The Mobile Industry: Today & Tomorrow June 2004 First Korea-UK Future Mobile Symposium The Mobile Industry: Today & Tomorrow Dr Walter Tuttlebee Executive Director, Mobile VCE

Setting the Scene for Today’s Talks Talk Structure Setting the Scene for Today’s Talks Some history – so you can understand something of how the UK’s role has evolved in this industry Where we are today – so you can appreciate the thinking of UK industry players and government The future – some personal perspectives, from a position at the heart of global industry R&D, on future evolution and Mobile VCE’s role in this Later talks will focus on specific technology factors and topics – this will be an overview

Some History: ‘Before 3G’ GSM Origins – CEPT 1982 Targets - 1985 Competing Technical Proposals in Europe Europe is NOT one country, unlike the USA ! The UK role – ‘The Honest Broker’ ! Base Standards – completed 1989/90 Mandated Spectrum & Technology (Europe) UK’s 1800 MHz initiative – ‘Phones on the Move’ Infrastructure Deployed – 1991 Handsets Available – 1992 Success Apparent – 1995 Globalisation – 1998 GSM will still be around for many, many years !

Some History: 3G 3G Origins – ‘RACE Mobile’ 1988 Targets - 1992 Early 3G research was commercialised pre-3G GSM1800, diversity, microcells, etc Base Standards – 1997/98 ITU - A “Family” of Standards Infrastructure Deployed – Japan 2001/2, Europe 2003/4 (Decent) Handsets Available – 2003/4 Success Emerging – 2004 ?

Mobile Communications in the UK Today Mobile Users Subscribers: UK – 52m, Europe – 450m Penetration: UK - 87%, W Europe - 84%, E Europe - 29% Importance of the Industry to the Economy 2.3% of UK GDP 0.6% of UK Jobs Mobile Operators 5 network operators including 1 pure-play 3G (‘3’) MVNOs Notably BT & Virgin, (upgrading to GPRS & 3G) Leading Global Mobile Operators Vodafone, Orange (both board members of Mobile VCE)

Transition from 2G to 3G Europe – poorly managed preparation for 3G Late advent of polyphonic phones, colour screens Mismanagement of user perceptions of WAP, esp UK Market was ill prepared Benefiting from the Downturn Opportunity for the market to catch up Operator rollout of 3G-type services using 2.5G Colour screens, polyphonic phones Cameraphones Portals (Vodafone Live!) Current Initiatives Music player Digital TV – DVB-H BT & Vodafone (fixed-mobile) BT & GWR (mobile-broadcast)

3G Today in Europe Country markets UK 77% Population Coverage Pioneer markets 2003 – UK, Italy – 3 Sweden, Denmark – 3 Germany,The Netherlands, Portugal, Spain, Sweden – Vodafone UK 77% Population Coverage June 2004 >1m subscribers Strong growth since Jan 2004 New handsets key to subscriber growth 10-20% of net adds in 1st qtr Including the LG U8100

3G Today in Europe Pioneer Markets - the UK & Italy - ‘3’ Same problems with initial take-up as DoCoMo’s FOMA in Japan, no decent handsets initially available Problems exacerbated by need for GSM dual mode Aggressive voice tariffs, built on lower cost-per-bit Subscribers by 1st April 2004: UK 377,000, Italy 469,000 Vodafone – pan-European launch spring 2004 Initial focus on business, data, users – 3G/GPRS datacard Targets high value early adopters Consumer phones – Samsung Z105, Sony-Ericsson Z1010 Orange, T-Mobile – European launch later 2004

Regulation & R&D Regulation – Ofcom – a new regulator R&D Unified regulation of communications & broadcasting >50% digital broadcast penetration Forward looking Light touch approach Spectrum trading R&D Most global industry players have R&D centres in the UK Strong Industry-Academic R&D infrastructure Mobile VCE - long-term, industry-led, research, established 1996, top UK universities – initially as a UK initiative but now global industry members & influence Focus on long-term industry-led research

Mobile VCE Industry Futures Vision Day – January 2004 Who & What ? Futures – Europe, US, Asia Views Mobile VCE companies from around the world – inc Korea Industry Directions Technology Implications Where do our industry members want Mobile VCE’s own future research to focus … ?

The Future: 4G or ‘Beyond Generations ?’ Origins – 1997 Mobile VCE’s ‘Vision 2010’ Published in the IEE Electronics & Communications Engineering Journal, December 2000 WSI, led to the formation of WWRF WWRF helped focus the agenda for 6FP Market Shifts Developing Markets: Volume – China & India Developed Markets: Compelling Applications Industry Shifts Closer Look @ RoI Core Markets & New Opportunities Technology Cost Base

The Future: 4G or ‘Beyond Generations ?’ Technology Shifts ‘New’ 3G Air Interfaces – WiMAX, Flash-OFDM, etc Short Range – Personal Environments, Passive Services Ubiquitous Networking, RFID Integration, M2M Adaptive Radio & Networks Regulatory Shifts Technology Neutrality but operators want standards…cf Vodafone @ FTMC Unlicensed Spectrum Ultrawideband … ? Spectrum Trading – 2006 ? Is the industry moving ‘Beyond Generations’ ? Are we seeing a new kind of evolution emerge ?

The Future: we need an ‘Industry-Efficient’ Evolution Path GSM – Latent Market Demand Approach Driven by Politics 1992 Single European Act Mandated European Spectrum & Technology 3G – A Period of Strong Market Growth Approach Driven by Globalisation Harmonised Global Spectrum, but … ‘Family of Standards’ → trend to Technology Neutrality The Future - What are the real Drivers ? What is shaping the Approach ? Technology still a Key Enabler – but Industry must steer Content, applications & services will drive new business models – ‘passive’ services, inter-networked applications Common standards…but how can these fit into a technology-neutral, spectrum-market world ? How to find an industry-efficient evolution path ? Key technologies to enable this, and why ?

This week, and today, we seek to explore such issues together… Session Themes New & Emerging Wireless Technologies Higher throughput, lower cost-per-bit Network Technologies in an All-IP World Towards IPv6 and an inter-networked world Securing Mobile Services What new approaches are required to security Content, Services & Applications New business models How should these drive technology research ? Spectrum – the ‘air’ of mobile comms Regulatory change & challenges

Thank you… Dr Walter Tuttlebee For further information please contact: E-mail: walter.tuttlebee@mobilevce.com Tel: +44 1256 338604 WWW: www.mobilevce.com