Lte workshop business plan-final
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Inwi is considering deploying an LTE network to take advantage of the growing LTE market. The document discusses LTE market trends, challenges facing Inwi, potential business models, and a conclusion. Key points include that LTE networks and devices are becoming more widespread and affordable, presenting an opportunity for Inwi, but competition in the Moroccan mobile market is also intense which could impact pricing. The document evaluates various business strategies like network migration approaches and pricing plans to help Inwi succeed with LTE.
Lte workshop business plan-final
- 1. Bring You to Broadband Era - Business Plan - Hassan KHAZANE Wireless Solution Manager hassan.khazane@zte.com.cn 16/01/2014
- 2. I. LTE Market Trend II. Challenge & Chance for INWI III. Business Model IV. Conclusion Agenda
- 3. I. LTE Market Trend II. Challenge & Chance for INWI III. Business Model IV. Conclusion Agenda
- 4. © ZTE Corporation. All rights reserved. LTE Status Worldwide 209 130 48 17 2 LTE Commercial Network - Cumulative 130 Commercial Network at December 2012 33.5 Million Subscribers at November 2012 GSA Forecast 209 Commercial Network by end 2013 LTE is the fastest deploying Mobile Communication System Technology Ever Source: GSA
- 5. © ZTE Corporation. All rights reserved. 1800 MHz is the most widely used band for 4G/ LTE System Deployments Worldwide 1800 MHz is used 38% of Commercially Launched Network 130 User devices Announced Includes 26 Smartphone – All the Leading Brands LTE FDD Deployments Worldwide: Source: GSA FDD SpectrumBands 5 MHz 10 MHz 20 MHz 2.5/2.6GHz √ √ √ 2.1GHz √ √ 1.5,1.7,1.8,1.9GHz √ √ 900MHz √ 800/850MHz √ DD(700to800MHz) √ √
- 6. © ZTE Corporation. All rights reserved. LTE TDD Investments Worldwide: Commercial Networks On Going 11 Commercial LTE TDD Systems 17 LTE TDD Commercial Networks Deployments On-going 2.6 GHz is the most used frequency for LTE TDD Source: GSA
- 7. © ZTE Corporation. All rights reserved. LTE Ecosystem Status Source: OVUM, GSA ZTE LTE Smart Phone ZTE LTE Smart Phone( 4 processor) ZTE LTE 1800 Tablet V11L ZTE LTE 1800 dongle MF820 USB Modem • LTE terminal: • Data card: $50-60; LTE terminal:-50%(2012),2013 to reach an affordable price($150-$200) to the public. • HSPA+ terminal: • Data card:$30-$50; HSPA+ terminal: $450 LTE Devices are becoming more Diversified and Affordable:
- 8. I. LTE Market Trend II. Challenge & Chance for INWI III. Business Model IV. Conclusion Agenda
- 9. © ZTE Corporation. All rights reserved. Moroccan’s Mobile Market Evolution & Maturity: Source : informa, 2012 Source : ANRT, September 2012 Source: Blycrotf Publishing, 2010 Morocco Operators Evolution of Mobile Subscribers & Penetration Morocco Population &GDP per Capita (PPP) Mobile Market Shares
- 10. © ZTE Corporation. All rights reserved. Moroccan’s Mobile Data Market: 0.05% Source : ANRT, September 2012 Internet Subscribers by Access Mode 18.42% Source : ANRT, September 2012 Mobile Internet Market Shares Source : ANRT, Annual Reports Internet 3G Subscribers Evolution Source : ANRT, Annual Reports 3G Internet Market Evolution Source: Pyramid Research Source : informa, 2012 Operators Market Shares
- 11. © ZTE Corporation. All rights reserved. •Price discount and promotion greatly improve MOU. vs •ARPU had fallen Competition Cause High Investment and Price War Price War Impact the ARPU: 16 32 48 80 120 (MAD)
- 12. © ZTE Corporation. All rights reserved. Larger gap between mobile traffic and wireless capacity, more and more BS sites are needed. Large gap between data traffic and the ARPUCost Desired Cost 2011 2012 2013 2014 2015 2016 Voice 9.76 8.88 8.21 7.62 7.15 6.73 Data 4.49 4.56 4.57 4.58 4.62 4.67 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 Mobile ARPU Forecast B USD Mobile OPEX Forecast Mobile data traffic is growing faster than revenues : More base station sites mean more TCO of the network Flat Revenue hard to cover the network cost
- 13. © ZTE Corporation. All rights reserved. 5 Keys to Win the Challenges User-paid Revenues 2005-2010 2010-20202000-2005 TCO and Carbon Footprint Broadband Network Applications & Device Traffic Voice-centric Pay per minute Unlimited wireless triple play New Value Chain Voice and Multimedia Pay per use Walled garden Non User-paid Revenues Enriched Service & QoE New Pricing Strategy
- 14. I. LTE Market Trend II. Challenge & Chance for INWI III. Business Model IV. Conclusion Agenda
- 15. © ZTE Corporation. All rights reserved. Inwi’s future business is facing an extreme intense competition: 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2012 2013 2014 2015 2016 2017 Subscriptions by Technology W-CDMA GSM CDMA ThousandThousandThousandThousandThousandThousandThousandThousandThousandThousandThousandThousandThousandThousandThousandThousand Operators Market Shares Inwi Should build a Competitive Network to be a head of Market Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 16. © ZTE Corporation. All rights reserved. INWI in BCG Matrix INWI in GE Matrix Attractiveness Competitive Strength StrongWeak High Low HighLow High Low Market Share GrowthRate GSM MB INWI’s Value Market Cash cowdogs question marks stars MB Fixed Telephony Voice ‘Stars’ Service Expand scale, enhance competitiveness, GSM and LTE will be. ‘Cash cow’ Service Maintain EVDO market advantage, prevent rivals’ encroachment, LTE launch to enhance it ‘Question Marks’ Service Right choose proofed, Actively increase GSM investment High ‘Attractiveness’ , Strong ‘Competitive Strength’ Keep EVDO Advantage, Speed LTE launch Mid ‘Attractiveness’ , Strong ‘Competitive Strength’ Selectively invest resource, maintain competition structure High ‘Attractiveness’ , Weak ‘Competitive Strength’ GSM direction proofed, Adopt active strategy, Allocate enterprise resource in prior Internet is the most valuable market for INWI, GSM voice is right choice and will be the basic for future How to gain advantage? Strategy Analysis Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 17. © ZTE Corporation. All rights reserved. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 R99 HSDPA HSUPA HSPA HSPA+ LTE Trial LTE MIMO 2x2 LTE-A 802.16e Rel 1.0 802.16e Rel 1.5 802.16e Rel 1.5 LTE Trial 1xEV-DO Rev A 1xEV-DO Rev B 1xEV-DO Rev C UMB 3GPP GSM 3GPP2 CDMA IEEE WiMAX GSM GSM GSM H + H + 1xDO Rev A HSDPA: 7.2 Mbps HSDPA: 3.6 Mbps 1xEV-DO: 3.1 Mbps BLR Migration Scenario There are different migration scenarios based on Inwi’s frequency resources Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 18. © ZTE Corporation. All rights reserved. Smooth Upgrade and Subscriber Migration Smooth Evolution: TotalTraffic Time + 1 EV- DO + 1 EV- DO + 1 EV- CDMA Traffic LTE Traffic GSM Traffic f1/f2 f1/f2 f1/f2 f1/f2 f1 f1 f1 f1 f1 f1 f1 f1 f1 f1 f1/f2 f1/f2 f1/f2 f1/f2 f1 f1 f1 f1 f1 f1 f1 f1 f1 f1 f1/f2 f1/f2 f1/f2 f1/f2 f1 f1 f1 f1 f1 f1 f1 f1 f1 f1 2013 - 2014 2014 - 2015 From 2015 Whole Network GSM For Voice Whole Network EV-DO For Data Important Cities LTE For Data Whole Network LTE For Data Whole Network LTE-A :Voice +Data Important cities LTE-A :Voice +Data Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 19. © ZTE Corporation. All rights reserved. Service Provider Example: CSL Service Offering • CSL Next G speed ranking in Global top 3 * (using Apple iPhone) • LTE/DC-HSPA+ Brings it to the Next Level* eLearning Mobile 3D TV HD Video Conferencing Cloud Computing Online Game Smart Office Live 3D/HD Video Streaming Interactive Gaming e-Health Three brands - 1O1O, one2free and New World Mobility, have their own unique positioning targeting to different market segments. Broadband Network Applications & DeviceEnriched Service & QoE New Pricing Strategy
- 20. © ZTE Corporation. All rights reserved. Service Offering Everything as a Service • Global Network, Managed and Communications Services • Cloud, Security and Professional Services • Open Development • Service Delivery Platform “It’s about a firefighter who can download the design of a burning building onto a handheld device, a student who can take classes with a digital textbook, or a patient who can have face- to-face chats with her doctor.” * * U.S. President Barak Obama, State of the Union Message, 25 January 2011 Service Provider Example: Verizon Broadband Network Applications & DeviceEnriched Service & QoE New Pricing Strategy
- 21. © ZTE Corporation. All rights reserved. P2P M2M, M2PP2M eNB MBMS Service Categories Particular Enterprise Ordinary Premium Broadband Network Applications & DeviceEnriched Service & QoE New Pricing Strategy
- 22. © ZTE Corporation. All rights reserved. B2C Plan Video Call IPTV 10 20 30 40 Gaming Voice CallVoD Mobile Chat Blogging Social Networking LBS Emails Media Sharing Mobile Music Volume Broadband Network Applications & DeviceEnriched Service & QoE New Pricing Strategy Multi-dimensional Business
- 23. © ZTE Corporation. All rights reserved. Signaling traffic increase due to higher penetration of Smartphone Massive applications requiring precise QoS policy Easier to achieve the objects with a controllable and smart network Mobile Data Pipeline Challenge Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 24. © ZTE Corporation. All rights reserved. Control the Traffic Explosion with Customized Pricing Plan: 1.Market-skimming pricing is proposed for the launch stage. The pricing is of following features: •End user: high end business or family users •Net profit rate : high •User quantity: small 2. When the market becomes mature, unit price drops and flexible pricings appear for different segments. 3.Two pricing methods are proposed to Inwi’s LTE service: •Pricing by data transfer rates & graded SLAs •Pricing by capped data allowance The 2 pricing methods are usually combined to form a whole pricing policy, targeting different segments. Pricing features Pricing by data transfer rates & graded SLAs Pricing by capped data allowance Target Market Middle or Low end market High end market Limits Limited of total traffic and data rate , usually less fast Capped data allowance, no other limits Source: Ovum Others Pricing Market-skimming Pricing Point of Inflection Maturity StageIntroduction Stage Unite Price Sales Volume Pricing Strategy Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 25. © ZTE Corporation. All rights reserved. Price Strategies • Together with the fastest mobile broadband network in Hong Kong, the new service plans will allow all mobile users to get the most out of their devices. one2free’s unique network provides broadband speeds up to 1.7 times1 faster than competitors, as well as the widest outdoor and indoor coverage in Hong Kong Monthly Fee $187 (HK dollar) $287(HK dollar) $387(HK dollar) Local Mobile Data Usage++ 1GB 5GB Unlimited Thereafter Charge $99/GB(Thereafter Charge Capped at $498/month) WiFi Hotspot Data Usage Unlimited* Example of Pricing Strategy: CSL Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 26. © ZTE Corporation. All rights reserved. The Verizon rewards customers that commit to long-term contracts with discounted prices, Price Strategies • Price:USD50-80 per month. Additional charges applicable after first 10 GB. Country Plan Detail Contract Length Monthly Cost (USD) Data Cap(GB) Cost Per GB (USD) Peak Downlink( Mbps) US USD50 Plan Two USB modems available at first launch. Ten further devices to be added by June 2011. 24 Months 50.00 5.00 10.00 12.00 US USD80 Plan 24 Months 80.00 10.00 8.00 12.00 Example of Pricing Strategy: Verizon Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 27. © ZTE Corporation. All rights reserved. Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy Good user experience Low power consumption Long battery life Diversified Devices Change User Habits
- 28. © ZTE Corporation. All rights reserved. US$100 US$50 US$40 US$35 US$30 US$0 US$30 US$60 US$90 US$120 2011 2012 2013 2014 2015 LTE Terminal Price Forecast LTE CPE Price Forecast Source: ZTE ResearchSource: ZTE Research Biggest Obstacle of LTE Device Will Be Cleared Up: For Premium ConsumersFor Largest Consumers Samsung Galaxy S III Samsung Galaxy Note II ZTE Light Tab V70 ZTE LTE FDD+TDD uFiZTE LTE FDD+TDD CPE ZTE LTE Smartphone V9800 Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 29. © ZTE Corporation. All rights reserved. Feature of LTE on handset lower data rate, shorter online time, higher revenue contribution User Type Monthly revenue (RMB) Monthly online time (ERL) Revenue per ERL (RMB/ERL) Data Card 19714482 6626311 2.98 Handset 3130943 297729 10.52 Enterprise 118713 393966 0.30 Total/Average 22964138 7318006 3.14 1 Euro ≈ 10 RMB Handset users occupy the least network resource, contribute the most revenue per ERL More and more applications transfer from PC to handset LTE on handset application could reduce traffic pressure and contribute more revenue Develop Handset Applications: Broadband Network Applications & Device Enriched Service & QoE New Pricing Strategy
- 30. I. LTE Market Trend II. Challenge & Chance for INWI III. Business Model IV. Conclusion Agenda
- 31. © ZTE Corporation. All rights reserved. INWI is Ready to Embrace LTE : Terminal Maturity: Yes • LTE devices are becoming more mature and affordable. Market Maturity: Yes • Morocco has a stable growth of population & economy; • GDP per capital (PPP) shows that LTE services are affordable in Morocco. Competition: Yes • INWI’s business may face a decline that needs a breakthrough in market; • To win the competition, skip Rev.B to migrate to LTE is a good choice. Resources: A question leaves to INWI: • Do you have the license? • Do we need to protect your actual investment or to seek a replacement? with • - • - • -
- 32. © ZTE Corporation. All rights reserved. Mobile broadband is the most valuable market for Inwi EV-DO phase 6 and LTE could make Inwi keep advantage, hold time-window continuously Flexible marketing and Pricing strategies could help Inwi create differentiate advantage on the Market EV-DO+LTE applications and devices could satisfy market demand with the lowest cost Summary :
- 33. © ZTE Corporation. All rights reserved. Revenue Growth Competition Customer Requirement Cost Reduction
Editor's Notes
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