Concrete Steps into 3G Mobility & Margin

Concrete Steps into 3G Mobility & Margin

Mobile Multimedia Evolution from 2G to IMT2000 Raimundo Duarte Manager for Regulatory and Industry Affairs Nokia do Brasil st Multimedia in 221 Century - Porto Seguro, April, 6th - 2001 [email protected] Agenda Nokia's vision of the Mobile Information Society Present Situation for 2G and 3G Mobile Services, perspectives GSM Phenomena in LA World Technological Division Evolution Path to IMT-2000 Nokia Solution Summary 2 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Nokia Vision: The Mobile Information Society Any Service Any Application Any Time Any Location

Any Network Any Device 3 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Present Scenario Current Networks are 2nd Generation 90% Digital Evolution of 2nd Generation Same bands IMT-2000 already specified Licenses for 3G granted ~75 to date 4 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Standands x Frequency in 2G GSM 800 - 900 1800 - 1900 CDMA 800 - 1700 - 1900 TDMA

800 - 1900 AMPS 5 NOKIA 800 Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Standands x Frequency in 3G WCDMA 1900/2100 CDMA2000 1900/2100 Number of Licenses 73 WCDMA 2 CDMA2000 New Frequency Bands for 3G were allocated in WRC2000 How to use >> Under Big Discussion in ITU 6 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD

Current Services SMS E-SMS m-commerce m-banking Entertainment Increase the ARPU today up to 9% 7 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Mobile data and SMS info on selected operators in Europe Operator, Country from Sonera, Finland NetCom, Norway Telenor, Norway TeleDanmark/Denmark OPI, Italy 4.5 TIM, Italy 3 D1, Germany 6.3 BT Cellnet, UK Vodafone, UK Orange, UK n/a Itineris, France Bouygues, France <1

Telefonica, Spain Telecel, Portugal Panafon, Greece Libertel, Netherlands Eircell, Ireland % revs data month 9 23 9 25 n/a 30 3 40 18 10 32 n/a 15 6 25 33 <1* n/a 5 4 13 1 4 4.6 30 2

n/a <2 30 Note: *data as of January Source: company data/Merill Lynch estimates, June 2000 8 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD SMS/sub/ Charge SMS chat (Euro cents) 16 1.2 Total Europe, 14 Merill Lynch estimat % Operator revenues 7 from data: 10 2000: 4% 12* 2005: 26% 8* 2010: 50% % Operator revenues 18.6 from non-access: 11 2000: 2% 6.4-16

2005: 16% 14* 2010: 33% 10.6 15 10 9 23* 14 The Philippines Phenomena Mobile Subscriber Explosion: 220 % growth in 12 months 96% of the new users chose GSM True Winner : COMMUNICATIONS, INC. 1 700 000 new users in 12 months Every subscriber sends 27 text messages every day at cost of 2 US cents per message 50 million messages / day Daily revenue : 1 M USD 9 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD 3G is an Evolution not a Revolution 3G will not happen overnight, but in

gradual evolutionary steps 3G is a combination of a wide range of enabling technologies For consumers 3G is not discontinuity, but an evolution of handset functionality 3G is one more step of Mobile Internet! 10 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD 3G is driven by services, not technology Thursday Partly cloudy. Temperature 4..8 C Friday Rain Today's applications will evolve to 3G Usability of 3G applications require higher bit rates 11 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD The Perspective of Mobile Data

13 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Data Over GSM by Technology, Western Europe 1999-2004 500000 Thousands of users 450000 400000 350000 UMTS (K) 300000 EDGE (K) 250000 200000 GPRS (K) HSCSD (K) 150000 CS (K)

100000 SMS (K) 50000 0 1999 2000 2001 Source: Dataquest (April 2000 estimates) 14 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD 2002 2003 2004 Mobile Services Revenue in Western Europe Voice versus Data, 19982004 160000 140000 $ Million 120000 100000

80000 60000 40000 20000 0 1999 2000 2001 Data Revenue Source: Dataquest (April 2000 estimates) 15 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD 2002 2003 Voice Revenue 2004 SMS Forecast, Worldwide (no. of messages sent) SMS in 2000 (average) Asia 5 billion

80 Billion 60 50 40 30 20 South America 1 billion 10 Eastern Europe 1 billion 0 2000 Totally 20 billion SMS per month GSM Association estimates 10 billion SMS on GSM by Dec. 2000 Source: Mobile Lifestreams, June 2000 NOKIA 70 Continental Europe

12 billion Middle East 0.25 billion North America 0.5 billion 16 SMS Forecast 2000-2005 (monthly) Multimedia in the 21st Century, Porto Seguro 04.06.01/RD 2001 2002 2003 2004 2005 Why this will happen? 18 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Metcalfes Law More manufactures and R&D produce greater range, drives capability up

and unit price down Large markets attract more manufactures and R&D Positive Feedback More users create large markets 19 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Large range, capability and low price attract more users GSM Phenomena in Latin America GSM Maybe GSM TDMA/ CDMA 20 GSM countries after 2000: Antigua &

Barbuda Argentina Bolivia Brazil GSM countries in Chile 1998: El Salvador Chile French French Caribbean Caribbean Paraguay Guatemala Venezuela Jamaica Mexico Paraguay Peru Suriname NOKIA Multimedia in the 21 Century, Porto Seguro 04.06.01/RD st Colombia Uruguay Ecuador Guyana Economies of scale 25BUSD 20BUSD CDMA

15BUSD TDMA 10BUSD GSM 5BUSD ~35% of CDMA subscribers are in Korea (1/2001) 0BUSD 1H99 2H99 1H00 2H00 Source : Global Mobile TDMA/GSM CDMA Infravendors ~7 Infra market 3/+10 ~4B/~17B ~$6B

Subscribers Terminal vendors 22 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD 62M/450M 80M 5/40 20 ~60% of world market +200 M units in 2000 First to the market Usually new features come first to GSM - vendors spend most and first of their efforts on the largest market SMS (chat, picture messaging, ring tones, logos / icons) Circuit switched data (9.6 kbps -> 14.4 kbps -> HSCSD x times 14.4 kbps) WAP Packet data (GPRS and EGPRS) Location Based Services (E-OTD, Cell ID & TA, GPS) Accessories (Handspring visor GSM module, telematics, etc.) SIM card Security M-commerce SIM ATK Control over handset configuration with Class 2 SMS Distribution SyncML, MMS, Java, EPOC terminals

23 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Strong Standardization Well defined standards in GSM and WCDMA GSM standard is strict, with rigorous Type Approval -> all carriers can utilize the standard terminal Other technologies with loose standards present possibility for endless carrier variations increasing the cost for handsets Easy to have multiple infrastructure vendors for GSM GSM offers worldwide roaming Value added services available when you roam (SMS, CSD, WAP, etc.) 24 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Analogue & Digital Technologies PDC 5% Analogue 10% TDMA 9% CDMA

12% GSM 64% Subscribers worlwide 25 GSM CDMA TDMA PDC Analogue 455 687 350 84 620 510 66 602 540 38 543 700 68 489 870 Total 713 943 970 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Source: EMC 01/2001 Digital Cellular Technologies TDMA 10%

PDC 6% CDMA 13% GSM 71% Subscribers worlwide GSM CDMA TDMA PDC Total 26 NOKIA 455 687 350 84 620 510 66 602 540 38 543 700 645 454 100 Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Source: EMC 01/2001 World Cellular Subscriber Division end 2000 PDC 7%

Analogue 10% TDMA800 4% TDMA1900 0% TDMA800/1900 4% GSM900/1800 21% CDMA800 5% CDMA1700 2% CDMA1900 2% GSM1900 2% CDMA800/1900 3% GSM1800 9% GSM900 31% 27

NOKIA Source:Porto EMCSeguro 12/0004.06.01/RD Multimedia in the 21st Century, WCDMA becoming the dominant 3G standard 73 WCDMA licences awarded plus more to come (120 by end 2001) Vs 13 CDMA2000 networks planned (out of which 2 already opted for WCDMA) Belgium 3 x WCDMA Portugal 4 x WCDMA Sweden 4 x WCDMA S. Korea 21 xx WCDMA CDMA2000 [??] Switzerland 5 x WCDMA Norway 4 x WCDMA 6 x WCDMA Austria 5 x WCDMA Taiwan Italy

Germany 6 x WCDMA Hong Kong Czech Ireland 2 x WCDMA Japan Greece 1 x CDMA2000 Denmark 5 x WCDMA France 4 x WCDMA Netherlands 5 x WCDMA UK Spain Liechtenstein Finland 1 x WCDMA 4 x WCDMA 1999 1Q 2000 2Q 2000 2H2001 28 NOKIA 3Q 2000 Multimedia in the 21st Century, Porto Seguro 04.06.01/RD

Singapore Australia New Zealand 4Q 2000 4 x WCDMA 5 x WCDMA 4 x WCDMA 1H2001 Evolution of Mobile Radio Standards Wide area coverage 30kHz Standard completed Estimated Product Availabiliy TDMA (IS41) CDPD 43.2 kbits/s 200kHz EDGE GSM (MAP)

HSCSD 115.2 kbits/s GPRS 384 kbits/ s 5MHz WCDMA TDD WCDMA FDD 170 kbits/s 10 Mbits/s TD-SCDMA PDC/PDC-P 14.4 kbits/s cdmaOne (IS-41) 76.8 kbits/s NOKIA 1.25MHz cdma20001X

307.2 kbits/s 2001 Multimedia in the 21st Century, Porto Seguro 04.06.01/RD 2 Mbits/s WCDMA HSDPA 2 Mbits/s 2000 29 Standard in preparation 1XEV DO 2.4 Mbits/s 4,8 Mbits/s 1XEV DV 2002 2003

Nokia UltraSite: solutions that garanty tomorrow operators today's investement Nokia UltraSite Base Station: One unit for all technologies! How does it work? First 'triple-mode BTS' in the world for GSM, EDGE, UMTS Data speeds of up to 107,4 kbit/s with GRPS Data speed of more than 400 kbit/s withGSM EDGEor Data speeds of up to 2Mbit/s with UMTS carriers EDGE Operates on all relevant frequencies part What are the benefits? 30 NOKIA Mobile Multimedia Coverage and GSM Coverage Enables GPRS, ECSD, EGPRS data services

WCDM One platform for all of GSM, EDGE, and UMTS A part Secures the operators network investement Multimedia in the 21st Century, Porto Seguro 04.06.01/RD Summary TDMA and GSM are converging with a smooth evolution path to 3G GSM is the dominate 2G protocol WCDMA and EDGE will be the dominate 3G protocol Global economies of scale and global roaming Better and more cost effective terminal, infra and application portfolio GSM800/1800/1900 enables 3G evolution to TDMA operators Common core network for GSM/GPRS -> EDGE/WCDMA Triple mode Nokia Ultrasite base station Multimode Terminals will allow roaming Worldwide and multiband terminals (GSM + WCDMA) 31 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD

Thanks! Muito Obrigado! 32 NOKIA Multimedia in the 21st Century, Porto Seguro 04.06.01/RD

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