3G / 4G / XG IN UKRAINEOleksii Khodenko

3G in Ukraine

2

− How much have we lost?

− How much can we win?

On February 23, the National Commission for State Regulation of Communications and

Information sold licenses in 3G standard. The winners of the tender were three major mobile

operators.

OUTLINE

1. Main questions

2. Evolution of mobile technologies

− Where is Ukraine?

3. The impact of broadband on the economy

− Contribution to GDP

− Contribution to employment

4. Global trends 2020

5. New products & services

6. Internet providers

3

Evolution of Mobile Technologies

4

Mln subs

1996 2000 2004 2008 2012 2016 20200

1,000

2,000

3,000

4,000

5,000

3G

2G

4G LTE

???

Source: GSMA Intelligence, OpenSignal.com

March 2015: 124 countries

with LTE

Evolution of mobile technologies

5

Weak Signal Strong Signal

Result 2015

Source: OpenSignal.com

Although UkrTelecom obtained 3G

license in 2005, it seems reluctant to

develop the new standard from zero.

4G Speed VS Other Technologies

6

3

7

10

1213

1415

1617

18

USA Saudi Arabia

Spain Finland Argentina UK JapanTaiwanPoland Australia

4,4

0,2

1,5

9,3

2G WiFi3GAverage 4G LTE

Average download speed (Mbps)

Source: OpenSignal. State of LTE report (March, 2015)

What Have We Lost?

7

Benefits of high speed broadband:

1. Increased economic growth− Direct investments in infrastructure

− Productivity gains in firms

− Higher household income

2. Job creation− Direct jobs

− Indirect jobs

− Induced jobs

3. Public welfare improvements

Source: Pellegrino and Klemann (2012)

We have lost much more than a

possibility to watch funny videos on

YouTube

Contribution to GDP

8

Kohman2011

Qiang2009

ITU Universe 2011

Czernich2011

Kongaut 2014

Deloitte2012

Every time a country`s broadband

speed doubles, the country`s GDP rises

0.3 per cent

Increasing the broadband penetration

by 10% stimulates GDP per capita by

0.9-1.5%

A 10% increase in mobile penetration

increases TFP in the long run by 4.2

percentage points

10% increase in broadband penetration

is yielded an additional 1.38% in GDP

growth

Impact on GDP varies widely, from

0.25% (OECD) to 1.38% for every

increase in 10% of penetration.

Broadband speed has greater impact in

countries with lower income than

countries with higher income

Contribution to GDP. Ukraine

9

2013

3 900???

2014

+2.87%

2012

3 873

2011

3 575

2010

2 974

2009

2 545

2008

3 891

2007

3 069

2006

2 303

2005

1 829

Source: World Bank, GSMA Global Mobile Economy 2015 Author`s calculations

GDP per Capita (current US$)

Total Impact

2.87%

Productivity Improvement

1.62%

General Economy

0.22%

Related Industries

0.29%

Mobile Operators

0.74%

Contribution to GDP

If 3G licenses had been provided in 2005, GDP per capita in Ukraine could increase by

additional ~110 US$ per year by 2013.

Contribution to Employment

10

Direct Jobs

• Telecommunications

technicians

• Construction workers

• Civil engineers

Indirect Jobs

• Electrical equipment

workers

• Metal products workers

• Professional services

Induced Jobs

• Consumer durables

• Retail trade

• Consumer services

Externalities

• Brand new businesses

Employment generated in

the short term by

deployment of network

facilities

Employment generated by

indirect spending (or

businesses buying and

selling to each other in

support of direct spending)

Employment generated by

household spending based

on the income earned from

the direct and indirect effects

Employment generated by

new applications and

services, new forms of

commerce and financial

intermediation etc.

Source: Katz, The impact of the broadband on the economy. McKinsey global SME survey

+ 0.81 + 1.78 + ~3.50

For every one job destroyed by the Internet 2.6 are created!

Contribution to Employment. Ukraine

11

Job creation in Ukraine

20162015 2017

8 018

10 289

20 774

2018

25 584

Direct

Indirect

Induced

Brand new

TOTAL = 63 616

United States

Switzerland

United Kingdom

Source: Katz, The impact of the broadband on the economy. Author`s calculations

Creation of 140k jobs per year over ten years.

(180k jobs per year by another estimation)

Total jobs: 114,000 jobs over four years (including

83,000 direct and 31,000 indirect)

Total jobs: 211,000 jobs over four years (including

75,500 direct and 134,500 indirect and induced)

Wireless advances creates jobs even in recession!

Public Welfare Improvements

12

Entertainment

Online Education

Banking Services

Health Care

Open Public Services

M-Payments

13

Investments in

Broadband

Higher quality

of life

Positive impact

on Economy

Global Trends

14

Global Market 2020

15

Unique subscribers, bln

4.6

3.6

2014 2020

3G / 4G connections

20202014

69%

39%

Smartphones, bln

2.6

2014 2020

5.9

Brand new services

?

2014 2020

?

M-Commerce, US$ bln

904

204

2014 2020

Wearables, mln

43

20202014

365

Source: GSMA Intelligence

Global Trends

16

mAgriculture

Green Power for Mobile

EntertainmentOnline Education

mBanking

mHealth Care

mGovernment

M-Payments

Potential 5G Cases

17Source: GSMA Intelligence

- Fixed point

- Nomadic

- On the go

Services that could be enabled by 5G

18

“Five years ago, most content on Facebook

was text. Now it’s photos. Fast forward five

years and it will be video. After that, it will

be immersive content like virtual reality.”

Connecting Everything

19Source: http://www.janua.fr/security-iot-internet-things/

The Internet of Things – embedding sensors and actuators in machines and other physical

objects to bring them into the single connected world.

Dozens of new services & products are

yet to come

20

Internet providers?

21

22

Google Project Loon

Source: Google Project Loon

Loon balloons float in the

atmosphere, twice as high as

airplanes and weather.

People will be able to connect to

the Internet directly from their

phones and other LTE-enabled

devices.

23

Google Titan

24

Facebook The aircraft will be powered by solar panels

on its wings and it will be able to stay at

altitudes of more than 60,000 feet for

months at a time. 

Aircraft will help to connect the 10% of the world's

population that live in remote communities without

existing internet infrastructure. 

25

Low-Orbit Internet Satellites

Elon Musk

4,025

Satellites

1,100

Altitude

~2020

Launch

Richard Branson

2,400

Satellites

1,200

Altitude

2017

Launch

CONCLUSIONS

1. The investments in broadband and new services enabled by 3G network will bring substantial economic and social benefits to Ukraine

2. Ukraine will bridge the gap with the developed countries and sooner or later will be able to move on par with them.

26

Thank You !

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