CDMA: The best option for CDMA: The best option for PCS in BrazilPCS in Brazil

PCS Forum PCS Forum Caesar Park Hotel - Rio de JaneiroCaesar Park Hotel - Rio de Janeiro

CDMA Development GroupCDMA Development Group

June 20, 2000June 20, 2000Guillermo C. FornaresioGuillermo C. FornaresioDirector, Latin America & CaribbeanDirector, Latin America & Caribbean

Overview

• Introduction to the CDMA Development Group

• CDMA Overview

• Challenges for the New PCS Operator

• PCS, 1XRTT and IMT 2000

• Summary

CDG Introduction

Information Distribution

Conferences

Newsletter

Website

Etc.

Technical Service Development

Wireless Local Loop

Advanced Systems

Evolution

Etc.

Deployment Assistance

Time-to-Market

Int’l Roaming

Interoperability

Etc.

To lead the rapid evolution and deployment of

CDMA-based systems based on open standards

and encompassing all core architectures to meet

the needs of markets around the world in an

emerging information-intensive environment

CDG Introduction

Officers

Bell AtlanticVodafone AirTouch

Sprint PCS

Bell Mobility

SK Telecom

Executive Board

ALLTEL

US West

TelstraLG Telecom

Hansol PCS

GTE Wireless

IDO

DDI

ClearNET

China Unicom

Telus Mobility

SK Telecom

SK Telecom

Leadership Council

ERICSSON

Qualcomm

Nortel Networks

NOKIA

Motorola

Samsung

Lucky Goldstar

Lucent

CDMA Worldwide Coverage

March 200041 Countries

57 million subscribers

CDMA Subscriber Growth Worldwide

0

10

20

30

40

50

60

Sep'97 Dec'97 Mar'98 Jun'98 Sep'98 Dec'98 Mar'99 Jun'99 Sep'99 Dec'99 Mar'00

North America Latin America Asian Pacific Europe & Rest of the World

Subs

crib

ers

(mill

ions

) Reaching 100 million subs

by Dec’ 2000

57

9

28

CDMA: Fastest Growing Standard

0

300

600

900

1200

1500

1800

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

PDC, 5 yr CAGR 8%TDMA, 5 yr CAGR 56%W-CDMACDMA, 5 yr CAGR 60%GSM, 5 yr CAGR 33%Analog, 5 yr CAGR -13%

Source: Volpe, Brown, Whelan & Company

46 Times in 4 years

46 Times in 4 years

CDMA air interface will prevail after

2005

Expect more than 600 million CDMA subscribers by 2005….

CDMA Growth in Latin America

0

1

2

3

4

5

6

7

Mar'98 Jun'98 Sep'98 Dec'98 Mar'99 Jun'99 Sep'99 Dec'99 Mar'00

Latin America

Subs

crib

ers

(mill

ions

) March 2000:

6.5 millionssubscribers !

320%

CDMA Operators

Key attributes of CDMA

CDMA as the clearest option for wireless Fastest growing wireless technology Capacity, Quality, Coverage Opportunities for regional footprint and roaming in the

Americas

Evolution path to 3G (1XRTT) in existing spectrum Preservation of investment Management of risk by upgrading systems in selected

areas

Multiple Access Overview

Challenges for the New PCS Operator

Market environment

Examples from International Operators

Requirements

1XRTT Solution

Key challenges

Offer high value services at competitive prices

How to differentiate from competitors Marketing strategies, segmentation, plans, billing Customer service Innovation, new products

Which services Voice (Quality, Coverage) Data (Introduction of new services) Other features

Mobile Market in Latin America

Source: ITU Americas Report 2000, The Yankee Group, The Strategis Group

0

20

40

60

80

100

120

1991 1995 1999 2004 2008

Caribbean Central America South America

37.7

3.8

76

108

1.04

Mill

ions

of

Su

bscr

iber

s

Additional Lines in Latin America

0

2

4

6

8

10

12

14

16

18

20

1994 1995 1996 1997 1998 1999

New Main Lines New Mobile SubscriberSource: ITU Americas Report 2000

Mill

ions

of

Su

bscr

iber

s

Experiences from CDMA operators

Demand for data services Perceived by customers as “valuable services” Source of revenue increasing MOU

Content Business: e-mail access, stocks alerts, airline information Entertainment: cinema, restaurants Miscellaneous: whether, traffic, shopping, horoscope

What customers want Speed: fast access to information Content: new stuff, interesting, fun, easy to use Time and place: Real time information at the current location Personalization: Access to favorite applications

Challenges with data services

Selecting contents: looking for the “killer application” Each Market is different Top 10 change overtime

Examples of current favorite applications Japan: Downloading games Korea: Downloading music US: Checking stock market

Identification of the right content Canada

Bell Mobility Dec-99 Apr-00

Stocks 40% 37%e-mail 38% 7%Portal 12% 48%Others 10% 8%

Forecast MoU Worldwide

Source: The Strategis Group

0

50

100

150

200

250

300

350

400

1999 2000 2001 2002 2003

Minutes of Use

275

221

320

372

174

Bill

ion

of M

inut

es

More data capabilities, more affordable services, more subscribers

Speed and Capacity: 1XRTT

Provide voice and data services require two key elements: high data speed and capacity

CDMA 1XRTT is the solution Double Voice Capacity compared with cdmaOne IS-95 A Data rates 144 Kpbs Backward compatible with terminals cdmaOne Roaming opportunities with Argentina, Chile, USA, Mexico, etc

Trials in the US (Sprint PCS), Canada (Bell Mobility) and Korea (SK Telecom)

Commercial with SK Telecom Korea (End 2000)

CDMA Roadmap to 3G and beyond

Existing or New Spectrum

IS-95B1.25 MHz

2.5G 3G/ IMT-2000 Services

1XRTT1.25 MHz

IS-95A1.25 MHz

cdma2000 - 3XRTT 5 MHz

1X EV Phase I/ PhaseII1.25 MHz

14.4 Kbps 144 Kbps56 Kbps 2 Mbps

Nov 1999 End 2000 End 2001Jan 1996

Backward compatibility = Preservation of investments

1XRTT deployments

1XRTT may be deployed in new or existing CDMA systems

Mix 1XRTT CDMA cells withIS-95-A/B cells

Support higher data rates Support enhanced capacity

Existing subscribers with IS-95 A/B terminals will be supported by 1XRTT cells, without disruption

Minimize risk by introducing 3G services as the market demands

cdmaOne Cell

1XRTTcell

M A

InitialDeployment

179.2 Kbps 236.8 Kbps

2000 2001 2002 2003 2004Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Wide Area -- Data Enabled NetworksWide Area -- Data Enabled Networks(Data Rate as specified in Standard)(Data Rate as specified in Standard)

1XRTT (IS-2000 1X)1XRTT (IS-2000 1X)(307 Kbps)(307 Kbps)

1XEV Ph I(Enhanced Data Rate)1XEV Ph I(Enhanced Data Rate)(2.4 Mbps, mobile)(2.4 Mbps, mobile)

GSM GPRS TechnologiesGSM GPRS Technologies(115 Kbps)(115 Kbps)

EDGE - Compact EDGE - Compact (250 Kbps)(250 Kbps)

EDGE - Classic EDGE - Classic (384 Kbps)(384 Kbps)

CarrierTrials (Rel 0)

LimitedDeployment

GeneralDeployment (Rel 1)

CarrierTrials

GeneralDeployment

CarrierTrials

26.8 Kbps 53.6 Kbps 62.4 Kbps

cdmaOne (IS-95B)cdmaOne (IS-95B)(115 Kbps)(115 Kbps)

Carrier Trials

GeneralDeployment in Asia Pacific

3XMC (IS-2000 3X)3XMC (IS-2000 3X)(2 Mbps, (2 Mbps, stationarystationary))

3GDS (W-CDMA)3GDS (W-CDMA)(2 Mbps, stationary)(2 Mbps, stationary)

NTT DoCoMoLimitedDeployment

GeneralDeployment

GeneralDeployment

2.4 Mbps2.4 Mbps(Mobile)

2.4 Mbps

154 Kbps 307 Kbps

64 Kbps

LimitedDeployment

NTT DoCoMoTrials, Japan Specific

64 Kbps

LimitedDeployment

154 Kbps

Source: Based on Andrew Seybold Group & QUALCOMM - 04 April 2000Note: Carrier trials are commercial trials. Values shown are peak data rates .

120 Kbps 90 Kbps

384 Kbps W-CDMA in Europe is expected to follow Japan’s lead.

180 Kbps 270 Kbps

Timeline for Advanced Technologies

Public WiredPhone Network

(PSTN)

Wireline Telephone

Other CellularSwitches

Intelligent Add-OnFunctions and

Databases

IS-95

Mobile Stations

IS-98

Base Stations

IS-97

Switch

IS-41

WIN

Base StationsController

IS-634

cdmaOne is: A global technology designator for

IS-95 based CDMA systems A term representing the entire wireless system and

specifications (e.g., air interface, network interfaces)

CDMA is an Open Standard

Licensed Terminal Suppliers

AcerAlpsAppeal TelecomCasioDensoFujitsuEricssonGTRAN Inc.HaitaiHanwha CorporationHitachi, Ltd.Hughes Network SystemsHyundaiKenwoodKokusai Electric CompanyKyoceraLG Electronics/LGICLucentMatsushita/PanasonicMaxonMitsubishiMotorolaNEC

4141

CDMA

77

TDMA

EricssonMitsubishi MotorolaNECNokiaPanasonicPhilips

NeoPoint, Inc.NokiaOKIPantech Co.Philips ElectronicsSamsungSanyoSeiko InstrumentsSharpSiemens Wireless TerminalsSierra WirelessSK Telecom Co., Ltd.SonySynertek Consortium - Sewon Co. - Standard Telecom (Nixxo) - Telson Electronics - Wide Telecom (Asuka)TellitToshibaUnidenUnited Computer & Telecom

Alcatel MotorolaAEG NECAscom NokiaBenefon NortelDancall OrbitelEricsson PanasonicHagenuk PhilipsHFCL SagemMatsushita SamsungMaxon SiemensMitsubishi Sony

GSM

2222

Licensed Infrastructure Suppliers

EricssonFujitsuHitachiHughes NetworksHyundaiLGICLucent TecnologiesMotorolaNECNortelSamsung

1111

CDMA

33

TDMA

EricssonLucent TechnologiesNortel

AlcatelEricssonLucent TechnologiesMotorolaNokiaNortelSiemens

GSM

77

Competition and Prices

The number of players in the CDMA market guarantee:

More developments on terminals with advanced features

More competition with lower prices Ongoing research for new and more efficient

solutions (1XEV, SIM Card) A wide array of options for infrastructure and

terminals

Capital Spending Per Subscriber Gain

CDMA- Decreasing at a Faster Rate Than Other Technologies

Source: Volpe, Brown, Whelan & Company; The Yankee Group

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1997 1998 1999 2000 2001 2002 2003

TDMA, $/subs gain, 5 yr CAGR 16%

GSM, $/subs gain, 5 yr CAGR -5%

CDMA, $/subs gain, 5 yr CAGR -15%

Poly. (GSM, $/subs gain, 5 yr CAGR -5%)

$US

PCS, 1XRTT and IMT 2000

Results from WARC 2000

Flexibility and CDMA

PCS 1900

Current status of IMT-2000

World Radio Communication Conference 2000 identified a number of bands with a high degree of flexibility to allow operators to migrate towards IMT-2000 according to market needs and other national considerations

IMT-2000 Bands

– 1885-2025 MHz and 2110-2200 MHz (WARC 1992)

– 806-960 MHz, 1710-1885 MHz and 2500-2690 MHz (WARC 2000)

All bands globally identified for IMT-2000 have equal status

Each country will decide on the timing of availability at the national level according to need of IMT-2000 bands

Evolution from 1G and 2G systems to IMT-2000, including frequency bands below 1 GHz (Existing cellular, DCS or PCS operators may migrate to IMT-2000 services in existing bands)

PCS will support IMT-2000 services

IMT-2000 is a service. It is not a particular spectrum or technology

Regional identification for common spectrum allows economy of scales and roaming

Using CDMA in the 1900 MHz PCS band, operator will migrate to 3G

1XRTT (cdma2000 Phase I) is a IMT-2000 approved technology and can be deployed in any existing 2G or 3G band

Why PCS 1900 ? Why PCS 1900 ? AdvantagesAdvantages

Maintain technology neutrality Support CITEL recommendation for allocation of 1900MHz band

in the Americas Roaming opportunities within the region (Argentina, Canada,

Chile, Dominican Republic, Guatemala, Haiti, Mexico, United States)

Open choice of technologies in 1900 MHz according market needs (CDMA, TDMA, GSM) introducing more competition

Create an industry-potential in the region Favor economies of scales Evolving technologies will offer a faster and more efficient in-band

migration path to 3G services Immediate availability of 1900 MHz terminals

Why PCS 1900 ? Why PCS 1900 ? Regional Integration Regional Integration

ArgentinaArgentina HaitiHaiti

BoliviaBolivia HondurasHonduras

Brasil Brasil (WLL)(WLL) MexicoMexico

CanadaCanada PeruPeru

ChileChile Puerto RicoPuerto Rico

Colombia Colombia (WLL)(WLL) Rep. DominicanaRep. Dominicana

Costa RicaCosta Rica UruguayUruguay

EUA EUA

GuatemalaGuatemala

There are 16 countries in the Americas using PCS 1900, providing economies of scales, roaming opportunities, and regional integration

Why PCS 1900 ? Why PCS 1900 ? Trips destinations 1998Trips destinations 1998

0%

10%

20%

30%

40%

50%

60%

Source: EmbraturData based on multiple choice

* * * * * *

Most Brazilians go to countries withPCS 1900

Why PCS 1900 ? Why PCS 1900 ? Brazilian Exports 1998Brazilian Exports 1998

Europe19%

USA24%

Latin America

40%

West Europe

1%

Asia5%

Africa4%

Other7%

Source: Siscomex

More economic integration with countries usingPCS 1900

Why PCS 1900? Anticipate 3G ServicesAnticipate 3G Services

cdma2000 Phase I (1XRTT) is a IMT-2000 approved technology and can be deployed in any existing 2G or 3G band, providing:

high-speed packed data @ 144 Kpbs

Double voice capacity respect to cdmaOne (IS-95 A)

Backward compatibility with existing cdmaOne phones

Why PCS 1900? Export opportunitiesExport opportunities

Existing and new companies looking for export opportunities in the 1900 MHz band

Brazil Exports January-April

(in millions of u$s Dollars)

1999 2000%

Change

Terminals 19.7 201 919%

Telecommunications Equipments

48 302 527%

Source: Gazeta Mercantil, ABINEE, June 2000

Summary CDMA

CDMA, recognized as the most efficient air interface, is expected to grow and dominate the market by the year 2005

Migration path with backward compatibility, allow new operators

– Preserve Investments– Reduce risk– Early Introduction of New Features– Faster Time to Market

Summary New PCS Operator

PCS Operators will require higher speed and capacity to attend voice and data contents

1XRTT, the first 3G technology to be market, will offers the most cost-effective solution combining high speed data packets with enhance voice capacity

Summary PCS 1900

1900 MHz is the best option for PCS in Brazil provide free choice of technologies (GSM, TDMA or

CDMA) with immediate availability of equipment facilitate integration with regional partners expand export opportunities

CDMA will allow the new PCS 1900 operator to use a very flexible platform to provide the most advanced services to new and existing CDMA customer base in the region

CDMA South AmericaHotel Sofitel Rio Palace

July 17-19, 2000Rio de Janeiro - Brazil

www.cdg.org

More Information !!

Muito Obrigado!!

Guillermo C. FornaresioDirector, Latin America and Caribbean Region

gfornaresio@cdg.orgPhone + 1 714 545-5211Mobile + 1 619 665-1501

WWW.CDG.ORG