TE aT Th lE TEn IS Co d no M To vE Wo Ta M Rl l BE d R

BUSInES S analySIS foR TElECoMS PRofES SIonalS

SEPTEmbEr 2011

lEadER

ConTEnTS
news in brief

SPECTRUM SPATS
The battle for scarce spectrum is intensifying as regulators gear up for auctions and operators eye up valuable assets
pectrum is at the top of the agenda right now for regulators and operators as service providers look to the next generation of mobile broadband services and at how to ease network congestion. Across the globe timetables are being set for spectrum auctions; in many countries the process is already underway. throughout europe, for example, regulators are in the process of auctioning off spectrum that can be used for lte services (timeline p.5). And there is another reason why this is a critical time for spectrum allocation: many of the original mobile licences that were awarded some 10–20 years ago are soon due

5 Timeline
A round-up of some of the major stories reported in our daily news service www.totaltele.com
technology trends

s

Ian Kemp Editor Total Telecom+

There is simply not enough spectrum to go round
to expire and are up for renewal, points out coleago consulting. Many argue that there is simply not enough spectrum to go round, although governments are taking steps to free up capacity. this month Uk regulator ofcom followed the lead of the Us in approving the use of white space spectrum—unused airwaves in bands reserved for broadcast tV signals—for services such as broadband and M2M communications. Just how precious spectrum has

become is reflected in some emerging confrontations. there are fears that Uk auctions, due in the first half of 2012, could be delayed due to potential legal action by some operators which argue they are not getting a fair crack at the whip in broadband/lte spectrum auctions (see network strategies p.12). And in the Us, At&t is finding to its cost that too much in the way of frequency assets and coverage can make the competition watchers twitchy. now that the department of Justice has moved to block its acquisition of t-Mobile UsA, At&t could face a break-up fee of up to $6 billion that would include losing valuable spectrum. if the deal is to succeed, At&t could still be forced to divest a large chunk of t-Mobile’s subscribers and spectrum. but others are making good use of their gains. operators which have been successful in lte auctions are giving iP multimedia subsystem (iMs) a new lease of life as they turn to the technology to deliver voice services and protect precious revenue streams (technology trends p.12). in future they plan to use the platform to deliver a whole host of new converged services. And reminding us that it isn’t all about ownership of assets, overthe-top content service providers are enticing operators into new partnership deals (p.16). with spectrum scarce, there could be a whole lot more sharing in future. n

8 IP multimedia subsystem (IMS)
iMs is finding favour among mobile operators moving to lte that want to protect voice revenues as well as introduce new converged services. but they face technology and process challenges, as well as competition from free applications.
network strAtegies

12 Operator LTE business models
spectrum will have a big impact on the lte business models of mobile operators, and some say they are not getting a fair crack at the whip in upcoming auctions.
content strAtegies

16 Over-the-top content strategies
operators are starting to embrace over-the-top content as a way to expand services and reach out to new audiences, developing new business models.
stAtistics

20 Prime numbers
worldwide mobile device sales in Q2, mobile operator capex and opex trends, and enterprise voice equipment revenues.

How do you meet the increasing expectations of your customers?

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terms. and restrictions set forth in Verizon’s tariffs or in applicable agreements between Verizon and the carrier. verizon. With our white label services. Verizon Global Wholesale will take care of everything else.Cable Operators . . modem cards and accessories branded as your own.com/wholesale/globalsolutions Verizon Global Wholesale serves: Carriers .You on the outside.Resellers © 2011 Verizon. Verizon Mobility Solutions has everything you need to satisfy your small business customers. conditions. Us on the inside. And with the reliability of Verizon behind it. you can provide your customers with the best service.ISPs .Wireless Providers . you can offer wireless handsets. You take the credit. All services are provided by Verizon in accordance with certain rates.

US blocks AT&T/T-Mobile deal the Us Justice department began a lawsuit to block At&t’s proposed Us$39 billion takeover of t-Mobile UsA. E100 million to roll out fibre to 100. as reported in our daily news service www. reached decisions on some major NETWORKS Spectrum auctions telefonica.totaltele.1 trillion in 2012.000 revenue (US$ billions) 800 600 400 200 0 595 2007 616 2008 631 2009 646 2010 Source: Wireless Intelligence n Developed n Developing 960 885 1. sprint nextel.8% and paving the way for a possible iPo.com revenues from mobile operators worldwide will reach US$1. a 35% stake in orange Austria.com BuSiNESS Google buys Motorola unit google agreed to acquire Motorola Mobility for around Us$12. Developing countries drive mobile growth 1.8-ghz spectrum and kt corp picked up 10 Mhz of 800-Mhz frequencies. Vodafone and france telecom were among operators to win spectrum in the 800-Mhz. 3 italia and wiMAX operator linkem are taking part in auctions of lte spectrum in italy to be completed in september. India policy changes Eircom invests in fibre irish operator eircom will invest india’s telecom commission. Another auction is expected in the autumn which could raise a further E2 billion. A merger would unite the country’s secondand third-largest operators to challenge market leader cosmote.TIMElInE A roundup of the major stories in telecoms in the past month. russia. closing its webos devices unit in the process.000 homes and businesses by mid-2012. later clearwire’s biggest shareholder.1-ghz band.5 billion in a deal it hopes will bolster its Android strategy.totaltele. with its home market operations rolled into europe. eircom will launch iPtV services on the infrastructure which will ultimately reach 1 million premises in ireland.65 billion. overtaking the US in terms of market size by 2012.057 290 344 382 410 Clearwire confirms LTE plans wiMAX operator clearwire confirmed it will roll out lte in densely populated areas of the September 2011 www. reducing its holding to 69. including the creation of a new unit. the restructuring plans will see h-P focus on software and services. Global operator revenues reached US$1. the country’s thirdlargest mobile operator.5% stake in its indian operation essar to medical services provider Piramal healthcare for £400 million.2 billion. Vodafone set for Wind Hellas Vodafone began talks to merge its mobile business in greece with rival wind hellas. if the deal does not go through At&t could be liable to a break-up fee of $6 billion in cash and spectrum. the threshold for foreign investment in a company in india is 74%. according to a new study by Wireless Intelligence.013 1. America Movil to buy Telmex wireless operator America Movil plans to buy the 40% of Mexican fixed-line operator telmex that it doesn’t already own. US cable acquisition time warner cable signed a deal to buy rival cable company insight communications for Us$3 billion. 900-Mhz and 2. skype bought group messaging application company groupMe for an estimated Us$85 million. to be headquartered in london. for a total of E1.057 trillion in 2010. France Telecom to sell assets france telecom plans to sell its assets in switzerland.5 billion. Sprint-Lightsquared deal sprint nextel agreed a deal to deploy and operate lightsquared’s planned nationwide wholesale lte network in the Us. for around Us$6. And in south korea lg U+ won 20 Mhz of spectrum in the 2. the unit will become one of three principal business divisions alongside europe and latin America. wind. 5 HP exits hardware market hewlett-Packard announced it will stop making computers and mobile products. and the company also announced the acquisition of database search company Autonomy for Us$10. including a limit to the maximum amount of frequencies a mobile operator can hold and the introduction of a uniform licence fee across all telecoms service areas. . and last year was prevented by the regulator from merging whollyowned orange switzerland with tdc’s sunrise. sk telecom acquired 20 Mhz of 1. mobile operators in the brIC countries—brazil.6-ghz bands in an auction in spain. telecom italia Mobile. the purchase is expected to be completed by early next year. Portugal and Austria. Telefonica restructures spain’s telefonica announced a significant restructuring of its organisation to focus on digital services. in phase 1 of a multi-year operation. it has a 20% stake in fixed-line operator sonaecom in Portugal. policy changes. Vodafone italy. Skype gets group messaging Vodafone sells India stake Vodafone agreed to sell a 5. Us. began talks with cable companies that could lead to the acquisition of the wiMAX wholesaler. telefonica digital. with developing markets the primary engine of growth and contributing over 40% of the total. lightsquared will pay about Us$9 billion over 11 years. India and China—are set to exceed US$200 billion in revenues.

Jobs co-founded Apple with Steve Wozniak in 1976. And AMc won the second 3g licence in Albania. www. Mombasa and kisumu. service and support management. with revenues for its 2011 third quarter increasing 82% year-on-year to US$28. aiming to launch an MVno in the Uk early next year and then in other european countries. but was ousted from the firm following a board power struggle in 1984. is also set to retire after 10 years working for the blackberry maker. LTE launches in Spain telefonica and Vodafone are set to launch lte services in spain this month. announced a shakeup of the senior management team. the current cfo and deputy ceo. Huawei appoints UK head RIM job cuts as COO retires riM is planning to cut 2. at its bonn headquarters through to 2015. Power company targets telcos state-owned hungarian power wholesaler MVM plans to enter the telecoms market. during which time Cook fulfilled his duties. BSNL upgrades broadband bsnl signed a deal for Zte to deploy Adsl2+ and Vdsl2+ equipment in 15 telecoms circles in india. Dish plans LTE network Us satellite tV company dish filed plans with the Us regulator to build a hybrid satellite and lte mobile network. up to 1. “I believe Apple’s brightest and most innovative days are ahead of it. Tellabs job cuts tellabs will cut about 330 jobs.” Jobs said in his resignation letter. will leave after the company undergoes structural separation next year. its coo. has been responsible for Apple’s worldwide sales and operations.57 billion and profit up 125% to US$7. Zain upgrades in Saudi Arabia Zain has selected Alcatel-lucent to implement a new iP/MPlsbased mobile backhaul solution in saudi Arabia. In a letter to the board. And I look forward to watching and contributing to its success in a new role. The previous month it reported record financial results. sales. FT appoints Europe head france telecom appointed benoit scheen as its vice president of europe excluding france. the former selected Alcatel-lucent to deploy two lte networks in Madrid and barcelona later this year. Pakistan. Paul reynolds. don Morrison. Telstra sets separation plan Australian regulators raised concerns over the details of telstra’s plans to undergo structural separation and migrate services to the new national broadband network by July 2018. UK operator shakeup olaf swantee.600 in total. iPod (2001) and iPhone (2007). taking over from ceo rob conway who resigned in June. His return in 1997 prompted Apple’s revival and a series of ground-breaking products: imac (1999). 6 New head for GSMA the gsM Association appointed orange executive Anne bouverot as director general. He also headed up the company’s macintosh computers division. Network sharing in Poland Polish operators Ptc—owned by t-Mobile—and tPsA—owned by orange—signed a deal to share their radio access networks. JoBS STEPS doWn 3G launch in Kenya orange-owned telkom kenya launched 3g services in nairobi. the network joint venture of mobile operators everything everywhere and 3Uk. In August Apple became the world’s largest company by market capitalisation. hoping to raise up to Us$1 billion.500 jobs related to the former Motorola solutions unit it acquired this year. dish plans to use the 20-Mhz frequencies in the 2-ghz spectrum band it acquired when it bought terrestar in July. but he will continue to serve the company as chairman of the board. Apple sold 20. scheen was ceo of Mobistar in belgium. Cook. replacing ivan seidenberg who retired in August. by the end of the second quarter of 2012.totaltele. Vodafone launched services in the country in January. bartz had led the company since January 2009. Batelco replaces CEO Yahoo changes leadership yahoo dismissed ceo carol bartz and appointed cfo timothy Morse as its interim head while it searches for a permanent replacement.com July/August 2011 . including supply chain. with interim ceo John stanton now board executive chairman.34 million iPhones in the quarter. Clearwire’s new head clearwire promoted erik Prusch to president and chief executive. bahrain-based operator batelco replaced long-time group ceo Peter kaliaropoulos with deputy chairman of the board. chinese vendor huawei appointed simon culmer in the newly-created role of vice president of enterprise in the Uk and ireland.TIMElInE Virgin wins MBNL contract Virgin Media business won an eight-year contract worth in excess of £100 million to upgrade the backhaul infrastructure for Mbnl. shaikh Mohamed bin isa Al khalifa.31 billion. Deutsche Telekom cuts deutsche telekom reportedly will cut around 400 jobs a year. Steve Jobs in August announced that he would step down from his role as CEO of Apple and will be replaced by chief operating officer Tim Cook. NSN job cuts nokia siemens networks will cut about 1. PEOPLE New Verizon CEO lowell McAdam is the new ceo of Verizon communications. Albania 3G licences Pakistan plans to issue the country’s first 3g licences in october. Apple co-founder Jobs was diagnosed with pancreatic cancer some eight years ago and in 2009 underwent a liver transplant during a lengthy leave of absence from work. China Telecom eyes Europe china telecom is planning its first mobile operations in europe. who took over from tom Alexander as ceo of everything everywhere in the Uk at the start of september. six executives will leave the company including richard Moat. in his role as COO. New Zealand CEO to leave telecom new Zealand ceo. Jobs admitted that he can no longer fulfil the duties and expectations required of the CEO role.000 jobs across its global workforce. or 10% of its workforce.

Inc. and drive revenue.©2011 Telcordia Technologies. We’ll help you get it right as you deliver innovative new services. The greater the challenge. Because when you’re backed by our expertise. operate more efficiently. you’re positioned to soar.telcordia. All rights reserved. Telcordia has been solving the world’s toughest communications challenges for nearly three decades. www. Fortunately.com . need to the greater the Balancing your need for revenue with your customers’ demand for new services isn’t easy.

product marketing & business development.” says Ali kafel. helping mobile operators to ward off competition for their core revenue-generating services. Viber and fring are developing new things.” she says. and now has several million VoiP subscribers. but it is also incorporating elements of iMs. “what we do with iMs is slightly different to what others do with iMs. google. as well as the handsets. “the general problem was that iMs required a significant reworking of the network. is time during which the likes of skype. “All of that stuff will be taking place while mobile operators are getting onto the Volte page. “it involved replacing or refreshing services that generated revenues. networks.10) have continually developed enhanced multimedia services using iMs. they can’t be run off one central location.” these internet players move quickly because they don’t I P M U LT I M E D I A S U B S Y S T E M S IMS is finding favour among mobile operators moving to LTE that want to protect voice revenues. senior director of technology at the gsM Association (gsMA). china’s operators including china telecom have been mandated to do this.” says dimitris Mavrakis. but there are technical and process challenges ahead. and deploy iMs only when you need to offer multimedia services. and while they take time to do this over-thetop providers can advance their offerings. as the chinese government looks to reduce the country’s power requirements. operators reacted cautiously to the technology. when delivering VoiP. And while operators grappled with how to make money from services such as instant messaging and video telephony.” says diane Myers. at infonetics research. iMs will add voice and multimedia telephony services to lte using Voice over lte (Volte). senior analyst. some mobile operators such as Japan’s ntt docoMo and korea’s sk telecom (see box p. “the challenge is that the length of time it takes to generate sufficient inter-operator interconnect and roaming. says dan warren.” iMs was envisaged a decade ago as an over-arching core signalling and control architecture upon which new services would be developed and delivered across various access networks. other operators are moving to VoiP using iMs switches to achieve operational savings as they replace their class 5 Pstn switches. at informa telecoms & Media. in part that is because vendors have adopted iMs for their voice products. but the main iMs deployments to date have been in the fixed network. Mobile operators adopting iMs-based Volte will need to ensure that the resulting services match the quality of circuit-switched voice.” says Myers. he says. monolithic boxes that consume a lot of power.” operators had no reason to replace infrastructure that was working well and generating revenues even if iMs promised greater efficiencies.6 billion $176 million 2008 2009 2010 2011 2012 2013 2014 2015 Source: Infonetics research while the likes of Vodafone and A1 telekom Austria (formerly Mobilkom Austria) have launched enterprise services. rather than adopting iMs. Worldwide IMS equipment revenues $1. colt technology services is one fixedline operator that has adopted sonus’ softswitch platform for VoiP. By Roy Rubenstein A have to worry about fallback to the circuitswitched domain or interconnect to other players. in reality. sonus networks. directing analyst. “class 5 switches are large. “there are operators where deploying iMs makes sense.totaltele. you have to have them located in different points of presence.TEChnology TREndS MUlTI TASKING confluence of events surrounding the deployment of long term evolution (lte) wireless technology is finally placing iP Multimedia subsystem (iMs) at the core of the network. deploy ngn. but mobile operators also face a dilemma: while they implement iMs and Volte. yet operators do have the option of staying with a next-generation network (ngn) softswitch architecture. “what iMs has become is the nextgeneration VoiP platform. internet-based services came along to deliver such services cost-effectively or even for free.” says nicolas www. VoiP and iMs. the communications providers whose services run over their networks will benefit from lte broadband without the challenges associated with iMs deployment.com September 2011 8 . but if your first step is VoiP. says Myers. responding to competitive operators’ offerings. france telecom has used iMs for voice as part of its triple-play services. “france telecom started to decommission its service-switched lines as subscribers began actively moving from their traditional phone line to their bundled service.

the research company found that operators’ plans to deploy Volte are ahead of where they were a 9 .” says fertl. “the enterprise market is one that is relatively unexploited by telcos. “Mobile is where the stickiness is for iMs. from an operation and maintenance perspective. full-blown iMs will be the long-term solution as operators replace their Pstn networks. global solutions marketing. iMs deployments typically are subscriber-centric and require elements such as the home subscriber server (hss) for user authentication. Q2 2011 (right) Legacy equipment obsolescence Genband Ability to offer converged services Other Huawei LTE network deployment AlcatelLucent Nokia Siemens Acme Packet 0% 20% 40% 60% % of service providers rating definitely a driver Combined worldwide trunk media gateway. but while there is a place for interim strategies. but colt has used only the iMs elements needed to enable VoiP access services for its enterprise customers. content. media server. but according to franz fertl. giving customers the ability to order it and enable it on several systems in the right way. “whereas before we had multiple platforms and multiple middleware. “All these things are big challenges. he says.” the result is a 95% reduction in power consumption and floor space compared to circuit-switched September 2011 www. “from real [operator] feedback. Vendors say iMs has been simplified as it has matured. than managing the Pstn.” says Mavrakis.” says informa’s Mavrakis. implementing the service and interfacing it to the company’s existing operations support system proved challenging. iMs solutions marketing at Alcatel-lucent. global iMs equipment manufacturer revenue was up 87% in the second quarter compared to the same quarter last year.” but if the fixed network is where iMs has been successful. we have now consolidated the technology. the merits of the service include a single bill and phone number. infonetics in a recent survey found that lte is now the main driver for nearly half (48%) of the 23 operators questioned that are implementing or have deployed iMs. Japan and south korea. driven primarily by activity in china. a converged mobile and fixed business service based on iMs that includes short number dialling and user presence. particularly in north America as operators increase lte deployments and prepare for Volte services in 2012.” says fischbach. VAS and CSCF server market share Source: Infonetics research fischbach.” According to infonetics research. director. “that made it very complicated to implement a process…to offer the service. “And it is the mobile operators that are the cash cow for iMs vendors.TEChnology TREndS Top drivers for moving to IMS (left). head of voice and iP transformation at nokia siemens networks. the research company says mobile iMs-based spending will be a strong contributor to market growth in the second half of this year. but Michael clever. not only did it involve one iMs box but also several servers and software elements. at Alcatel-lucent. the biggest recent iMs development is the adoption of Volte. SBC.” says ed elkin. director of service network at A1. Asia Pacific accounted for 68% of all iMs equipment spending in the second quarter.” says cassidy shield. colt’s network strategy and architecture director. cloud and communications. Voice is only part of the package which includes Adsl and mobile broadband. A1 telekom Austria launched its unified voice service in 2010. “the platform we chose is flexible. softswitch. who highlights Vodafone spain’s iMs-enabled oficina service. “this is a big jump from a year ago.totaltele. and converged pricing plans. in a separate lte survey.com solutions. so you don’t have to deploy all the components that make up an iMs architecture but [rather] start with a softswitch that also delivers siP and has whatever you need around it for business VoiP services. says the motivation for iMs deployment goes beyond voice: “it is being driven for voice services. leading carrier VoIP and IMS vendors by revenues. oficina provides users with a fixed number on their mobile handsets while delivering advanced capabilities on their fixed phones. which uses a stripped down version of iMs to deliver voice and multimedia for lte. lte is now a primary driver.” one example of other drivers is converged fixed-mobile enterprise services. but if it was just for VoiP no one would implement this.” says Myers. “we can put two million subscribers into a single chassis. the cost of operating an iMs network is now lower.

resulting in a fourfold improvement in video resolution.totaltele. SK Telecom’s HD video calls use the 3G packet network and WiFi to transmit at 100-200 Kbps. “now operators are accelerating their plans. A minority of operators plan to have sufficient lte coverage such that a user can remain using Volte without needing to hand over to any other cellular voice technology. the operator has launched a steady stream of IMS services including mobile messaging. “one year ago it was still circuitswitched fall-back. says Woo-Yong Choi. rcs-e will enable users to send instant messages. For example. there are two approaches for adopting Volte. senior manager of the core network development team at sk telecom. senior manager of the core network development team at SK Telecom. indeed. voice implemented not on lte but using the existing 2g/3g circuit-switched infrastructure. “we think it is important to implement Volte. “this is technically tough. says furustam: “that is becoming more of a real. telecom italia. but woo-yong choi. says warren. telefonica and Vodafone announced at Mobile world congress earlier this year plans to launch rcs-e services by the end of this year or in early 2012. “this is the biggest challenge to iMs. Verizon wireless and MetroPcs. Having started with a video call service.com September 2011 . The operator claims such interconnection of ImS services between operators remains the only example to date. “the Volte implementation will not be difficult as our company can use its existing iMs infrastructure and technology. he says: “it is a huge effort and does not come for free. The user can also choose whether to just receive video or use two-way video sharing. orange.” Another important component that builds on iMs and which will play its part alongside Volte is an enhanced version of the rich communication suite (rcse).” n www.” says choi. photos.” sk telecom highlights the threat posed by free smartphone applications that directly compete with iMs-based services provided by mobile carriers. says getting such coexistence to work between the circuit-switched and packet-switched cores will be challenging. “All the while. says furustam. a converged fixed-mobile service. vendors. deutsche telekom. operators must grapple with how to advance their services in a world where all sorts of communications applications can be downloaded in a second. it is essential for the operator community to develop around Volte and rcs. a user starts a circuit-switched voice call and can choose from a list of multimedia features such as real-time video. “the return-on-investment will be high if one decides to adopt iMs and develop many additional services instead of stopping at just one or two. One of the strengths of ImS is that it allows for experimentation and customisation. the nature of the voice bearer changes from iP to a circuitswitched one. With SK Telecom’s rCS-based HD video calling service. but for rcs/rcs-e enabled services to be used across operator boundaries in the same way as voice calls and sMs.TEChnology TREndS IMS pioneer: how SK Telecom has blazed a trail South Korean operator SK Telecom has been providing ImS-based multimedia services since 2005. SK Telecom has also joined with Korean mobile carriers KT and LG U+ to enable subscribers to use the mobile messenger service across networks. launching Volte much more quickly once lte is in place.” says warren at the gsMA. vice president. fixed Internet telephony. For 3G circuit-switched video calls. the 3gPP and the gsMA. in iP networks the surge can be 100 times the load. real concern. such a connection has sufficient bandwidth to support the iP bearer.” says Myers—in other words. the iMs core needs to be designed to tackle such unpredictable traffic. the operator conducted a study and found that some users felt uncomfortable being seen on a video call.” but operators face significant challenges as they move to implement iMs for mobile. the challenge is that two events must be supported simultaneously. but that it is less a technical problem than one of project planning. voice and video traffic are transmitted at 64 kilobitsper-second (Kbps). but choi implies that success will largely be down to the operators. Magnus furustam. believes the implementation would be straightforward.” says furtl. other operators will need to keep the voice call active as a user moves from an lte cell to a 3g or 2g cell. and it has exercised the minds of the operators. work is about to start to harmonize rcs-e with the latest version of rcs to create the functionality required using a reduced set of protocols. high-definition video calling and a social networking talk service.” he says. A1 is considering such issues. making use of the handset’s address book. one solution operators are investigating is to separate the two events by delaying the bearer handover. a sketch book and location information. It has resulted in the mobile messenger service being used by 14 million subscribers. video and files. year ago. “the biggest strength of iMs is that after it is launched the development of additional services becomes very simple. defined by five european operators and which is being promoted by the gsMA.” he says. in this case moving from lte to a 3g hsPA 10 connection first. says warren. who says that mobile operators’ future business models will be shaped on developments based on rcs. allowing the handover to circuitswitched infrastructure to occur later. clever at nsn highlights another networking challenge operators face when moving to iMs. As the radio interface is handed over. “the things that have stopped rcs happening are the business case. they will also need to ensure interoperability between their iMs-enabled core communications services. “And if you implement Volte. is how they protect their most important business: voice and sMs services that still typically represent 75% of their revenues.” what is of more concern for operators. and in some areas the complexity of the service itself. this is the strategy of two Us operators. the internet players will be further developing their offerings. [is it necessary to have] a fallback solution for gsM or is it possible to start the call in lte and finish it in hsPA?” sk telecom is still undecided about its plans to adopt Volte.” says warren. this requires a handover from the iMs domain to the mobile switching centre server. product area core & iMs at ericsson. for example. in time-division multiplexed networks a peak load might be three times the regular load.

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with rural areas in large part underserved by new lte broadband services.114.461 11.244. it is a small amount compared with the 190 Mhz typically available in the 2. wireless intelligence says 14 of the eU27 countries do not yet have targets to auction spectrum in the iMt-extension band—2.5 ghz–2.818 76.841 1.329.154 70. “the problem is that when regulators start to tinker they have an impact on operators’ economic business models. According to analyst company wireless intelligence. given the similar signal propagation characteristics between 800-Mhz and 900-Mhz spectrum.425.458 2014 2. are being liberalised across europe for use for 3g and lte services— so-called spectrum refarming.000 2010 — — 5.907 58. As a result the 900-Mhz and 1800-Mhz frequency bands. goldenits says contiguous 2x10 Mhz blocks are the minimum requirement to run efficient lte services.646.840 30. and there is always the danger that regulators don’t get the outcome they hoped for.491.400 4. initially limited to 2g services. was that there was no significant difference in the long-term worth of 800-Mhz and 900-Mhz spectrum.129 8.369.630 3.336.436.14).613.960. in europe.770. the european commission also sees the value in the switchover and has set a target of the end of 2012 for auctions.565 16.330 1. commissioned by ireland’s regulator comreg.329 2012 128. in addition. An added bonus of 800-Mhz spectrum is that it can provide better indoor coverage than higher frequency bands.603 4. By Ken Wieland pectrum for high-speed mobile data services is in short supply. and some believe they are not getting a fair crack at the whip. spectrum from the so-called digital dividend—occupying the 800-Mhz frequency band vacated by broadcasters switching from analogue to LT E B U S I N E S S M O D E L S s digital television—is of particular value to operators and regulators. Meanwhile Uk regulator ofcom describes 800 Mhz and 900 Mhz as “broadly equivalent”.225 — 126. nrAs in europe.073.270 9.183 3.” says walter goldenits.659 69. in discussions with broadcasters.841.505 4.932 2015 4. the upshot is that some operators are going head to head with nrAs over restrictions on the allocation of spectrum and how it could impact their lte business models.030 28.102 168. the 800-Mhz band enables mobile network operators (Mnos) to cover suburban and rural areas more cost-effectively than higher frequencies which have shorter signal ranges.nETWoRK STRaTEgIES MIXEd SIGNALS Spectrum allocation will have a big impact on mobile operators’ LTE business models.432 7.314 41.482.630 54. but that is causing some operators to show concern over the potential impact on their mobile broadband business models.560 2013 689.299 2. but a further six will not do so until 2013-15 and will therefore miss the ec deadline.101.com September 2011 12 . cto at A1 telekom Austria. if so.916.225 330. as well as over obligations being placed on how quickly and extensively services should be implemented.856 2011 9.515.210 1.300 Source: Wireless Intelligence Mhz) of digital dividend spectrum. national regulatory authorities (nrAs) are also concerned: A lack of spectrum could lead to congested networks that adversely impact broadband performance for businesses and consumers.163 194. typically are attempting to clear 60 Mhz (2x30 ‘When regulators start to tinker they have an impact on operators’ economic business models’ LTE connections forecast by region 2009 africa americas Asia Pacific Europe: Eastern Europe: Western Middle East US/Canada World — — — — 2. and it could lead to digital divides. A growing number of Mnos can now use their 900-Mhz assets to provide 3g services. a lead analyst at Analysys Mason. nrAs will have a hard time slicing and dicing 2x30 Mhz if they want to attract more than three players to this frequency band and maintain effective national mobile broadband competition.296 684.834.297. one conclusion of the study.094 7. and the growing prospect of allowing lte at 900 Mhz.420 304. And for nrAs and governments aiming to extend access to broadband services nationwide—often placing obligations on spectrum winners as a result (see box p.220 141. “800 Mhz is an essential part of the lte success story.6-ghz band also suited to lte services. but one snag with 800-Mhz spectrum is its relative scarcity.339 23.totaltele.203.107.13)—the digital dividend makes that goal much more achievable.561 4.000 — — 2.464 17. consultancy dotecon published a benchmarking report in september 2010 on the possible value of 800-Mhz and 900-Mhz spectrum in ireland.589.436.6 ghz. nrAs increasingly are starting to see the two frequency bands in the same light.728 715.747. 11 countries within the eU27 have already switched off analogue broadcast services and 10 plan to do so between 2011-12 (see table p.341.241 15.562 34. the concern for some operators that hold 900-Mhz spectrum is that they may be capped on the amount of digital dividend www.” says terry norman.936. and the ec is calling on all nrAs in the european Union to free up the spectrum for ‘4g’ lte by the end of this year.533.638 131.921 19. frustrating operators eager to roll out lte technology and enjoy better operational and spectral efficiencies on increasingly overloaded networks.806 77.798.555.254.

” o2 and Vodafone Uk each have 2x17. in such an event. Winners of spectrum in the 800-mHz spectrum auctions in Germany. whereas 3Uk and everything everywhere would be if they placed reserve bids on each of the spectrum floors outlined by ofcom.” spectrum they can acquire. “most coverage not-spots ten years ago are still not-spots today. “The forthcoming auction presents an opportunity to address the fact that GSm coverage has largely stood still since the arrival of 3G. particularly in the lower frequency bands (800 mHz and 900 mHz) which are more suited to wider coverage: Wireless Intelligence says Denmark. “One question regulators have to grapple with is whether or not it is socio-economically effective to hobble operators by forcing them to roll out networks into rural areas. “the one rather large flaw in that argument is that lte 900 Mhz is only standardised for 10-Mhz carriers because there are so few 900-Mhz operators that have more than that.6-GHz spectrum next year. the report also found that charging high premiums for lte is unsustainable in the long term due to competitive pressures in the industry. the minimum that lte services require. so that spectrum will not be immediately available for lte. we and Vodafone Uk already pre-qualify as having enough spectrum holdings to provide a highspeed lte service. they argue. “we are not yet in a position to give a view on the relative merits of the different arguments. neither is 900-Mhz spectrum necessarily split into contiguous 5-Mhz blocks. operators appear to be finding it hard to differentiate on tariffs September 2011 www.” says blades. which don’t have any 900-Mhz assets.” it said in response to Ofcom’s consultation on the auction. as well as their judgement on the future use of 13 . As well as 800-Mhz caps potentially weakening the lte business case.” says graham louth. ofcom is treating 800 Mhz and 900 Mhz the same. 2g services will have to be maintained for some time at 900 Mhz. there isn’t an ecosystem to support a high-speed service at 900 Mhz using 2x15 Mhz and there won’t be. “that means we’re not guaranteed any 800-Mhz spectrum.” adds Mccormick. for example. which allows them to find the best way of deriving revenues from the premium service. there have been similar ructions in the Uk. certainly.nETWoRK STRaTEgIES Economic Headline balance: regulators impose obligations on LTE coverage Regulators and governments increasingly are imposing LTE coverage obligations to prevent national digital divides emerging. would be able to bid for much more.6-GHz spectrum in September 2010 the regulator ruled operators should provide 25% of the population with mobile broadband coverage by the end of 2013. it is a worrying prospect for goldenits at A1. the caps and conditions that nrAs impose on auctioned spectrum. o2 maintains that it needs 900 Mhz to support its 2g and 3g customers.” Spectrum caps are also favoured by NrAs as a way to promote competition. by setting minimum amounts of spectrum for bidders as well as imposing spectrum caps—and taking into account mNOs’ existing spectrum—Ofcom says it is aiming for at least four “credible” national providers capable of delivering “high-quality data services” in the UK. it may be necessary to pool spectrum resources through network-sharing. argues that ofcom’s conclusions about the true worth of 900-Mhz spectrum for the delivery of lte services has led to an unfair set of proposals for auctions set for next year. goldenits suggests that if the operator does not acquire as much 800-Mhz spectrum as it needs to provide a high-performing and nationwide mobile broadband network. must roll out services in rural areas first and aim for nationwide coverage by 2013. everything everywhere and 3Uk.” by contrast. Asia-Pacific and the US. “operators will need to be careful not to alienate high-end customers that have paid a premium for a fast. 1800-MHz and 2.” he says. “According to ofcom. Moreover. nick blades. “we serve more than five million subscribers on our network. however. many other countries are planning to set out similar obligations.totaltele. A1’s lte strategy to differentiate on network performance could be compromised. For the first time in over 25 years significant spectrum is about to be released that is lower frequency than any that is currently deployed…800 mHz is a good solution for rural coverage and presents the opportunity…to correct the adverse coverage position.com alone. in a new report LTE Tariff Comparison: Europe. which under ofcom’s sub-1ghz cap of 2x27. Austria plans to auction digital dividend spectrum in the first quarter of 2012. lte 800 Mhz is standardised for larger carriers—2x15 Mhz and 2x20 Mhz—which enable higher speeds than 2x10 Mhz.” says Norman at Analysys. with each bidder required to have a minimum amount of sub-1ghz spectrum to provide high-quality data services. for one thing. head of regulatory affairs at o2 Uk.4 Mhz of 900-Mhz spectrum.” says nicole Mccormick. so we need the capacity based on existing frequencies to provide good quality services with national coverage including 2g. “ofcom says that if you have got 2x15 Mhz of 900-Mhz [spectrum] you can a run a high-speed lte service. Another unknown is how much of a positive socio-economic effect there is from rural broadband connectivity. “800 Mhz is new spectrum and lte is a new business. France and the Czech republic have already expressed their intentions to set coverage targets for rural and remote areas.5 Mhz means they would be restricted to acquiring 2x10 Mhz of 800-Mhz spectrum. everyone should have the same right to apply for 800-Mhz frequencies. and when Austria allocated 2. ofcom’s spectrum policy director. and goldenits strongly opposes any links being made between 900 Mhz and 800 Mhz. ovum senior analyst. “It might be that the cost of rural rollout is passed on to the customer. 900 Mhz-owning Mnos argue that lumping together 900-Mhz and 800-Mhz spectrum as sub-1ghz spectrum is a flawed notion. In the UK the Communications Consumer Panel—an independent group formed to provide advice to the regulator—in July called on Ofcom to enforce coverage obligations on operators taking part in next year’s LTE spectrum auction. which would have a negative socio-economic effect. UK regulator Ofcom favours “spectrum floors” for the auction of 800-MHz.” the stakes are high for A1 and other operators looking to develop their lte business models. which holds 2x17 Mhz of 900-Mhz spectrum. we can’t understand why ofcom hasn’t picked up on that important fact. most operators have not grasped this opportunity. “lte provides operators with the opportunity to experiment with new and innovative pricing models.” says blades. high-quality service by reducing lte tariffs too quickly or drastically.

in the 800-.3 0. but prices can increase drastically when demand exceeds supply. but that won’t necessarily be repeated elsewhere as a limited number of bidders and high availability of 1800 Mhz for lte [in finland] and tight spectrum caps [in the netherlands] were big factors in those auctions.nETWoRK STRaTEgIES 900-Mhz and 1800-Mhz spectrum. ceo of coleago consulting. “in hong kong’s 850-Mhz and 900-Mhz spectrum auctions earlier this year the prices per megahertz per pop paid by smartone and hutchison were more than six times greater than the sums paid by hong kong’s operators in the 2.6 GHz (Sep 2010) Germany 2. which has a much stronger economy than ireland.6 GHz (Jan 2009) Sweden 2. in dotecon’s benchmarking study the consultancy concluded that a 2x5-Mhz block of sub-1ghz spectrum was worth between €18 million and €26 million. 900.1 0.6 GHz (Dec 2010) Finland 2.7/Mhz/Pop finally paid for by operators in germany. “in finland and the netherlands 2.6 GHz (Nov 2009) Netherlands 2.0 ‘If rapid growth in mobile data traffic continues it may well start to drive spectrum prices up’ EU27 implementation deadlines and auction timetable digital switchover deadline Austria belgium bulgaria Cyprus Czech republic Denmark Estonia Germany Greece Finland France Hungary Ireland Italy Latvia Lithuania Luxembourg malta Netherlands Poland Portugal romania Spain Slovakia Slovenia Sweden United Kingdom Q3 2011 Q1 2010 Q1 2015 2011 Q4 2011 Q4 2009 Q3 2010 Q4 2008 2013 Q3 2007 Q3 2011 Q4 2014 Q4 2012 Q4 2011 Q2 2010 Q4 2012 Q2 2006 Q2 2011 2012 Q3 2013 Q2 2012 2013 2014 Q4 2010 Q4 2010 Q4 2007 Q2 2012 digital dividend auction Q1 2012 2012-13 Q2 2010 2012 Q2 2010 Q3 2011 Q1 2012 2012-13 2012-13 2012-13 Q3 2011 2011 2012 frequency (Mhz) 900 1800 900/1800 900/1800 900/1800 900/1800 900 900 900/1800 1800 900 900/1800 900 900/1800 900/1800 900 900/1800 900/1800 900/1800 900/1800 900/1800 900/1800 900/1800 900 900/1800 900/1800 Spectrum re-farming Timeframe Q4 2010 Q2 2011 Q4 2010 2012-13 Q2 2011 Q1 2014 Q4 2009 2013-14 Q4 2009 2010 Q3 2011 2013 Q4 2009 2011 2011 Q3 2010 Q3 2010 Q1 2010 Q1 2010 Q4 2011 2010 Q2 2010 Q1 2010 IMT extension auction Q3 2010 2012 2012-13 Q2 2010 Q4 2010 Q2 2010 Q4 2011 2013 Q2 2010 Q4 2011 2011 Q2 2008 2013 Source: Wireless Intelligence (June 2011) www. close to the €0.5 0.0 Germany 800 mHz (may 2010) Sweden 800 mHz (mar 2011) Hong Kong 2.6 GHz (may 2010) Norway 2. even if regulators do impose some onerous bidding conditions. it may well start to drive spectrum prices up. warns stefan Zehle. and networks become congested. selected auctions 0.6 0.6-ghz spectrum.7 0.” says Morris. there may in effect not be much of an auction as the regulator is setting the price for spectrum…there are ample studies that show that high prices for spectrum are counterproductive in terms of overall economic gain.and 1800-Mhz bands. it plans to have a cap to ensure that no company can win more than ten blocks of spectrum. “if the regulator sets high reserve prices. technology editor at the economist intelligence Unit.2 0.6 GHz (may 2008) Denmark 2.6-ghz prices were extremely low.” n 14 Price per megahertz per pop (US$). setting high reserve prices would be a dangerous game for comreg to play. “Prices paid elsewhere are not an indication of how operators value the spectrum in ireland.6 GHz (may 2010) Estonia 2.9 1.6-ghz auction [in January 2009]. each consisting of 2×5 Mhz of spectrum.com September 2011 . “if rapid growth in mobile data traffic continues.58/Mhz/Pop.6 GHz (Apr 2010) Source: Economist Intelligence Unit 0.6 GHz (Nov 2007) Austria 2. will all have a bearing on how Mnos value 800-Mhz and 2.” he says.8 0.” says iain Morris.4 0. A reserve price tag of €26 million would work out at €0.” in ireland comreg intends to auction off 28 blocks of spectrum. ireland is running that risk.totaltele.

BOOK NOW! Call + 44 (0)207 608 7023 Sponsors: www.WORLD ORLD Re-imagine Global Communications 2 Day Conference.com/world . London 3 months to go until the event of the year! Don’t miss out.totaltele. 7 – 8 November 2011 One Whitehall Place.

at france telecom. the operator recently launched a new tV service for tablets— currently only available on the iPad—and has invested in france’s most popular online video company. games consoles and set-top boxes.” says Paul-francois fournier.000 0 Q12007 Q22007 Q32007 Q42007 Q12008 Q22008 Q32008 Q42008 Q12009 Q22009 Q32009 Q42009 Q12010 Q22010 Q32010 Q42010 — Subscribers — Net additions 3.000 500 0 -500 180 160 140 120 100 80 60 40 20 Jan 09 mar 09 may 09 Jul 09 hulu has forecast revenues of $500 million this year. including content from dailyMotion as well as Vod services and other orange tV content.000 1.ConTEnT STRaTEgIES ToP SLICING perators traditionally have viewed over-the-top (ott) content players as adversaries that hogged network and stole customers from their own paid-for services. at Motorola. dailymotion. for example. executive director.com September 2011 Jan 11 0 . but now we are starting to see an evolution in that relationship as ott companies and service providers look to bridge the gap between their two business models: huge audiences but limited revenues on the one hand. “two years ago most telcos delivering video were perceiving ott as a threat.000 10.yet the opportunity is growing: Us online video service ‘Telcos now view over-the-top content as an added feature to the service offering’ 25. technocentre.totaltele. says informa. which has its own branded tV content business. they need to partner with those providers that have carved out new audiences. ott content will be accessed via connected tVs. it’s becoming a more open ecosystem. tablets and smartphones. general manager and VP of home business. for example. Ad little.500 1. the idea is to use it to drive new users to the service.000 15. as well as through Pcs. but when you are an orange customer you get access to more services—for Netflix subscribers in thousands (left) and BBC iPlayer monthly requests in millions (right) n Online. telcos are also starting to accept that in order to target users who increasingly are watching content on different screens. ArPU for ott service providers currently is low compared to cable and iPtV customers.500 3.000 5. paid-for product—is the third most-watched channel on service provider Virgin Media’s network in the Uk. “the portal is available to everyone. and ArPU-uplifting network subscriptions but threatening commoditisation on the other. estimates that ArPU for netflix customers is around Us$12 per month while iMs research says ArPU for comcast video customers is about Us$133. TV n Virgin Media TV Sep 09 Nov 09 Jan 10 mar 10 may 10 Jul 10 Sep 10 Nov 10 Source: Arthur D Little / Exane BNP Paribas estimates 16 www. france telecom. “we see that the tV is no longer the only outlet. he says the bbc iPlayer—which in July finally made its debut as an international. radio n Online.000 20. By Ingrid lunden o services—defined as content and services delivered over networks not owned by content/services companies themselves— still are encroaching on the iPtV offerings telcos are trying to grow to offset other declining areas of their business. Analysts at informa telecoms and Media forecast that by 2015 some 380 million people worldwide will be consuming ott content—more than double the 163 million iPtV subscribers by that time—with growth driven by providers such as streaming service netflix (see pie chart) and the bbc’s iPlayer. it has signed deals with lg and samsung to preload its orange portal on their connected tVs.500 2. also has been positioning itself as an ott player of sorts. developing new business models. as well as make it easier for existing customers to get extra content.000 2. now it is viewed as an added feature to the service offering. but there has been a huge mindshift. there is no doubt that ott OVER-THE-TOP CONTENT Operators are starting to embrace over-the-top content as a way to expand services and reach out to new audiences. eMeA.” says steve Mccaffery. having launched in 2008.

Network. TDC Janet Schijns Premier Analyst Sponsor Association Endorsements Training Sponsors Official Electronic Show Daily Sponsor Official 4G World News Desk Sponsor Vice President. Emerging Technologies and Industry Standards. tablets and tVs from lg and samsung. now operators are exploring ways to increase ArPU from such services in conjunction with their iPtV platforms. Alvarion Senior Vice President. and mobile Internet applications and services. Ericsson Co-President. Cellular South Hank Kafka Tom Keys Sponsors: Corporate Hosts Service Provider Sponsors Premier Sponsors Vice President of Radio Access & Devices.” in the Us. Intel Koichi Tagawa Ken Wirth Chairman. mobile network technology and architecture. peak period. Hideo Okinaka Said Ouissal Bernd Reul Vice President. by platform 100% Penetration of households (%) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Primary 2011 Primary 2016 Secondary 2011 Secondary 2016 Source: Analysys mason n Analogue cable n Digital cable n IPTV n Pay DTT n Satellite n Over-the-top services Other 15% Netflix 30% BitTorrent 10% YouTube 11% HTTP 18% Source: Sandvine example. develop business opportunities and create new alliances and partnerships with executives and decision-makers from across the industry and around the world. to pull through audience onto the higher-ArPU service.ConTEnT STRaTEgIES Peak Internet downstream traffic Top applications by downstream bytes share. Qualcomm Senior Vice President. 24 -27 W W W. Juniper Networks President.4GWORLD. Ericsson IP & Broadband Vice President of Operations and Technology. now the plan is to put that on top of its iPtV offering. Verizon Wireless Ton Steenman Vice President of the Intel Architecture Group. Sprint 4G World’s unique conference program includes: Dedicated 4G Expo with 150+ exhibitors – the world’s largest! Near Field Communication Summit – hosted by NFC Forum 4G Backhaul Summit Yankee Group’s Customer Experience Summit WCAI Spectrum Summit – hosted by WCAI 4G Americas and GSMA Special Education Sessions Innovative mHealth Solutions – hosted by Forbes Interactive Birds-of-a-Feather Sessions Attendee VIP Lounge Passes 4G World Solutions Theater Executive Breakfasts And much more! Arun Bhikshesvaran Matt Bross Chief Marketing Officer.” says fournier. in italy iPtV service provider fastweb in May launched a tV and video ott service called chili. primary and secondary services. Business Solutions Group. comcast is also extending McCORMICK PL ACE CHICAGO OCT. Network.COM If you can only attend one event on 4G in 2011. Marketing. AT&T Chief Operating Officer. North America. E2E Network Solutions. fixed access. MetroPCS Jon Kuhn Director of Product Management. or catch-up tV. “it went to a million subscribers in six months. Amdocs . CFN Services Dr. Huawei Technologies Rick Corker Eran Gorev Suzy Hays Head of North American Region. Learn from the industry’s foremost thought leaders and innovators and those who are pioneering 4G deployments. having signed content agreements with companies including warner and Paramount. NFC Forum President. Mccaffery at Motorola says his company has built a new ott service for turk telekom. March 2011 Hulu 1% SSL 2% Facebook 2% RTMP 3% iTunes 3% Flash video 5% European Pay-TV penetration. 4G World should be the one! 4G World delivers a world-class comprehensive four-day conference program that highlights the rapidly evolving interdependencies between operator business models. Alcatel-Lucent ® Yossi Zohar Customer Management Marketing Director. Manoj Leelanivas Randy Muench Platinum Sponsors Gold Sponsors Official Spectrum Manager Executive Vice President and General Manager. Vice Chairman and Chief Technology Officer. Wireless Division. the service can be accessed from any device connected to the internet including smartphones. USE CODE 4GWMS49 AND SAVE 100! Cristiano Amon Bob Azzi REGISTER NOW Keynote Speakers Senior Vice President of Product Management. KDDI Corporation Vice President of Regional & Customer Engagement. which runs as a web tV offering. Symantec Corp. Nokia Siemens Networks President and Chief Executive Officer. Vod billed directly to your bill.

totaltele. comcast is in part reacting to competition from netflix and hulu—the joint venture from Abc. how can mHealth improve healthcare and what is the role of connected devices? Global 100 Operators . has launched its own Xfinity app to offer selected content on tablets and smartphones. fox and nbc offers tV content as well as films on an ott basis—as these services increasingly move to more platforms. The Path to True 4G – November As the first LTE services start to launch. cost-effective and engaged environment. What’s the business model for the telecom operator and where does LTE-Advanced fit? Next Generation Cloud Services – December A look at the business model for next generation services. the cable operator. Breakfast For more information or to book your place contact: breakfast@totaltele. which last year bought tV broadcaster and content producer nbc Universal. now it is aiming to add some 10.ConTEnT STRaTEgIES Total IPTV and OTT bandwidth demand 250.com/breakfast Breakfast with www.000 — france — China — US — South Korea — Japan — germany — UK — Canada Set-top box (STB) unit shipment share 100% Hybrid (OTT) STbs 75% IP STbs 200. relatively untapped opportunity for telecom operators. whether operators should compete with over the top providers or partner with them. What are the opportunities for cost savings from mHealth.com www. hulu last Join us in a new series of mini-conferences connecting buyers and sellers of telecom products and services in a focused. although it still owns a share. with this event to get the first look at the results and to engage with Attend leading experts on what is driving the key trends affecting the industry.18 October The Global 100 is Total Telecom’s annual ranking of the world’s top 100 telecom operators by revenue and profit. courtesy of its nbc purchase.000 50% 100. working in partnership with vendors elemental and thePlatform.totaltele.com/breakfast .000 mbps 150. a path is being beaten towards true 4G.14 September mHealth represents a vast.000 0 2010 2011 2012 2013 2014 2015 2011 2015 Source: Infonetics research Source: ImS research (July 2011) the synergy between operator and ott player.000 25% Cable STbs 0% Satellite STbs 50.000 hours of new content to the accessible archive. and whether mobile cloud is truly with a new opportunity. Upcoming events: with Breakfast Breakfast Breakfast with mHealth Update . Part of comcast’s regulatory agreement to buy nbc Universal included the provision that it has no say in the operations of hulu.

The report. rented. not Microsoft. initially in Japan. says while OTT services will not displace traditional pay-TV services—cable. • Another new report. DVD rental companies that have expanded into streaming services. digital music. iMs research forecasts that retailers will grow their share of the ott market. the companies say this will be a new media platform that will offer ott content on an iPtV-style basis to homes across the country. Microsoft and broadcast satellite service provider dish network. the operator says it hopes to deliver spotify at a discounted rate relative to current offerings. yahoo.58 million households will be using an OTT service as a primary service for their main TV set in Europe in 2016.4 billion in 2016. devices. with 4. and licensing fees from pay-TV services account for $100 billion. devices and services this year. representing 1. “i really don’t know where orange’s dailyMotion stake will take it.17). downstream traffic from Netflix accounts for some 30% of all peak Internet traffic in the US. digital books and mobile apps make up the other $100 billion. OTT service revenues will reach US$16. • Today. which include fixed voice. • Analysts at Gartner forecast that consumers worldwide will spend $2. in April Uk retail giant tesco bought an 80% stake in internet tV service blinkbox. says only 2.4 billion in 2016.1 trillion on all digital content. Gartner says that some 62%. Virgin Media signed a deal with spotify to bundle that music streaming service with its triple-play subscriptions in the Uk. It says connected TVs and other Internet-ready devices—such as set-top boxes and DVrs—will reach 2 billion units worldwide this year. and in July this year. but that will decline to 69% by the end of 2016. streamed or downloaded video content. accounts for 28% of consumer spend.” what’s more. there will be much stronger growth for OTT services as a complementary. will be spent by consumers on subscription-based services.11 billion.com to its 2007 purchase of sling Media which enables it to deliver online and mobile video to its subscribers. while the European VOD market totalled $1. • Strategy Analytics forecasts worldwide connnected TV device revenues will reach US$95 billion by 2015. broadband and pay-TV subscriptions. It forecasts 14.ConTEnT STRaTEgIES By the numbers: the value and impact of over-the-top content • IMS Research forecasts that paid-for OTT subscription services will generate a cumulative US$32 billion in revenues worldwide over the next five years.8 trillion by 2015. and will account for the majority of revenues when compared to pay-per-view video services. while PC and gaming software. n 19 . but some analysts believe service providers could be barking up the wrong tree. video is not the only kind of content that telco service providers are eyeing up. according to network traffic solutions company Sandvine (see pie chart p. And In-Stat says worldwide streaming media player—also known as OTT set-top boxes—unit shipments in 2011 will reach just over 3. pay-DTT or satellite—as the main provider of video services to primary TV sets in Europe. mobile voice and data. or $600 billion.” claims kit digital in its promotional material. rising to $2. as well as pay-per-view and video-on-demand (VoD). of that $2. although their share is forecast to decline from 90% of worldwide OTT video revenues in 2010 to 69% in 2016. the video delivery specialist kit digital is working with the shenzhen Media group and 19 tV broadcasters and newspapers across the country on the china United television (cUtV) project.6 million. Households viewing just free videos accounted for 77% share of the total OTT market at the end of 2010. and plans to launch in Europe starting in Spain next year. IPTV. but i do know that it should have been an operator buying skype.” says independent telecoms analyst dean bubley. dish network in April acquired dVd rental company blockbuster to add September 2011 www. accounting for 13% of worldwide ott service revenues of Us$16.2 million pay-TV households. The two regions combined comprise 46. video-on-demand or catch-up video on computers and mobile devices including Apple i-devices and Android handsets.4% of the 185. Although Virgin Media has not yet launched its service or pricing details. indeed. This month Netflix is expanding into 43 countries in Latin America and the Caribbean. in china. in future operators will face competition from other quarters including large retail companies. or $200 billion. and according to reports during the summer has been in talks with companies interested in purchasing the venture including google. OTT content will account for 10%. for “single-digit millions”. in July 2010. and retailers that offer online video—will continue to generate the largest proportion of OTT service revenues. • SNL Kagan analysts have estimated how much over-the-top substitution will erode multichannel subscriptions in the US. Internet-based OTT service providers—broadcasters offering content online. As well as being accessed through the internet. or secondary service. in return.totaltele.2 trillion. orange invested in a minority stake in the music streaming service deezer which it plans to launch in the Uk this month.1 million pay-TV subscriber homes that are using VOD services.5 million households predicted to opt for Internet video instead of subscribing to a multichannel video package by the end of 2011. established ott services increasingly have started to appear on other platforms worldwide: the bbc iPlayer has expanded from a web-based service to pay-tV delivery including through bt’s iPtV offering Vision and Virgin Media’s cable service. not content-oriented ott plays. from Analysys Mason. mostly on additional TV sets. The remaining category. it estimates in its new report Over-the-Top Video—Service Delivery & Business Models (2011). operators are developing business models with the aim of tying together a mix of content and delivery media. “i think that operators should be investing in application-oriented ott plays. “with just one click viewers can watch live tV programmes.6 million households in Europe will be using over-the-top services as a secondary TV service by 2016. month announced it will expand outside the Us. Pay TV in Europe: forecasts and analysis 2011–2016. in some regions ott players are aiming to deliver broader offerings in line with the services of iPtV and pay-tV players. ImS says the North American VOD market generated $1. All the while.98 billion in revenues in 2010. or $1. The company now claims over 24 million subscribers in the US making it the biggest pay-TV/video company surpassing Comcast.1 trillion total: Purchased. Amazon. the service is available on Ps3 games consoles and in future on internet-ready tVs from companies including samsung and sony.

MoBIlE dEvICE SalES (ThoUSandS of UnITS) 2Q11 2Q11 market 2Q10 2Q10 market share (%) share (%) nokia 97.026. largely due to channel partners reducing the volume of Symbian-based smartphones in their inventories.com +44 (0)20 7608 7076 ruth. The combined smartphone operating system share of iOS and Android doubled to nearly 62%. ebitdA jumped from 35% to 39% of total revenues.661.bryant@terrapinn. Revenues for the first half of this year declined 1% compared to the same period in 2010.1 35.9% compared to the same quarter in 2010.8 Research In Motion 12.662. says Gartner.0 kujime-pbi@gol.652. opex has risen slightly to 62% over the past two years with ebitdA stabilising at 38% of revenues.109.4 9.com ToTal TElECoM EvEnTS Port shipments (millions) World Communication awards www.2 3. As a result.743. 20 EnTERPRISE voICE EQUIPMEnT REvEnUES dEClInIng gloBally aS PoRTS RISE TeleGeography says new data from partner Synergy Research Group shows that enterprise voice equipment vendor revenues declined 4% globally between Q2 2010 and Q2 2011. mary.8 103. All rights reserved.6 16.com London Joanne Taaffe jtaaffe34@gmail. PBX/KTS (key telephone system) revenues experienced the greatest decline year-on-year.worldvendorawards.3 3.2 hTC 11.com France Ken Wieland ken2wieland@yahoo.276.628. operating expenditure as a percentage of revenues declined from 65% to 61%.4 2. despite a 14% increase in port shipments.4 Sony Ericsson 7.com +44 (0)20 7608 7071 SUBSCRIPTIon/CUSToMER SERvICES aleisha Bryant aleisha.8 3. the indian sub-continent and latin America. newsdesk@totaltele.016.0 11. but shows that total global mobile capex peaked at Us$204 billion in 2008.0 others 153.wood@totaltele.8 1.com JAPAN hiroko Kujime Pacific Business +81-3-3661-6139 CaPEX REdUCTIonS A new report from wireless intelligence shows that mobile operators reduced capital expenditure during the economic downturn in order to protect cash flows and maintain profits.6 2. falling 9% from Q2 2010.4 2.3% sequentially in 2Q11 to $2.8 10 © 2011.2 17. 10-11 Charterhouse Square.com +44 (0)20 7608 7077 greg.8 5.com +44 (0)20 7608 7041 media tablets to be shipped this year. but rose 3.il Israel Ingrid lunden ingridlunden@gmail.008.com ToTal TElECoM+ Ian Kemp Editor Michelle young Art Editor ToTal TElECoM Mary lennighan Editor nick Wood Assistant Editor lewis dowling reporter ian. up from 17.1 5. up from just over 31% in the second quarter of 2010. accounting for 21% of total operator revenues. the study forecasts operator capex will remain stable at 16% of total revenues in developed markets and 23% in developing markets in 2011-12.2 100 367.com alan Kernc – West & Canada AlanKCS@aol.uk London advERTISIng 60 million HEAD OFFICE. in developed mobile markets.com Total Telecom World www.com aleisha Bryant +44 (0) 7608 7042 MaRKETIng Tally Judge marketing manager Ruth Clark marketing Executive tally.1 million in the first quarter.co.hitchen@terrapinn. “continuing its path of slow and steady recovery on a year-over-year basis”. up from 17% in the second quarter of 2010.7 8.070.totaltele.4 2. Terrapinn Holdings Ltd registered office: 4th Floor Welken House.4 million in 2010.PRIME nUMBERS ConTaCTS SMaRTPhonE SalES STIll RoCKETIng Worldwide sales of mobile devices to end users totalled 428. sales of wiMAX equipment worldwide reached $502. while the voice gateway and IP telephony segments showed modest declines. EnTERPRISE voICE REvEnUES & PoRT ShIPMEnTS 3.com/world revenues (US$ billions) 2. up from 302 million in 2010.com +44 (0)1626 835 703 m7chelle@gmail.328.8 4. Asia-Pacific was the only region that saw year-on-year growth in Q2.3 65.473.chambers@totaltele.kemp@totaltele.0 2.6 5.1 2. operators reduced capex by 8% in 2008 and by 6% in 2009 but increased spend last year as they began investing in lte.com World vendor awards www.6 8.5 3.1 global Total 428.827. (Juniper Research) 4th Floor. In a separate report Gartner forecasts there will be 5.7 11.02 billion. up from 5 billion in 2010.com +44 (0)20 7608 7047 EvEnTS Charles georgiou Project manager charles. (IHS iSuppli) UNITED STATES AND CANADA KCS International T +1 717 397 7100 F +1 717 397 7800 Karen C Smith-Kernc – East KarenKCS@aol.judge@totaltele. Sales of smartphones were up 74% year-on-year and accounted for 25% of device sales. with enterprise voice revenues increasing 3%. Nokia continued to lose market share but held onto its lead in the smartphone market.5 1.clark@totaltele.6 billion mobile connections worldwide by the end of this year.co.7 30.uk/totaltelecom mANAGEmENT Rob Chambers Publisher greg hitchen Chief Executive Officer rob.1 2.7 million units in the second quarter.worldcommsawards.com Customer Services Executive +44 (0) 7608 7042 or subscribe free at: www. 10-11 Charterhouse Square. and fell to Us$197 billion (19% of revenues) in 2010.0 n revenue — Port shipments 16 15 14 13 12 11 Total Telecom Plus is published by Q310 Q109 Q309 Q409 Q210 Q410 Q110 Q111 Q209 Q211 1.8 lg 24.5% increase from the second quarter of 2010.2 2. between 2007 and 2008. Welken House.com +44 (0)20 7608 7069 nick.com +44 (0)20 7608 7089 CONTRIBUTING EDITORS Roy Rubenstein royruben@netvision.com WIMaX hITS 20 MIllIon infonetics research says wiMAX subscribers passed 20 million worldwide at the end of the second quarter and are on track to exceed 25 million by the end of the year.com September 2011 Source: TeleGeography .georgiou@totaltele.4 1.lennighan@totaltele. Infonetics Research says revenues from global PBX/KTS phone systems alone declined 2.366. London EC1M 6EH www.com +44 (0)20 7608 7046 lewis.holmes@totaltele.net.986. LONDON nick Carter Sales Director leonie holmes Sales manager nick.com T +81-3-3661-6138 F advERTISIng PRodUCTIon Please forward all advertising material directly to: production@totaltele.221. the research company noted strong growth in the Us. London EC1M 6EH +44 (0)20 7608 7030.subscription.0 apple 19. while revenues in EMEA fell 9%.412.dowling@totaltele.totaltele.7 29. In a separate report.869.6 Motorola 10.420. according to the wiMAX forum.com +44 (0)20 7608 7065 leonie.6 28.4 ZTE 13.6 1.carter@totaltele.0 6.908.3 Samsung 69.8 111.7 100 vendor 1 billion EdIToRIal smartphones shipped annually by 2016.5 huawei device 9.266.730. a 16.3 22.628.8 2.

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