Australian Mobile Telecommunications Association Productivity - Connectivity - Mobility Mobile Broadband A Key Economic Driver Overview • Broadband is the centrepiece of the digital age • NBN in partnership with latest generation mobile telecommunications will drive our digital economy • Aim to deliver - Productivity - Connectivity - Mobility • Spectrum is critical mobile infrastructure • What do Australian mobile operators need ? – retention of existing bands – access to Digital Dividend (700MHz) and 2.5GHz • The risk of indecision – Australia must keep up! Latest data (June 30 2008) Australian Communications and Media Authority • The number of 3G subscriptions grew by 88% in 2007-08 from 4.6 million to 8.6 million • There were 22.12 million mobile phone services in Australia at June 30 2008, up from 21.26 million • The welfare gained by customers (consumer surplus) from using mobile telecommunications services was $3,287.80 million compared to $317.50 million for internet services. The ACMA report says the majority of the increase in the consumer surplus is attributable to changes in the mobile telecommunications sector as prices fell and subscriber demand grew • In estimating the consumer surplus for mobiles, ACMA calculated that mobile phone calls fell in price by 21.5% and the price of SMS/MMS decreased by 41.5%. Economic Contributions of Mobile Telecommunications 16.0 $7.73 b $14.20 b Indirect Contribution Total Contribution 14.0 $ billion 12.0 10.0 8.0 $6.47 b 6.0 4.0 2.0 0.0 Direct Contribution Source: Access Economics 2008 Mobile Broadband - economic contribution Why mobile broadband will continue to drive productivity gains across all sectors of the Australian economy Current Forecast • As at June 2008 there were an estimated 1m mobile broadband connections via fixed CPE, data card, USB modem, handset as modem or embedded connection* • Increasing take up of 3G data services will contribute an additional $2.1 billion to Australia’s economic input by 2010** • Annual real household consumption will be 1.4% greater than it would be in a scenario without mobile broadband services^ • Real GDP increases by 0.9% more than it otherwise would without mobile broadband^ *3G in Australia: HSPA mobile broadband boom, Ovum, 10 November 2008 **Australian Mobile Telecommunications Industry: Economic Significance and Contributions, Access Economics, 2008 ^ NextG Productivity Impacts Study, Concept Economics, 13 February 2009 Demand for Mobile Broadband – Fact or Fiction? Broadband subscription forecast Fixed 2100 Mobile Subscriptions (Millions) 1800 1500 1200 900 600 300 0 2005 2006 2007 2008 2009 2010 2011 2012 Mobile Broadband includes: CDMA2000 EV-DO, HSPA, LTE, Mobile WiMAX, Other Fixed broadband includes: DSL, FTTx, Cable modem subs and other Mobile Broadband 2/3 of all subscriptions by 2012 Source: Ovum RHK & Internal Ericsson de title 40 pt subtitle 24 pt Technology Mobile Broadband speed evolution Text 24 pt vel 2-5 20 pt LTE - Advanced LTE HSPA+ Market impact Peak rate Typical user rate downlink Typical user rate uplink 2009 2010 ~2014 42 Mbps ~150 Mbps ~1000 Mbps 1-10 Mbps 10-100 Mbps Operator dependent 0.5-4.5 Mbps 5-50 Mbps Operator dependent Today, most regional areas have access to average 8Mbps services with HSPA+ 2 2009-06-02 Top right corner for field-mark, customer or partner logotypes. See Best practice for example. Global Spectrum Demand Forecast 2010 - 2020 M.2078: 1300 MHz ?? M.2078: 840 MHz Dec 2013 919 MHz evolving to 4G 700 MHz: 126 MHz Today: 380 MHz 2010 3G & LTE 2.3 GHz: 98 MHz 3G & HSPA 3.6 GHz: 125 MHz 3G, 2G & 3G HSPA & LTE 2.5 GHz: 190 MHz LTE & 4G 793 MHz Australia Spectrum bandwidth M.2078: 1720 MHz 2015 Source: ITU-R Report M.2078 (2007) Demand Forecast 2010-2020 2020 Retention of existing bands Incumbent spectrum licences in 800MHz, 1800MHz and 2100MHz expire from 2013 -17 No guarantee that incumbents will retain use of existing spectrum licences Impacting investor confidence in next generation networks ‘AMTA supports the Minister making a determination under s.82(3) of the Radcoms Act 1992 that mobile telecommunications – including future mobile broadband services are a class of services where reissuing spectrum licences to incumbents is in the public interest’ Getting the most out of the digital dividend • Research shows that the Australian Economy will be $7 to $10 billion better off if the Government unlocks the full potential of the digital dividend to support both broadcast and mobile use* ‘AMTA considers that demand for mobile broadband will require at least 120+MHz of usable UHF spectrum to be allocated to the mobile industry’*^ • Support for allocation of the Digital Dividend for mobile broadband use avoids Australia being isolated from the emerging global band plan •Spectrum Value Partners, ‘Getting the Most out of the Digital Dividend’, April 2009 Getting the most out of the digital dividend Net value added ($bn) 10 9 8 7 1. M obile ubiquitous / FTA market conservative 2. M obile ubiquitous / FTA market aggressive 6 3. M obile complementary / FTA market aggressive 4. M obile supplementary / FTA market conservative 5 40 MHz 60 MHz 80 MHz 100 MHz 120 MHz 140 MHz UHF spectrum allocated to mobile broadband (MHz) - UHF value maximised Reallocation of 2.5 GHz for mobile use • 2000 • International agreement on International Mobile Telecommunications (IMT) use reached • Universal international roaming band for LTE • 2008 • “This is not a healthy environment for business investment” Senator Conroy, RadComs, 2008 • Govt announced ‘way forward’ - limited progress • 2009 • No certainty - LTE deployment, ENG redeployment • 2010 > • Roll out plans from 2010 (US) - many other countries 2011 - 2013 Australia urgently needs conformity with global band plan Summary • • • • • • • Mobile demand growth (3G) strong and prices falling – ACMA Mobile economic contribution – direct and indirect – Access Mobile Broadband – productivity enabling technology Global and local demand for mobile broadband on the rise Technology pathway – speed and capacity evolution New spectrum allocations – critical future infrastructure Key spectrum issues; – Retention of existing bands – re-issue licences – Digital Dividend (700MHz) – unique opportunity - $7 - $10 billion from optimal allocation – latest research – 2.5GHz spectrum band key to 4G and beyond • Australia must keep up.