32.8 Billion

Wireless Providers

Bell Wireless Alliance Paging CompaniesTelus Mobility e.g., PageNet CanadaRogers Allstream WirelessOther Radio CommonMicrocell Telecommunications Carriers

Wireline Competitive Providers

Alternative Providers ofLong-Distance Services

e.g., Allstream (June 2003)Call-Net (Sprint Canada)

Competitive Local ExchangeCarriers

e.g., Futureway CommunicationsGT Group Telecom

Competitive Pay TelephoneProviders

e.g., Canadian Payphone Corp.

Satellite & Other Telecom Providers

Satellitee.g., Telesat Canada

TMI communications, Stratos Global Corp.

Resellerse.g., Primus Telecommunications

$6.6 Billion

$21.8Billion

$2.7Billion

$1.6 Billion

Wireline

Incumbent Carriers

Major Telephone Companies:

Bell Canada

Telus

Aliant

MTS

Sask Tel

Northwest Tel

Independent Telephone

Companies

e.g., Thunder Bay Telephone

Incumbent Overseas Carrier

Teleglobe Source: Statistics Canada and company annual reports

Page 5: Celia Desmond

Celia Desmond IEEE Communications Society

5ANDICOM’2004 Cartegena de Indias October 2004

Global Telecom MarketGlobal Telecom Market

Local Services

DLD ILDMobile

ServicesGlobal Market Size

(US$B)308 205 91 227

North America 35% 42% 31% 28%Asia Pacific 21% 19% 18% 30%

Europe 29% 25% 32% 31%CALA 12% 10% 11% 8%RoW 3% 4% 8% 3%

2000 Market Size of US $880B

Asia Pacific23%

RoW4%

North America34%

CALA9%

Europe30%

2000 Market Share by Services

Mobile27%

Local37%

ILD11%

DLD25%

2000 Global Telecom Market Share Breakdown:

Page 6: Celia Desmond

Celia Desmond IEEE Communications Society

6ANDICOM’2004 Cartegena de Indias October 2004

Global Telecom Market: Since 2000Global Telecom Market: Since 2000

“We built it, and they didn’t come”

Page 7: Celia Desmond

Celia Desmond IEEE Communications Society

7ANDICOM’2004 Cartegena de Indias October 2004

Out of businessOut of business

Aleron

360Networks Digital Teleport

Enron Broadband

Ebone/GTS

FLAG Telecom Global Crossing

GST

Impsat

KPNQwest

Sigma Networks

Sphera

Storm TelecommunicationsTeleglobe

Telergy

Velocita

Viatel

Williams Communications

AdelphiaBroadband Office

Metromedia

Convergent Com

Covad

ICG Comm

FastComm

Global Telecom

North Point

Rhythms

McLeodUSA

OnSite

NetConnections

XOCommun

Yipes

WINfirst

ZephionIridium

Omnisky

Metricom

NextWave

PSINet

Ardent Excite@home

Exodus

iBeam

NetRail

Globalstar

StarBand

Motient

ART

WinStar

Teligent

Page 8: Celia Desmond

Celia Desmond IEEE Communications Society

8ANDICOM’2004 Cartegena de Indias October 2004

Telecommunications Equipment Telecommunications Equipment ManufacturersManufacturers Orders for communications equipment reached a peak at

about $13.3 billion in June 2000, steadily to about $3.6 billion in September 2001.

Industry operating at about 55% of capacity, down from 87% in May 2000.

In 2001, sales revenues for telecom equipment, declined by nearly 28% from the prior year.

Revenues fell further in 2002. Economy.com forecasted revenue to decline 19% in 2002 Profits were down in 2001, and remained weak in 2002. Headcount in top 10 companies is 1/2 that 10 years ago

Page 9: Celia Desmond

Celia Desmond IEEE Communications Society

9ANDICOM’2004 Cartegena de Indias October 2004

ICT Market (1999-2002)ICT Market (1999-2002)Value in Millions of DollarsValue in Millions of Dollars

Fonte: Assinform / NetConsulting

681.7

556.5

391.4

242.8

761.2

625

435.3

293.4

759.2

661.3

474.5

323.1

754.6

658.6

483.2

337.9

1999 2000 2001 2002

North America(Canada & USA)

Asia – Pacific(Japan, Singapore, Hong Kong, Taiwan, Korea and Asia Pacific countries)

Europe

1.872

13%

11.7%

12.3%

11.2%

20.8%

2.115

-0.6%

-0.4%

1.8%

4.6%

2.234

Rest of World

4.9%2.218

0.7%

-0.3%

5.8%

9%

10.9%

Page 10: Celia Desmond

Celia Desmond IEEE Communications Society

10ANDICOM’2004 Cartegena de Indias October 2004

TLC marketTLC market

Fonte: Assinform / NetConsulting

1.9%

-2.8%-2.2%

0.9%

-1.7%

3.4%

6.5%

3.6%

IT TLCNorth America

Europe AsiaRest of the world

% 2002/2001% 2002/2001

Page 11: Celia Desmond

Celia Desmond IEEE Communications Society

11ANDICOM’2004 Cartegena de Indias October 2004

So where are we now?So where are we now?

Telecom Service Industry is a Trillion Dollar Industry – 1,300 billion at end of 2002

Telecom services make up 75% of the industry, with Telecom Equipment broken into 13% infrastructure equipment, 7% mobile handsets, 5% enterprise equipment

Overall this industry represents 3% of GDP Americas 43%, EMEA 34% and Asia Pacific 24%

• Telecom industry is still a large and very viable industry

Page 12: Celia Desmond

Celia Desmond IEEE Communications Society

12ANDICOM’2004 Cartegena de Indias October 2004

If we add the IT marketIf we add the IT market

2002 Market Size in Revenue is $2,200B

Telecom makes up 57% 46% in the Americas, 22% Asia

Pacific, 34% EAME IT services are 57%, hardware 33%,

software 10%

Page 13: Celia Desmond

Celia Desmond IEEE Communications Society

13ANDICOM’2004 Cartegena de Indias October 2004

2004 Update2004 Update

US Dept of Commerce – only 21,000 jobs added in Feb 2004, despite economic growth since summer 2003

Unemployment in computing at 5.2% in 2003, as compared to 2% in years in last decade – as opposed to 6% rate in all jobs, compared to an earlier 4%

Causes: outsourcing, automation and business strategy Companies using the investments they made in the 90’s rather

than researching, developing and deploying new technologies Total focus on cost cutting 80% of CEO’s surveyed recently say they will shift focus to

new growth projectsSource: International Herald Tribune, March 10, 2004

Page 14: Celia Desmond

Celia Desmond IEEE Communications Society

14ANDICOM’2004 Cartegena de Indias October 2004

PC, PDA, Cell Phone sales PC, PDA, Cell Phone sales (2000-2002)(2000-2002)

Source: Assinform / NetConsulting

Millions of Units

128

123

130

11.7

12.8

11

405

390

410

PC's

PDA's

Cell Phones

2000

2001

2002

Page 15: Celia Desmond

Celia Desmond IEEE Communications Society

15ANDICOM’2004 Cartegena de Indias October 2004

Cellular Growth in the USCellular Growth in the US

Yes, there is still some good news:

~141M subscribers as of Dec 2002

10% Y/Y growth in subscriptions

36% Y/Y growth in minutes

20.8% Y/Y growth in capital investment

Forecast data revenues ~$1B in 2003

Source: CTIA Wireless Industry Survey, Mar 2003

Page 16: Celia Desmond

Celia Desmond IEEE Communications Society

16

Cellular Local Number Portability Cellular Local Number Portability

• FCC Mandate in 2003 for LNP between US Cellcos

• US Cellular service commoditized-

Few differentiators:• Price• Bundled cell phone• Technology transparent to

users

Retention factors today:• Contract termination

penalty• Need to change phone #

when changing carriers

Impact on Cellular carriers: Increased Churn Rate

Page 17: Celia Desmond

Celia Desmond IEEE Communications Society

17ANDICOM’2004 Cartegena de Indias October 2004

Wireless PossibilitiesWireless Possibilities

3G WiFi Ultrawideband Bluetooth WiMax ZigBee

Page 18: Celia Desmond

Celia Desmond IEEE Communications Society

18ANDICOM’2004 Cartegena de Indias October 2004

Wi-Fi is Driving Rapid ChangeWi-Fi is Driving Rapid Change

Wi Fi is today’s “hottest” new technology Allows users to create Wireless Local Area

Networks (WLANS) with high speed internet service

Analysts predict 700 million users and a nearly U.S. $3 billion worldwide market by 2007

54 million laptops, PDAs, televisions and other devices with Wi Fi will be sold in 2004 4 times as many as in 2002

Page 19: Celia Desmond

Celia Desmond IEEE Communications Society

19ANDICOM’2004 Cartegena de Indias October 2004

IEEE 802.11 “WiFi” LAN IEEE 802.11 “WiFi” LAN Properties Properties

Properties Power: 100 mW max Configuration: Hierarchical or Ad-Hoc Spectrum: 2.4 and 5.8 GHz Unlicensed bands Channel BW: 20 MHz (Overlapping) Two modulation technologies are available:

CDMA: 802.11b @ 2.4 GHz OFDM: 802.11a @ 5.8 GHz, 802.11g @ 2.4 GHz

CSMA/CA LAN Protocol (Carrier Sensing Multiple Access/Collision Avoidance)

Security via station authentication Data rates up to 11 MB (b), 55 Mb (a and g) Actual data rates are usually much lower Maximum range ~100M with clear LOS in LAN configuration

Some specialized point-point applications up to 20 km.

The WiFi Alliance is an organization of vendors and users, that provides interoperability standards and testing to equipment compliant with IEEE 802.11 standards

Page 20: Celia Desmond

Celia Desmond IEEE Communications Society

20ANDICOM’2004 Cartegena de Indias October 2004

Wi Fi Standards Wi Fi Standards

Wi Fi = IEEE 802.11 WLAN standards--Compete with each other for market share

IEEE 802.11a -- data rates to 54 Mb/s in the 5 GHz band IEEE 802.11b – 11 Mb/s in 2.4 GHz band

Today’s leading Wi Fi technology IEEE 802.11g – 54 Mb/s in 2.4 GHz band

Backwards compatible with .11b at higher speeds– Opens possibilities for wireless multimedia video transmission and broadcast MPEG. Catching on quickly.

IEEE 802.11n – work just starting – plans to increase data rates to over 100 Mb/s

Page 21: Celia Desmond

Celia Desmond IEEE Communications Society

21ANDICOM’2004 Cartegena de Indias October 2004

WiFi HotSpot service is a major growth area

• Leading providers, T-Mobile, Boingo, Wayport Access, Megabeam (UK)

• Service by subscription or open (e.g. hereUare)• Important partnerships developing

– T-Mobile / Starbucks (subscription)– Cometa / McDonalds (open)– Holiday Inn / Megabeam (open)

• Valid 3G alternative for portable services– Ubiquity of 802.11 interface- being built into new

laptops– Unbeatably low equipment costs– Low capitalization, no incremental spectrum

802.11 and a Double Latte, please…..802.11 and a Double Latte, please…..

Page 22: Celia Desmond

Celia Desmond IEEE Communications Society

22ANDICOM’2004 Cartegena de Indias October 2004

Wi Fi Faces Fierce Competition Wi Fi Faces Fierce Competition from Other Technologies from Other Technologies

Limited range: only about 50 meters from base station; hundreds of base stations needed to match coverage of single cell phone station

Addressing security concerns Next generation security solution in

development: IEEE 802.11i Will include new encryption, keys exchange

and authentication methods

Development of Ultrawideband could impact Wi Fi

Page 23: Celia Desmond

Celia Desmond IEEE Communications Society

23ANDICOM’2004 Cartegena de Indias October 2004

Ultrawideband to Offer Full Ultrawideband to Offer Full MobilityMobility

UWB is super high speed, low power personal area networking technology suited for wireless multimedia applications

High data rate of 1 gigabit per second allows movement of massive files over short distances

Short range of 30- 60 feet -- an advantage if operating multiple independent links at one location

UWB transmits low power streams of extremely short pulses over a huge section of radio frequency spectrum Uses either orthogonal frequency division

modulation or direct sequencing

Page 24: Celia Desmond

Celia Desmond IEEE Communications Society

24ANDICOM’2004 Cartegena de Indias October 2004

Ultrawideband Ultrawideband

Many potential revolutionary consumer and specialized business uses: For example, at home: wireless users could move data from

PC to stereo, from DVD to TV On road: might transfer data from laptop in truck to handheld

computer; send email In business: doctors could look at patients charts and view

digital xrays

Expected to grow from 0 now to 6 million UWB nodes embedded in devices by 2007

No standard yet: IEEE 802.15.3a in development--high speed, physical layer Market is not waiting: Motorola already selling chips based on

early version

Page 25: Celia Desmond

Celia Desmond IEEE Communications Society

25ANDICOM’2004 Cartegena de Indias October 2004

Bluetooth “Wireless Cables” Bluetooth “Wireless Cables”

• Bluetooth is a low power, short range data transfer technology

• Moderate date rates

• Applications primarily as cable replacements

• Support of mesh network configurations

• Frequency-hopping spread spectrum technology in the 2.4 GHz ISM band

The Bluetooth SIG is an industry association dedicated to the development and application of equipment based on the IEEE 802.15.1 spec.

Page 26: Celia Desmond

Celia Desmond IEEE Communications Society

26ANDICOM’2004 Cartegena de Indias October 2004

WiMax Ideal for Rural AreasWiMax Ideal for Rural Areas WiMax will use either licensed or unlicensed parts of

the radio spectrum As fast as traditional broadband but potentially less

expensive; relatively easy to create Well suited to rural areas as those found in Russia- no

need for wired “last mile” British Telecom testing an 802.12a product now in

small, remote Northern Ireland village; if successful, may roll out across UK

In addition to Internet access, WiMax can also carry voice over Internet Protocol--another technology I’ll address shortly

Page 27: Celia Desmond

Celia Desmond IEEE Communications Society

27ANDICOM’2004 Cartegena de Indias October 2004

WiMax Faces Some WiMax Faces Some ObstaclesObstacles

Many proprietary systems- affects device interoperability

systems from Cisco, Motorola, Tsunami

Other systems based on IEEE 802.16 standard or corresponding one from the European Telecommunications Standards Institute

Intel, Nokia, Alvarion Ltd among about 40 companies in WiMax Forum working to eliminate barriers to adoption of standard, such as interoperability and cost of deployment

No mobile version yet

Page 28: Celia Desmond

Celia Desmond IEEE Communications Society

28ANDICOM’2004 Cartegena de Indias October 2004

IEEE 802.16 “WiMAX” WAN IEEE 802.16 “WiMAX” WAN PropertiesProperties

Properties Power: Varies with band. Profiles from 100 Mw up to 2W Configuration: P-P and P-MP Cellular Spectrum: Initially 3.5 GHz licensed and 5.8 GHz unlicensed bands Radio interface: OFDM, using 256 tones Access Protocols:

Downstream: TDM (Broadcast) Upstream: TDMA with access contention

Security via station authentication and encryption Data rates variable with channel bandwidth 3.5 MHz in 3.5 GHz band, 20 MHz in

5.8 GHz band Actual realizable data rates are ~ 2b/Hz

Maximum range ~2Km for indoor Non-LOS cellular service at 3.5 GHz Indoor NLOS 2nd Gen interoperable products in 2006

The WiMAX Forum is an organization of vendors and users, that will provide interoperability standards and testing to WAN equipment compliant with IEEE 802.16a/d/e standards. It is described as “WiFi on steroids”.

Page 29: Celia Desmond

Celia Desmond IEEE Communications Society

29ANDICOM’2004 Cartegena de Indias October 2004

ZigBee: ZigBee: Ultra-low power TelemetryUltra-low power Telemetry

• 802.15.4 is a simple data protocol for low-capacity wireless networks intended for telemetry and control

• Optimized for very low power, extremely long battery life

• Applications as Active RFID tag

• Support of mesh network configurations

• Direct Sequence Spread Spectrum technology

• Three unlicensed bands, 27 channels specified

– 868.3 MHz 1 Channel 20 Kb/sec– 902-28 MHz 10 Channels 40 Kb/sec– 2.4 GHz 16 Channels 250 Kb/sec

The ZigBee Alliance is an industry association dedicated to interoperability of equipment conforming to the IEEE 802.15.4 spec.

Page 30: Celia Desmond

Celia Desmond IEEE Communications Society

30ANDICOM’2004 Cartegena de Indias October 2004

Comparison of Wireless Data Comparison of Wireless Data TechnologiesTechnologies

Technology 3G CellularWiMAX™(802.16d/e)

Wi-Fi™(802.11b)

ZigBee™(802.15.4)

Bluetooth™(802.15.1)

Typical Application

Wide Area Voice & Data

Wide Area Data

Data/Voice LAN

Control & Telemetry

Cable Replacement

Battery Life (days)

1-7 N/A N/A 100 - 1,000+ 1 - 7

Bandwidth (KB/s)

100-2000 1K-40K 11,000+ 20 - 250 720

Typical Range (m)

1,000+ 1K-30K 1 - 100 1 - 100+ 1 - 10+

Key Attributes

Coverage, Quality

Throughput, Coverage

Cost, Speed, Flexibility

Cost, Power, Flexibility

Cost, Simplicity

Page 31: Celia Desmond

Celia Desmond IEEE Communications Society

31ANDICOM’2004 Cartegena de Indias October 2004

2004 Update2004 Update Total Service Revenues Rise Nearly 13 percent -- U.S. carriers

earned service revenues of $41.4 billion in the first six months of 2003, up from $36.7 billion in the first six months of 2002.

Data Service Revenues Up 70 percent -- Total reported data service revenues reached $700 million in the first six months of 2003, up 70 percent from $411 million in the first six months of 2002.

Minutes of Use Up 30 percent -- Total billable minutes of use (MOUs) for the first half of 2003 were over 380 billion -- up more than 30 percent from 292 billion for the first half of 2002.

Monthly SMS Traffic Up Over 31 percent -- Reported SMS traffic for the month of June 2003 was over 1.2 billion -- up more than 31 percent from 930 million in June 2002.

Ref: CTIA

Page 32: Celia Desmond

Celia Desmond IEEE Communications Society

32ANDICOM’2004 Cartegena de Indias October 2004

2004 Update (Continued)2004 Update (Continued)

Digital Subscribership Reaches 92 percent -- The number of digital subscribers topped 128.3 million, an increase of nearly 17 percent since June 2002.

Wireless Investment Up Over 13 percent -- Wireless carriers reported over $134 billion in total cumulative capital investment in the first six months of 2003 -- up from $118.4 billion in the first six months of 2002.

Total Wireless Subscribership Up 10 percent -- Overall wireless subscribership increased to 148.1 million by June 2003, from 134.6 million as of June 2002.

Page 33: Celia Desmond

Celia Desmond IEEE Communications Society

33ANDICOM’2004 Cartegena de Indias October 2004

The Growth of InternetThe Growth of Internet

0

5

10

15

20

25

30

35

40

45

50

Nu

mb

er o

f In

tern

et h

osts

(m

illio

ns)

Growth in the Number of Internet Hosts (1991-1999)

Internet 2000 Over 300 million users online

Worldwide Internet Users (3Q’2000): North America - 147.48 M Europe - 91.82 M Asia/Pacific Region - 75.5 M Latin America - 13.19 M Africa - 2.77 M Middle East - 1.9 M Growth estimated over 500,000 new users per month Business is the fastest growth area

(Source: Microsoft)

Page 34: Celia Desmond

Celia Desmond IEEE Communications Society

34ANDICOM’2004 Cartegena de Indias October 2004

IP Telephony Market OpportunityIP Telephony Market Opportunity

From $314 million (U.S.) in 2000 to $4.02 billion (U.S.) in 2007

IP Telephony as % of all int’l calls in 2004

IDC forecasts that “Web Talk” revenues will reach US$16.5 bn by 2004 with 135 billion mins of traffic Tarifica forecast 40% Analysys forecast 25%

In developing countries, the majority of IP Telephony calls are incoming

(Source: IDC)

“Web Talk” revenues, US$bn

0.208

16.5

0

5

10

15

20

2000 2004

But it didn’t take off yet!

Page 35: Celia Desmond

Celia Desmond IEEE Communications Society

35ANDICOM’2004 Cartegena de Indias October 2004

Electronic CommerceElectronic Commerce - Growth of E-commerce- Growth of E-commerce

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2000 2001 2002 2003 2004

Growth of E-commerce (in billions)

(Source:IDC)

Page 36: Celia Desmond

Celia Desmond IEEE Communications Society

36ANDICOM’2004 Cartegena de Indias October 2004

The Next Generation Network: Internet2

low bandwidth best effort

transport protocols low security no allocation

Static applications e-mail file transfer browsing

high bandwidth quality of service

middleware user authentication cost-allocation

Real time applications interactive client server teleconferencing telepresence virtual environments collaboratories

Mission StatementFacilitate and coordinate the development, deployment, operation and technology transfer of advanced, network-based applications and network services to further U.S. leadership in research and higher education and accelerate the availability of new services and applications on the Internet

Mission StatementFacilitate and coordinate the development, deployment, operation and technology transfer of advanced, network-based applications and network services to further U.S. leadership in research and higher education and accelerate the availability of new services and applications on the Internet

Internet Vs. Internet 2

Page 37: Celia Desmond

Celia Desmond IEEE Communications Society

37ANDICOM’2004 Cartegena de Indias October 2004

Impact of ApplicationsImpact of Applications

DSL expecting solid growth Fast ethernet to gigabit crossover in 2004 E-business applications more bandwidth intensive

Implies tremendous growth for internet

Network doubling each year implies 1000 times the traffic in 10 years

Page 38: Celia Desmond

Celia Desmond IEEE Communications Society

38ANDICOM’2004 Cartegena de Indias October 2004

Value Proposition Value Proposition In total, service providers of revenue generation network services can provide

systems that have 5 basic pieces: A variety of access systems ranging from wireless to circuit to packet

systems A set of transport switching and routing systems that has an optical core A set of network services that build on top of the transport to make them

useful A layer of network management to perform element and multi-element

network management A layer of service provisioning systems performing customer care, billing,

trouble tracking/dispatching, etc.

In providing any portion of these services, the basic value proposition should

include reliability, manageability, and multiservice

Page 39: Celia Desmond

Celia Desmond IEEE Communications Society

39ANDICOM’2004 Cartegena de Indias October 2004

One Proposition - Broadband One Proposition - Broadband ServicesServices

Mobile services, local loop unbundling and VOIP causing decline in fixed market

In Hong Kong, voice services and broadband services are saturated

PCCW now offering TV, aiming for broadband data With over 30 channels of TV, they attracted 100,000

customers within 2 months Reference: Infocom 2004 - Dr. Liang Wu,

PCCW

Page 40: Celia Desmond

Celia Desmond IEEE Communications Society

40ANDICOM’2004 Cartegena de Indias October 2004

Another ApproachAnother Approach

SK Telecom has 55% of the Korean mobile market (47M people, 70% penetration)

They offer fixed and wireless internet and even handsets Offered 2G in 1999, 2.5G in 2001, 3G November 2002 Subscriber base growing rapidly with 3G offerings

• Services

– Ring tones 23%

– Games 8%

– Chatting 4%

– Shopping 2% SK Telecom has a joint venture with China Unicom Not all Korean experience will transfer directly to Chinese market - need to study

itSource: Infocom 2004, John Liu, CEO SK Telecom in China

Page 41: Celia Desmond

Celia Desmond IEEE Communications Society

41ANDICOM’2004 Cartegena de Indias October 2004

POTSISDN

PSTNSignalingGateway

POTS

ISDN

Cable Modem

xDSL

ResidentialGateway

• Billing Servers• Name Servers• Messaging Servers• Data VPN

SessionManagers

Service andBusiness

Management

NetworkDatabases

Network Services

NIU

Fixed Wireless

A Network VisionA Network Vision

BusinessMUX

POTSISDN

POTSISDN

OC3

xDSLRemote

VoiceATMLANs

NIU

Business Wireless

Firewall

MobileWireless Access

Residential AccessBusiness Access

Gateway

ATM Switches& IP Routers

Internet

PSTN

Multi-MediaResource

ServerFeatureServers

PacketGateway

PacketGateway

PacketGateway

Wireless,Wireless,Comm SftwComm SftwWireless,Wireless,Comm SftwComm Sftw

Wireless Access Gateway (

MobilityServer

ApplicationProcessor

Page 42: Celia Desmond

Celia Desmond IEEE Communications Society

42ANDICOM’2004 Cartegena de Indias October 2004

New Trends in TelecommunicationsNew Trends in Telecommunications

Convergence of telecommunications, computation and entertainment, leading to innovative new services

Bandwidth expansion The great rates war Migration of intelligence Globalization Create need for both technical skills and personal management skills Emerging role of consumer electronics

Sony announced new line of television and appliances with WiFi Intel supports WiFi in domestic environment Centrino and various chip for enabling WiFi on appliances Trend toward non-hierarchical networks, wireless routers, hot spot Software radio

Page 43: Celia Desmond

Celia Desmond IEEE Communications Society

43ANDICOM’2004 Cartegena de Indias October 2004

What about the business What about the business perspective?perspective?

Since 1993, major mainframe/server manufacturers changed - only 1 of 18 major manufacturers left today (Kevin Kalkhoven OFC 2003)

PC’s replaced mainframe - market shift - financed by individuals rather than corporations

Grew as % of GDP from 2% in 1991 to 10% in 2001 US business and consumer expenditures flat at 2% - so

telecom needs to find a similar new market in order to grow more than the GDP

Page 44: Celia Desmond

Celia Desmond IEEE Communications Society

44ANDICOM’2004 Cartegena de Indias October 2004

Top CompaniesTop Companies

1997 Revenues $M

Alcatel 30,880

Lucent 30, 147

Motorola 29,794

Ericsson 21,242

Nortel 15,475

2002 Revenues $M

Motorola 30,004

Nokia 27,763

Ericsson 22,369

Alcatel 22,567

Cisco 18,915

Factset and Band of American Securities estimates

Page 45: Celia Desmond

Celia Desmond IEEE Communications Society

45ANDICOM’2004 Cartegena de Indias October 2004

2002 Year End Actuals2002 Year End Actuals Americas

• Motorola• Cisco• Lucent• Nortel

Europe• Nokia• Seimens• Alcatel• Ericsson

Asia• Fujitsu• NEC

26.7

19.2

10.8

10.6

28.5

18.5

16.5

15.0

13.6

11.3

Page 46: Celia Desmond

Celia Desmond IEEE Communications Society

46ANDICOM’2004 Cartegena de Indias October 2004

Network EvolutionNetwork Evolution

To survive, networks must be Evolvable Scalable Flexible Have open standards Be easy to maintain and operate Be open to rapid service development Be priced competitively Support multiple services

Page 47: Celia Desmond

Celia Desmond IEEE Communications Society

47ANDICOM’2004 Cartegena de Indias October 2004

Where is Networking going?Where is Networking going?

Future Internet will be the basis for high speed global networking

Security is very important for e-Business to take off Rapid growth and diversification of the ISP Market Upgrading the Local Access Infrastructure Growing Role for Wireless Services WAN, MAN, LAN,

CAN, HAN - 3G in NA???, 3G now in Asia Voice and data convergence generating new integrated

services

Page 48: Celia Desmond

Celia Desmond IEEE Communications Society

48ANDICOM’2004 Cartegena de Indias October 2004

Market DynamicsMarket Dynamics

Revenue of voice and data are split as 80% and 20% in 2000

Local voice in single digit growth Traditional data in single digit and

Internet services in double digit growth ILD and DLD voice flat to decline Mobile in rapid growth Optical bandwidth glut is triggering

price declining in Data/Internet services

2000 Market Size of US $880B

Asia Pacific23%

RoW4%

North America34%

CALA9%

Europe30%

2000 Market Share by Services

Mobile27%

Local37%

ILD11%

DLD25%

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Celia Desmond IEEE Communications Society

49ANDICOM’2004 Cartegena de Indias October 2004

CompetitionCompetition-the technology perspective-the technology perspective

Transport• T1, PRI, T3, Optical (SONET, SDH, DWDM), Microwave, and

Satellite Access

• ISDN, DSL, Cable Modem, Broadband Fixed Access, Wireless access, and Satellite

Switching• Frame Relay, ATM, IP Routing, MPLS, and Gigabit Ethernet

Mobile• GSM, TDMA, CDMA, GPRS, 1xRTT, WCDMA, and

CDMA2000

Page 50: Celia Desmond

Celia Desmond IEEE Communications Society

50ANDICOM’2004 Cartegena de Indias October 2004

ConclusionConclusion

•More content format

•More network-based services

•More technology changes

•Changes in end user’s device

•…

Internal Influences•Service definition•Service design•Network design•Customer service levels•Special technology and vendors

Ext. Influences•Regulatory•Technology•Standards•Marketplace

Technology Influences•Speed – BW•Security•Access terminal•Standards Service Influences

•Intelligence move to edge•Peer-to-peer application•Free service model failed•New killer application

Future: Network-Centric Age Content-Centric Age

InternetTelecom

New Influences •Regulatory•Market•Competition

+

Gradual fading away of circuit switching ...