Mobile Broadband as a Complement to Fixed Broadband Banjul, Gambia, 13 July 2010

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Mobile Broadband as a Complement to Fixed BroadbandBanjul, Gambia, 13 July 2010

Belinda Exelby, GSM Association

© GSM Association 2010

Mobile Complements Fixed for Broadband

Fixed Broadband

1.3 Billion Lines19.4% of the world’s

population

Mobile

4.8 Billion Connections

72.7% of the world’s population


The Lessons of History

Source: Wireless Intelligence & ITU

(Fixed)

Comparing the slow growth in fixed broadband with the rapid pace of mobile adoption suggests that much of the future growth of broadband delivery will be over the mobile network.


The Changing Face of Mobile

Source: Wireless Intelligence, January, 2009

HSPA+28-42Mbps

HSPA14.4Mbps

WCDMA384kbps

GSM9.6kbps

2G

3G

GSM

HSPA

WCDMA

LTE100Mbps

199

0199

1199

2199

3199

4199

5199

6199

7199

8199

9200

0200

1200

2200

3200

4200

5200

6200

7200

8200

9201

0201

1201

2201

3201

4201

5

Consistent evolution of global standards provides economies of scale which drive down costs for consumers


HSPA Subscribers Today

HSPA/HSPA+ will dominate wireless broadband services, with 1.1 billion customers worldwide by 2015

US & Canada – 47.3MUS & Canada – 47.3M Western Europe – 75.6MWestern Europe – 75.6M Eastern Europe – 12.8MEastern Europe – 12.8M

Africa – 4.3MAfrica – 4.3M Asia Pac – 77.9MAsia Pac – 77.9MAmericas – 10.5MAmericas – 10.5M

Middle East – 9.3MMiddle East – 9.3M

Source: Wireless Intelligence, Q1 2010

Total HSPA Subs 237.7

million


LibyaHSPA Lunch: Q1 2007HSPA Subs: 811,983

EgyptHSPA Lunch: Q2 2006HSPA Subs: 819,774

BotswanaHSPA Lunch: Q3 2008HSPA Subs: 10,964

GhanaHSPA Lunch: Q4 2008HSPA Subs: 78,957

UgandaHSPA Lunch: Q4 2007HSPA Subs: 61,561

MadagascarHSPA Lunch: Q4 2009HSPA Subs: 5,411

MoroccoHSPA Lunch: Q2 2007HSPA Subs: 520,107

MozambiqueHSPA Lunch: Q4 2008HSPA Subs: 122,075

NamibiaHSPA Lunch: Q4 2006HSPA Subs: 37,832

NigeriaHSPA Lunch: Q1 2008HSPA Subs: 450,454

South AfricaHSPA Lunch: Q2 2006HSPA Subs: 1,289,510

TanzaniaHSPA Lunch: Q2 2007HSPA Subs: 112,997

KenyaHSPA Lunch: Q2 2008HSPA Subs: 31,218

HSPA Launch Dates and Subscribers in Africa


In Africa Mobile drives Broadband Penetration

In 2007, mobile broadband represented 24% of fixed broadband connections in Africa

By the end of 2009 this figure had climbed to almost 75%


Mobile Broadband - overtaking Fixed

Source: Wireless Intelligence & Telegeography

Where there is a choice of broadband access technology in Africa, consumers are using mobile more than fixed


Infrastructure Challenges

FIXED MOBILE

Limited existing infrastructure

High operating expenses

Further roll-out cumbersome and expensive

Rapid, relatively low-cost roll-out

Easily scalable

More spectrum becoming available

Mobile is critical for universal broadband coverage


Broadband -Transformational in Emerging Markets


Broadband Drives GDP Growth

World Bank analysis of 120 countries estimated that for every 10% increase in the penetration of broadband services, there is an increase in economic growth of 1.3%*

Booz & Co research found that:

Countries with 80% broadband penetration are more than twice as innovative as countries with 40% penetration

Increasing broadband penetration by 10% translates into a 1.5% increase in a country’s labour productivity

Sources: *World Bank, Qiang 2009; † Booz & Company, Enabling Sustainable Digital Highways; Strategies for Next-Generation Broadband

†


How Broadband Stimulates Economic Growth

12

Source:McKinsey

Explanation Examples

GDP contribution from direct investments in network

Immediate value creation

Impact of broadband investment on suppliers of equipment, content, etc.Multiplier effects

Foreign direct investments as a result of good ICT infrastructure

Foreign direct investments

Direct (ICT industry)

Indirect (other industries)

Increase in knowledge and skills as well as improved services through broadband

Human capital formation

More efficient business processes because of connectivity

Productivity increases


Policy-making to Facilitate Mobile Broadband

POTENTIAL ACTIONS FOR POLICY MAKERS

• Make low-band spectrum available to reduce access network cost• Ensure allocation of sufficient contiguous spectrum (10–12 MHz)• Monitor and manage usage to optimize allocation• Guarantee neutrality of technology to ensure innovation

• Promote infrastructure sharing (tower/backhaul) to reduce network cost

• Allow spectrum sharing/national data roaming to increase efficiency and reduce operational costs

• Charge nominal spectrum/licence fees to ensure affordability• Award licences based on coverage, partially substituting or

replacing financial criteria

• Ensure an economically viable number of players in the market• Allow industry consolidation if not market-distorting

-40–50

-35–40

-25–35

-20–30

-15–30***

• Provide incentives for roll out (e.g., regulatory concessions) • Encourage public-private partnerships or grant separate

licenses for rural areas to drive coverage• Provide public funding for remote areas to achieve sufficient coverage

Impact on cost to serve per subscriber*

Total impact of up to 75% reduction in cost to serve

Source:McKinsey


1987-2010

450-600 MHz

in each market

1987-2010

450-600 MHz

in each market

X3

Regulators are allocating more bandwidth and eliminating or redefining spectrum caps as they realise broadband requires

more spectrum

Regulators are allocating more bandwidth and eliminating or redefining spectrum caps as they realise broadband requires

more spectrum

According to ITU, by the year 2020 mobile services will need:

1.280 GHz for low market demand (rural areas)

1.720 GHz for high market demand (urban areas)

Aggregated Band Width

2010-2020

1.3GHz-1.7GHz

in each market

2010-2020

1.3GHz-1.7GHz

in each market

Spectrum is Needed for Broadband to Grow

Source: ITU-R Report M.2078


Economic Impact of Taxation

Impact of Taxation on the Development of the Mobile Broadband Sector in Emerging Countries, GSMA, July 2010


Estimated percentage increase in mobile penetration resulting

from changes in taxation

Estimated percentage increase in mobile user base resulting

from changes in taxation

Note: Malaysia is considered to be the benchmark at 6.1%

Taxation Structure Impacts Mobile Penetration

Source: Impact of Taxation on the Development of the Mobile Broadband Sector in Emerging Countries, GSMA, July 2010

Reduction of 1% of tax on TCO

Reduction of tax to benchmark rate (6.1%)

Reduction of 1% of tax on TCO

Reduction of tax to benchmark rate (6.1%)


Conclusions

Mobile broadband is a vital complement to fixed

Internet connectivity via mobile broadband will dramatically enhance people’s lives

and prospects provide a huge boost to national

economies Spectrum and taxation policies will

affect the pace at which mobile broadband networks can be rolled out


Your input to us?

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Mobile Broadband as a Complement to Fixed Broadband Banjul, Gambia, 13 July 2010

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