The document discusses the mobile broadband paradox and the mobile cloud. It summarizes key findings on mobile broadband traffic and revenue trends for European and Indonesian mobile operators. It also outlines typical operator strategies to address the broadband paradox such as network sharing, spectrum refarming, offloading traffic, and new pricing and service models. Finally, it proposes a mobile cloud business model for operators to transition to as a "mobile cloud operator" and provides examples of potential mobile cloud services and applications.

1. Broadband Paradox and Mobile Cloud
By : Dr.Ir.Joko Suryana
Laboratory of Radio Telecommunications and Microwave
Reference sources: Internet

2. Outline
• Mobile and IP-based • Mobile Broadband Facts :
services : – European Market
– Mobile and Internet – Indonesian Market
Subscriptions • ‘Traditional’ Operator
– Device Adoption Strategy
– Global IP Traffic
• Mobile Cloud Approach
– Global Mobile Traffic
– Traditional Telco vs OTT
• Mobile Broadband Operator
Paradox – Telco+OTT Approah
– Introduction – Mobile Cloud Business
– The Paradoxes – Softbank Study Cases
– Current Findings

3. GLOBAL IP TRAFFIC 2010-2015

4. Cisco Global IP Traffic 2010-2015
• Total IP Traffic  80.5 Exabytes per month by 2015
– By 2015, annual global IP traffic will almost reach a
zettabyte
• Fixed Internet  59.4 Exabytes per month by 2015
– By 2015, one million video minutes cross the network each
second
• Managed IP  14.8 Exabytes per month by 2015
– Business IP video conferencing will grow six-fold from
2010-2015
• Mobile Data  6.3 Exabytes per month by 2015
– Mobile video will increase 26-fold from 2010 to 2015
Source: Cisco Visual Networking Index (VNI) Global IP Traffic Forecast, 2010–2015

5. Entering Zettabyte Era
• By 2015, global IP traffic will reach an annual run rate
of 966 exabytes per year
• 966 Exabytes is equal to:
– 8X more than all IP traffic generated in 2008 (121 EB)
– 28 million DVDs per hour

6. Global Device Number :
By 2015 there will be 1.5 B Device

7. Global Device Adoption 2011

8. Smartphone OS Market Share 2011

9. Global Device Number :
Generated Traffic by Device

10. Global IP Traffic 2010 – 2015 :
Regional Contribution

11. Global IP Traffic Drivers 2010-2015

12. Global Mobile Traffic 2012

13. INDONESIA INTERNET PROFILE

14. Global Internet Users 2011

15. Global Mobile Users 2011

16. Profile of Indonesian Internet Users 2011

17. Indonesian Mobile Broadband:
Subscriber Subscription
• Total number of cellular subscribers in Indonesia, has reached 225 million
in 2010 with an average 1.33 SIM cards used per person, it is estimated
that there are approximately 168 million mobile phones in Indonesia.

18. Indonesian Mobile Operator Profiles
BB Infrastructure 2011-2012
FY 2011 Q1 2012
Telkomsel XL Indosat Telkomsel XL Indosat
Internet BW 20 Gbps 5 Gbps 8.36 Gbps 20 Gbps 5 Gbps 8.36 Gbps
BW of Blackberry (RIM) 5 Gbps 3 Gbps 2.7 Gbps 5 Gbps 3 Gbps 2.7 Gbps
Mobile Internet Subscribers 45 millions 25.5 millions 20 millions 48 millions 29 millions 22 millions
Mobile Broadband Subscribers 6.7 millions 3.7 millions 3 millions 8.6 millions 7 millions 5 millions
Blackberry Subscribers 3.6 millions 1.8 millions 1.7 millions 4.4 millions 2.5 millions 2 millions
Traffic per day 115 TByte 66 TByte 36 Tbyte 115 TByte 66 TByte 36 Tbyte
Node-B BTS 9500 4910 3400 10000 5000 3500
FY 2012 Outlook
Telkomsel XL Indosat
Internet BW 35 Gbps 10 Gbps 10 Gbps
BW of Blackberry (RIM) 10 Gbps 8 Gbps 5 Gbps
Mobile Internet Subscribers 56 millions 36 millions 28 millions
Mobile Broadband Subscribers 15 millions 14 millions 8 millions
Blackberry Subscribers 6.5 millions 3.5 millions 3 millions
Traffic per day 200 Tbyte 120 Tbyte 80 Tbyte
Node-B BTS 11000 8000 5000

19. Mobile Broadband Market Size 2012
The Big Three : TSEL, XL, ISAT
• Data ARPU and Infrastructure Profile :
– Data ARPU ( blended )
• Rp 100.000 per month (Q1 2012)
Benefit
• Rp 70.000 per month (Q4 2012) Providers Data Plan
(Price – Volume – Speed)
– Total BTS Networks : IDR 100,000 – 1 GB – max 1 Mbps
Telkomsel Flash Unlimited
• 24.000 Node Bs IDR 200,000 – 2.5 GB – max 2 Mbps
• Bandwidth Estimation Profile : Indosat Paket Browser Bulanan IDR 100,000 – 1 GB – max 1 Mbps
IDR 99,000 – 2.5 GB – max 3.6 Mbps
– Internet BW XL Hotrod 3G
IDR 199,000 – 6 GB – max 3.6 Mbps
• 60 Gbps Axis
Bulanan Premium IDR 79,000 – 1 GB – unknown
– RIM Bandwidth : Bulanan Ultimate IDR 200,000 – 2.5 GB – unknown
IDR 50,000 – 1 GB – unknown
• 23 Gbps 3 Paket Internet 3 IDR 75,000 – 2 GB – unknown
• Data Business 2012 Profile : IDR 125,000 – 5 GB – unknown
– Total data subscribers Bakrie
Super Giga
Ultimate
IDR 100,000 – 2 GB – max 3.1 Mbps
IDR 500,000 – 35 GB – max 3.1 Mbps
• 37 million user IDR 50,000 – 2 GB – max 3.1 Mbps
• 12 x Rp 70.000 x 37 million Smart Paket Data IDR 100,000 – 6 GB – max 3.1 Mbps
• Rp 31 trillions IDR 150,000 – 12 GB – max 14.7 Mbps

20. Indonesia International BW 2010-2015
Fixed BB 2011: 100 Gbps
Fixed BB 2012 :120 Gbps

21. MOBILE BROADBAND PARADOX

22. Mobile Broadband Paradox : Definition
• Mobile broadband is
Traffic Increases rapidly increasing rapidly both when
Revenue grows at low level it comes to traffic and
number of subscriptions.
– The swift growth of the demand
will require substantial capacity
expansions.
• Operators are challenged by
the fact that :
– Revenues from mobile
broadband are limited, just a
few per cent of ARPU, and thus
not compensating for declining
voice revenues , creating a so
called :
“Broadband Paradox”

23. Broadband Paradox :
Mobile Data Traffic Behavior
The data services are
dominating type of traffic
in the networks

24. Broadband Paradox :
Mobile Data Revenue Behavior
But the data services revenue
contribution is at a low level

25. Broadband Paradox #1 : Revenue

26. Broadband Paradox #2 : Service

27. Broadband Paradox #3 : Network

28. Broadband Paradox #4 : Investment
• Mobile operator problem : Scalability of cellular systems :
– Data traffic and the need for • For a specified amount of spectrum and
additional network capacity for the same type of Radio Access
( investments) are increasing Technology :
substantially – deployment of N times more
– While revenues are growing capacity will imply N times higher
at a very low level network costs.
• The cost is proportional to the number of
users, the demand per user, the service
area and also a function of quality

29. MOBILE BROADBAND CURRENT
FINDINGS

30. Findings From Current Development
A. Mobile broadband unable to drive revenues
• The data points underscores that operators are highly
dependent upon the revenue stream from the voice
business.
• It requires limited network capacity as voice customers
only generates 10 MB of traffic per month, while
mobile broadband users in average consumes 130
times more traffic, paying only 1% of the price per MB
compared to voice.
• This asymmetry is unsustainable, although low
utilization rates in the UMTS networks initially can
handle the increased load factors.

31. Findings From Current Development
B. Operators forced to look for new revenue streams
• This forces operators to launch new value added
services to compensate for a deteriorating voice
business.
• But this has so far been unsuccessful, illustrated by
the limited interest users have showed for mobile
videoconference, mobile-TV, and gaming.

32. Findings From Current Development
C.Lower free cash flow restricts capex
• The financial crisis has placed the focus on debt making
operators more cautious on capex in order to have the
ability to service debt, pay dividends and strengthen their
balance sheets.
• But the operators’ ambition to expand aggressively on
mobile broadband requires capex upgrades.
• Given that mobile broadband generates no cash flow it
weakens operators financially in a time when investors and
banks are favoring financial stability.
• This forces operators to make strategic prioritizations and
subsequently alter business models for mobile broadband.

33. MOBILE BROADBAND FACTS :
EUROPEAN MARKET

34. Broadband Paradox : Traffic Facts
(European Mobile Operators)

35. Broadband Paradox : Revenue Facts
(European Mobile Operators)

36. Broadband Paradox : Revenue Facts
(European Mobile Operators)

37. MOBILE BROADBAND FACTS :
INDONESIAN MARKET

38. Indonesian Mobile Broadband :
Voice Traffic and Revenue

39. Indonesian Mobile Broadband :
SMS Traffic and Revenue

40. Indonesian Mobile Broadband:
Data Growth is Picking Up

41. Indonesian Mobile Broadband:
3G NodeB Investments

42. Indonesian Mobile Broadband :
The Lowest Usage in the Region

43. Indonesian Mobile Broadband :
Capex Still High in the Region

44. Telkomsel Mobile Broadband :
Data Revenue vs 3G CAPEX

45. XL Mobile Broadband :
Data Revenue vs 3G CAPEX

46. Indosat Mobile Broadband:
Data Revenue vs 3G CAPEX

47. TYPICAL OPTIONS FOR OPERATOR
STRATEGIES

48. Operator Options
Strategy to bridge the revenue gap :
1. Network sharing : all forms of operator
cooperation where sites or parts of the radio
access networks are shared.
2. Spectrum refarming : replace or mix radio access
technologies in specific frequency bands.
3. Offloading heavy data traffic : to local networks
or indoor systems.
4. Pricing strategies and service differentiation
5. New types of services and revenues : M2M, NFC

49. 1. Network sharing
• Network sharing includes all forms of operator cooperation
where sites or parts of the radio access networks are
shared. This is a form of long term cooperation.
• In Sweden all 3G operators are involved in different types of
joint ventures, and a new constellation has been
announced regarding the deployment of LTE.
• The cost savings can be in the range 20-40% depending on
the level of sharing :
– The potential for saving is obvious when you consider coverage
and macro base station deployment where the site costs are
large
– For capacity expansion in urban areas the potential savings with
shared networks would presumably be much lower.

50. 2.Spectrum Refarming
• Another way to exploit current networks and re-use existing sites is to
replace or mix radio access technologies in specific frequency bands.
– One example is the 900 MHz band where WCDMA, HSPA or LTE can replace
GSM/EDGE resulting in increased capacity per site and MHz of spectrum.
WCDMA in the 900 MHz band implies that 3G coverage can be achieved with
a lower number of sites than in the 2.1 GHz band. Hence, these benefits
would be most valuable for wide area coverage.
– On the other hand the present usage of the 900 MHz band is for GSM and
EDGE. So when calculating the benefits the costs for the whole WCDMA
implementation has to be included. These costs have to be covered by the
additional revenues resulting from WCDMA.
• Nokia Siemens Networks claims that the total savings in capex and opex
can be up to 60%, i.e. total cost of ownership (TCO) is reduced to 40%
compared to deployment in the 2.1 GHz band.
– For indoor coverage the benefits of the above mentioned type of spectrum
refarming is more difficult to exploit than for wide area coverage.
– In urban areas high capacity is already achieved by dense deployment of
macro or micro sites using WCDMA or HSPA operating at 2.1 GHz.

51. 2.Spectrum Refarming: Indonesia Context

52. 3. Offloading Heavy Data Traffic
• Instead of deploying a large number of outdoor base
stations for mobile broadband the heavy data traffic can be
offloaded to local networks or operators using indoor
systems .
• In addition to the potential of substantially lowered
network costs a number of other motivations can be
identified:
– the data traffic is mostly (~90% ) generated indoors
– the users are stationary or nomadic
– the users are ”known” (at the office or at home)
– no need to deal with wall attenuation
• Compared to capacity expansion using macro or micro base
stations the use of cellular femtocells or WLAN systems
indicate cost savings in the range 20 times .

53. 3. Offloading Heavy Data Traffic

54. 4.Pricing Strategies and Service
Differentiation
• Currently the flat rate
subscriptions area associated with
some type of restrictions, e.g.
maximum amount of data per
month (1GB, 5GB) and maximum
data rate (384 kbps, 3,8Mbps,
7Mbps).
– Operator “3” in the UK offers
subscriptions with different
maximum amount of data per
month, e.g. 1 GB for £10, 5 GB for
£15, and 15 GB for £30.
– Heavy data users have to pay more.
– This kind of pricing scheme is a way
to handle the “waste” problem
associated with flat rate.

55. 4.Pricing Strategies and Service
Differentiation ( Continue )

56. 5.New types of Services and Revenues
• M2M Services
• NFC-based Services

57. MOBILE CLOUD BUSINESS MODEL

58. Traditional Telco Business Model :
Current Service delivery positioning
• Telcos are becoming dumb pipes for service providers

59. Traditional Telco is a Dumb Pipe

60. Traditional Telco Business Model :
Approach doesn’t work

61. Telco 1.0 vs Telco 2.0

62. Two Sided Model : Google
• Google is a ‘two-sided’ business model master
• Telco Business should consider the Google business model

63. Google vs Vodafone = 2-sided vs 1-sided

64. Two Sided Model :
Open up more markets for Telco platform

65. Two Sided Model :
Cloud Service Provider by Telco
Three Major Tasks :

66. Mobile Cloud Service : Architecture

67. Cloud Service Center

68. New Business Model : : OTT+Telco

69. Telco and OTT Worlds

70. Telco+OTT World

71. Telco+OTT World

72. Value Chain of Mobile Cloud

73. Sample of Mobile Cloud Services

74. Leading Mobile Operator :
Mobile Cloud Operator

75. Mobile Internet Evolution
• Mobile Internet 1.0 :
– The first wave of mobile data connectivity was very rudimentary with
technologies such as CDPD, GPRS, and messaging (SMS).
• Mobile Internet 2.0 :
– The next wave brought in better devices, faster networks and the
consumers started migrating their tasks, content creation and
consumption behavior to the mobile platform
• Mobile Internet 3.0 : Mobile Cloud Operator
– Is defined by the cloud-enabled, software driven, IP-centric, high-
speed 4G+ networks; the consumers using multiple connected
devices; the flattened value-chains; and the operators relying on
mobile data services for majority of their revenues

76. Cloud Computing Evolution

77. Mobile Cloud :
Service and Application Areas

78. Mobile Cloud :
Service and Application Areas

79. Mobile Cloud :
Service and Application Areas

80. Mobile Cloud :
Service and Application Areas

81. Mobile Cloud :
Service and Application Areas

82. SUCCESS STORY : SOFTBANK

83. History

84. Group Sinergy

85. Group Network

86. Softbank Performance

87. Softbank vs Competitor

88. Top Brand

89. ARPU and Subscribers

90. Winning Formula

91. Traditional Mobile Services

92. New Mobile Services

93. Cooperation Network Technologies

94. Increase Capacity

95. Content and Applications : Softbank

96. Thank You