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3G - UMTS market
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Outline
I - The 3G opportunity: subscribers forecast
II - The estimated cost of infrastructure
III - The cost of 3G licenses
IV - The position of the top 8 pan-European operators
V - The 3G business model challenge
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World-WideSubscriberEvolution
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
3G
GSM
TDMA
CDMA
58%
9%
10%
18%
27%
50%
15%
6%
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All rights reserved 2000, Alcatel, Paris.MCD/SM December 28th 2000, page n 4
0
50
100
150
200
250
300
350
400
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
3G
GSM
Western EuropeSubscribers
1%
3%
7% 15%25% 38% 53%
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0
50
100
150
200
250
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
3G
GSM
North-America Subscribers
3%
15%25%
38% 53%
CDMA
TDMA
19%
42%
32%
7%
0.5%
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0
50
100
150
200
250
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
3G
GSM
China Subscribers
30%
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0
10
20
30
40
50
60
70
80
90
100
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
3G
PDC
Japan Subscribers
1%
5%12%
18% 25%
CDMA
79%
20%
33% 43% 53%
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0
100
200
300
400
500
600
700
800
900
1,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
3G
GSM
Rest of the World Subscribers
1%
1.5%
3%
6%
CDMA
TDMA
51%
26%
17%
9%
12%
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Outline
I - The 3G opportunity: subscribers forecast
II - The estimated cost of infrastructure
III - The cost of 3G licenses
IV - The position of the top 8 pan-European operators
V - The 3G business model challenge
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All rights reserved 2000, Alcatel, Paris.MCD/SM December 28th 2000, page n 10
2000 Total market: 45.4 B$GSM 46 %CDMA 28 %TDMA 14 %PDC 7 %
2000 Worldwide
Infrastructure MobileMarket
US & Canada : 9.7 B$CDMA 52 % (=>CDMA2000)
TDMA 36 % (=>EDGE)
GSM 12 % (=>EDGE/UMTS)
Western Europe: 10 B$GSM 100 % (=>UMTS/EDGE)
China : 4.3 B$GSM 95 % (=>TD-SCDMA)
Japan: 4.9 B$PDC 67 %(=>UMTS)
CDMA 33 %
(=>UMTS/CDMA2000)
Rest of the World : 16.5 B$GSM 35 % (=>UMTS/EDGE)CDMA 36 % (=>CDMA2000/UMTS)
TDMA 18% (=>EDGE)
=> anticipated 3G evolution
NSS+BSS Infrastructure Investments
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World-WideMobile Infrastructure Investments
0
10
20
30
40
50
60
70
80
1999 2000 2001 2002 2003 2004
41.4
Billions $
45.4
52.2
61.7
69.174.7
4.717.5(80%)
29.6
(77%)
40.6(75%)
23.7
13.8
6.4
10.5
17.7
21.1
12.7
6.5
GSM
3G
(% UMTS)
CDMA
23.420.9
TDMA
12.711.6
5.7 5.2 4.7
f
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3Ginfrastructure investmentsper region
0
5
10
15
20
25
30
35
40
2000 2001 2002 2003 2004
Billions $
Western Europe
China
Japan
North America
Rest of World
40.6
4.7
17.5
29.6 14.1
2.7
3
6.5
9
8
12.3
8.7
6
5.8
4
5
1.5
2
1.5
0.3
2
UMTS f
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UMTS infrastructure investmentsper region
2.55
2.5
4
4.5
3
8.7
12.3
14.1
4
3.5
1.5
2.7
0
5
10
15
20
25
30
2000 2001 2002 2003 2004
Western Europe
China(TD-SCDMA)
Japan
North America
Rest of World
30.6
4.2
14
22.8
0.3
Billions $
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CDMA 2000 infrastructure investmentsper region
Billions $
1.53
3.5
1.8
2
5
1.5
0
2
4
6
8
10
12
2000 2001 2002 2003 2004
Japan
North America
Rest of World
10
0.5
3.5
6.8
O tli
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Outline
I - The 3G opportunity: subscribers forecast
II - The estimated cost of infrastructure
III - The cost of 3G licenses
IV - The position of the top 8 pan-European operators
V - The 3G business model challenge
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2000
Japan 3
2001New Zealand
4
2001Australiaregional
2001Canada 4
x 14rgions
2001 Hong Kong4
2001
South Africa 2
2001
Isral 3
2000Korea
2
2001
Malaysia 2/3
2002
UAE 2
2001
China
4
2002
Philippines
5(3+2)
2001Taiwan
52003
Thailand
3
2001Singapore 4
2002
Egypt 2
Awarded
H2 2000
2001
>2002Licence Date
CountryNb licence
(incumbents + New
entrant)*
Auction or Mix
Beauty contest or TBA
2001
Venezuela4
2001
Chile
3
2001Argentina4
2002
USA
3G licences planning
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1999 Finland4(3+1)
2000
Austria
6(4+2)
2001
Greece
4
2000
Switzerlan
d 4(3+1)
2001
Belgium4(3+1)
2002Luxembourg
2
2000Italy
5(3+2)
Awarded
H2 2000
2001
>2002
2001Ireland 3-
4
2002
Hungary 2-
3
2000Lichtenstein
1
Licence Date
CountryNb licence
(incumbents + New
entrant)*
(*) : likely split
Auction or Mix
Beauty contestor TBA
2001
Russia
2/region
2001 Czech
Rep 3
Average price
per Lic in Euro
2000UK
5(4+1)
2000Netherlands
5
2000Germany
6(4+2)
2000Spain
4(3+1)
7.4 B
520 M
8.5 B
2000
Portugal
4(3+1)
100 M131 M
4.9 B
2001 France
4 (3+1)
650m
2000 Poland
3
2001Denmark 4
24.8 M
2000Norway4(2+2)
2000Sweden4(2+2)
2.43 B
139 M
34 M
10 k
3G licences planning : Europe
Outline
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All rights reserved 2000, Alcatel, Paris.MCD/SM December 28th 2000, page n 18
Outline
I - The 3G opportunity: subscribers forecast
II - The estimated cost of infrastructure
III - The cost of 3G licenses
IV - The position of the top 8 pan-European operators
V - The 3G business model challenge
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Top 8 UMTS bidders
Country BT DTFT New
Orange
KPN/NTT
Docomo/
Hutchison
Te le fonica Telenor Voda fone TIM
Austria Maxmobil HutchisonEuropean
TelecomConnect Ausria Telering
Belgium Mobistar KPNOrange ST3GBelgacom
Mobile
Denmark Mobilix Sonofon
Finland
France SFR Itineris
KPN/NTT
Docomo/
Hutchison
ST3G SFR Bouygues
Germany Viag Interkom T-Mobil Mobilcom Eplus-* Groupe 3G Viag interkom Mannesman-Mobilfunk
Greece Cosmote Panafon
Ireland Esat Digifone Orange Eircom Esat Digifone
Italy WindAndala
(Hutchison)Ipse Omnitel TIM
Luxembourg ST3G
Netherlands Telfort 3Gblue(Ben) Duchtone KPN Libertel
Norway Telenor
Portugal Optimus ONI Way Telecel
Spain Airtel Telefonica Airtel Amena
Sweden Telenordia Mobility 4 Orange/B2 Hutchison Reach Out Telenordia Europolitan
Switzerland Orange ST3G Swisscom
UK Cellnet One2One Orange Hutchison 3g Vodafone
Awarded
in red incumbents mobile operator
in blue new entrants in mobile local market
underlined majority holdings in incumbent operator
* Hutchison out of the consortium in Germany
Forecasted UMTS subscriber market shares
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Forecasted UMTS subscriber market shares
UMTS triggers concentration among mobile operators
which is already effective in GSM
Western Europe
3G Subscribers Year 2005
Market share by Operator
BT
8%DT
8%
Vodafone
15% TIM
6%
Others
16%
FT/New
Orange
17%
Telenor
2%
Telefonica
9%
KPN/Hutchison/NTT
Docomo
11% New Entrants
8%
Total 3G Subscribers 50.3 Millions
Top 8
70%
Outline
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All rights reserved 2000, Alcatel, Paris.MCD/SM December 28th 2000, page n 21
Outline
I - The 3G opportunity: subscribers forecast
II - The estimated cost of infrastructure
III - The cost of 3G licenses
IV - The position of the top 8 pan-European operators
V - The 3G business model challenge
Revenue increase is key to UMTS
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57
4943 40 39 37
36 35
0
10
20
30
40
50
60
70
80
1998 1999 2000 2001 2002 2003 2004 2005
Average Revenue per User/ Month ()
Vodafone
Orange
TIM
Info / dataD2
Revenue increase is key to UMTS
profitability
Voice
40
Info/Data
220
What additional revenue will network operators
be able to generate from Info/Data traffic ?
In 2002
Mobile Internet
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Early-Adopters
Conservators
Visionaries
T
Mobile data adoption
Pragmatics
Few UsersTrend setters
Numerous Users
WAP
GPRS
UMTS/
EDGE
Data Evolution phase 1:
Plug-in to transport data
Data Evolution phase 2:
Smooth evolution to bring
Speed and Capacity
2000 2001 2002 2003
Skeptical
Mobile Internet
Market evolution
Mobile Internet will change
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3rd PartyApplication providers
Content
Providers
Content
Aggregators
ServiceProviders
NetworkOperators
UsersTerminals
Delivery
Chain
Mobile Internet will change
the business model
Source : Arthur D.Little : 100% equates to 4060 per subscriber (Western Europe)
Revenues w i l l shi f t fromnetworkservices toappl icat ions and co ntentservices
72%
25%25%23%12%3%
38%2%
GSM UMTS GSM UMTS GSM UMTS GSM UMTS
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