Radiocommunications Agency

1
Broadband Fixed Wireless Access40GHz

• Radiocommunications Agency
• Industry Consultative Group
• 9 June 2000

2
Contents

• Objectives of phase 1
• Progress of industry consultation
• Key findings
• Next steps

3
Phase One Study Objectives

• The objective of the first phase of the study
  has been to assess whether there is likely to be
  a market for 40GHz. This has been carried out
  through
• consultation with operators, vendors and other
  interested parties
• estimating potential revenues at a high level for
  both the business and residential markets

4
Contents

• Objectives of phase 1
• Progress of industry consultation
• Key findings
• Next steps

5
40GHz Interview Programme
Status of interviews as at 9 June
Status
Number of
Received
Considering
Respondent type
questionnaires sent
response
response
No response
Declined
Operator
25
7
6
0
12
Vendor
16
7
2
3
4
Industry (incl. IEE, DTI etc)
8
2
1
2
3
Total
49
16
10
5
19

• survey covers detailed questions on the target
  markets and services, competing technologies and
  market shares, costs and network architectures
• c. 50 organisations contacted

6
Contents

• Objectives of phase 1
• Progress of industry consultation
• Key findings
• Next steps

7
Key points from questionnaires 1

• Homeworkers are considered a target market by
  half of respondents
• Networks will be rolled out to urban and suburban
  areas, plus some network rolled out to larger
  rural towns
• Operators appear to prefer regional licences to
  national. There is no consensus from the vendors
• 40GHz is considered to be a complement to 28GHz -
  only one operator said the two were substitutes.
  Two operators commented that the 2 technologies
  were both complements and substitutes
• The majority of respondents considered backhaul
  should be permitted using 40GHz
• There is little information about network costs
  available, from either operators or vendors.
  Only one vendor provided cost information by
  network equipment item

8
Key points from questionnaires 2

• The majority of respondents considered broadband
  Internet services would be a key revenue stream
  for both business and residential. There was
  less certainty on what the other key revenue
  services would be
• Operators consider broadcast revenues will
  important. Fewer vendors envisage broadcast as a
  key revenue stream. One vendor did not consider
  broadcast over BFWA to be worth while
• There is little consensus on whether business or
  residential services will be of more importance
  to the 40GHz market or timing of rollout

9
Summary results - key revenue streams
Vendor responses
Operator responses
Target markets
Target markets
Business
Residential
Business
Residential
Voice
1
1
Broadband Internet
5
4
Data
3
3
Telephony
1
1
Broadband Internet
6
4
Broadcast/VOD
0
2
Telephony
1
0
Other (ASP, VPN)
3
0
Broadcast/VoD
4
0
LAN access
1
1
Interactive Home Shopping
1
0
Other (ASP, VPN)
3
0

• Both the vendors and operators considered
  broadband Internet to be the most likely key
  revenue stream
• Telephony revenue was considered more likely than
  broadcast services. It should be noted that all
  the vendors stated that broadcast services would
  be offered by 40GHz
• Operators expect interactive shopping will be a
  further key revenue stream not foreseen by the
  vendors
• The operators stated that business data services
  will also be a key revenue stream for 40GHz
  services

10
40 GHz in the business and residential markets
Share of business and residential services
Business
Residential
Operator 1
80
20
Operator 2
33
67
Operator 3
20
80
Vendor 1
90
10

• Most respondents considered the business and
  residential markets separately
• Only four respondents provide an answer to the
  percentage split between business and residential
  for the overall market. These are shown in the
  table above
• The splits between the business and residential
  markets differ substantially

11
Advantages of BFWA over other broadcast
technologies
Advantage of BFWA over other broadcast
technologies
Capacity
Cost
Speed of rollout
Service quality
Better
Same
Better
Same
Better
Same
Better
Same
DST
7
0
2
1
3
0
6
4
Cable
3
2
2
2
11
0
0
5
Terrestrial
9
0
2
2
5
0
2
4

• 40GHz BFWA is considered to have advantage over
  the competing technologies in certain areas
• Compared to Digital Satellite (DST), 40GHz offers
  more capacity and a better service quality
• Cable can offer either a greater or similar
  capacity to BFWA, but is bettered in speed of
  rollout
• BFWA is considered to offer better capacity and a
  slightly better service rollout than its
  terrestrial competitors

12
Advantages of BFWA over other telecoms
technologies
Advantage of BFWA over other telecoms technologies
Capacity
Cost
Speed of rollout
Service quality
Better
Same
Better
Same
Better
Same
Better
Same
DSL
7
1
3
2
7
0
3
4
Cable
4
0
7
1
11
0
2
4
Fibre
1
0
9
0
12
0
0
5

• BFWA exceeds DSL in terms of both capacity and
  speed of rollout
• Cable for telephony is considered to be more
  expensive and slower to roll out than BFWA
• Fibre is considered to be the most expensive and
  slowest competitive access technology to roll out
  

13
Service launch

• There is little consensus with regard to the
  timing of the service launch
• This may reflect considerations such as
• the availability of equipment
• the speed of rollout
• timing of the licensing

Timing of service launch
Business
Residential
1Q 2001
1
1
2Q 2001
1
3Q 2001
1
4Q 2001
1
1Q 2002
1
2Q 2002
1
3Q 2002
4Q 2002
1Q 2003
1
1
2Q 2003
1
14
Initial conclusions

• there is interest in the market
• no respondent suggested delaying the licensing
• the 40GHz market appears to be broader than 28GHz
  with both business and residential segments and
  telecoms and broadcast services
• Internet is expected to be a key revenue driver
  by most respondents and broadcast revenues also
  expected to be important
• But the overall service composition appears
  uncertain
• there is still uncertainty about timing,
  equipment costs and when economies of scale will
  be achieved

15
Contents

• Objectives of phase 1
• Progress of industry consultation
• Key findings
• Next steps

16
Next steps

• Detailed market assessment required KPMG to
• develop models (market, costs, economic)
• populate models
• generate market estimates
• Thereafter proceed as for 28GHz