Competitive Positioning of 5GHz FWA systems WAG Meeting 6 th May 2003

Presentation Structure Main potential markets: school connectivity, NHS, SME and community networks Market drivers Procurement / business models Key criteria for technology choice Prospects for 5GHz FWA Main potential markets: school connectivity, NHS, SME and community networks Market drivers Procurement / business models Key criteria for technology choice Prospects for 5GHz FWA

School connectivity: market drivers Broadband connectivity policy for schools: 2Mbps primary; 8Mbps secondary by 2006 Funds: – £71m ( ), £287m ( ) England – £204m Northern Ireland (incl. ICT) – £10m Wales (local access) Content development initiatives: £50m e-Learning credits; £150m for digital content development Future bandwidth requirements: – Video conferencing – Video streaming (subject teaching) – Interactive materials (subject teaching) Improving ICT competence amongst teachers Broadband connectivity policy for schools: 2Mbps primary; 8Mbps secondary by 2006 Funds: – £71m ( ), £287m ( ) England – £204m Northern Ireland (incl. ICT) – £10m Wales (local access) Content development initiatives: £50m e-Learning credits; £150m for digital content development Future bandwidth requirements: – Video conferencing – Video streaming (subject teaching) – Interactive materials (subject teaching) Improving ICT competence amongst teachers

Procurement models (1) RBC/LEAs own the school network: – Low cost connection – Sustainable broadband provision – Control over the network – Cost-effective solutions sought (wireless) – ‘Hidden costs’ – Customer response/customer care? – Direct competitors to commercial operators? – Interconnect to SuperJANET? RBC/LEAs own the school network: – Low cost connection – Sustainable broadband provision – Control over the network – Cost-effective solutions sought (wireless) – ‘Hidden costs’ – Customer response/customer care? – Direct competitors to commercial operators? – Interconnect to SuperJANET?

Procurement models (2) Leasing broadband capacity from a commercial operator + managed service – Defined performance criteria – RBC/LEA avoids ownership of network and associated costs – Sustainability beyond 2006? – …BT main provider, but wireless technologies being considered Leasing broadband capacity from a commercial operator + managed service – Defined performance criteria – RBC/LEA avoids ownership of network and associated costs – Sustainability beyond 2006? – …BT main provider, but wireless technologies being considered

Major wireless deployments CLEO Warwickshire Somerset Milton Keynes Cheshire North Yorkshire Fixed links + 2.4GHz CLEO Warwickshire Somerset Milton Keynes Cheshire North Yorkshire Fixed links + 2.4GHz

Criteria driving the choice of technology Cost of deployment On-going costs Actual data throughput Guaranteed QoS Speed of deployment Scalability Sustainability of broadband provision Cost of deployment On-going costs Actual data throughput Guaranteed QoS Speed of deployment Scalability Sustainability of broadband provision

Prospects for 5GHz FWA Current capacity insufficient in 2-3 years (PTP or PMP over 2.4GHz) More cost-effective solutions sought Separate frequencies for access and WLANs Plans to migrate 2.4GHz connections to 3.4 or 5GHz Extend networks to other public sector and SMEs At least 10% of school connections over wireless by 2006 (up to 15% incl. other public sector and SMEs) Current capacity insufficient in 2-3 years (PTP or PMP over 2.4GHz) More cost-effective solutions sought Separate frequencies for access and WLANs Plans to migrate 2.4GHz connections to 3.4 or 5GHz Extend networks to other public sector and SMEs At least 10% of school connections over wireless by 2006 (up to 15% incl. other public sector and SMEs)

The NHS: market drivers (1) Re-procurement of NHSnet (N3)- £2.3billion (2003 – 2005); infrastructure and ICT – N3: min 2Mbps between trusts, min 256Kbps GP practices – Best value for money – 10 year contract to 5 SPs – Frequent local contract re-competition over 10 years Wales - Dawn 2 NI, Scotland – part of overall public sector aggregation model Re-procurement of NHSnet (N3)- £2.3billion (2003 – 2005); infrastructure and ICT – N3: min 2Mbps between trusts, min 256Kbps GP practices – Best value for money – 10 year contract to 5 SPs – Frequent local contract re-competition over 10 years Wales - Dawn 2 NI, Scotland – part of overall public sector aggregation model

The NHS: market drivers (2) Increase in bandwidth requirements in the next 2-3 years: – Integrated Care Record Services (electronic patient records, prescription transfer and appointment booking) – PACS (storing, archiving and transfer of clinical images) Increase in bandwidth requirements in the next 2-3 years: – Integrated Care Record Services (electronic patient records, prescription transfer and appointment booking) – PACS (storing, archiving and transfer of clinical images)

Criteria driving the choice of technology Security Cost/value for money Guaranteed QoS Speed of deployment Credibility of service provider Security Cost/value for money Guaranteed QoS Speed of deployment Credibility of service provider

Prospects for 5GHz FWA Bluetooth - common mechanism for connecting medical devices Reluctance to use 2.4GHz for access (interference; less secure) 2.4GHz as an interim local solution 5GHz or 3.4GHz preferred 10-20% of GP practices in England will be connected via wireless Bluetooth - common mechanism for connecting medical devices Reluctance to use 2.4GHz for access (interference; less secure) 2.4GHz as an interim local solution 5GHz or 3.4GHz preferred 10-20% of GP practices in England will be connected via wireless

Community and SME networks: market drivers Lack of broadband infrastructure Government’s broadband policy objectives Availability of public funds: DTI Broadband fund, Wired-Up Communities community projects using FWA (2.4GHz + licensed fixed links) Most use subsidies 3-4 to 30 nodes; 10 to 100+ users Lack of broadband infrastructure Government’s broadband policy objectives Availability of public funds: DTI Broadband fund, Wired-Up Communities community projects using FWA (2.4GHz + licensed fixed links) Most use subsidies 3-4 to 30 nodes; 10 to 100+ users

Business models (1) Community-owned networks: – Driven by availability of funds – Sustainability? Will users pay £25-40 p.m.? – Cost of backhaul – Backhaul to school networks and SuperJANET Community-owned networks: – Driven by availability of funds – Sustainability? Will users pay £25-40 p.m.? – Cost of backhaul – Backhaul to school networks and SuperJANET

Business models (2) Operator-driven networks: – Integrated network + service provision – Wholesale broadband capacity provider + ISP – Operator bears commercial risk Operator-driven networks: – Integrated network + service provision – Wholesale broadband capacity provider + ISP – Operator bears commercial risk

Criteria driving the choice of technology Cost Capacity versus demand Speed of rollout / immediate access to spectrum Cost Capacity versus demand Speed of rollout / immediate access to spectrum

Prospects for 5GHz FWA (1) Significant interest from operators deploying unsubsidised networks for SMEs PMP and PTP (leased line alternative) 5GHz for backhaul No immediate perceived demand to migrate from current 2.4GHz links in community-run networks Significant interest from operators deploying unsubsidised networks for SMEs PMP and PTP (leased line alternative) 5GHz for backhaul No immediate perceived demand to migrate from current 2.4GHz links in community-run networks

Prospects for 5GHz FWA (2) Broadband take up: 13% of households with Internet access (7% of UK households) 19% of SMEs with Internet access (12% of UK SMEs) 20-27% of households and businesses will have no access to ADSL/cable (c.20% at town edges and in rural areas) Broadband take up: 13% of households with Internet access (7% of UK households) 19% of SMEs with Internet access (12% of UK SMEs) 20-27% of households and businesses will have no access to ADSL/cable (c.20% at town edges and in rural areas)

Conclusions and common themes (1) FWA over 2.4GHz seen as an interim solution for broadband connectivity to schools, NHS, SMEs (replacement within 5 years) FWA have typically much lower on-going costs than BT leased line products (esp. in rural and remote areas) Choice of wireless - trade-offs between: – capacity – cost of equipment – QoS – availability and ease of access to spectrum – risk of interference … for each specific market FWA over 2.4GHz seen as an interim solution for broadband connectivity to schools, NHS, SMEs (replacement within 5 years) FWA have typically much lower on-going costs than BT leased line products (esp. in rural and remote areas) Choice of wireless - trade-offs between: – capacity – cost of equipment – QoS – availability and ease of access to spectrum – risk of interference … for each specific market

Conclusions and common themes (2) Access to 3.4GHz uncertain; higher equipment costs Immediate demand for access to Band C by professional operators: – Timescales driven by government targets – Most contracts to be finalised in early 2004 – Separate frequencies for access and WLANs – Most cost-effective alternative for SMEs given less certain demand and limited ability of operators to raise funds Access to 3.4GHz uncertain; higher equipment costs Immediate demand for access to Band C by professional operators: – Timescales driven by government targets – Most contracts to be finalised in early 2004 – Separate frequencies for access and WLANs – Most cost-effective alternative for SMEs given less certain demand and limited ability of operators to raise funds