Creating New Investment Opportunities: The First CDMA 450 EV-DO Network
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1 Creating New Investment Opportunities: The First CDMA 450 EV-DO Network Eduard Eck Technical Strategy Manager Eurotel Praha, s.r.o. All rights reserved. 12/21/2005 1
2 The Case for Mobile Broadband Business computing goes mobile sales of portable computers or personal devices are growing The society aims at bridging the digital divide but the actual delivery of data services to rural areas is inefficient as long as fixed networks are concerned Limited success of some FWA or mobile projects in the past can be partly attributed to narrow customer segment focus either just replacing wired infrastructure or serving just mobile users but only users tolerating the questionable performance. Advanced technologies such as CDMA EV-DO become available to address the full mobility issue while still delivering broadband performance. 2
3 A Need for New Growth Areas Mobile voice market is saturated in most European countries. UMTS is not going to change that even though there might better capacity to CAPEX ratio than for GSM depending on a particular usage scenario. Hopes of the industry are related to content based services, however, only limited success has been demonstrated so far. Non-voice revenue streams being successful so far do have very little to do with 3G technology. Premium rate SMS, ringtones and some games do not require more than GPRS- EDGE in fact. While the mobile content business would be successful or not and while current mobile operators would secure significant part of that success is yet to be seen. But there is another growth area MOBILE BROADBAND. 3
4 The Technology for Mobile Broadband The research and development brings wide variety of radio access schemes and techniques. The interest of developers clearly shifts from voice to data-centric systems and data/voice/video unification over the IP platform. The 3G/IMT-2000 family of standards has passed the laboratory stage and is available for robust commercial application a goal yet to be fulfilled by some alternative technologies. CDMA2000 has the unique feature that the broadband component (EV-DO) can be deployed independently from the legacy voice core if so desired. That given the extremely high spectral efficiency of EV-DO radio interface makes CDMA2000 EV-DO the technology of choice for cost efficient high performance mobile or nomadic data service. 4
5 Frequency Spectrum for Mobile Broadband Europe with the notable exception of the 450 MHz band in some countries does not allow in-band technology migration to wideband services. New technologies are then pushed out to still higher and higher frequency bands. That makes new broadband services less available to rural areas - as the inevitable result of radio propagation physics. Making the digital divide more obvious rather than gapping it. 5
6 The 450 MHz Band The radio propagation in the sub 500 MHz bands is extremely good making it feasible to reach remote areas with innovative services. What is commonly hailed as the (CDMA) 450 MHz success concerns only very small portion of the available spectrum chunk (2x4.something MHz in most cases). The rest is used for obsolete, still analogue in many cases, narrowband services with spectral efficiency lower by several orders of magnitude. Not all aspects of 450 MHz band are beneficial to the operator. The band requires careful planning to avoid additional cell fragmentation (= coverage changes) as traffic rises. The radio propagation makes cross-border coordination rather difficult given the asymmetrical regulatory protection to narrowband services. 6
7 The Conclusion of the Planning Game: There is a case for mobile broadband service CDMA2000 EV-DO provides the best mix of mobility, performance, price, industry support and robustness The 450 MHz band allows the service to reach a significant part of the population with limited number of base stations Eurotel Data Expres 7
8 The Coverage Coverage (at 200 kbps and up): over 80% of the population Compliant to regulatory requirements for cross/border coordination and narrowband service coexistence 8
9 Advanced Service Packages EVDO450 + WiFi EVDO450 + WiFi + GPRS (roaming abroad) 1 EUR = 30 CZK Monthly fee, VAT included Monthly fee, VAT included, contract for 12 months GPRS (unlimited) adsl EVDO+WiFi* EVDO+WiFi+GPRS* * also available with adsl instead of EVDO The ca 30 EUR ARPU is purely incremental to GSM one 9
10 Improvement of EV-DO 450 Terminals The performance and reliability issues of the first terminal have been a disturbing factor A considerable improvement has been reached over the last year as new devices become available: - advanced Qualcomm MSM6500 chipset - receive diversity - further performance growth - new form factors are available (PC card, handset) MSM6500 allows GSM and CDMA2000/EV-DO functionality to be combined in a single device. 10
11 Advanced EV-DO 450 Terminals 11
12 Express Service Application Driving Acceptance Residential: Home broadband mobile alternative taken if required by lifestyle. Typical mobile users are traveling professionals, commuting students or people leaving the city for weekends. The combination of wired/radio service allows the Czech Telecom/Eurotel group to offer broadband access even in rural areas where adsl deployment does not give sufficient return of investment. SME/Corporate segment: Converged Fixed/Mobile virtual private network clearly is the #1 service being rquired 12
13 Evaluation after the First Year of Operation Eurotel Data Expres is a unique mobile data broadband service It can be safely considered the highest performance mobile data network in Europe. The financial parameters are stellar compared to many traditional 3G business cases Uncompromised broadband connectivity is available not only to traveling professionals but also to residents in rural areas. EV-DO serves about 15% of all broadband connections in the country (complementing adsl, cable and FWA networks). It is a remarkable success for a mobile wireless service. The Czech broadband connectivity market is still growing and so are growing successful services. 13
14 Time for Q&A 14
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