The Need for a Socio-economic Approach in
Assessing Spectrum Requirements for Future
Mobile Communications Markets and Services
Simon Forge
SCF Associates Ltd
simon.forge@whsmithnet.co.uk
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ITU Geneva
Ubiquitous Networks and Radio Aspects
SCF Associates LTD
SCF Associates LTD
07 Ubiquitous
April 2005
ITU Geneva
networks and Radio Aspects
SCF Associates Ltd
all rights reserved
1
SCF Associates LTD all rights reserved
New services have often been mysteries to the industry - greatly
underestimated or overestimated
Telecoms Industry
view at launch
The consumer speaks –
the ‘street’ view
ISDN
The next generation of
telecoms- replace POTS
UK / USA : “Idiot Services
users Don’t Need”
WAP
The mobile user will really
go for this technology
“WAP is crap” - expensive,
no services, difficult to use
Iridium LEOs
Just what the remote
business traveller needs
20 times too expensive
Internet/WWW
Ignore.... Oh still there ?!!
..horror -stifle! ..VoIP wins
Just use it (@ no cost)
GSM – digital mobile
An extra (minor) feed for
our fixed networks
Just what we need! - till we
see the bill ! -so PAYG rules
SMS
Minor supplementary
service (CLASS for Mobile)
The only service (mobile or
fixed) for many users
While some of the biggest product launches in communications services over
the last 20 years have delivered flops, seemingly trivial services have exploded.
ITU Geneva Ubiquitous networks and Radio Aspects
SCF Associates Ltd
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We need a better strategy to assess spectrum demands
- the underlying concepts and policy need to be improved as we have a rapidly
evolving market with exploding demand –
- a discontinuity in radio technology could occur at any time, in order to cater for a
far larger user population than the industry has ever seen before as radio
exceeds fixed line, and this effect is price sensitive
- a transformation is under way from a mobile communications market for the
transport of plain vanilla voice, over networks, towards a media and commercial
transaction environment and again this effect is price sensitive
However, many players in the traditional telecommunications world have yet to fully
realise these developments will occur.
Any useful approach must take account of this - it should track the most likely path for
customer demand based on needs and income and the healthy development of radio
services, not biased by a technical view or that of specific short-term interests.
ITU Geneva Ubiquitous networks and Radio Aspects
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The context – a global user population growth
Billions of mobile services users worldwide
•With globalisation, costs of services and handsets will slowly be set by average world prices
•Saturation is set by affordable price for the majority of users – numbers which may reach near
65% of a global population of over 7.5Bn by 2020 = 5Bn users
5
4
3
2 Bn, 2006/7
2
estimated
1.5Bn, 2004
1
800K, 2000
0
1985
1990
ITU Geneva Ubiquitous networks and Radio Aspects
1995
2000
SCF Associates Ltd
2005
2010
all rights reserved
2015
2020
4
Potential take-up of radio services: from communication to mobile
applications relies on a price benevolent context for disposable
income levels of the global mass market
Number of Mobile Applications
in mass usage
Applications service business
1000
Network service business
100
10
1
Phase 1
Network Communications
services
Voice
Voice
& SMS
1985
1990
ITU Geneva Ubiquitous networks and Radio Aspects
1995
2000
SCF Associates Ltd
Phase 2
First
Applications
phase
2005
2010
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Phase 3
Second
Applications
phase
2015
2020
5
Usage of a Public Service is dictated by cost
– with demand following to the Dupuit Curve (1840)
Price of service
High activity area of curve– where Disposable income
makes service affordable – so- service chosen depends on affordability –
-In Philippines, SMS is most affordable service – some
phones never used for voice
-Youth/ Children in OECD countries often only use texting
An added concept : the ‘Perception of freeness’
= unlimited usage
User Population
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Understanding the potential take-up of services
Measure against:-utility value to users
-affordability
-accessibility
ACCESSIBILITY
High take-up space
-Useful
-Affordable
-Available
(accessible
ubiquitously)
High
UTILITY
VALUE
High
Low
Low
Low
ITU Geneva Ubiquitous networks and Radio Aspects
High
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AFFORDABILITY to user
(includes terminal)
7
Mapping the potential of services to succeed
GSM
voice
Mobile Internet
Services
(if secure)
SMS
ACCESSIBILITY
MP3
download
High
High take-up space
-Useful
-Affordable
-Available
(ubiquitous)
3G
Services
2005
UTILITY
VALUE
Fixed Internet
Services
(Unprotected)
High
Fixed Line
Voice 2005
Fixed Line
Voice 1950
Telegraph ISDN
1850
Low
Low
WAP-1
Low
ITU Geneva Ubiquitous networks and Radio Aspects
High
SCF Associates Ltd
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AFFORDABILITY to user
(includes terminal)
8
The strategy going forward in spectrum
– what form of spectrum allocation suits each type of underlying technology?
Usable
Freq range
(Actual range)
Differentiation
mechanism
Form of spectrum
assignment
Assigned Bands
+ Guard bands
2G
FDD & TDD & Limited Spread
spectrum CDMA
0.3 – 3.5 GHz
(0.45- 2.3 GHz)
2.5G
FDD & TDD & Limited Spread
spectrum CDMA
0.4 – 3.5 GHz
(0.45- 2.3 GHz)
Assigned Bands
+ Guard bands
3G
Limited Spread spectrum
W-CDMA/ CDMA-2000
0.4 – 3.5 GHZ
(2.5- 3.3GHz)
Assigned Bands
+ Limited Guard bands
4G
Other NONcellular AWTs*
(WiFi etc)
Spread spectrum
Under 5 GHZ,
possibly
6-10 GHz
Unlicenced
spectrum, possibly
in bands
Limited Spread
spectrum/other
Under 5 GHZ,
possibly
6-10 GHz
Unlicenced
spectrum, possibly
in bands
*Alternative wireless technologies
ITU Geneva Ubiquitous networks and Radio Aspects
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Growth of take-up of radio services
Services
& capacity
available
Number of Mobile Applications
in mass usage
1000
Take-up
Machine to machine
ubiquitous services
AMI- style
Lifestyle multimedia services
at low cost
100
Multimedia and transaction services
with 2.5G and 3G constraints
on affordability and richness
10
2.5G Data and WAP
Voice
SMS
1
1985
1990
ITU Geneva Ubiquitous networks and Radio Aspects
1995
2000
SCF Associates Ltd
2005
2010
all rights reserved
2015
2020
10
Our perspective of demand is economic – it sets social and
technical parameters and features
Economic parameters
Social parameters
ITU Geneva Ubiquitous networks and Radio Aspects
Technical parameters
SCF Associates Ltd
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Focus on user needs gives a balanced estimate of future mobile
services
Economic /Financial Setting
Questions
to be
answered
User/ Social/Cultural
environment
Market/ Regulatory
Supplier industry /
Technology/
environment
What are the services
that are wanted?
What are the services
that are to be offered?
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How can we draw socio-economic pictures of future demand ?
- paint Scenarios
Assign
individual theme
within domain
of interest with
drivers
Assumptions
Scenario
Framework
(Static)
Assertions
List
Known key
Variables
Hypotheses
(to be tested)
Causal
Impacts analysis
Scenario
Behaviour
(Dynamics)
Relevance
trees
ITU Geneva Ubiquitous networks and Radio Aspects
Scenario
SCF Associates Ltd
Scenario Construction for Forecasting
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Scenarios generate motivations & user types with needs analysis
Disposable
income
Applications
User
Profiles
– usage
types
Application
Attributes
Network
Services
Needs
Scenarios Socio - economic
patterns
User
Population
by type
Content
Services
Cost vs. Disposable
income
Traffic
Motivations
Usage levels
(amount of use)
- and eventually applications, services, content and traffic
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The study for IPTS : -
FMS
IPTS /DG JRC/EC
Future
Mobile
Services
Future Mobile Services and Markets in Europe
http://fms.jrc.es
Simon Forge
Colin Blackman
Eric Bohlin
SCF Associates Ltd
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The whole FMS method can be summarised as 6 steps –
based on the economic, social and technical parameters
1…X
scenarios
Relative
Disposable
Incomes
between
scenarios
Motivations
ITU Geneva Ubiquitous networks and Radio Aspects
User
Types
Needs
Relative
Degree of
Usage of
Applications
Applications
(eg financial
Transactions)
SCF Associates Ltd
Amount
of Usage
Traffic
Volume
Services
Traffic
type
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The FMS method can be mapped on to the economic, social
and technical parameters
Numbers of Users in High/
medium/ Low income
bracket, by Epoch
Economic parameters
Relative
Disposable
incomes
User
types
Degree of
usage of
Applications
Amount
of usage
Traffic
Volume
Services
Traffic
type
1…X
scenarios
Motivations
Needs
Applications
(eg financial
transactions)
Social parameters
ITU Geneva Ubiquitous networks and Radio Aspects
Technical parameters
SCF Associates Ltd
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Mapping scenarios - against the economic and sociological
conditions
Favour
the take
up of
services
Main scenarios
Scenario 1:
Smooth
Development
Wild card
disruptive
scenarios –
may occur
within any
main scenario
Scenario 3:
Constant
Change
Economic
conditions
Scenario 2:
Economic
stagnation
Scenario 5: Natural
Or Man-made
International Disaster
Inhibit take
the up of
services
Favourable
ITU Geneva Ubiquitous networks and Radio Aspects
Social/ cultural/
political conditions
SCF Associates Ltd
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Scenario 4:
Financial
Crash
Unfavourable
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Comparing development in the Main Socio-Economic Scenarios
Scenario
2010
2005
1 SMOOTH
2015
2020
150%
100%
2 ECONOMIC 100%
STAGNATION
90%
80%
3 CHANGE – 110%
Changing
regions of
prosperity
100%
90%
EU Economic output
ITU Geneva Ubiquitous networks and Radio Aspects
Mean Disposable income 2005 -2020
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