Lte Forum Sweden April 2010 Ventura Lte Discussion
18
turning knowledge into action LTE Forum Stockholm April 28 th , 2010 David Brown: +447939544481, email: [email protected] HSPA / LTE Business Case Modeling approach to UK broadband spectrum options
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Ventura addresses the question of whether it makes sense for legacy 900GSM operators in the UK to bid on 800MHz spectrum in view of a proposed sub-1GHz cap on spectrum. Using our suite of wireless technology models, we calculate under different network clutter types for Greater London and Cambridgeshire the conditions under which it would make sense to deploy LTE in 2.6GHz, 800MHz, or persist with HSPA. Our conclusions validate anecdotal evidence that for legacy 900GSM MNO's, there is little to be gained from bidding on 800MHz unless to achieve deep rural coverage. Ventura has a comprehensive suite of network technology models that are able to calculate network CAPEX and OPEX for GSM, UMTS/HSPA, LTE and WiMAX for any spectrum allocation at any spectrum band. The suite has been designed with CTO technology selection decisions in mind and allows for multi-technology comparisons - quick and simple it isolates the major cost drivers from the perspective of the technology executive. The model outputs cumulative CAPEX, network cost/GB and customer profitability. Used in conjunction with our revenue and market share model, the combined suite can be used to undertake detailed business planning and valuation.
Transcript of Lte Forum Sweden April 2010 Ventura Lte Discussion
turning knowledge into action
LTE Forum Stockholm April 28th, 2010
David Brown: +447939544481, email: [email protected]
HSPA / LTE Business Case
Modeling approach to UK broadband spectrum options
Confidential – Page 2
Should original GSM900 MNO’s in UK bid for 800MHz?
• Loss of 900Mhz (2x10) and significant migration and disruption costs.
• Both Vodafone & O2 have invested heavily in UMTS/HSPA.
• Both legacy 900GSM operators are investing in HSPA Plus.
• What would we have to assume about the growth of data for it to make sense for Vodafone UK & O2 to deploy LTE nationally?
Confidential – Page 3
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2009 2010 2011 2012 2013 2014
'00
0 T
Byt
es/M
on
th
Mobile Data / Month (Global)
Global data set to grow to 3.6 ExaBytes/month
• Dongles (USB) being adopted in ever greater quantities.
• New devices – iPad
• New media platforms
• e.g Iplayer
• Smart Phones
• W. Europe: ~ 50% EoP
• Lower cost Netbooks, (emerging markets)
Source: Cisco Visual Networking Index 2009-2014
Data CAGR 108%
0.09
EB/month
3.6
EB/mont
h
Confidential – Page 4
How did we get to 3.6 ExaBytes/month?
Confidential – Page 5
Global growth translates into over 400 TB/month for the UK
• Aggregate Data CAGR 33% by EoP.
• USB broadband accounts for 15% of all handsets in market by EoP.
• Smart Phones (active data users)50% of all handsets by EoP.
Source: Ventura analysis adapting underlying
Cisco assumptions and trend.
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250
300
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400
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500
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
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Byt
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Total UK Traffic Forecast / Month
Smart Phone USB/Large Screen
Confidential – Page 6
UK data growth translates into over 23GB/month/customer
Source: Ventura analysis
Cisco Data Growth
Scenario ~
23GB/month
0
5
10
15
20
25
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
GB
ytes
/ M
on
th
UK Subscriber Traffic / Month
USB Data Smart Phone Data
Confidential – Page 7
• Is the perceived speed of LTE noticeably different?
• Does HSPA provide sufficient capacity?
• Migration path & timing?
Options for migrating to LTE in urban and rural areas
HSPA
HSPA Plus
LTE @ 2.6GHzHotspots/urban
LTE @ 800MHzCoverage
View on forecast data?
?LTE @ 900MHz,
1.8GHz & 2.1GHz
Dual / Quad Carrier scenario
Confidential – Page 8
Validate the prevailing view 800MHz (2x10) insufficient for LTE
Greater LondonSU,U, DU
HSPATarget 2Mbps
HSPA Plus2Mbps
LTE @ 800MHz (2x10)4Mbps
CambridgeshireR, SU, U
HSPA 2Mbps
HSPA Plus2Mbps
LTE @ 800MHz (2x10)2Mbps
LTE 2.6GHz (2x20)2Mbps
LTE @ 2.6GHz (2x20)4Mbps
LTE @ 800MHz (2x10)4Mbps
LTE 2.6GHz (2x20)4Mbps
LTE @ 800MHz (2x20)4Mbps
1
2
3
4
Using our network modeling tool designed for Executive decision making…
Confidential – Page 9
Assumptions 1 / Coverage Greater London
Sub-Urban 927km2
Urban 1,073km2
Dense Urban 187km2 Sub-Urban 927km2
Density 3,416km2
Urban 1,073km2
Density 9,164km2
Dense Urban
187km2
Density 18,000km2
(est. day-time pop)
Greater London Pop
7.5 million (2006)
Vodafone est: 2.3 million sub’s (pop x penetration x market share)
Confidential – Page 10
Assumptions 2 / top-level dimensioning
• Modulation Scheme 64QAM
• Both LTE @ 800Mhz & LTE @ 2.6GHz are deployed on existing sites
• Busy hour data calculated on USB dongle only
• Assume Smart Phone data spread more evenly over day
• Only civil upgrade costs incurred
Confidential – Page 11
LTE vs HSPA Greater London: comparable service speeds
9GB/month26GB/month
HSPA @ 2.1GHz (2x15)
+ LTE @ 2.6GHz (2x20)
in Dense Urban only
Customer Proposition
HSPA 2Mbps
LTE 2Mbps
LTE @ 2.6GHz (2x20) in
SU, U, DU
LTE 800MHz (2x10)
(SU,U) & 2.6GHz (2x20)
in Dense Urban only
Spectrum costs excluded from analysis.
Confidential – Page 12
Assumptions 3 / Coverage Cambridge & surrounding villages
Rural 4759km2
100km2
Sub-Urban 56km2
1,500km2
Cambridge & Rural
752k (2001 census)
Vodafone est: 240k sub’s (pop x penetration x market share)
Sub-Urban 50km2
Density 1,500km2
Urban 10km2
Density 2,400km2
Rural 4759km2
Density 100/km2
Urban 5km2
Density 2,400km2
Confidential – Page 13
LTE vs HSPA Cambridge: comparable service speeds
9GB/month
26GB/month
At lower data levels -
LTE 800MHz (2x10)
offers coverage
benefit over HSPA up
until ~ 9GB/month
Spectrum costs excluded from analysis.
LTE 800MHz (2x10)
converges towards
HSPA Plus at higher
data speeds. No real
advantage to deploy
in 800MHz.
16GB/month
Confidential – Page 14
LTE vs HSPA Cambridge: higher service speed on LTE
9GB/month26GB/month
After 9GB/month LTE
800MHz (2x10) is
capacity constrained
& LTE 2.6Ghz
performs better.
13GB/month
Spectrum costs excluded from analysis.
Confidential – Page 15
LTE vs HSPA Cambridge: higher speed on LTE & 800MHz (2x20)
13GB/month 26GB/month Coverage advantage
for LTE800MHz
(2x20up until ~
13GB/month. There
is marginal coverage
advantage in the long
run.
Spectrum costs excluded from analysis.
Confidential – Page 16
LTE vs HSPA Cambridge: Cost/GB
13GB/month 26GB/month
Initial cost advantage
of deploying in
800MHz (2x20) until
system is capacity
constrained ~
13GB/month.
Cost comparison of
deploying LTE in
800Mhz (2x20)
offering 2Mbps.
Benefit of LTE in
2.6Ghz (2x20)
Spectrum costs included in analysis (based on cost / GB for 3G auctions).
Confidential – Page 17
LTE vs HSPA Cambridge: Profitability per customer/month
13GB/month26GB/month
Impact of deploying
LTE in 800Mhz
(2x20)
Benefit of LTE in
2.6Ghz (2x20)
Analysis assumes:• LTE 4Mbps service• 10 Euro/month• 5 EURO assuming 50%
bundle utilisation)• Overhead• Network• Spectrum
Confidential – Page 18
Conclusion – we have validated conventional wisdom
• Geography where 800MHz is beneficial may be limited to deep rural coverage, transport corridors.
• LTE works best in 2x20 as is generally understood.
• 800MHz is potentially less valuable to legacy 900GSM operators (also migration costs).
• More likely deploy LTE in 2.6GHz and in the longer run migrate voice to 2.1GHz and deploy LTE in 900MHz.
• Despite not having access to 800MHz a 900GSM MNO can still launch a compelling broadband proposition in 2.6Ghz.
• H3 possibly well positioned to acquire lower band spectrum and deploy a nationwide broadband network.
