ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG
Global System for Mobile
a European success?
Ewan Sutherland
Executive Director
International Telecommunications
Users Group
ewan@intug.net
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG content
•
•
•
•
•
•
•
introduction
Groupe Speciale Mobile
market failures
the transition to IMT-2000
an ecosystem
what is a success or failure?
conclusions
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG Groupe Speciale Mobile
• many years in the making
• development of technical standards and
Memorandum of Understanding (MoU)
• enabled:
– exports beyond Europe
– economies of scale in manufacturing
– international roaming
• strong support of European Commission
• the legend of its own success
INTUG growth of digital mobile
1,600
3GSM
TDMA
1,200
PDC
iDEN
millions
1,000
GSM
800
CDMA
600
400
200
0
04-Q2
2003
2002
2001
2000
1999
1998
1997
1996
1995
Source: GSM Association.
1994
1993
1992
ITU SPU, Geneva 27.i.2004
www.INTUG.net
1,400
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG the “success” of GSM
• customer base built up over years
• vastly more than expected
• significant share of increased consumer
spending on communications
• pre-paid cards widened the market
• text messaging popular with youth
• increased share price (spin off from fixed)
• benefits for value chain
– manufacturers
– operators
– retailers
ITU SPU, Geneva 27.i.2004
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INTUG handsets
• highly personal device
• strong growth and competitive market
• European operators:
– cross-subsidies from other revenues
– weaker brands than handsets with belated
response of own/dual label devices
• Japan-Korea operators:
– close coupling with manufacturers
– essential for success of value-added services
and Internet access
INTUG n operators
• two 900 MHz:
ITU SPU, Geneva 27.i.2004
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– fixed incumbent encouraged
• two 1800 MHz:
– only one in some countries
– some opportunists entered, then sold out
• n+1 for UMTS:
– licences still left unassigned
– some licences returned
INTUG market failures
ITU SPU, Geneva 27.i.2004
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• mobile termination markets:
– excessive pricing
– discrimination in favour of on-net calls
• international mobile roaming markets:
– collusion
– excessive pricing (voice, SMS and data)
• SMS markets:
– excessive pricing
– discriminatory allocation of golden numbers
• call origination and access:
– number portability
– blocking or charging for 800 and +800 calls
– Irish joint dominance case
INTUG mobile termination rates
€ 0.25
peak
off-peak
per minute
€ 0.15
€ 0.10
€ 0.05
€ 0.00
CH
SL
PT
EE
MT
IT
GR
HU
BE
NL
FR
PL
ES
DE
LU
DK
UK
IE
AT
LV
IS
Source: ERG, July 2004.
SK
SE
LI
CZ
FI
NO
ITU SPU, Geneva 27.i.2004
www.INTUG.net
€ 0.20
€ 1.00
t-mobile (US)
t-mobile (UK)
vodafone (UK)
cingular (US)
att-ws (US)
vodafone (AU)
sfr (FR)
orange (FR)
bouygues (FR)
vodafone (IE)
telia (SE)
mobistar (BE)
meteor (IE)
tim (IT)
proximus (BE)
t-mobile (NL)
vodafone (ES)
wind (IT)
O2 (UK)
telfort (NL)
sonofon (DK)
telstra (AU)
vodafone (NZ)
t-mobile (DE)
vodafone (DE)
tdc mobile (DK)
ept (LU)
tango (LU)
netcom (NO)
telenor (NO)
base (BE)
telefonica (ES)
tele2comviq (SE)
cosmote (GR)
cosmote (GR)
tim (GR)
tim (GR)
€ 0.00
roaming
non-roaming
€ 0.80
€ 0.60
€ 0.40
€ 0.20
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG roaming calls within greece
€ 1.40
€ 1.20
INTUG roamers from 02 UK in Greece
O2 Pay & Go
without Euro bolt on
ITU SPU, Geneva 27.i.2004
www.INTUG.net
O2 Pay & Go with
Euro bolt on
O2 Pay monthly
O2 Business
roaming tariff
TIM - Talk n Text
Domestic Greek prices
for comparison
Cosmote - 480+240
£0.00
SMS
£0.25
£0.50
call within Greece
£0.75
call to UK
£1.00
£1.25
incoming call
£1.50
€ 20
€ 10
Cost per Megabyte
€ 15
€5
orange (FR)
sfr (FR)
bouygues (FR)
tim (IT)
t-mobile (AT)
wind (IT)
t-mobile (DE)
one (AT)
mobistar (BE)
sunrise (CH)
optimus (PT)
a1 (AT)
t-mobile (UK)
telia (SE)
telefonica (ES)
telenor (NO)
O2 (UK)
Source: INTUG, August 2004
proximus (BE)
ht-mobile (HR)
t-mobile (NL)
pannon (HU)
vodafone (UK)
vodafone (IE)
sonofon (DK)
vodafone (ES)
€0
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG GPRS roaming in Greece
€ 25
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG roaming in Singapore
T-Mobile (US)
Rogers (CA)
Fido (CA)
Optus (AU)
Vodafone (AU)
Vodafone (NZ)
Smartone (HK)
Telstra (AU
MTC (RU)
Sunday (HK)
Celcom (MY)
0
1
2
3
US cents per kilobyte
Source: INTUG, September 2004
4
5
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG operator resistance to
• regulatory interventions
• Mobile Virtual Network Operators
(MVNOs)
• alternative technologies:
– Wireless Local Loop (WLL)
– cdma450
– WiMAX
INTUG growth is in Asia
ITU SPU, Geneva 27.i.2004
www.INTUG.net
• developed country markets saturated:
– replacement handsets
– operator churn
• developing and emerging markets:
– China 5 millions a month
– India 2 millions a month
• competition with:
– WLL and limited mobility
– multi-mode handsets
INTUG Japanese mobile Internet
80,000,000
J-sky
EZweb
i-mode
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
2004-12
2004-08
2004-04
2003-12
2003-08
2003-04
2002-12
2002-08
2002-04
2001-12
2001-08
2001-04
2000-12
Source: TCA.
2000-08
2000-04
ITU SPU, Geneva 27.i.2004
www.INTUG.net
70,000,000
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG europe mobile Internet
• millions of GPRS handsets
• but no evidence of operator revenues
• money comes from:
– SMS
– ring tones
• operators have failed:
– to move customers to new services
– to engage service providers
INTUG transition to 3G in Japan
90,000,000
80,000,000
60,000,000
cdma2000 1x
50,000,000
W-CDMA
40,000,000
cdmaONE
30,000,000
PDC
20,000,000
10,000,000
0
2004-12
2004-11
2004-10
2004-09
2004-08
2004-07
2004-06
2004-05
2004-04
2004-03
2004-02
2004-01
2003-12
2003-11
2003-10
2003-09
ITU SPU, Geneva 27.i.2004
www.INTUG.net
70,000,000
INTUG transition to IMT-2000
ITU SPU, Geneva 27.i.2004
www.INTUG.net
• largely irrelevant for customers:
– cheaper voice?
– expensive new handset?
– but handset choice depends on features
(MP3, camera, PDA function, etc)
• real transition is to new services:
– GPRS or cdma2000 is adequate for users
• vital for operators and manufacturers:
– CDMA upgrade seems to work
– GSM to UMTS route still not proven
INTUG content delivery alternatives
• satellite broadcasting:
ITU SPU, Geneva 27.i.2004
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– Digital Multimedia Broadcasting (DMB)
• terrestrial transmissions:
– Digital Audio Broadcasting (DAB)
– Digital Video Broadcasting (DVB)
• terrestrial broadband plus:
– Wi-Fi hot spots
– FWA, Wi-Max, Flash-OFMD, etc.
e.g., MP3 ringtones direct from broadband
INTUG ubiquitous networks
ITU SPU, Geneva 27.i.2004
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• shared vision:
– Japan and South Korea
– government and industry
– fits with Keiretsu/Chaebol model
• built on today’s reality:
–
–
–
–
–
10-100 Mbps to the home
0.5 to 2 Mbps to the handset
Wi-Fi at home and in public places
DMB
wireless broadband (WiBRO)
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG an ecosystem
• term borrowed from biology, but not well
understood in mobile business
• 3GSM is only one part of a bigger system
• it is not immune from VoIP:
– Free.fr EUR 23.90 per month
for ADSL and fixed national calls
• can content providers make better
arrangements through other channels?
• complex value chain
INTUG beyond 3G
ITU SPU, Geneva 27.i.2004
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• seemingly inevitable hype about:
– High Speed Downlink Packet Access
(HSDPA)
– NGN, 4G, 5G, 6G, etc
– convergence
• putative policy framework:
–
–
–
–
ensuring competition
assigning new spectrum
business models
moving customers (without pain)
INTUG what is a failure?
ITU SPU, Geneva 27.i.2004
www.INTUG.net
• enduring abuses of market power
• wealthy operators exercising influence at:
– political level
– regulatory level
• incentives distorted from market demand
• failure to contribute to economic growth:
– directly in manufacturing and services
– downstream in the rest of the economy
• loss of social benefits
• loss of national “leadership”
INTUG what is a success?
ITU SPU, Geneva 27.i.2004
www.INTUG.net
• telecommunications sector:
– increased competition
– productivity gains
– new revenue streams
• downstream economic benefits:
– productivity benefits in business
– new services and markets
• upstream economic benefits:
– design and manufacturing jobs
– value-added services and content jobs
• social benefits:
– affordability
INTUG conclusions
ITU SPU, Geneva 27.i.2004
www.INTUG.net
• GSM crowd became overconfident
• the European model is deeply flawed:
–
–
–
–
serious and enduring market failures
power confined to a few
long-term planning and standardisation
despite the absence of robust business models
• 3GSM/UMTS plan is failing:
–
–
–
–
–
slow rollout
low revenues
little competition
increasing threat from other networks
still selling technologies
ITU SPU, Geneva 27.i.2004
www.INTUG.net
INTUG thank you
Ewan Sutherland
International Telecommunications Users Group
Reyerslaan 80
B-1030 Brussels
Belgium
+32.2.706.8255
ewan at intug.net
http://www.intug.net/ewan.html